Real estate brokers often reach out to me after they pass their licensing exam because they’re looking for a managing broker. I average 5-10 calls a day from new brokers with this very question. And while I don’t think any one firm is going to be the best fit for everyone, I do have a few suggestions.
Actually, before I get to the suggestions – one thing. RECRUITERS ARE PAID TO RECRUIT. Yes, even me. So, take everything a recruiter says with a huge grain of salt. Verify it independently and do your own research. Remember – the recruiter has a vested interest in explaining why their firm is going to skyrocket your success as a broker. 🙂
Tip 1 – Be suspicious of firms that do not list their commissions and fee structure on their website.
Go visit the three biggest brokerage firm websites in your area and you’ll probably be more confused than ever. For some reason it’s hard to figure out what a firm pays you per deal, and what their fees are. Hmm… Why is that? It’s actually very simple – they want to be super vague online so you come in for a sit-down meeting. Also, most firms take anywhere from 30-50% of your income, which is going to turn off most brokers if they read it online. But in person they’ll have a great presentation on why that fee makes perfect sense! (by the way, it doesn’t make perfect sense – if it did, it would be LISTED ON THEIR WEBSITE AND THEY WOULDN’T NEED TO HIDE IT.)
When I built this website my thought was, “I don’t want a broker to HAVE to come visit me to get simple details like fees and commissions.” And you know what? Every week brokers join our firm and say things like, “You’re the only site that put all the information out there so I could make up my own mind.” Actually, I’m glad all the other firms do this. Makes my job easier!
Tip 2 – Remember this number – 70%.
That’s the percentage of buyers and sellers that choose someone they already know as their realtor. 7 of every 10 consumers, when they go to buy or sell a home, pick their broker from someone they know or they ask their friends for a referral. This is critical to grasp because it means that no matter what your managing broker promises, most “leads” are never going to close.
So, what am I saying here?
You’re probably going to source 99.9% of your leads, no matter what firm you join. That’s just how it goes for most everyone. If a managing broker promises you to shower you with leads, well, don’t get too excited. While it sounds great, it isn’t likely to really do much for your business. Or, at least I’ve never met a broker (and I’ve met over a thousand) who worked at a firm where that was the case. And be suspicious of a firm that promises you leads at all! I can’t tell you how many real estate agents are promised leads only to never see even one. Again, it’s great for me when a managing broker does this, as it drive the broker right over to our firm. But, save yourself the aggravation – don’t fall for the “we’ve got leads” sales pitch.
Tip 3 – Most of the tools firms promote to entice you to come over are smoke and mirrors.
Look, I’m the biggest tech nerd you’ll ever meet. Nobody loves tech tools more than me. And I’m always striving to provide the most cutting edge stuff for our brokers. If used correctly, you can optimize your business and automate a good chunk of it using the technology some firms provide.
Here’s the problem. Tools are often over-hyped and under-used. At the end of the day the most important piece of technology is YOU. Every day you’ll need to get out in the real world and meet a few people and tell them what you do. Grab their contact information and then go home and set a follow up strategy. Write them a thank you, put them on an email drip, call them once in awhile, etc. If you do that, you’ll be swimming in leads within a year. And you don’t need any technology to execute that plan.
That being said, realize that some tools are extremely helpful. For example, we build every broker their own custom broker website with IDX MLS search. It has a back-end with email marketing functionality, CRM, etc. It’s beyond amazing.
But, you know what? Most of our brokers never set it up. That’s not because it’s not awesome – it’s just that it’s not as important as getting out there and meeting people.
Tip 4 -Training is overrated.
Now, before you stop reading, let me explain.
First, nobody loves training more than myself. I can’t recommend highly enough to take advantage of every training program your firm offers. Also, invest in yourself. Go to the Mike Ferry events. Buy the Brian Buffini courses. They’re all awesome and they work.
Look at the dropout rate in this profession. Most full time brokers don’t survive even a full year before quitting. So, why is that happening?
PEOPLE ONLY QUIT FOR ONE REASON – THEY DON’T MAKE ENOUGH MONEY.
And you don’t make enough money if you don’t do the most important activity that every broker MUST. You know the answer – prospect. And that’s the one thing no training can provide. Trainers can tell you exactly what to do to grow your business, but you must actually get out there and shake hands with real people. Here’s the other truth – most firms have great training. They really do. Whether you’re at a big franchise firm or small brokerage, odds are they have a decent training program.
So, if someone goes to Coldwell Banker and quits within a year, I doubt they’d say, “Coldwell Banker’s training sucks and that’s why I failed!” Nope – Coldwell Banker has excellent training. But, all the best training in the world doesn’t matter if you don’t get out there and meet clients.
Now, pick a firm that does have good training, just don’t place too much value on it. I’ve met dozens of successful brokers that started at small firms where there was no training offered, and they still figured it out. I don’t recommend those firms – but if you’re dedicated you can still succeed.
Tip 5 – Don’t get ripped off.
If a firm says they’re worth 30%-50% of your commission because of their “name”, run the other way. That’s simply NOT true. Or at least, I’ve never once seen one shred of evidence that the most buyers and sellers choose their broker based on the name of the broker’s firm. People will choose you as their broker because they like and trust you. Or because you were referred to them by another one of your clients.
The truth is that your clients don’t care what firm you work for. THEY CARE ABOUT YOU.
So don’t get “sold” by a recruiter that tells you how great their brand is in attracting customers. The best asset any firm has is their brokers. Not the firm’s name. For example, we’ve been around 66 years, have a street named after us, been in the newspaper’s Top Places to Work, and have other accolades. And you know what? It really doesn’t matter. Your clients won’t even notice. It’s great for our ego to get awards, but again, your clients only care about you.
Don’t pick a crappy managing broker, of course. But, this is why the 100% commission firms have become so popular recently. Our firm three years ago switched over to a 100% model where we just take a flat fee instead of a percentage of your commission. We had ten brokers before the switch. Just yesterday we added our 431st broker. Is it because I’m such a great recruiter? Ha! I wish!
Brokers now are realizing that much of the traditional firm pricing just doesn’t make sense.
Probably in every city there’s a 100% brokerage firm like ours. Do a Google search and find your local options and call them to find out how it works.
One final point. 100% firms with less than 100 brokers are probably not making any money, and could be in danger of closing. The margins are razor thin, and it’s not typically cash-flow positive until they crack 100 brokers. So, find a 100% firm with at least 100 agents.
Bonus Tip – Support is everything.
Choose your managing broker based on the level of support they provide. And for gosh sakes, do not ask a recruiter to provide a list of some of their brokers to chat with. Who do you think they’re going to send you – someone who hates it there? If you want to confirm what the recruiter is promising, call up three random brokers at that firm and ask them directly. Tell them you are thinking of joining, but wanted to get their honest opinion about all the “promises” the recruiter talked about.
I hope this helps in your search. You worked hard for your license so don’t get seduced by recruiters promising the world. The reality is that it’s YOUR business and YOU are in charge of it.
Now, go out there and prospect and have a great year!