What Should Real Estate Agents Look for in a Brokerage?

What Should Agents Look for in a Brokerage? 

The job of being a real estate professional has never been easy, but hanging your license with the right brokerage can make a big difference in getting your career off the ground or reaching new heights of mastery. 

While there are seemingly endless training courses and systems for agents outside of the brokerage concept, agents have traditionally looked to the brokerage to provide the tools, resources and knowledge base to help fuel their professional efforts. 

In that way, agents aren’t just looking at brokerages for transaction paperwork and licensure compliance, but also for performance support, guidance and technology.

However, not all brokerage opportunities are created equal. Here are the key facets agents should be looking at when contemplating where to hang their license and what to expect from their brokerage:

Value, Fee Structure

When it comes to brokerage fee structures, there are a few concepts you’ll want to be aware of. To begin with, think of your brokerage relationship in terms of what you’re getting for what you’re paying. 

Typically, brokerages charge a combination of monthly fees, transaction fees, and also have a “cap” on how much is paid out to the brokerage in total. 

The monthly fee is typically set up to cover access to brokerage resources, support, paperwork review, etc. These monthly fees are often somewhere in the $30 to $100 range, and sometimes higher or lower depending on the offering. Agents typically have a credit card on file from which monthly deductions are processed. 

When it comes to commission splits or transaction fees, these are the fees taken out of an agent’s commission check upon successful closing of a transaction. Commission splits can be all over the map, but most common is to find splits somewhere in the 15% to 36% range .Alternatively, some brokerages offer a flat fee instead of a split. Sometimes these flat fees are as low as a few hundred dollars and can keep the bulk of the commission in the agent’s pocket, but again, these fees - whether commission split or flat fee, are usually commensurate with the offerings and resources provided by the brokerage to the agent.

Cap is the total amount of commission you pay out to the brokerage. For example, an agent may have a 20% commission split, meaning that they pay out 20% of the commission amount to the brokerage, but once they’ve “hit their cap” and paid out a total of $16,000, for example, they keep 100% of their commission (or at least the bulk of their commission) from that point forward. 

Ultimately you’re looking at a combination of the monthly fee, transaction fees and commission split, and weighing that in relation to what you’re getting from the brokerage, in order to determine the value provided by your brokerage relationship. However, it’s not necessarily always about paying the minimum - real estate is a hard job and the right resources from your brokerage can truly make a difference. 

Now that we have covered the cost side of the equation, let’s look at those resources typically provided by brokerages to empower their agents: 

Support

Support from your brokerage, especially for newer and growing agents, is critical. What do I mean by support? Do they offer the training, guidance, resources, etc. to help you put your recipe together for finding and winning business, and thriving in your career. This usually consists of a few facets: 

Training 

What classes and courses are provided to help you get further with your real estate efforts? This includes both the technical - contracts, compliance, rules and regulations, etc., along with performance based training, like how to find and win business, how to build a career in real estate, how to get that next listing, etc. In real estate, so much of the “on the job training” is handled through the brokerage.

Mentorship

Does your office provide a mentor program? Especially for new agents,  having a good mentor is critical. This is the person that you’re calling at 6pm on a tuesday evening, or 2pm on a Saturday afternoon, or sometimes even 9pm at night, because you have to get an offer written, or your deal is blowing up and need guidance saving it, or for any of the other multitude of clients, contracts and transactions questions that can come up. 

With a mentor, you’re typically offering another 10%-15% additional commission split in exchange for their support, guidance and availability. While this sounds like it could be expensive, just know that a good mentor can truly make a difference between getting traction on your initial efforts as opposed to fruitlessly flailing, trying to make things happen. 

However, be careful. Just like a brokerage, not all mentors are created equal. With a good mentor you need a “coach” mentality that is willing to take time out and help you. The problem is many mentors, if not most, have a “player” mentality where they are thinking about their production first,  and care and concern for their mentees feels a bit more like an afterthought. If you’re not getting the proper consideration from your mentor, especially in light of mentorship fees, don’t hesitate to get someone that is going to be there for you when you need the help out in the field.

Coaching 

Not all brokerages offer coaching. Coaching is typically much more hands on and direct than a mentor. While a mentor is usually more reactive in helping you handle the business you’ve opened up, a coach is on the proactive side to help get you dialed in with your business and career building activities. A good coach is like a mentor on steroids, but be careful, not all coaches are great and some will have you doing rote exercises, etc. instead of laser focusing on business building and agent effectiveness. 

Technology

What does your brokerage offer in regard to technology? Most brokerages, even those at a flat fee, offer your backbone agent website, CRM and IDX solution. This is an agent’s backbone tool - the website is their public face and a place where prospective clients can check you out, access resources. The CRM is where you keep track of your prospects and leads. Many systems are set up so that any lead capture on the website is added to the CRM and email marketing applied. The IDX part is what allows people to search for homes on your website, and allows the agent to set up automated email property alerts, which are huge in staying top of mind and ultimately prospect’s business. 

Brokerages should also offer additional technology, including transactions software, valuation tools, etc. Again, how much you’re paying should have some bearing on what you’re expecting on the back-end in regard to technology solutions to help support and amplify your efforts. 

Lead Opportunities (Bonus)

Most brokerages offer the technology, support, and fee structures that agents need to build their careers. Some also provide lead generation opportunities, though usually for an additional cost or increased commission split. Lead gen is one of the hardest and most critical activities for agent success. While paid brokerage leads need to provide positive ROI, a good lead program can save agents significant time and effort, accelerating growth. When evaluating offices, understand any lead offering costs and benefits to determine if the value is there. Quality lead gen through a brokerage partnership can give a vital boost to sales efforts.

In Closing

Think about what you’re paying for, and what you’re getting in regard to your brokerage relationship. Offerings and resources are by no means limited to support, tech and leads, but ultimately you’re thinking about how does this entity help me get ahead? What resources am I getting and how valuable are they for my business, versus what I’m giving up to access them? Ultimately you are responsible for your career and the brokerage is a tool that you plug into. Make sure it’s working for you, and if not, find a home that does.