Did you just pass your real estate broker exam (or about to pass) and are looking around for a firm to join? It’s a confusing journey, isn’t it? You know why it’s hard to compare one firm against another?
BECAUSE THE FIRMS WANT YOU TO BE CONFUSED!
I’ll prove it to you – go look up a few local “come work at our real estate firm” websites. Notice how all (or almost all) of them do NOT give the fees, commissions, or any other specifics you can actually use to determine if it’s a good fit. Annoying, right?
I wonder why they all do that… 🙂
Well, I’m going to break down a few industry secrets so that you can make a better decision about what firm is the best fit for your needs. You deserve the truth.
Most firms pay new brokers abysmally low commissions.
I mean, really, really, really low. Like 50% low. That means on every sale, you’ll give them half. And here’s how you know the firm even thinks it’s a bad split. The split isn’t listed anywhere on their recruiting website. If a firm wrote on their website, “Hey, we pay 50%!” you know what would happen? NOBODY would join that firm. So, how do they get people to sign up?
The recruiting websites just talk in generalities. Vague mentions on how great their training, support, and technology is for a broker in their first year. Then, to learn more, they’ll want to schedule a face-to-face meeting or a phone call. Then comes the sales pitch. At that point the recruiter will likely spin an impressive tale about why they’re worth taking 50% of your commissions.
Here’s the problem – I’ve never seen one study or shred of evidence that says the average home buyer or seller cares one iota about the firm you work for. They care about you! And since you’re going to be sourcing 99% of your leads, how important is the firm name? The firm trying to recruit you will tell you it matters. But ask for empirical evidence that the average consumer uses that as factor in choosing a real estate agent. Watch smoke billow out of the recruiter’s ears as they try to talk their way out of that one.
SOLUTION – pick a firm that pays a fair commission. I work at a firm that pays nearly 100% on all sales. We think that’s fair. Trust me, you’re worth it.
Don’t get hung up on training.
What? Training isn’t important?
No – training is CRITICAL. But don’t pick a firm because of their training. Seriously. Here’s why. The very best training programs for real estate agents are from independent training facilities. Programs from trainers like Brian Buffini and Tom Ferry. They’re both awesome and worth your money.
Now, don’t get me wrong. I’m not suggesting you pick a managing broker that offers no training. Make sure the firm you join has some sort of training option for new brokers. But don’t make it the most important factor when picking a company.
SOLUTION – Invest $500 in one of these programs and I guarantee you’ll love it. Here’s the thing – if you invest $500 in a training program (and most have money back guarantees), then you are taking responsibility for your development. And guess what you can do at that point? Find a brokerage firm that doesn’t charge you for it! (see the 100% idea above). Makes sense?
Don’t believe the “we have tons of leads” promise.
99.9% of brokerage firms have ZERO leads. Now, to be fair, I’m sure there is at least one firm out there that actually has leads and delivers on that promise. But after 525 brokers have joined our firm in the past 3.5 years (most of which came over from other firms), I’ve literally never met one who said they received leads from their previous firm.
Here’s why firms don’t have leads – because it’s not how buyers/sellers choose their broker! Studies show that only around 10-12% of clients choose their REALTOR that way. Firms obviously know this which is why they don’t spend money to generate leads. Because it simply doesn’t work!
SOLUTION – if a firm promises you leads, have them write it into your contract that you’re obligated to receive X number of leads per week. They’ll never do that, of course. At which point realize that they might be exaggerating the whole lead business. Pick a firm that says, “Nah – we don’t get leads. You’ll have to build your own business.” At least that firm is telling you the truth!
Don’t fall for the “our average agent makes X per year” nonsense.
One of the most common questions I get from new agents shopping around for a firm is, “What does your average broker earn?” And that question makes me cringe because I know the new broker must have met with a competitor before me who probably said something moronic like…
“Why join our firm? Well, our average broker earns seventeen million dollars a year. I’d say that must mean we’re doing something right, right? RIGHT?”
Here’s the truth. A firm should NEVER take credit for someone’s success. Remember above how I said firms don’t feed you leads? So, they’re not directly building your business. But, D.J., what about those impressive numbers? Well, here’s what these firms do. They know most people are going to be impressed hearing big numbers, so they literally kick out any part-timers or people not meeting those numbers.
Remember you’re an independent contractor. It’s YOUR business to grow. What if you only do one sale a year and that’s your goal? I say, “Great – congrats!”
SOLUTION – Choose a firm that accepts you no matter what your production goals are or if you’re part-time or full-time.
Tools are great, but you probably won’t use all of them.
I’m the biggest tech nerd you’ll meet. I am ALWAYS looking for more tools and technology to provide to our brokers. And the tools we provide really does work to help a broker build their business! But 85% of our brokers don’t really use all the tools.
Why? Because at the end of the day, real estate is still very much a face-to-face business. You should absolutely use technology and the tools offered to help make your business effective and efficient. But you can also purchase tools on your own or find comparable free versions anyway.
SOLUTION – make sure the firm you choose has a nice suite of tools, but don’t make it the deciding factor. You probably won’t use all the tools anyway.
Hopefully this has been helpful in cutting through some of the marketing smoke-and-mirrors in broker recruiting. Here’s the best advice I can possibly give you…
Pick a firm that you believe to be honest and helpful.
Anyone that seems grateful to have you choose them is a good sign.
Remember, without you a firm isn’t able to pay their bills. If a real estate brokerage suggests that you’re the lucky one to join them, this is not a firm you want to join.
If you’re in the Chicagoland area, feel free to contact me and I’ll tell you more about what we provide. If you live in a different part of the country, look for firms that have transparency and high commissions and great support.