How Do You Pick the Right Real Estate Brokerage?

You have to understand what is most valuable to perform at the highest level possible and hit your financial goals.

When considering real estate brokerages, an agent has many options to choose from. So, how do you get a handle on what is vital and what is just a pretty new thing? How do you cut through the noise and figure out the important questions to ask? You have to recognize what is unimportant, and focus on the more foundational, higher-level business questions. You have to understand what is most valuable to perform at the highest level possible and hit your financial goals.

When interviewing with brokerages, many agents focus on non-essentials that won’t move their business forward. That’s partly a function of this industry having virtually no barriers to entry, and attracting people from many different walks of life, levels of education, and motivations. So, most agents – like me when I started – just don’t know what to ask. They often focus on, and regurgitate, what they’ve heard from agent friends or prior brokerages, and fail to think deeply and critically about their new entrepreneurial endeavor.

The reality is that there are two essentials in real estate sales. The first, and most important, is lead generation. The second is providing customer service that earns relationships and results in consistent referrals. That’s it. All important questions should relate to those two areas.

What Is Often Asked But Is Not Essential

When interviewing with brokerages, many agents focus on non-essentials that won’t move their business forward.

Below are some of the questions Momentum typically receives from real estate agents. We call them $10 questions because their answers are good to know, but do not offer the insight crucial to deciding which brokerage to join.

·       Do you have an IDX website? Do you offer a CRM, and which one?

These questions are relatively unimportant because there are so many choices available and most will do. IDX? Honestly, who cares what platform is made available? There are plenty of acceptable choices. CRMs? The same. Momentum likes Follow Up Boss, (which is offered at a 60% discount for $37/month with a built-in dialer), but there are other CRMs that will also do the job. These aren’t awful questions to ask, but they are certainly not essential for choosing a brokerage.

·       Do you have printing in the office?

Tech savvy agents rely less and less on paper, so printing isn’t as important as it once was. And, if printing is needed, the cost is a drop in the bucket compared to other expenses. Again, nice to know but not significant to making a brokerage choice.

·       What is the commission split?

Obviously, the split is important, but it cannot be considered in a vacuum. In addition to knowing the numbers, agents must be able to put them in context to understand what they are getting – or giving up –  in return for that split. So, the relevant question is bigger: What is the value I receive by splitting that part of my commission with my broker?

·       Do you have office space?

Most successful agents today operate from home, their car, and/or a coffee shop. Sure, a nice office is attractive, but it certainly isn’t essential to success. And, sometimes, when brokerages pay all that money to have an office, they require their agents to be there, even when it’s not convenient or conducive to an efficient business.

An astounding 87% of real estate agents fail in their first two years.

An astounding 87% of real estate agents fail in their first two years. And it’s because they fail to ask the right questions before diving into the business and choosing a brokerage. 

What is Crucial to Ask

What agents should be asking brokerages is how they will advance their dreams and goals. Who, specifically, is going to help them reach those goals? And how “valid” is the brokerage and its agents?  Here are some specific questions to ask:

·       Who is the most valid person in your brokerage? Valid means someone who has successfully walked the walk, and is not just engaging in talk, as often seen on social media. Who is the person you would be learning from? Is it someone who has actually done what you want to accomplish? Or are their accomplishments mostly smoke and mirrors? Does their high sales volume correlate with substantial profit for themselves, and not just the brokerage?

·       How many valid agents do you have in your brokerage? How many agents have accomplished what you seek? Are there dozens of agents, but few or none who have acquired significant wealth? Let’s get real: If you are going to a brokerage that has been open for 10-15 years, and they can’t identify any of their as people as millionaire agents, that would be a Big Red Flag.

·       How did your agents become top performers? Was it due to something that the brokerage provided?

·       What is the net worth and lifestyle of your top performers? Do they invest in the product they sell? How much annuity income do they have from their investment properties?

·       Is the brokerage helping their top agents continue to grow? How? 

·       What brought leadership to the brokerage? Is the leader simply an MBA on a salary looking for management and leadership experience? Or are they a top performer who wants to give back and improve the level of service of the community? There’s a BIG difference.

·       Is the leader really good, but no one around them is having success? If so, that could be an issue of communal wisdom not trickling down to the agents.

·       What resources will be available to help me think differently and grow? Who, specifically, will help me see better ways to get things done so I can grow faster? You don’t need to put in 10,000 hours in order to achieve mastery if you’re surrounding yourself with brilliant people who are doing bigger and better things, and will share how they do it. When you are in a high-energy, high-achieving environment, your own energy will be greater and you will perform at a higher level. You should seek an accountable tribe where others will praise your successes and share their wins and losses.

What agents should be asking brokerages is how they will advance their dreams and goals.

See the pattern? Think bigger and higher-level when evaluating a brokerage. For example, simply asking, “Can you give me leads?” creates the beginning of a reliant relationship, and sets the agent up for victim status. While online leads are helpful – Momentum buys $70K worth of online leads per month with its agents – reliance on them will not constitute a long-term sustainable business. (Momentum emphasizes this philosophy while offering leads as a way to jumpstart a business toward becoming organically built on referrals.) Agents must think bigger and more long-term, such as working toward becoming the local real estate economist or real estate celebrity of choice. The agent’s goal can’t be to rely on online leads, but to build a database they service via a touch program that generates referrals and reviews. If you’re a restaurant and you don’t have repeat customers will you be in business long? No, of course not. It’s no different with real estate sales. So, instead of asking if the broker buys its agents leads, ask who it can help you become so that people will want to come to you for real estate service.

Questions Brokers Should Be Asking You

You are the average of the 5 people you spend the most time with.

Just as important as the questions you ask, are the questions the brokerage asks you. Are they simply seeking to sign anyone who walks in the door, or are they actually interested in the quality of the agent they associate with, and supporting their growth? Here are the basics they should ask you:

·       What is your business plan?

·       What are your top 3 lead sources?

·       What are your strengths, and how do you use them to maximize the activities that you like to do?

·       Should you be working with buyers or sellers? How will that impact your lifestyle?

·       What do you want to have accomplished 5 years from now?

Choose an Environment of Support and Growth

How do you build your own validity? Well, it doesn’t start with training from someone who has never earned it themselves. Nor with paying 30%+ of your commission for an office, printing, and CRM, when the true value of those items is closer to 5% of total commission dollars. It starts with finding a place with successful agents who share their stories and offer guidance so that you can achieve your own success. A place offering genuine support and encouragement to continue doing better.

If your brokerage is fine with its agents completing an average of four sales per year – equivalent to one home every three months -- that means a low production level is their default.

If your brokerage is fine with its agents completing an average of four sales per year – equivalent to one home every three months -- that means a low production level is their default. Basically, they have settled for a culture of non-producers, with few or no expectations, accountability, or standards. Is that your goal? Because, unless those homes are ultra-luxury, no one is going to live a Big Business Life selling 4 homes per year.

The key is to find a brokerage where you grow and focus on the right things. A place where you can say, “I want to join this brokerage because I want to follow in the footsteps of its valid agents, and accomplish big things, too.”

Momentum was created because our leadership, two top-producing agents ourselves, was tired of seeing hard-working agents make next to nothing after splits, taxes, and not watching their financials. We thought if those agents just had someone on their other side to offer guidance, push, or accountability, that support could change the direction of their business and even their lives. We envisioned a workplace where there was no judgement about past mistakes or failures, because it’s all about where you’re going, not where you’ve been. Whether it’s with Momentum or another brokerage, we urge you to reach out to someone with validity, with a history of performing at a higher level than you. We encourage you to think hard about what you want, then find and connect with people who have already accomplished it. Life is too short, and we all need to maximize the time we’re here.