Getting your real estate license can really be an exciting experience. You’ll feel great for a while until you remember that you still have to figure out how to pick a brokerage as a new real estate agent. While it might seem stressful, the process doesn’t have to be daunting.
So, how do you select the right brokerage to start your real estate career with?
You have many things to consider when you start working at a real estate brokerage, especially as a new agent.
When you have experience and time in the business, you already know what to look for and how you operate your business. This means that you’ll know what questions to ask, what to look out for and what’s unacceptable to your business.
As a new agent, you don’t know exactly what you’re looking for and the right questions to ask that broker.
In this article, we’re going to uncover some of these questions and talk about some major factors that you should be looking out for and questions to ask when picking your first real estate brokerage.
What Commission Split Am I Going to Get As A New Agent?
This is a fair question because we all know that your commission split impacts your overall gross profit at the end of the year. However, don’t get super hung up on the commission only. This is a huge mistake that many new real estate agents make. We hope you don’t make that same mistake.
Here’s why; as a new agent, you might want some additional support to jumpstart your business. You might also want some leads because cold-calling to get referrals from your friends and family only go so far. Please don’t get so hung up on the split alone because, as they say, a 100% of nothing is still nothing.
If you can get 50 or 60% of a huge business pool, that would be worth looking into. 60% of 100k is still 60k. 100% of even 30k is still only 30k.
When negotiating the split, always negotiate based on the value you’re getting from that broker. Some important questions to ask include:
- Are you going to provide me with leads?
- What kind of systems and software are included if I join this brokerage/team?
- Are there any monthly fees and costs associated with being at this brokerage?
These just a couple things to watch out for. As a new real estate agent, it’s understandable that you might not make any commission in the first few months. However, you’re definitely spending an amount of money to get out of bed each day. This is something you should take into consideration while joining a real estate brokerage.
So, what’s the best commission split for a new real estate agent?
This depends on several factors, such as the market, amount of support, and the resources you get. Before you sign up with the brokerage, make sure you understand how the split works and whether or not it can lead you toward building a profitable business.
Some brokerage firms will give you 100% of the commission. However, they have other ways to earn from you. You might be required to pay for desk fees, transaction fees, insurance, and other expenses in such instances. You might also receive very little to no support at all.
Keep in mind that some brokerage firms nowadays are offering their agents a salary plus other benefits. You might want to shop around if this hybrid model appeals to you. Just keep in mind anything with salary usually means far less earning potential. If you want to control your business and go for real estate millions you need to stay 100% commission.
Build something centered around you and embark on your journey to your first million.
How Do I Actually Get Started?
Now that you are ready to select a brokerage to work with, you need to decide whether you want to work with a franchise or an independent firm. Franchises have offices all over the country, while independent firms might serve a specific community for decades.
Franchises might exert more pressure on their agents than independent firms but tend to give more support and training. Independent firms are based locally and have small or mid-sized teams. With an independent firm, you might have more freedom to build your business how you want to.
Generally, there are three major ways to get started. They are:
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Join a big-box brokerage
This would be something like Keller Williams, Homesmart, or Remax. These brokerage firms can be great and offer a lot of value. Many new agents also love joining such firms because they offer a lot of training and support.
One thing you ought to be careful with is that they may be a little bit expensive to be part of. The split structure is going to be a little more aggressive. Frequently they will cap that commission structure. This means that after you close a certain number of deals and pay a specific amount to the brokerage, they’ll put you on what they call a 100% split structure and that usually resets every single year.
There are also other big box broker styles, like Homesmart, where you’re only paying a flat fee per transaction. This can be a really great model as well. Especially if you are more entrepreneurial. The smaller split can allow you to invest more back into your marketing and building your personal brand.
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Join a small independent local brokerage
If you don’t want to go with the big-box brokerage firms, you can join a smaller firm. Most of these small Indy brokers have up to 40 agents. These types of brokerages can give you more one-on-one support, and sometimes you can even negotiate a better split. This is not always the case, but sometimes they will. It’s something worth looking into and see how much they’ll give you on that split.
Always shop around, compare and contrast, and go where it feels right at the end of the day. You might start with one where it won’t feel right, move to another, and work with them for years. I have been with my current brokerage for 6 years now. I started as a solo agent and build my business to the stage I am at now which is operating a full scale team.
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Team Model
If you want leads and a already built system to plug into, you need to find yourself a top producer or a team scaling up. Every single real estate team is going to run a different way.
Essentially a real estate team is almost like a brokerage, but it’s not. It’s inside a brokerage, and you’re going to get additional support. For example, you might get a CRM at no cost, leads, and software tools to to do CMAs. You might even have access to the team leader, who in most cases is selling houses on their own or have a history of being a top producer, and now they’re expanding and trying to scale through other people.
If you really work hard, get yourself into one of these structures, and attract the attention of a good team leader, you’re going to be in good shape. This person is going to help you grow, succeed and get to the next level.
You’re also going to cut a lot of time off the learning curve because keep in mind that every time you sell something, the team leader will make money. They have an incentive to help you sell, learn and make money.
This helps the team grow because, at the end of the year, if they put up a hundred or two hundred sales in the team, it makes their team look really good. It also helps attract more business by having more signs on the ground and getting more referrals to the agents on the team so they can scale.
If you want to have a proven system already put together for you where you can just plug into and start working without having to worry about a business plan, a team might be a really good option for you.
One thing to consider when joining a team is the brokerage the team is affiliated with. Although you’re on a team and you’re going to be on the team’s commission split, that team will also have fees from the main broker in the main brokerage. You’ll have to look into where that team is being parked because every team at every different brokerage will have a different fee structure.
Some teams might cost more money to be a part of for you as an agent joining up, compared to other teams at other brokerages. Make sure you get a good deal layout and see what the actual true cost of being on that team really is.
How’s the Brokerage’s Work Culture?
You have to make sure that the brokerage you’re at feels right. Every brokerage is going to have a different culture in place. There are some brokerages with really great cultures, while others are toxic where you find the main broker or main team leader screaming and yelling at their agents during sales meetings because their follow-up isn’t that good.
Some people might want to be a part of that. Others don’t want anything to do with that. They want to be in a place where there’s a sense of belonging. They want a place ideal enough to make friends, openly discuss their ideas and be part of a growing community.
You just have to decide and figure out what culture is the best for you. Where are you going to fit in best? Where are you going to be the happiest? Most importantly, where are you going to be the most productive?
Dig in and find out what the culture is. If you can, reach out to some of the agents in that brokerage or in that real estate team and find out how they’re doing. Find out how the culture is and what it’s like to actually be a part of a team or brokerage. Digging deeper will help you determine if it’ll be a good fit for you. If it’s not, move on and keep looking.
You also need to consider the people you’ll be working with. An office full of new agents may be full of energy but also chaotic at times. On the other hand, one full of seasoned experts can be stable, but it could leave you feeling isolated. Striking a balance will give you the best of both worlds.
Remember that you don’t have to make a lot of money while feeling miserable. No law in the real estate books stipulates that you have to be woeful to make a living. A good firm can make selling real estate much more enjoyable.
Bottom-line
All brokerages are not created equal. Every broker and team leader is going to have a different structure in place and offer different things. Not every brokerage is the right fit for you. As a new agent, you need to shop around and find out who the right fit for you is.
When you find the right fit for you, remember that commission splits are important, but not everything. Find out what value you’re getting with that commission split. More importantly, make sure that wherever you go, the work culture is suitable for you.
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