10 Essential Factors to Consider When Choosing a Real Estate Brokerage
Make Sure You Outlive Your Competition By Choosing the Right Real Estate Brokerage
As you launch your real estate career, it’s important to start off on the right foot. When considering how to do this, there are several key factors that should be taken into account. From selecting the right brokerage to creating a marketing strategy, building your business can involve many different considerations. With the proper preparation and guidance, however, beginning a successful real estate career is achievable for anyone willing to put in the effort and time needed. In this blog post we will explore 10 critical areas that should be assessed before starting out as a real estate agent. By diving deeper into these topics - such as your commission to technology - you can ensure that you are setting yourself up for success from day one in your new career!
1. Commission Split.
Let's start with your commission split because it's your hard work that makes the brokerage business possible. If the brokerage you are applying for cannot easily tell you what your commission rate will be or if you have to do any kind of math to figure it out, that should be the writing on the wall. Airbnb and Turo can tell you what you will earn at first glance and so should your brokerage, especially in this tech-driven era of real estate.
In most cases, if you are being offered promises of residual passive income in addition to your commission, that would be a red flag but should not be confused with equity in the brokerage. Residual income isn't really aligned with the brokerage model, so the company's focus will be in the wrong place and may provide you with less value when it comes to getting new listings and clients to work with.
The general rule of thumb is any commission offer that is too good to be true (say, 95-100% commission) usually is. At Outlive, we have a transparent fair flat rate 80% commission to join our team. However, at Nooklyn we have a flexible commission rate and provide rental leads and rental listings to work on.
Ultimately it is not always about getting the highest percentage, but it should feel fair to you for the value you receive in exchange.
2. Remote Work.
Real Estate is gradually going fully remote and has been since the arrival of the dot com. When was the last time you bought or rented a home from an advertisement in the window of a real estate office storefront?
I believe working from home as an agent and as a brokerage owner is freeing and absolutely life-changing. It allows for more focus with purpose, providing fewer distractions and more time to network in our own communities. It allows us quality time with our children, family, and friends, and to explore the things that make us truly happy and content. Isn't this why we all got into real estate in the first place: to be in control of our schedule and destiny? I think life should be fun and free and your work should fit in around the things you love. Don't get me wrong—I work really hard but only because I also get to surf and hang with my family. Quality family time and steady exercise in the ocean have helped me from feeling any kind of "burnout," so I encourage you to find what keeps you psyched as you're in this for the long haul.
I have bought and sold many properties over the last 12 years and the office has never been instrumental in any of these dealings. So where is the money coming from to pay the rent for all of these big fancy offices? I think you already know. Long story short: do not judge a brokerage by their office but rather on their experience, quality listings, and company culture. I think all brokerage owners should be working toward reducing and ultimately eliminating their office footprint while increasing their spending on technology and social marketing tools for their agents and clients alike.
3. Company Culture.
At my first brokerage, Nooklyn, based out of Bushwick in Brooklyn, our culture was centered around the idea of trust and transparency for our renters. Believe it or not, trust and transparency was not common practice when we started. This aligned the company, attracted the right agents, and gave us all a common goal that made sense to us—a goal to help others find a home. At Outlive, our culture is centered around being a better brokerage for both people and our planet.
When joining a firm, it is important that the company culture doesn't make you want to puke or you may have a hard time reaching your full potential as an agent. When picking a brokerage, make sure you stand behind the company and its culture. I can't stress enough that you must be excited every day about working with them and not trying to hide your affiliation.
4. Brokerage Mission.
At Outlive, our mission is to make real estate more natural: adapted to the way we work and live, and supportive of the planet we all call home. We’re on a mission to plant 10 million trees before our 10th birthday — more on all this on our Mission page.
Your brokerage must have a big clear mission beyond fat stacks and lux condos. If you wake up proud to work for the company and stand behind its unique mission, that will come through in the conversations you have with your clients and the number of deals you do each year.
5. Tech Offering
Technology has improved our lives and helped us grow in the brokerage business, but relationships still remain more valuable in the short term than technology alone. That said I have hired some of the best developers and together we've built award-winning technology and won best real estate website in 2018.
Finding a company that can both build great technology and use it to help you grow and discover new relationships is key. Brokerages that completely outsource their technology will be at a disadvantage to those building their own, because they will move slower in areas that matter most to clients. You should be seeking brokerages that are building their own platforms and updating their listings in real-time. Find brokerages that are actually pushing a new path in real estate and not just claiming they are.
Bottom line: really look at the platform the brokerage is building and listen to where they want to take it and be sure to agree.
6. Brokerage Business Model.
One thing to consider is what the brokerage specializes in. There are tech brokerages, rental firms, sales firms, commercial firms, discount firms, flat fee firms, Ibuyers and probably more. Some brokerages charge fees including desk fees, technology fees, paperwork processing fees, and training fees. It is important that you understand the fee structure and agree with them.
For example, Nooklyn specializes in renting apartments, rooms, and roommate matching, as well as commercial leasing and sales in Brooklyn. Nooklyn charges a technology fee, but for this, you get client leads and access to exclusive listings.
Outlive specializes in home sales, long-term rentals, and vacation rentals in both Hawaii and New York, and charges no fees. It is important that you find a brokerage that matches your target clients and operates competitively in your area.
7. Real Estate Training.
I stray away from online courses or the all-too-common over-promise of agent training in the office. Your brokerage should provide you with agent-to-agent mentors and allow for real collaboration on and offline. Working on deals as a team has been the secret sauce that has allowed us to grow year after year. If you are anything like me, you learn from doing and talking to others that have done it. There is a time and place for podcasts, motivational speakers, and online courses, but when you are new to a brokerage, I recommend tuning everything out with a tunnel vision focus. You should be focused entirely on building relationships to get you listings and studying the listings on the market. You can be honest about your level of experience and ask for help when needed, and you will always find it.
The best thing you can do to stay motivated as an agent or entrepreneur is to set your goals and check on your progress daily. Keep in mind, your goals should shift and grow with you. They should be really big, but they must be achievable and match your interests.
For example, setting a goal of $25M a year having never crossed $100K in a year is an unrealistic goal that could easily demotivate you. At the same time, a goal too small can also be demotivating, so you need to find well-balanced goals. I also encourage you to look for win-win goals that not only help you but help others.
Here is the goal-setting framework I like to use on my iPhone notes.
Goal: State the goal.
Benefits: What are the benefits of achieving this goal?
How: List how and the skills you need to acquire the goal.
Who: Who are the people or companies that can help you?
Obstacles: What are the obstacles in your way?
Deadline: Set a deadline.
Plan: Write a simple plan to achieve this goal.
8. Brokerage Size.
This is a tricky one. Joining a large national brand have some tried and true advantages, but it also comes with some major pitfalls. Larger brokerages move slower and are less creative. They tend to not deal in real time but with their own corporate agenda and have too many restrictions. One of the biggest disadvantages is they all copy one another and rarely innovate.
Joining a younger tech-forward brokerage is exciting and can have more opportunities for you to become a valuable agent within the brokerage. This way you are not just a lost name in a sea of agents.
Before starting my own brokerage, I hung my license at both a big company and a smaller one. I ultimately preferred the smaller brokerage for so many reasons. The biggest reason was it was simply faster-paced, scrappier, and more fun to work for a smaller company. In addition, the relationships were more meaningful with both fellow agents and owners, giving a real sense of community and teamwork.
Even though my time there was short-lived, the experience of working at a big firm led me to build my version of a better brokerage. So yes, I am a bit biased here but I'd say give an underdog a chance and you might be pleasantly surprised—unless you were built for the corporate grind.
9. Social Media.
To TikTok or not. I was an early adopter of real estate content on Instagram, and I still believe it is important. I don't think it is a make-or-break, but agents with a sizable following have the upper hand.
Finding a real estate brokerage that will support and back your content game is a no-brainer. At Outlive, we focus the majority of our marketing through social and community events so we can connect with people in real time.
10. Giving Back.
The construction behind all of our real estate dealings is almost always at a cost to the planet we all call home. Every light fixture and appliance is shipped and arrived boxed and covered in plastic, and that is just a tiny fraction of the materials used in every modern home. We may own or rent real estate, but we don't truly own the land underneath. Together we need to be better caretakers of our earth. I encourage you to consider the environmental practices of your brokerage and how the team you work with can make a plan to give back and protect our planet.
And remember, you can always start now by donating 1% of your commissions via 1% for the planet no matter what brokerage you hang your hat with. Alternatively, you can join our mission at Outlive to plant 10M trees.
Aloha and thank you for reading. We wish you much success on your next journey at whichever brokerage you find and call home.
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