Becoming a real estate agent can be difficult, but can also be a great way to make a living. Getting a real estate license is only part of becoming a real estate agent. Before you sell any houses, you will have to find a broker to work with. Real estate brokers all have different commission splits and offer varying amounts of service for their agents. The type of broker a new real estate agent wants will vary based on that agent’s needs and goals. An investor who only wants to get a license to help them buy their own houses, will not need the same type of broker as an agent looking to make a career out of real estate. It is not easy finding the perfect broker for your needs, but it is extremely important you to do so.
Why do real estate agents have to work under a broker?
When a real estate agent gets their license, they have to start working with a broker before they can sell any houses according to licensing state laws. I discuss the process in more detail in this article. Purchasing a house will be most people’s biggest purchase in their life and agents should take it very seriously. When a real estate agent works for a broker that broker takes on responsibility for that agent. A new real estate agent will have to work under a broker for a certain amount of time before they can start their own office.
What will a real estate broker offer new agents?
Depending on the brokerage, there will be intensive training for new agents, some training or no training at all. Brokers will also offer varying commission splits for new agents. Usually the less training and services offered to a real estate agent, the smaller the portion of the commission the broker keeps.
Brokers also may offer office space to agents, administrative assistants, advertising and some brokers even pay for agents to get their license. Other brokers will pay for nothing, offer no office space, no office administration or help at all. The less services a broker offers, usually the less commission split they will keep.
How does a real estate agent know what broker is best for them?
Every new agent has different goals and aspirations. Those goals will determine what type of broker will work best for them. A real estate agent who only wants to use their license for their own investments may want to work with a broker that offers no services or training and leaves the agent with the highest commission split. Some brokers only charge a small transaction fee on each closing, which leaves the investor agent with the most money. However these brokers offer almost no support, and it will be up to the real estate agent to create all of their own business and to train themselves.
A real estate agent who is looking to start a career out of real estate will want a broker that will offer training and accountability. The agent might make less money on each deal with a higher commission split going to the broker, but they will probably sell many more houses and make more money with training and accountability. Many new agents will choose a brokerage based on the best split they can get, but it is not easy to sell real estate without help. If you do not sell any houses, it won’t matter what your commission split is with the broker.
If a real estate agent has a team or is planning to create a team at some point, make sure you ask potential brokers how they structure teams. Some offices are very team friendly and others are not.
Real Estate Express is a great real estate school that three of my agents have gotten their license from.
How do you find the best real estate broker?
Once you decide what type of broker you want to work with, you have to find them. I think it is best to work with the brokers that are selling the most houses. If brokerages are selling many houses, the community will recognize the company name. Buyers and sellers want to make sure the agent or company they are working with does business and knows what they are doing. Even if an agent is brand new and has never sold a home, the company they work for may have a great reputation for selling houses and the buyers or sellers will assume that agent does as well. Another advantage of offices that sell many houses or have many leads is they provide leads to their agents. Some offices offer floor time or other lead services, which can be a huge boost to a new agent’s business.
To find the offices of brokers that do the most business, look on Zillow or another house listing site. Look for what offices list the most houses in your area and start calling the offices. Most brokers are actively looking for new agents and will be excited to talk to you.
You should be able to set up a meeting with a couple of brokers to see if they are a good fit. If they aren’t what you are looking for, ask the broker what office they would suggest you work with. Don’t be shy to ask for help or suggestions. If you are having trouble finding brokers to talk to try these techniques as well.
- Ask friends and family what real estate offices they have worked with
- Check Facebook for real estate agent or office posts; they are all over the place!
- Do a simple web search for real estate in your area and many offices will pop up
- Ask title companies or lenders what agents or offices they work with
- Ask the real estate school you took your training with who they recommend
After enough calls and meetings you should be able to find a few brokers to talk with.
What should you ask a potential real estate broker?
When you start talking to brokers to see if they are a good fit, you need to know what questions to ask. Before you ask these questions, it is important you know what you want their answers to be.
- What commission splits do you offer real estate agents? This can vary from 50/50 or less, to 100% with a transaction fee. Commission splits can also vary based on how much business you do.
- What services do you offer your real estate agents? Do they offer administrative assistants, a showing service to set up appointments on your listings, advertising, do they pay for signs, do they have a website for their agents, do they provide email addresses, office space, phone service, printers and paper, computers etc.
- Do you charge buyers or sellers a transaction fee on top of the commission? Some offices do this and it is a surprise to the clients meaning the agent sometimes pays it.
- Do you offer lead generation for the real estate agents? Is there floor time available, does the office work with Zillow or another lead generation source, how is it determined who gets these leads and floor time?
- How much office time is an agent expected to put in? Is there an at home or part-time agent option (not suggested)?
- What kind of training does the real estate broker offer? Do they have mentors, accountability, courses or other training for new agents and is it mandatory?
- How many agents are in the office and is the office losing or gaining agents?
I cannot give you the answers to these questions. However, I can tell you it is much more important to choose a broker with the best training, rather than the broker with the lowest fees. It is much better to sell 20 houses your first year and pay 50 percent of your commission to the broker, than to sell 1 house in your first year and pay only 10 percent to your broker.
What if you choose the wrong broker to work with?
If you are already with a broker you do not like or choose a broker that is a bad fit; move! The longer you stay with a broker that doesn’t fit you, the worse off you will be. Depending on the broker, you may lose some listings or some deals you have under contract, but you need to move to a broker that fits you. The longer you stay with a broker that does not fit you, the harder it will be to leave and move on.
Choosing the right broker is a huge part of how successful agents are or are not. Take your time and do not choose a broker simply because they have the highest commission split to you. If you need help choosing the right broker, I offer coaching with my Real Estate Agent Success System.