For Agents: Picking The Right Brokerage Company For Yourself
After you've passed your state licensing exams to become a real estate agent, the next step is to choose a brokerage company. This will be an important decision to make as it will have a heavy bearing on your initial success.
One of the major criteria that you will use to decide which brokerage company you want to work with is the way that company splits commission. As a real estate agent, you will make about 6% of the selling price of each home in commission. The brokerage you work for will then allow you to keep a percentage of this commission while you keep the rest. For example, if you sell a home for $200,000, you earn $12,000 in commission. A brokerage company that splits 50/50 will take $6,000 and allow you to keep the remaining $6,000.
In interviewing the brokerage company, ask how the commission rate increases over time and if there is a cap. While you may start out receiving a smaller percentage of commission, in most brokerage companies your percentage will increase with time, experience, and successful sales. Some companies place a cap on the percentage of commission their real estate agents can receive.
Training is essential for new real estate agents. While you learn a lot about real estate in the initial courses required to obtain your license, you will need training once you start working. Some brokerage companies provide these services free of charge, while others charge a fee. If there are fees required for training courses, these fees should be commensurate with the amount of commission you are receiving.
Even if there is a fee required for training offered, if you are a new real estate agent, the fee will be well worth the information you receive. Being a real estate agent is not as easy as it first might seem. You will need a little hand holding in the beginning.
Some brokers charge monthly desk fees. In essence, you pay this fee to have a desk at the brokerage. The monthly fee includes the charge for your phone, mailing supplies, and other expenses you incur while working for the brokerage.
Find out about the health insurance and other benefits offered by the broker. You also want to know the portion of the benefits your employer pays versus the amount you pay. It is common in the real estate industry for brokers not to cover insurance.
When you are talking with brokers, you should make sure that you talk to multiples, even if the brokers represent the same name. Brokers set their own rules for how their companies are run. This includes the amount of compensation their real estate agents receive. Two real estate agents working for different brokers under the same could end up receiving vastly different amounts of commission.
In your conversation, find out as much as you can about the culture of the brokerage companies you are considering. If it is possible ask other real estate agents about the company that they are working for.
There are several factors that go into the decision for a brokerage company. Prioritization of these factors will vary from person to person. Make sure the factors you feel are most important are present in the brokerage company you choose.
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