As a new real estate licensee, the first step you’ll need to do is choose a real estate broker (sometimes called a “broker-in-charge” or “managing broker”). The process of picking a broker can start early, as some states require that you be sponsored by a broker when you take your real estate exam. Don’t let the process of finding a real estate broker to work for intimidate you. Here are some things to keep in mind. Also, you can check out our five steps to help you choose a real estate broker!
Questions to answer when you are searching for a sponsoring broker:
- How good is the reputation of the broker?
- What kind of real estate is the broker selling? Is it the kind you are interested in selling?
- How technologically savvy is the broker?
- Have they sponsored people before? If so, in what ways do they support their real estate agents education and training?
- What commission structure do they offer?
- Do they offer other benefits?
- Do they provide their real estate agents with leads and marketing materials?
- Does the brokerage have room for growth or are there already more agents than are needed for their quantity of business?
When you’re just getting started in your career, it helps to tap into the knowledge and network of someone who has worked in the region in which you’re looking to do real estate transactions. You can think of a broker as both your partner and your boss, as they’ll help you maneuver through the beginning of your journey as a real estate agent in exchange for a commission split. The price of the properties being bought or sold through a brokerage determines the commission amount, but usually, brokers calculate their cut based off of a flat fee or commission split.
Here’s the difference:
Flat Fee: This is usually determined on a monthly basis and requires that you pay a broker a set fee for their services.
Commission Split: The percentages depend on individual agreements, but a 70/30 split is common. This means that you would keep 70% of commission as the agent and hand over 30% to the broker.
Why is broker selection so important? In your first year as a real estate agent, you’ll have a ton of questions, uncertainties, and getting-your-feet-wet experiences. You’ll need to choose a real estate broker that will be there with you each step of the way.
When you’re first starting out, you won’t have the funds to compete with the big real estate brokerages when it comes to marketing, lead generation, and conversion. You’ll need a broker’s help getting your name out there, and you’ll want to use the broker’s tools and systems to kick start your career.