What to Look for in a Real Estate Brokerage in 2022
When you’re looking for a new real estate brokerage to work for, it’s important to do your research. There are many things to consider when making this decision, and it can be tricky to know what’s important. In this article, we will outline the things that you should look for in a real estate brokerage, as well as some things to avoid. Keep reading for more information!
Compensation Plan: What is the Brokerage’s Commission Split?
It should be pretty obvious that the first thing that an agent should look for in a new brokerage is how much the agents will be paid through their sales production. Commission splits are a major factor in how much an agent can earn, so it’s important to find out what the split is at the new brokerage.
Most brokerages offer a 60/40 commission split, while others may flat fee or higher percentage. This should go without saying but you need to be absolutely sure what the commission split is before you sign on with a new company. You don’t want to be stuck at a brokerage that offers low payouts!
Commission Splits: What is the Brokerage’s Policy?
Along with knowing the commission split at the brokerage, it’s also important to know the policy for changes in that split. Many brokerages have a policy where agents must agree to any change in their commission split, but there are a few that allow agents to maintain their current split even if the company changes it. This is an important thing to consider, as you don’t want to be stuck at a brokerage where your payouts are suddenly lower than they were before.
Caps: What are they and why they are important for Top Producers
Another thing agents need to look out for in their commission structure is the cap. Brokerages will often put a cap on the amount of money that an agent needs to pay to the brokerage every year in splits through their sales production. This is usually done in order to protect the company’s top agents who are making a lot of money.
While this may not be a factor for new agents, it’s something to consider if you’re a top producer. If you’re consistently selling over $7,000,000 worth of real estate each year at a brokerage with no cap, you might want to calculate how much money you are actually giving to your brokerage each year in splits. Sometimes agents can actually make more money at a brokerage with a lower split with a cap than at a brokerage with a high split for agents but no cap.
For example: If you are selling $7,000,000 worth of real estate each year at 3% commission at a brokerage with a 90/10 split. You are paying your brokerage $21,000 each year in splits. Since caps are the maximum amount of money you will pay to a brokerage and most caps are $20,000, you would essentially be paying an additional $1,000 to your brokerage just by being at a brokerage with no cap and a seemingly better split.
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History: What is The Brokerage’s Track Record?
An extremely overlooked way of obtaining accurate information before making a decision is from the primary source. When you purchase an item on Amazon, you probably would have first looked at how the customer reviews were for that product.
The same philosophy should be applied to working at a new brokerage firm. Looking at a brokerage’s track record of agent success will give agents the best overview of what they should expect at their new brokerage.
Asking Current and Former Agents
When looking at a brokerage’s track record, you want to look for two things: how many agents have left the company and why they left. If a high percentage of agents are leaving the company, it could be a sign that there is something wrong with the way the brokerage operates. On the other hand, if most of the agents are leaving because they’ve achieved their goals or moved on to another opportunity, then it shows that the company is successful in training and supporting new agents.
You can find this information by either visiting review websites like Yelp or Google Reviews or by contacting current and former agents of the brokerage directly.
Market Specialization
It’s also important to take into account what type of real estate market your potential new brokerage specializes in. If you’re an agent in a luxury market you might want to look for a brokerage that already has other luxury agents who are also successful. This will give you the best opportunity to learn from their experiences and continue growing in your market.
Although looking at the track record of agents is a great strategy, always remember that your success as an agent is ultimately up to you. No matter how great the company or team you are working with is, if you don’t put in the effort and dedication, you won’t see results.
Benefits and Tools: What Resources Do the Brokerage Provide?
Since agents are providing their brokerage value in the form of commission splits, it is only fair that real estate brokerages focus their efforts on providing equivalent value to their agents.
One way brokerages provide value is by offering an arsenal of benefits and tools to their agents.
Some things to look for when assessing if a brokerage provides value are: lead generation software, marketing centers, training, and technology.
Lead Generation Software
Most top brokerages offer some type of lead generation software to their agents. This software allows agents to automatically receive leads from the MLS or other sources into their email inboxes or CRMs. Having this tool decreases the amount of time spent prospecting for new business and increases the amount of time spent closing sales.
Marketing Centers
Another benefit that many top brokerages offer are marketing centers. These centers provide all the resources an agent needs to create professional-looking marketing materials for their listings. This could include templates for flyers, postcards, door hangers, and more.
Training
A good real estate brokerage also provides training to their agents of all experience levels. Good training programs will cover a variety of topics such as how to use the company’s lead generation software, how to market properties effectively, how to generate leads, how to become specialized in a certain market sector, different marketing mediums like social media, or even how to negotiate deals.
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Technology
In this digital age, it’s important that brokerages provide their agents with technology that will help them be successful in their business. Some technologies an agent might find helpful are: a CRM system that stores all client information in one place, lead tracking software that records when and where leads were generated, or even a real estate metaverse where agents can find live support from the comfort of their own homes.
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Although it is important to consider the benefits and tools that a brokerage provides, always remember that you should do your own research on what works best for you. What might be a great resource for one agent may not be as beneficial for another.
The most important thing is that you feel confident in the resources your brokerage provides and are able to utilize them to their fullest potential.
Payment Processing: How and When are Agents Paid?
It comes as a surprise that not many agents actually ask about how or when they will get paid when they are looking for a new real estate brokerage to move to. After all, what good is a great commission split if you never actually get paid!
When agents look for new brokerages, they should always try to find out how and more importantly when they will get paid.
There are two main types of payment processing systems that brokerages use: monthly and at closing.
Monthly Payment Processing
Under this system, agents are paid on a certain day of the month for all sales closed in the previous month. This is usually done through direct deposit into an agent’s bank account.
At Closing Payment Processing
This system is less common than monthly payment processing, but it does have its benefits. Under this system, agents are paid when they close a sale, which can be either through a check or wire transfer.
Many agents prefer to get paid at closing because it allows them to see exactly how much money they made each month. It can also help with budgeting and cash flow planning.
No matter which payment processing system a brokerage uses, it is important that agents are clear on the terms and conditions.
Ask your potential brokerages about their payment processing systems to make sure you are comfortable with how and when you will get paid.
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Values and Culture: Do the Agents Enjoy Working There?
People make decisions based on 3 different areas of their life. Time, Money, and Emotions. What most real estate agents look for in a real estate brokerage is how they can make more money. Although that is important (without money you can not enjoy your extra time which leads to poor emotions), it is also important to keep in mind how your new brokerage will give you back more of your time and how you will feel working there.
Culture and values are two things that do not come up often enough when agents, especially top producers, look for in a brokerage.
When an agent joins a new brokerage, they are essentially joining a team. It is important to know what that team’s values and culture are before you join.
If the team’s values do not align with your personal ones, it will be difficult for you to produce at your best potential. You may also find yourself constantly frustrated with the company and its practices.
On the other hand, if you join a brokerage whose values match your own, you will most likely enjoy working there more and be more productive.
How can you tell if the agents working at a brokerage enjoy their work? One way is to look at their social media profiles. If they only have negative things to say about their job or the company, it is a sign that they are unhappy.
It is important to find out if the agents at the brokerage you are considering joining enjoy their work. If they don’t, it may be a sign that the company is not a good fit for you.
Consider What Matters Most To You!
There are many things to consider when looking for a new real estate brokerage to join. By thinking about what matters most to you, you can easily narrow down your choices.
When agents focus on what is important to them, they are able to ask better questions and get more specific answers from brokerages during the interview process. This will help them make an informed decision about whether or not a particular brokerage is right for them.
Additional Opportunities: Are There Additional Income Opportunities?
Lastly, real estate agents who are looking at moving to a new brokerage should look for ways that they can capitalize on their business potential in the future rather than only solving an immediate problem in the present. Although uncommon in the past, many brokerages today offer agents more than just one stream of income through their sales production.
Agents should always be on the lookout for additional opportunities that their new brokerage may be able to provide.
Some of these opportunities include getting referrals paid to them for attracting other agents to the brokerage, becoming a manager or team leader, and earning commissions on sub-agent transactions.
Also, for the first time in the history of the industry, brokerages are actually giving their agents equity and ownership in their company. This is huge for top producing agents and team leaders who have spent their entire careers building a business for their brokerage.
Since the only things that agents and team leaders own in their businesses are their name and other miscellaneous marketing materials, they walk away with virtually nothing except their own savings at the end of their careers. But now that brokerages are actually beginning to offer agents equity for the first time in history, agents can now build a business that they own instead of rent.
Ask your potential brokerages about their additional income and equity opportunities to see if there are any that interest you. By doing so, you can start planning for your future in real estate while still taking care of business in the present.
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Conclusion: What to Look for in a Real Estate Brokerage
There are many things to consider when looking for a new real estate brokerage to join. By thinking about what matters most to you, you can easily narrow down your choices.
When agents focus on what is important to them, they are able to ask better questions and get more specific answers from brokerages during the interview process. This will help them make an informed decision about whether or not a particular brokerage is right for them.
Making the switch from one brokerage to another can be daunting, but it doesn’t have to be if you take the time to figure out what’s important to you!
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