HOW TO CHOOSE A REAL ESTATE BROKERAGE TO WORK FOR
Ready to be a real estate agent? Not so fast! Before you kickstart your career as a realtor, there are a few essential steps you have to take to ensure you go about it the right way.
One of these steps includes choosing a real estate brokerage to work “under” – an absolute requirement as a new licensee.
But don’t let this put a damper on your dreams. Brokerages actually offer visibility and marketing pull that are difficult to recreate if you’re working as an independent agent. In addition, the classes you take to become a licensed Agent are designed to help you pass the State mandated testing requirement. They do not help you learn the skills needed to become a great Realtor.
Much like job hunting, finding the right real estate business or brokerage to work for can be a challenge.
That’s why we’re breaking down what to look for, how to weigh your options, and which companies stand out as some of the top brokerages in Arizona.
What’s a Real Estate Brokerage Firm?
A real estate brokerage firm is a group of real estate agents who all work under one umbrella.
An individual real estate broker typically owns the brokerage, but may occasionally be an employee. This position, employs all the other agents in the brokerage. To become a real estate broker, a real estate agent must first work as a licensed Real Estate Agent for 3 years, pass their additional educational requirements, and be recommended by their referring Broker to become a licensed broker.
Each brokerage varies in their offering, but joining one can provide real estate agents with:
- Offices and administrative assistance
- Collateral Materials
- Database and Other essential tools
- Ongoing training
- Lead and New business generation
- Document preparation and storage
- And most importantly advice and assistance with tough situations
Real estate agents working for nationally recognized brands may receive a smaller cut of commissions on sales than do those working for independent real estate companies. However, most find that the name recognition, tools, and support offered at a name brand brokerage helps them gain more clients, and make more money.
What is a “Virtual” Brokerage?
A virtual brokerage is a real estate brokerage that’s run entirely online.
There are no central in-person offices, and real estate agents that belong to the same brokerage may not live anywhere near one another.
However, most everything else remains the same as a brick-and-mortar brokerage, including ongoing training, access to common documents, and assistance with marketing and other operations.
Reasons to Choose a Virtual Brokerage
Virtual brokerages have some advantages over brick-and-mortar brokerages. However, choosing a virtual brokerage isn’t for every real estate agent and most new Agents find it untenable.
Here are some of the reasons real estate agents choose virtual brokerages:
- Wider service area: Because virtual brokerages aren’t bound by one geographic area near an office, real estate agents can join from anywhere in the country. In some cases, Agents can even move to a new real estate market without having to find a new brokerage to join.
- Easy access to information: Virtual brokers often have sophisticated digital document storage systems and apps that are accessible from smartphones and other mobile devices. This allows agents to work from anywhere in the world.
- Lower brokerage cut: In some cases, the lower overhead means that the brokerage passes the savings on to the agents and consumers. Agents receive a larger portion of the commission fee, and the overall commission fee may be lower.
How Much are Traditional Broker Fees?
You’ve heard the old adage, “You get what you pay for”? This is the case with typical brokerage fees. Finding the brokerage with the right amount of brand recognition, training, broker support, and leads is key and should be based on each Agent’s business growth goals.
The independent or “no-name” brands often offer very small commission splits. In most cases they will have a per transaction fee, a desk use fee, or both. In this model, very little to no broker support, business development, and leads are offered. Typical costs in this model are $75.00 per transaction and a $400 monthly office fee. Agents in this model are typically on their own for advertising, marketing, training, and business tools.
The major brands will have higher splits but will also typically have much better resources and broker support. They’ll typically have huge national advertising campaigns, web resources, and lead generation tools that are critical for new Agents. However, they are usually independently owned and operated so Broker support can vary by office. Typical costs in this model are a commission split of around 30% that cap after the first $100,000 of commission earned. These brokerages are typically, full service, they provide all of the tools, training, leads, and support needed.
What Does the Broker Fee Cover?
A Broker fee, or broker split, is the fee or percentage a Broker charges an Agent for the management and support that is provided. The fee is typically subtracted from the commission earned on the sale of a property. In the case of most independent Brokers that fee or percentage is lower. Since they typically have no national marketing and advertising budgets, don’t pay for other costs like signage, lock boxes, and leads, their costs are typically lower than the Brokers who provide everything needed to grow and support an Agent’s business.
How to Choose a Real Estate Broker
If you’re thinking about working for a real estate broker, it can be difficult to choose one from all your options. It’s an important decision and requires a decent amount of consideration, as it can set the stage for your future in real estate.
Wondering how to choose a real estate broker as a real estate agent? Here are some things to consider before selecting the right brokerage for you:
Learn About the Company Culture
If you’re someone who is just starting out and not sure where to begin, or if you need hands-on support from your co-workers, look for a brokerage that has this type of culture. A National brand could be right for you.
For those who are more lone wolves and prefer to do their own thing, that type of support and management can seem suffocating. You could be a candidate for an Independent brokerage.
Decide Between Franchise vs. Independent Brokerage
Next, you need to decide whether you want to work for a nationwide big-name brokerage, such as Century 21 or Coldwell Banker, or if you’d prefer to work for an independent brokerage.
Some bigger franchises may have more rules for their real estate agents to follow, but the opportunities and name recognition are often larger for agents looking to grow their client bases. Smaller firms may work better for people who wish to have more freedom, but the lack of support may make success more difficult.
Check Out its Reputation
You may already know the reputation of the brokerage you’re hoping to join, especially if you want to join a larger brokerage with a strong presence in your area.
Tour the facility and meet the people working there. You can tell a lot about a place by how you are greeted. Look to see if things seem hectic or if there is structure and order. When you are new, having a well managed office, where people have time to talk to you and answer your questions is critical.
Ask about the age of the firm. Remember, real estate is cyclical. If an office has been around awhile it’s proven that it can adapt and grow and is likely part of a well run organization.
Choose a Niche or Go General
Some real estate brokerages only work with properties in a certain niche, such as office buildings or high-dollar homes.
If you want to work in these niches, find a brokerage that tailors to them for the best results getting leads. For those who don’t want to work in a specific niche, a general brokerage is sufficient.
Notice What Technology is Available
Does the real estate firm have its own app or set of real estate-focused software available to all its agents? What sorts of programs and platforms will you be expected to use if you work for the firm? Do they provide a CRM and transaction management tools? Do they have lead generating and management tools?
The real estate industry is fast-paced and adding new technology all the time. Find a brokerage that uses a level of technology you want to see in your working life or one that offers training for those unfamiliar with new software.
Ask About Support and Training
The best real estate firms offer ongoing education and training to their agents to help them keep pace with changes in the industry.
Find a firm that offers frequent in-house or online training. Ask if their are mentor programs, marketing classes, and continuing education courses.
When it comes to support and training, we’ve got you covered.
Check out Chapter 8: Online Realtor Continuing Education.
What are the Best Real Estate Brokerage Firms to Work for?
You know what it takes for a great real estate brokerage to make the cut – now it’s time to choose the best one for you.
It is a personal choice, as each real estate firm is going to have its pros and cons, and no two real estate agents will choose the same brokerage as their top pick.
Here are what we consider to be some of the best real estate brokers in Phoenix AZ, and beyond:
1. Century 21
Century 21 was founded in 1971 and now operates in 80 countries.
There are more than 127,000 Century 21 real estate agents in approximately 9,400 independently owned and operated franchised broker offices. They are considered to have the highest name recognition of any real estate company in the world, and have consistently won the J.D. Power award for all four categories of excellence in customer service.
2. Coldwell Banker
The Coldwell Banker brand is the oldest and most established residential real estate franchise system in North America. In fact, in many ways it was the original real estate “start up.” Founded by young entrepreneurs Colbert Coldwell in 1906 and later Benjamin Banker, Coldwell Banker changed the way people bought and sold homes across America, ultimately becoming one of the most trusted real estate brands in the world. More than 100 years later, the Coldwell Banker network is still continuously recognized for its innovation and leadership across 3,000 offices in 49 countries and territories.
3. Sotheby’s International Realty
Sotheby’s International Realty is a luxury real estate brand founded by Sotheby’s Auction House. As of 2016, there were more than 19,000 sales associates at approximately 850 offices in 65 countries and territories globally. Become a part of this global team by checking out their application process online.
Real Estate Brokerage Summary
Choosing a real estate brokerage in order to jump-start your career and start making real estate sales doesn’t have to be a hassle. Like any job hunt, you can find the right fit with a little research, patience, and a positive attitude.
Brokerages want to hire agents that will bring something to the table.
If you are able to sell yourself and communicate how you will help the agency, chances are they’ll be confident that you’ll be able to sell houses too.
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