If you’ve ever dreamed of becoming a real estate agent, you’ve probably wondered about the difference between different brokerages. While all sorts of brokerages can offer great opportunities for agents and home sellers, some stand out above the rest. In this article, we’ll explore how to find the best brokerage for your real estate career so that you can succeed on your first deal and beyond!
How to differentiate between brokerages?
How to differentiate between brokerages
- Look at the brokerage’s website. Does it look like a real estate site? Or does it resemble an old-timey blog where people write about what they ate for breakfast and post photos of their cats? If your answer is “the latter, but I think this is trendy now,” you should look elsewhere.
- Check out reviews from current or former agents! It can be tricky because some agents might be biased toward one company over another—but if there are enough negative reviews out there, you’ll know that things aren’t as rosy as they seem at first blush. You can also see what kinds of training courses or seminars a brokerage offers its staff; if the descriptions sound like something out of the ’90s (or before), that’s not a good sign either! It sounds like common sense advice: use common sense when evaluating brokerships’ websites and social media presence. But if nothing else goes wrong in your search for a new job (and let’s face it—something always goes wrong), hopefully, this will help separate the wheat from the chaff when looking for legit opportunities on LinkedIn.”
What about independent brokerages?
Larger, more traditional brokerages have primarily replaced the independent brokerages of yore. Independent brokerages indeed tend to offer the best commission splits and a more hands-on approach than their larger counterparts, but you’ll still find yourself doing all your legwork without the help of office staff. Plus, if you’re starting and need more capital, you might need more than these commissions to compensate for your lower price.
What is the commission split?
When it comes to the commission split, there are two primary questions you should ask:
- What percentage of the commission will I get?
- The answer to this question generally ranges between 50% and 90%. Brokers typically take a more minor cut than agents when selling homes. Still, some brokers may also take a larger share depending on how long they’ve been working in real estate or if they have other reasons for doing so (for example, some brokers will offer free listing services or other perks). Generally speaking, most brokers want somewhere between 70%-80% of your home’s selling price as their cut. Some agents might try to negotiate lower percentages during negotiations because they don’t wish to have higher commissions eating into their profit margins—but be aware! Lowering your commission can mean reducing your income significantly, which could end up costing you more money overall. It’s essential not only that you choose an agent who has experience negotiating contracts with multiple clients. But also one who understands what kind of costs go into running their business (i.e., advertising expenses) so that they don’t try reducing their compensation without understanding all those factors at play first!
- Will there be minimum or maximum fees? Many offices have set minimums for transactions under $500k, while others have no limits. Still, regardless of where these thresholds fall within each company’s guidelines, some firms need to allow agents any leeway when deciding whether something qualifies as worthwhile enough work deserving compensation.
Who is the broker of record?
The broker of record is the person who signs the listing agreement with your client. This individual has a fiduciary duty to your clients and is held accountable for all actions relating to that client’s deal, including any errors or omissions that occur while working on the transaction. As such, it’s in your best interest as an agent to only work with brokers who understand their role as fiduciaries.
For example, if you were having trouble finding financing on the house and needed help getting approved by a lender. But we’re not allowed to contact them directly because they are “out of network” (remember our discussion about this above), then it would be up to your broker. Who has direct access—reach out and ask for approval from someone internally at that lending institution so that you can see if there are any options available. A good real estate brokerage wouldn’t hesitate for even one second before doing so!
Is there a desk fee or a monthly fee?
A desk fee is a charge that some brokerages charge for using their services. It’s like renting an apartment—you pay one month’s rent upfront, and then you get to use it for however long you’re paying. Desk fees can be as low as $100 or as high as $1,000 per month. You may think, “But why would I ever want to pay someone else money when I could just buy my place?”
The truth is that even if real estate agents don’t charge a desk fee for access to their listings, there are still costs associated with every transaction that goes along with buying or selling a home: researching purchase offers and writing counteroffers, visiting properties and taking photos; preparing contracts; coordinating inspections; negotiating mortgage terms (including interest rates) with banks; coordinating closings on mortgages (which involve a lot of paperwork). And until 2011 in Canada at least (when legislation changed), agents had to pay taxes on their commission income—a substantial chunk of change! In short: working with an agent comes with all costs besides the commission they receive from sales they make.
How long have you been in business?
You want to know how long they’ve been in business and what kind of experience they have. Do they have a full-time sales team? How many agents do they employ? The more employees, the more deals you could close. But be wary: there’s a reason why some brokerages have hundreds of people working for them—they may not be effective at closing deals on their own!
It would be best if you also asked about the agent who will work with you directly. If that person is not an independent contractor but an employee of the brokerage firm, then pay attention to whether or not they are licensed in real estate (this would indicate that they are experienced). It can also help if the agent has previous experience in real estate; however, this is optional as it depends on your goals and expectations from working with a brokerage firm.
What kind of training and support do you offer?
You’ve found a brokerage that has everything you could want. They have a great brand, an extensive list of services and support, and they offer top-notch training programs. Now what?
But wait! Before you join their ranks, there are some questions you should ask about the broker’s training and support programs. Specifically:
- How does the brokerage train, new brokers? Does it offer mentorship or other forms of one-on-one coaching?
- Is there anything special about how your future colleagues were trained that makes them exceptionally skilled at what they do? Does this translate into better service for them as brokers or clients?
Where will I go when I close on my first deal?
As you close your first deal and move forward in this business, it’s essential to have the right team. To help you navigate this next stage of your career, I’ve made a list of some roles that will be useful for you to fill:
- Support Network (your team)
- Partners (investors and other brokers)
- Teacher (of others)
The right brokerage can make all the difference in your real estate career.
In this industry, it’s all about finding the right brokerage for you.
The right brokerage can make all the difference in your real estate career; the best brokerages have some things in common: they offer their agents everything from marketing tools and financing to legal advice. They also provide support with marketing strategy, client management, and ongoing training to help agents grow their skills and business.
Here’s the thing: there are a lot of brokerages out there. There are good ones and bad ones, but the bad ones often look like the good ones at first glance because they have flashy websites and high-dollar advertising campaigns. So which brokerage is right for you? The answer is simple—ask yourself these questions: Do I want a brokerage that cares about its agents and clients or just sales? Will this brokerage provide me with training so I learn everything I need to know about being an agent, or will it expect me to figure it out as I go along? Does it offer support when things get tough instead of leaving me alone in my time of need? Does anyone ever answer their phone when I call or respond when sending emails? If so, they may be worth giving a chance!