Posted by: Jim Normile, CRB, E.MBA, JY Monk Real Estate Instructor
September 29, 2015
Congratulations! You passed the state licensing examination and are now ready, willing and able to join the ranks of one of the world’s oldest professions. Getting started can be a confusing and overwhelming process, combined with the critical decisions that need to be made early on.
The real estate industry is unique in regard to the many pathways you can take as an agent. Some agents work independently from a home office, while other agents opt to work for independent, regional, or national franchise firms. Your first task is to decide where to work.
Deciding Where to Work
An interview with a real estate brokerage isn’t a typical job interview. The real estate brokerage house needs you as much as, or more than, you need them. So this is your opportunity to ask questions and figure out if the brokerage is the best place to start your real estate career. When interviewing brokers and brokerage firms, the following questions and topics will help you learn more about what it’s like to be a broker at this particular brokerage, and whether or not it’s a good fit for you.
Commissions and Fee Schedule
Each brokerage house operates differently in regard to commission splits, bonuses, property management commissions, office fees, desk fees, franchise fees, lead generation fees, technology fees, referral fees, insurance fees, and so on. When interviewing, there are two key components of the equation to understand in regard to commissions and fees:
- What commission and bonus schedule is offered, both short term and long term?
- Exactly what weekly, monthly, and yearly fees will be charged?
Key point: Do not prioritize the commission split being offered as the number one reason to join a firm. Ask yourself, even if the firm paid you 110% of all commissions generated, but you had no access to leads, walk-in traffic, formal training, referrals, mentoring, and so on, what are your realistic odds of initially generating income? They’re probably not very good. A 110% commission split of zero dollars generated equals no income.
Consider the following in regard to location:
- Does the physical office location present itself well to vehicle and pedestrian walk-in traffic?
- On average, how many potential buyers and sellers walk in to the real estate brokerage on a daily basis?
- Is the office location in reasonable proximity to your future niche market?
Consider the following in regard to the culture of the brokerage:
- Do they have a Policy and Procedure manual you can review?
- Does the office offer “agent opportunity time?”
- How are company-generated leads distributed to agents?
- Approximately how many company-generated leads can you expect to receive each month?
- How much do you pay for company-generated leads?
- On what holidays is the office closed each year?
- Does the office conduct scheduled trainings or office meetings?
- Does the office routinely caravan agent listings for exposure and inventory awareness?
- Are you requited to purchase and maintain any specific company-mandated insurance policies for Errors and Omissions or your personal vehicle?
- Will you be sponsored or reimbursed by the company for any real estate certification or designation courses?
- Does the brokerage owner or sales manager list and or sell homes (competing broker)?
- Are all incoming sign calls directed to the agent on duty or forwarded to the listing agent?
- What is the office and agent safety plan?
Consider the following in regard to technology:
- Specifically, what technology resources are available (e.g., internet, secure wireless connectivity, printing/fax options, forms software, MLS access, digital cameras, etc.)?
- Which web-based platforms and social media brands does the company provide formal training?
- Which web-based software is utilized for transaction management (e.g., DotLoop)?
- Does the company provide a Client Relationship Management (CRM) program?
Consider the following in regard to training:
- How many hours or days per week is formal in-person training presented?
- Does the company offer or recommend a specific new agent training track?
- What specific web-based new agent training is available?
- Is there a cost for training?
- Will you be assigned to a mentor?
Marketing and Advertising
Consider the following in regard to marketing and advertising:
- Are there company restrictions or guidelines to farming specific neighborhoods or niche markets?
- Will you be allowed to hold other agents’ listings open in order to attract buyers to help you acquire leads?
- Will you be allowed to advertise any company or fellow-broker listings in order to generate leads?
- Will the company pay for or reimburse you for advertising?
- Are there any advertising restrictions?
- Are preformatted templates available?
Franchise or Independent
One of the most fundamental and common questions new real estate agents ask is, “Should I work for a franchise or non-franchise (independent) real estate office?” I have managed and owned both, and each model possesses advantages and disadvantages. Each market center also views each model subjectively. Here are some basic pros and cons to consider during your due diligence process.
Franchise Office (e.g. RE/MAX, CENTURY 21, etc.)
|Name brand recognition||Less freedom in some advertising initiatives|
|Advanced internet-based resources||Less freedom in some branding and marketing|
|Larger U.S. and/or global listing inventory|
Higher costs and initiation fees
|More formal and web-based training available||Less agent input to corporate leadership|
|Access to national/regional client referral programs||Referral fees|
Independent Office (eg. Jacksonville Realty, The Smith Group, etc.)
|Flexibility||May be resistant to change|
|Lower cost to agents||Smaller intra-referral network|
|More freedom in advertising initiatives||Fewer internet-based training programs|
|More direct input to ownership||Depending on market, less brand recognition|
Always remember that customers, clients, and rival brokers will seek you out either by referral, as a community real estate placemaker, or because you have proven yourself worthy. Your success in real estate will depend more on your initiative and ability than the brokerage where you choose to hang your license. In light of that, choose a brokerage whose business model best matches your needs.
Jim Normile has worked as a broker, sales manager, real estate instructor, and co-owner of two franchise offices. He has listed and/or sold over 4,000 homes. Jim holds a Bachelor of Science, Real Estate, Summa Cum Laude, and Executive Master of Business Administration diplomas. He has been recognized as a Realtor of the Year, featured in Top Agent Magazine, nationally ranked in The Wall Street Journal Top Agents in America, inducted into the RE/MAX Hall of Fame, and is the author of Responsible Influence in New Home Sales.