How to Pick a Brokerage: Splits, Leads, Training
I’ve been licensed nationally since 2003 for residential sales, and in the last eighteen years or so have hung my hat at a few different Brokerages. Choosing the right Brokerage or Realty company to work with has always had a significant impact on my personal business and on the business of the team I run in Oregon and Washington. I could easily rank each Brokerage by a multitude of factors including Realty splits, leads, fees, training, oversight, office space, technology, and more. I could tell you which Brokerages are best for individual real estate agents, real estate teams, new agents or experienced veterans in the industry. It would be impossible to put everything I’ve learned in one article, but let’s start with leads and see how it goes from there.
Choose a Brokerage: Home Buyer and Seller Leads
According to NAR, National Association of Realtors, there are over 100,000 different Realty Brokerages in the U.S. According to our 2021 report, there are over 1.4 million licensed Realtors in the U.S. as well, a record high. So let’s be frank here, that’s only 14 or so agents to each Brokerage and I couldn’t possibly compare all the 100,000 options. However, what I can do is give you some solid guidelines.
In-person Brokerage Leads
This is pretty rare, but if the Realty company you’re considering has an office on a high-traffic, high walk score street, typically office space on a street that is zoned for retail, they might have some walk-in traffic that is worth something. If the Brokerage office is tucked away or in some larger office complex – forget it. I’m talking about Realty offices right next to shops, restaurants, famous retail shops, coffee shops, etc. If they have an office like that, the next question you have to ask is how those leads get distributed. Each office will likely have its own policy. Overall, even if the Realty office is on the best street in the city, don’t expect enough in-person leads to support your own business, at best it is likely to be a small supplement – if they bother to give you any of the walk-in business. I’m going to put Brokerage “floor time” or phone leads in this same section because it is almost non-existent. Home buyers and sellers almost never pick up the phone to call a local Brokerage to get help. It is almost unheard of. Home buyers and sellers will pick someone they are referred to, already know, or they will look and research online for a good real estate agent.
Brokerage Online Leads
Expect to be disappointed. If the Brokerage tells you they have a home search website and their agents get round-robin leads, it doesn’t mean much. Be very skeptical. It can take hundreds of buyer registrations on forced registration home search sites to lead to one viable lead. Most of those “online leads” are doing nothing more than wasting your time. They are high quantity, gutter-level quality. In fact, if you find yourself at one of those Brokerages tell them to check out VestorFilter.com, it is a non-forced registration smart home search program that gives something to home buyer’s Zillow doesn’t. Vestor Filter™ is available to Brokerages and individual agents and doesn’t produce ten garbage leads a day. It is more likely to produce one decent lead a day and in doing so doesn’t waste everyone’s time. We’ve had tremendous success with Vestor Filter™ but we’re a team, not a Brokerage, which I will get to later in this article.
Brokerage Referral Leads
If you’re looking at a national or international Realty company, sometimes they will have a decent referral portal. Ask to look at it. Can you search by state, by city? It is active? Are there a lot of referrals getting posted daily or weekly? Personally, I’ve been with local Brokerages, regional multi-state Brokerages, and now an international Brokerage (big presence in every state), and it took going international until I found a Brokerage with enough referrals to be a benefit to my team’s business. (This would be for accepting leads sent to us and having great agents to send leads to.) Unfortunately, some national and international Brokerage have no single collaborative platform for their agents to connect and send buyer and seller leads across the country or across the world. It took until I joined EXP Realty, the fourth largest Realty company in the U.S. and fastest-growing in the world, to receive enough referral business from my Brokerage to get excited about it. Their referral (and general connection platform) for agents is easy to use, universal. They don’t have a slew of competing technologies within their own company you often see at national Realty franchise companies. You can research and ping any agent across the world. Also, there is no additional charge to use their referral program (which is huge).
Brokerage Leads Summarized
Honestly, don’t pick a Brokerage to get leads, or expect a Brokerage to provide enough leads to make a serious difference in your business. Brokerages are primarily warehousing companies for agents. They provide office space, training, insurance, and opportunity for networking. That is what they’re best at. Not lead generation. Brokerages will typically accept any agent with a clean record that is willing to pay their fees and accept their oversight. Brokerages might provide some supplemental leads for your business, but primarily you need to look elsewhere. If you’re looking for leads, I believe there are only two ways to go about it. First, you could join a team. The NAR Member Profile Report for 2020 says 30% of all licensed Realtors are currently on a team. There are two types of teams out there. The first type generates and provides leads as the primary source of business for its agents. The second type is a collaboration of already successful agents that want to specialize, say have one be the buyer’s agent and one be the seller’s agent. And of course, there are mixes of the two. Bigger teams will typically have spots where it makes sense for newer agents to fill in and spots that are only occupied by veterans of the industry. So one consideration on Brokerage leads is to choose a Brokerage with a ton of active teams and a way to connect with everyone (via an active, open online platform like EXP Realty’s) so you’ll know when there are openings or can connect yourself with top producers. The second way to get leads for yourself is to build your own online presence. You can do this best through social media efforts, home search sites like VestorFilter.com, or home value sites. A few years back a top agent told me that all home buyers want online is to search for homes, and all home sellers want online is to see what their home is worth. If you can find good programs to brand yourself on for both – it can work.
Choose a Brokerage: Splits and Fees
It is hard to find good data on Brokerage splits, but NAR reports there are three basic types of splits, 100% all the time, fixed at something less than 100% all the time, and graduated where you start at a split and then after you do enough deals it goes go 100%. Truth be told, there are thousands of different models. Warning, you cannot simply look at the splits. You have to look at the splits and all possible fees. Some Brokerages advertise 100% commission, meaning no splits, but they make up for it in fees – big fees. Don’t focus on the spit number, focus on how much money you will be giving the Brokerage annually based on your production based on all applicable splits and fees. Don’t be lazy. Run hypothetical realistic numbers for your production that year and calculate how much the Brokerage will be making off of you. The possibilities of what Brokerages are going to offer you are nearly endless – do the math.
Every year I’ve been licensed I’ve weighed out all my Brokerage advantages: leads, support, training, technology vs. total cost of being with that company. In every case except for one, there has been a net cost to being at that Brokerage, but one that I was obviously willing to pay. Shockingly the Realty company that I am with now, gives me a net profit at the end of the year. A few years ago if anyone told me that was possible, I’d tell them that pigs fly. So here’s the deal in the most basic way I can state this: EXP Realty takes their thousands of agents worth of commission splits and fees and puts it in a big pot. Then they cut that pot in half and give back half of everything they earned that year to agents as bonuses/rewards. Now, this is a non-technical way of saying what actually happens, which is beyond me. But what I can tell you is, I’ve never been in a situation before when I look at the Brokerage element of my team’s business and there is an annual net profit to my team due to the Brokerage we are with.
Choose a Brokerage: Training
Okay real estate agents have a few primary paths to training. You need to stay up to date on local and national laws and you have to keep on top of what is changing in the real estate industry. Local Title companies typically offer free training in mass – if you are interested in in-person training options. And some of the best training I’ve gotten is from a class put on by my local Title company. Then your Brokerage may also offer in-person or online training. Finally, there are all sorts of online real estate gurus you can follow (but most are noisy distractions you’d be better off ignoring). I’m looking at the EXP Realty online training calendar and they is a whopping 27 classes offered online today. Just today. I’ve never experienced a Realty company with more training options. Now they are all online, but hey if I want in-person training I still have tons of local options through the Title companies in my area. It works for me. Also, I’m at a stage in my career where 101 type classes are of no interest to me, I need a truly broad selection to find something new to learn. But this is one question to not pass up, make sure when you’re choosing a Brokerage to learn about their training options. This I’m separating from mentoring programs. EXP Realty has a well developed mentoring program and so do many other Brokerages around the country, but that is a different topic.
Other Reasons for Picking a Brokerage
I get it, if you have friends in the industry with a particular Realty company it’s not a bad reason to join. I also understand if there is one Realty company that dominates a local rural area (typically not true for any sizable metros) and there almost isn’t an option, you need to go with them. But if you do have choices this guide is a decent starting point to learning about Brokerage Splits, Leads, and Training. If you’re interested in EXP Realty (anywhere in the world) contact me on our chatbot here (bottom left corner). I’ll reach back out to you. Also for more on them, read our 5 reasons to join EXP Realty article. Ultimately though, I hope this helps you choose your next Brokerage, and stay tuned for more articles like this one. I run a top 250 team in the U.S. according to Real Trends and my team is closing in on 2,000 home sales. I’ve seen a lot along the way. The real estate industry is full of false hopes and promises, be careful out there.February 22, 2021