In the vast world of real estate, you’ll have multiple options when it comes to choosing a broker. Should you go with a well-known franchise, a boutique firm, or an online broker? These types of brokers vary widely, so you’ll want to consider your personality, work environment preferences, and the level of support you need.
Brokers can help you get a good start in your career, but keep in mind that you’ll need to be proactive to find leads and grow your business. In this article, you’ll learn some key information on brokers and how to choose the right one.
Types of Brokerages
Not all brokerages are created equal. Here are the pros and cons of the three main brokerages:
National firms like Keller Williams, Coldwell Banker, and RE/MAX are reputable and well-known across the country.
Pros: National firms provide brand recognition and educational courses for agents.
Cons: Franchises have a less favorable commission split.
Best For: New agents looking for the most support at the start of their careers.
Small, localized brokers have fewer clients than national franchises. However, this allows many boutiques to focus on delivering quality customer service.
Pros: Personalized and focused on excellent service for clients. Provides one-to-one training and mentorship.
Cons: There may not be as many leads available compared to a franchise.
Best For: Agents who are team-oriented, and want more hands-on experience and mentorship.
As the name implies, this type of brokerage conducts business entirely online. eXp Realty and Real are two examples of cloud brokers.
Pros: Everything is available on your devices.
Cons: Not everyone is willing to do business with virtual brokers or knows much about them. You should exercise caution when looking for legitimate brokers online to avoid scams.
Best For: Agents who are tech-savvy and prefer remote work may find this option enticing.
Mentorship, Coaching and Training
Real estate licensing courses teach agents about following the law and the ethics of the profession. However, they don’t typically cover a real estate agent’s daily workload. You’re responsible for finding the broker with the type of learning opportunities you want, so ask the brokers questions! Decide if you want live instruction, online courses, conferences, etc., and find out the costs.
Find out if your prospective brokerage has a mentorship or new agent training program. Experienced agents will often mentor newer agents using practical and hands-on training. Look for additional opportunities when getting started to interact with other agents who have more experience than you.
The Commission Split
Types of commission splits vary widely among brokers but the general idea is the same.
Math Example: Let’s say you sell a $300,000 house. A 6% commission gets paid to your broker, who then splits the commission between you and the buyer’s agent. That 3% commission or $9,000 gets split between you and the broker. If you had a 50/50 commission split, that would mean you’d take home $4,500 before expenses or taxes.
As you gain more experience your broker should offer you a better commission split.
There are many services that brokers provide to their agents. Every broker offers different services, and some require you to pay monthly fees. Some examples of services include marketing materials, workspace, office supplies, signage, and ad space in newspapers and online platforms.
When you’re choosing between brokers, interviews are a valuable way to gather information. Ask to set up interviews with at least three brokers and do your research before you talk with them.
Sample questions to ask:
- What is the culture like at this brokerage?
- What marketing and lead generation tools will I have access to?
- What are the top three reasons agents cite for leaving your brokerage?
- How are leads distributed?
- Will I receive a workspace, and if so, what would I need to provide?
- Does your broker encourage mentorship and training?
- What educational courses do you offer to agents?
- What fees am I responsible for paying?
The Bottom Line
Deciding where to hang your license is no small feat. Consider the pros and cons of each national, boutique, and virtual brokerage before making a decision. While you might be able to grab national attention at RE/MAX, a local brokerage could provide better mentorship opportunities. Look for broker representation that provides a fair commission split so you can make the most of your commissions, but don’t be transfixed by the ratio—especially if you’re just getting started.
Overall, the ideal representation will support you in your endeavors and give you the tools you need to succeed. While brokerages can certainly supercharge your career goals, it’s important to remember that great agents aren’t a product of brokerages; brokerages are a product of great agents.