If you are a real estate Broker or Team leader losing agents is never fun. In this post we dive into the top 5 reasons agents change brokerages.
We found there are many reasons agents change brokerages but among the many we found 5 of the most common that seemed to come up over and over again.
Changing brokerages is a big deal for most agents. Here are some of things agents make the jump to another brokerage for.
Lead generation
Let’s face it. Lead generation is a challenge that many agents face and struggle with. A lack of leads can sometimes mean a lack of closing.
The easiest way for another broker to recruit your agent is financial trouble. If you want to keep agent retention high you must work with your agents to make sure they are closing deals.
It is true that some agents do not need or want leads. Sometimes more experienced agents will have their own book of business or even have figured out how to generate their own leads.
If your brokerage business model does not offer leads there are some simple solutions to this problem.
Recruit Teams
As a broker recruiting teams can be a big win. Not only will you get multiple agents but you will also get a team leader who likely has training, systems and leads to offer agents.
This can solve your agent lead problem. If you do not offer leads at your brokerage and you have agents that need them, you can connect them with a team at your brokerage.
This is a huge win/win situation. The team leader will be thankful that you are supporting their business as the broker and the solo agent looking for leads will not have a total system with leads and mentorship.
Team Leaders Recruit
Another benefit to recruiting teams to your brokerage is the boost in recruitment you will get from the team leader.
Team leaders are often times looking to grow their business and hire new agents just like you are as a broker. Most team leaders will be recruiting machines also building relationships and attracting new agents to the brokerage.
Think about the leverage you get when your team leaders are out in the field looking for new talent every week. Once they find and hire that talent your brokerage will grow as their team gets larger and larger.
Sign Up For Lead Referral Programs
The main reason brokers choose not to offer leads is the cost structure. Let’s face it. Leads are becoming more and more expensive.
Offering leads to a large brokerage presents many problems. If your agents are not following up and calling leads you will waste a lot of money.
A successful lead buying program must be carefully managed or you are likely to loose a lot of money.
To avoid the high cost of buying leads sign up for a lead referral program. Think of company’s like OptCity.
The program sends leads over up front and then collects a referral fee when they deal closes.
The fees in these programs can be costly. But they might make sense for a agent looking to generate new business without investing a lot of money upfront into lead generation and marketing.
Monthly Overhead Fees
Nobody likes ongoing fees. Especially if you feel like you are not getting value from it.
Some brokerage models have high monthly fees that they charge their agents.
Therefore this can be a great business model for brokerages as it keeps monthly revenue steady and consistent. Just remember you must continue to add value and keep your agents happy so they are happy to keep paying the monthly expenses associated with your brokerage.
Training and Mentorship
Real estate sales people are arguably one of the most under trained group of sales professionals in the sales industry. One of the main value propositions you need to offer your agents is quality training that helps them be successful in every market.
But why don’t most brokers invest money into training their agents? Well, it probably has to do with the high turn over rate in this industry. They know 87% of new real estate agents are going to quit the business and go back to their 9-5.
Although this might make sense in the short term we do not believe it makes sense in the long term. Here is why, some agents that fail could have been saved if they just had guidance. Can you imagine how many agents who had the potential to be very successful never realized that success due to a lack of direction and training?
Investing in your agents can help boost retention and long term ROI. Better training often times leads to better sales numbers and revenue for your brokerage.
Office Culture
Office culture is a bigger deal than you might think. Most real estate agents want to work at an office with good vibes. As the brokerage you must create a culture agents want to become a part of.
I know, this might be surprising considering many real estate agents work on the road or from home. But consider this, many agents who start out in real estate sales are trying to escape a 9-5 job that they hate.
Most agents want to love where they work. It is important to them. Focus on building a office culture that people love being apart of and watch your agent attraction and agent retention sky rocket.
Commission splits
Most real estate brokers believe this is the most common reason agents change brokerages. But we would argue that it is not. Think about it, how many real estate teams and brokerages are charging lower splits than you?
Probably a lot! But the agents still stay at that brokerage or team. They stay because they are getting enough value to justify the lower commission split.
Do not get us wrong, commission splits DO matter to real estate agents. Just maybe not as much as you think. If you can provide all the things above you will be able to retain agents while still charging a more profitable commission split.
Conclusion
Real estate agents change brokerages for many reasons. But the must common reasons might surprise you. We found agents are not changing brokerages based on commission splits alone as many brokers believe.
If you want to retain and attract real estate agents you must focus on creating value. Agents want support, training, and a great office culture where they feel like they belong. If you can build this you will have great success.