Now that you have your real estate license, the first thing you need to do is get a real estate broker. Depending on the state, this process may start early if you’re required to have broker sponsorship when you take the real estate exam. Do not allow this to overwhelm you. The following are five tips on how to choose the right real estate broker.
1. Learn about commission splits
The majority of real estate agents are paid by commission. Make no sales, and you won’t get paid; however, when a purchase is made, you must give half of the commission to the broker that is sponsoring you. Not all broker commission structures are the same. Although some have salaried positions, this is very rare indeed. Many things can determine which broker to choose. For instance, items such as the company’s market share, resources, environment, reputation, and training opportunities may affect your decision. All of this is important, but make sure your chosen broker provides a satisfactory commission split. Understand that most divisions get better as you learn more and make more sales.
Exactly how does a commission split work? If you sell a home that sells for $300,000 and the commission is six percent, the buying and selling agents are each entitled to three percent. This means they have to split $18,000. Then you would have to turn around and cut your portion, which is $9,000, with your broker. If your agreed-upon split is 60/40, then you would get sixty percent of $9,000, which is $5,400. This is your share before taxes and expenses are taken out.
What is a satisfactory commission split? It depends on numerous factors such as real estate agents, the industry, and broker support and resources. Understand what’s going on when it comes to your commission split. Also, know that it should get more significant as time goes by.
Be advised that a lot of brokerage firms will offer you a salary with benefits, which is known as a hybrid model. As a realtor, if this sounds like a better deal to you, then look for companies that offer this type of payment option.
2. Research how brokerage firms work
Do your research before picking your broker. Do you know what type of company you want to work for? Do you want to work for a company that offers a sound support system? Brokerage firms are no different from regular companies. They have corporate environments, as well. Find one where you’ll fit in.
Do you want to work for a mom and pops company, or do you want to work in a franchised environment? Do you feel more comfortable in small intimate settings, or do you like a larger group environment instead? Talk with different real estate agents to determine if you like where they work and how their companies function.
3. Independent or franchise brokerage?
When deciding upon a real estate broker, determine if you want to work with an independent or franchise brokerage. Larger brokerages such as RE/MAX and Keller Williams have offices nationally. A smaller independent firm might only be located in a specific city or state. Although larger franchised companies are more controlling, they offer the average realtor more training and support than the smaller independent company. Smaller companies are usually located in one region, but they offer more flexibility.
According to the National Association of Realtors, 57% of all real estate agents choose to work for independent companies. If you love freedom and hate working in corporate America, then stay away from the larger franchise brokerages such as RE/MAX or Keller Williams. But, then again, if you love brand recognition and loads of support and training, you probably won’t be happy with a smaller independent brokerage company, says this website.
4. Research its reputation and target market
Pretend to be a buyer and perform a Google search for each prospective brokerage firm. Use the phrase “home for sale (your city of choice).” What results do you see? Not only do you want to find a broker that has a large market, but you also want it to be very credible and reputable. With a larger market, there shouldn’t be any problems finding leads. Obviously, a good reputation speaks for itself.
You should also be concerned about the brokerage’s niche. The right niche can help maximize your income potential. Factors such as your lifestyle, interests, and area opportunities can all impact the outcome.
5. Confirm that support is available
A good broker is hands-on and knows how to mentor you. It will provide free training and marketing collateral. Bad ones do nothing more than offer space for you to work on your own business opportunities. This type of brokerage may offer a few helpful classes or have random office meetings, but you’ll basically have to find your own success. Then, of course, there are other companies that may be a mix of good and bad. Thus, find the company culture that works best for you.
As a newly licensed real estate agent, it is imperative that you consider these five tips when trying to find the right real estate brokerage firm. This process includes doing a lot of research and speaking with plenty of real estate agents. Make sure you visit various brokerage firms and learn about their company culture and policies. This is the only way to determine which one can contribute the most to your success. Assess each company’s style of doing business and determine if it matches your expectations and goals.
Why is it important to choose the right real estate broker? Why should you take this whole process very seriously? You are a new realtor who is trying to learn everything there is about the real estate industry. You’ll have plenty of questions to answers because you have a lot of learning at this point. You need to have an experienced broker who can mentor and help with your training.
In the beginning, you won’t have enough money to generate leads, handle marketing, and conversion on your own. This is how a broker can help you during this time. Use his tools and guidance to put your real estate career on the right path towards success.