October is New Agent Month at Inman. Follow along as we go deeper on the tools, tech and tips you’ll need to survive and thrive in 2024. For curated content crafted just for first-year agents, be sure to subscribe to our weekly newsletter, The Basics.
Due to the lack of inventory, the chaos from the commission lawsuits, economic uncertainties and the pressure to adapt to tech innovations, finding the right broker when you’re a new agent is more challenging than ever. Here’s what you need to know to survive in today’s tough market and thrive as you launch your real estate career.
Many new agents mistakenly believe that passing the licensing exam means they’re now prepared to earn a living selling real estate. Instead, your real estate license is akin to passing the written part of the driver’s exam. After you pass the exam, you still must learn how to drive.
The question is, “Where’s the best place to learn to “drive?” Choosing the right broker to affiliate with is critical to your success. Here’s what you need to know before making that decision.
Begin by asking yourself the following questions
The make-or-break question: Are you adequately capitalized?
The biggest reason new agents fail is that they’re inadequately capitalized. When you first start in the business, you not only have all the startup costs, which typically range between $1,500 to $2,000 to join the MLS, purchase cards and signs, etc., but there is typically a 45-to-60-day lag time between the time you put your first property under contract and when it closes.
To illustrate this point, if you put your first deal under contract when you’ve been in the business for 30 days, you won’t receive your first commission check until 60 days later. That’s 90 days with no income for your business or your personal expenses. The hard truth is that it takes most agents several months before they place their first property under contract.
CAVEAT: If you don’t have at least six to 12 months of living expenses in the bank to cover your start-up period as a new agent (or adequate income from other sources to cover these expenses), wait until you do. The complexities of today’s market make going part-time impractical for many new agents, so wait until you are adequately funded to devote at least 40 hours a week (or more) to your new career.
What type of office would you prefer working in?
Agents succeed in all types of offices. The first question is do you want to work in a brick-and-mortar office, or would you prefer to work from home and affiliate with a virtual (online) brokerage?
If you do decide to work at a brick-and-mortar office, would you feel more comfortable in a smaller office where it may be easier to get to know people, or would you prefer a big office that is bustling with activity? Large, productive offices often have more incoming buyer and seller leads; however, they may not be able to provide you as much personal support as some smaller offices.
If the company is virtual, when you have your interview, be sure to ask about where agents can conduct in-person meetings with clients. Also, inquire about whether the company holds any face-to-face events for their agents. Some companies may have a regional office, but the agents are spread out over a large area and typically work from home.
Are you someone who enjoys working independently, or would you prefer to be part of a team?
If you’re a self-starter and like working independently, then being a solo agent is the right solution for you. The drawback is waiting for those commission checks to start coming in.
On the other hand, if you enjoy working with others, consider joining a successful team. That’s a great way to not only start learning the business but to possibly speed up the process of receiving your first commission check.
When you took your licensing course, did you shortcut the process?
Perhaps the most significant research finding from the large-scale new agent studies I have been involved in is that agents who engage in continuous learning are the ones most likely to succeed in the business. Those who took their agent training over one weekend and failed to take the time to learn the material almost always wash out of the business.
As one broker who hired me to speak observed, “All my top agents were sitting in the first three rows of your session. The ones who really needed to be here didn’t even show up.”
Agents who strongly value education and, in many cases, earn designations such as the GRI (Graduate Realtor Institute) early in their careers represent the bulk of the agents who succeed. The industry’s top producers are avid learners, constantly seeking that extra edge that will help them obtain more business.
What to look for when selecting a brokerage
Before scheduling interviews with the brokerages you’re considering, take time to learn more about each company. Key items to consider include:
How large is the broker’s market share in the area(s) where you will specialize?
Investigate this by driving through the one or two areas where you intend to specialize and notice which brokerages have the most signs in the area. Sellers tend to list with one of the top three brokerages with the most visibility because they believe these companies are generating more buyer calls.
Also, don’t make the mistake of trying to be all things to all clients. The truth is, “Niches build riches.” Decide on two or three areas where you want to specialize and start there.
What is the online footprint of the brokerages you’re considering?
Research Google to determine which brokerages come up highest in the organic search results for your area. Also, search the reviews to find out the broker’s rating on Google and Yelp. If you find a complaint, note how it was handled.
Next, go to ChatGPT and ask it to research the pros and cons of working with each brokerage.
Who is the supervising broker or manager?
This usually is the person who will hire you and will be your go-to person when you need help. In larger offices, however, you may also have an assistant manager, in-office trainer, and/or coach. For each office you’re considering, research these people on LinkedIn and Facebook. Look for reviews as well.
It’s extremely important to determine whether your supervising manager or broker is actively listing and selling properties. A major source of dissatisfaction among both new and experienced agents occurs when their manager competes with them for business. Most new agents prefer to work in an office where they can readily access management assistance when they need it. Having a full-time supervising broker or manager means you’ll be more likely to get help when you need it.
Important questions to ask during your interview
A key factor to your success: Do you have a robust new agent sales training program?
Assuming the company does offer a new agent training or mentoring program, here are the key questions to ask:
- Would you describe how the program works?
- Will I be assigned a trainer, mentor, or another agent in the office who I can shadow and ask questions?
- If the broker/manager is my trainer, how often will we meet and what is your availability when I have problems? (In other words, will they take your calls on weekends and evenings?)
- May I see your training manual? (If they don’t have one, you may want to search for a company that does.)
- In addition to the training, do you offer any mentoring or coaching and if so, are there any fees? (If the answer is “yes,” ask about the cost.)
- Do you have an accountability program to help keep me on track?
Please note that in most small offices, the broker/manager is the trainer. If the company is part of a national franchise, however, it often has access to a franchise-wide new agent sales training program.
What is your commission structure and are there any additional fees that you charge?
Please note that how much you earn is based on how hard you work. If you affiliate with a dead office with little or no support, you’ll have to work much harder to succeed vs. affiliating with an active office with plenty of listings, excellent training, and 1:1 help for you as a new agent. Keep in mind that 50 percent of 10 deals is much more than 80 percent or 90 percent of only two deals.
When you’re considering the “commission rate,” you must also pay attention to the other fees the broker may charge and weigh that against the programs they provide in exchange for that lower commission split.
Types of fees you may encounter include:
- Advertising and/or technology fees.
- Franchise fees (which are paid to the franchisor/parent company such as Century 21, Coldwell Banker, RE/MAX, etc.) These come off the top before commission splits are paid.
- Transaction fees (typically between $250 to $500 per transaction) which may be used to compensate the company’s transaction coordinator who handles the bulk of the transaction once the property is under contract. In other cases, the broker may charge a fee to cover expenses.
- If there are fees, ask if there is a cap on those fees, and if so, how much?
Ask what types of print and digital marketing, and tools are offered
Please note, many full-service companies pay lower commission splits but provide a substantial number of additional services at no charge or at a reduced fee, as compared to higher commission rate companies that provide fewer services.
Examples include professional listing presentation materials; robust print, email, and web marketing programs; in-house Client Relationship Management platforms (CRMs); lead referral programs; and/or relocation programs.
If the broker does offer any of these services, always ask if there is a charge and, if so, how much it costs to participate.
Carefully evaluate which brokerage will best support your success
Before signing with a brokerage, take time to evaluate which brokerage is the best fit for you in terms of the services they provide, the commission splits, and the support you receive, not only at the management level but in terms of the office culture. Then, choose the best fit for you as you launch your real estate career.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, and the founder of RealEstateWealthForWomen.com is a national speaker, author and trainer with over 1,500 published articles.
