Odds are, if you’re here, it’s because of one of two scenarios…
- You’re a brand new broker who just got their license (or about to get their license).
- You’re already at a real estate firm and are contemplating a move.
Either way, I’m going to do my best to help!
I’m going to try it in a different way than most articles that tackle this subject. I’d rather dispel some myths about what a brokerage firm offers. There’s so much marketing out there about what firms can do for you, and a good percentage of it is complete BS. So, let’s get started with some of that! 🙂
Myth · A real estate firm deserves 30-50% of your commissions
This one is so obvious I feel like I’m insulting your intelligence even bringing it up. If you’re reading this article, you likely already think that a real estate company taking half of your income is insane. And here’s how you know the firms that take 50% know that it’s a crappy split. The split isn’t listed anywhere on their recruiting websites. 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. Then, if you’d like to learn more, the firm will want to schedule a face-to-face meeting or a phone call. You get all dressed up and go to the interview. Now get ready, because here 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. Your clients 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, objective data 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 – Choose a firm that pays a fair commission. I work at a firm that pays nearly 100% on all sales. We think that’s fair. 530 brokers have joined our firm since we started paying almost 100%. And it’s not because I’m so persuasive (I’m not). It’s because we pay what’s fair!
Myth · Training is everything!
What? Training isn’t important?
No – training is CRITICAL. But don’t pick a firm only 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?
Myth · We have tons of buyer and seller leads!
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 534 brokers have joined our firm in the past 3.5 years (most of which came over from other firms), I’ve 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!
Myth · Our average agent makes 76 million dollars per year!
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.
Myth · Our tools and technology will skyrocket your business!
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 trustworthy 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.