Steps In Choosing The Right Brokerage
Congratulations you just passed your Real Estate exam! Now comes one of the first critical decisions you’re going to make in your Real Estate career. Which brokerage do you join? Which structure works best with you? There are tons of questions that you should answer internally. Choosing the right brokerage is the same as choosing a right company to be employed by. Sure, you can move brokerages, get up and leave anytime you want. But avoid the headache and make the right decision as soon as possible. The following list will help you navigate through the process and make the ultimate decision.
National, Local, or Virtual?
First go macro and figure out what type of brokerage would best fit your needs. There are 3 types of brokerage companies. National franchise’s, Local brick and mortar, and Virtual.
National brokerages are ones like Keller Williams, Remax, or Coldwell Banker. They are amongst the highest producing companies housing thousands of Agents and Brokers. Most of them are located in all 50 states with multiple locations in large metropolitan areas. Joining a national brokerage will automatically situate you in a well known brand that consumers can relate too. Another benefit may be that most offices have teams ready to recruit new agents and help them become successful. Many of the National brokerages have implemented top tier training programs for their new agents. This will help with onboarding training and continued education later on in your career. We’ve seen that with National brokerages you may not get the individualized attention as you would with a one location brick and mortar brokerage. But clearly this is a top option for many agents.
Local brokerages can be amazing in terms of getting hands-on training by the designated broker and having a small dedicated team to work with. Joining a local brokerage can help with leveraging your brokerage's name in the community. Independent brokerages have deep roots with their local community if they’ve been around long enough. Using your broker’s strong local connections will help your business. We’ve found that independent brokerages are more lenient as far as marketing. As long as you stay within their guidelines and local rules and regulations you should be free to be as creative as you’d like. We’ve also noticed that many of the designated brokers take their recruits under their wing to make sure they become successful, which you won't see with many of the larger brokerages.
The newcomer to the brokerage world have been the few but feisty Virtual brokerages. Many agents have opted this route because of its open environment and low fees due to there being low to no overhead expenses. Virtual brokerage’s tend to have strong incentivized recruitment tactics which allow agents to earn passive income. There are tons of training available for new or experienced agents but one must have self drive to conduct the training because technically there isn’t someone watching over you making sure you attend. This option has been a favorite and has been growing quite rapidly. We have a special link if you’d like more information on the top virtual brokerage out there right now. https://rb.gy/ok9zue
Training and Support
Receiving the correct training and support is crucial to your success, especially as a newcomer. Many think just because you passed your test you can head out into the world and start selling homes right away, this is false. Your new license is only the beginning. This is where the real world training kicks in. You’re not taught how to write a contract, how to negotiate your commission with sellers, or how to handle objections over the phone. You must choose a brokerage that has all aspects covered and easily accessible to you for review. One major mistake new agents make is choosing a brokerage for the glitz and glamor but forgetting that this is an actual profession, and because of this you must put in hours into perfecting your skillset. Along with training comes important backend support when needed. In the middle of a transaction a million things can go wrong. You need to make sure you have a good support system to assist you with tough transactions.
Fees and Commission Splits
You got into real estate because of passion (we hope). With any passionate profession comes great pay. There is no set structure that all brokerages follow as far as fees and commission splits. Everyone is different. Pay attention to cap rates, splits, and misc fees. A Cap Rate is when a defined amount (in fees) that you must have paid prior to your split reaching a higher level. For example; your split is 80/20 until you pay $15,000 in fees to your brokerage. Once you fulfill the cap of $15,000 you split becomes 100% and you pay a very small transaction fee. Split Rate is the fee that is split between you and your brokerage, mentor, etc. In the above example if your split fee is 80/20 that means you receive 80% of the transaction commission and your brokerage receives 20%. There are many Misc Fees that may come along with your brokerage. A few may include desk fees, franchise fees, transaction fees, e&o insurance fees. These are the main fees but they may vary from brokerage to brokerage. Do your due diligence and research all that's included.
Believe it or not when you join a team or brokerage they want you to succeed because your success is ultimately their success. Many brokerages will offer immense resources to help in your continued success with them. Resources may include discounted rates with vendors, lead flows that get passed around, continued education for free, and much more. See which resources you’ll need when just starting out and find out which brokerage fits best.
Team or solo
Choosing to join a team or being a solo agent depends on which type of brokerage you will join. With a Virtual Brokerage it’s a bit more difficult to find a local team to join (though they are growing) than it would be with a national or local brokerage. There are both benefits and downsides in joining a team when first starting out. Some benefits would be that with a team you may receive excess leads to follow up on. They can be your support team when needing help with clients or a specific transaction. At times you can cover open houses and get tons of referrals from. Also, it's always fun to work with other great individuals and grow together. On the flip side if you’re a “get it done by myself” type of person joining a team may not be the best idea. Some teams may include additional splits and/or desk fees. Since you would be using their office space they may charge for items like printer paper or stationary. Do your research and speak to some team leaders. You’ll get a better feel if joining one is the right choice for you.
What are your long term goals?
When starting your Real Estate Business (yes, you are a business) you should have long term goals set. Figure out where you want to be in the next 5, 10, 15 years. Join a company that will support your goals with the infrastructure they’ve assembled. Do you want to do sales only and retire comfortably? Do you want to recruit agents and earn passive income? Are you interested in growing a team and training them to ultimate success? Or would you like to eventually open and manage your own brokerage. Dig deep and ask yourself these pressing questions. If you’re going to be in the Real Estate business for a long time then set yourself up from the getgo and plan ahead.