Best Real Estate Company To Work For
Choosing the best real estate company to work for is often a difficult decision for many agents to make. One of the prerequisites for representing clients in most of the states is that a real estate agent has a sponsoring broker. There are different types of brokers in the US, so the first important decision is choosing the most suitable to join.
What are the different types of brokerages?
There are three main types of brokerages in the US: national franchise, boutique, and virtual.
1. National Franchise Brokerages – A Competitive Environment
Examples of brokerages that are national franchises include Keller Williams and Re/Max. These large brokerage companies sell the rights to use their business model, name, and branding to a broker. They also charge the broker for every deal they close at a set percentage rate. Rules and regulations about how these franchises are run are set by the head office of the company, and the franchisees must follow these closely.
There are certainly some pros for agents choosing this type of brokerage because these offer credibility and visibility. Real estate franchises have intensive training programs, use technology to their advantage, and offer marketing solutions for agents.
However, due to their large size, there are also some cons when it comes to working in these real estate franchises. The whole environment is often too impersonal, and there is huge competition for leads and promotions. Management is usually not allowed to make decisions about changes, and approval for these must come from head office, which often takes ages. Finally, agents often feel like their development is not noticed or valued because of the size of these agencies.
2. Boutique Brokerages - Offer Flexibility and Growth
The real estate market may have appeared a bit sluggish at the start of 2020, but it soon surpassed all predictions, breaking records as demand grew. Boutique firms have come in on their own across the U.S. since they offer specialized customer service and are locally owned and run. Boutique brokerages also deploy a range of software tools and serve their clients with professionalism. Unlike what many people believe, they don’t only cater to the high-end market.
Some examples of boutique brokerages include Iron Valley Real Estate at The Beach in Rehoboth Beach, Delaware, Bayside Real Estate from Los Angeles, @Properties in Chicago, and Core Real Estate from Manhattan.
The pros of using a boutique brokerage are many since these have evolved their marketing and use of technology to meet the needs of their clients and their dedicated agents. Agents at boutique brokerages get individual nurturing and coaching, there is less competition for new leads, and teamwork adds to the general camaraderie.
Importantly, agents also have more flexibility in how to market properties, and the decision-making process is much faster. Finally, many people don’t realize that boutique agents have quickly caught up with, and in some cases, they have overtaken national franchise brokerages as far as technology is concerned.
Not only do they offer the same Multiple Listing Services (MLS) as other agents, but many have also developed their own online sales platforms and other software tools. One example is Iron Valley Real Estate At The Beach. Its owner Jay Lesko created an online sales platform Cinc Pro for the exclusive use of his clients and agents. The agency saw immense growth in the past year, growing from zero to thirty agents while also reaching the ranks of the top ten brokerages in income generation.
Despite having less brand recognition and smaller marketing budgets, boutique brokerages have come into their own of late.
3. Virtual Real Estate Brokerages – The Best of Both Worlds
Software as a service (SaaS) real estate software has also created job opportunities for real estate agents at virtual brokers. Real and eXp Realty are two of the best-known virtual real estate brokerages.
The pros for these agents are that they can work from the comfort of their homes and they earn attractive commission splits. Because the agents work from an out-of-office environment, these virtual agencies have some excellent CRM and other tools for their agents to work with. Virtual work also means an end to boring meetings, training sessions, and social outings.
However, there are cons for agents working for virtual brokerages, especially for newer agents, since they are isolated from their colleagues. Virtual brokerages offer agents fewer opportunities to discuss, train, and network, all very important for growth in the real estate business.
Should You Work Alone or Join a Team?
Real estate agents are often offered a choice to work solo or join a team when they associate their license with a brokerage. When an agent joins a team, it means they will work under a more experienced agent.
Going solo means more money in the agent’s pocket and more autonomy. However, a solo agent is responsible for their own lead generation and must make sure to have a large enough cash reserve to carry them until they start earning commission from sales.
Within a team, the agent has a lower commission split but will immediately have leads to follow. Joining a team is the best option for a new agent without much experience.
Commission Plans and Fee Structure
Brokerages all offer different commission splits and charge different fees. Before deciding, it's best to understand the types of commission plans and what they mean.
1. High Split
Here the agent can expect to get anything between 70% to 100% of the commission paid to the brokerage. They can expect to pay certain fees to their brokerage which may include training, desk fees, and transaction fees. Some of these fees are paid monthly, whether the agent has earned a commission or not.
2. Traditional Commission Split
The traditional split plan means that the brokerage and the agent agree on a split of the commission earned. This is usually about 50/50 or 60/40. Often, with these plans, there are no other fees involved.
3. Hybrid Split Plans
These plans are usually offered to agents on a tier system and their split increases as their sales grow or the set goals are met.
How to Choose the Best Commission Plan?
Choosing the best commission plan will depend on the experience of the real estate agent, and hybrid splits are usually best for new agents. However, before an agent decides what’s best they need to ask for offers and compare them.
Before signing their real estate brokerage contract, the agent must understand the commission structure, what fees they are liable for, and how leads are distributed at the brokerage.
Understanding Potential Success Factors
Besides commission splits and the type of brokerage, an agent also needs to evaluate other potential success factors of the brokerages they are considering.
These include the market share of the brokerage, its reputation, training plans, online presence, its office environment, and culture. These are all indicators of the company’s success and the team spirit that exists at the company.
Choosing the best real estate company to work for requires some serious research and delving. However, once the pros and cons have been weighed and the choice is made, real estate agents can have a potentially brilliant career, especially at a time when houses are in such great demand.