Does Your Real Estate Brokerage Measure Up?
In this week’s episode Jennifer talks all things real estate brokerages. Whether you’re new to real estate and trying to pick a brokerage or you’re considering a change or you’re perfectly happy where you are….this episode is jam packed with info for real estate agents at every stage.
Curious what EXP Realty is all about?
In the video below, Jennifer shares the straight goods without the sales hype, so that you’re better equipped to decide if EXP is the right real estate brokerage for you.
Well hello there, Jen Percival here from the women rocking real estate podcast. Thanks so much for tuning in. Before we get started I just wanted to send a quick Special shout out to Anna, Ann, Daniella, Megan, Jodi and Rachel for leaving me recent reviews on iTunes. I so appreciate you ladies taking the time to let me know you’re enjoying the show and would love to hear from anyone else that is too.
Alright you know how I like to run this show, no dilly dallying around, just straight to the point. today we are going to be talking all things brokerages – the good, the bad and the ugly.
Now I have a quick story I want to share that I think is relevant to this topic in a backwards kind of way. My very first corporate job was at an iconic company here in Canada called Canadian Tire. I got hired as a communications specialist in their head office and I can still look back and say it was the best company to work for. I worked there for 6 years, which is on the short side because so many people stay for life, but they were seriously some of the best years of my life. The people were just amazing, my managers were all really supportive and I got promoted 4 times in those 6 years and learned so so much. In terms of job satisfaction and happiness, I was like a 10 out 10. But I always knew deep down that I was meant to be an entrepreneur. That was my calling and even though I was super happy where I was, I knew two things:
Getting different experiences is never a bad thing. You don’t know what you don’t know and learning more will never hurt you.
Secondly, I also knew that people usually make better decisions when they’re in a good place, than they do when they’re unhappy and in a bad place. When you’re in a bad spot, your decisions can be made from desperation & impulse, instead of intuition.
So when head hunters started calling me, even though I was super happy, I decided to look at the opportunities. Because how do you know, unless you at least look? Now for the record before someone jumps on me that I’m suggesting you apply this principle to all areas of your life, like your relationship I’m not ok. This is not a grass is always greener somewhere else thing, but when it comes to your livelihood, you have to remember you don’t owe anybody anything. You don’t have the same commitments or obligations to where you choose to work. We spend a lot of our lives working, so we owe it to ourselves to make sure we’re as happy as we can be. And if we’ve only experienced one thing, we have nothing to compare it to.
So I took one of the jobs that was offered to me and it was a big promotion and a lot more money. I spent 3 years there and without going into any of the details, it turned out to be an absolute nightmare. When I got pregnant and left for my first maternity leave, I remember packing up my office, shutting the door and saying out loud that I would never work for anyone ever again.
Now some would say, well then obviously it was a huge mistake to have left Canadian tire and if I’m being honest, at the time it felt like that, but in hindsight it was the best decision I ever could have made….because it led me on my entrepreneurial journey to my real estate career. If I’d stayed at Canadian Tire I would have a totally different life and I would have probably been happy….but not happy like this. I wouldn’t have known any different, but now I do and I’m so grateful that I was open to opportunities and took those risks.
We have to be careful that we don’t take being content and allow it to make us complacent.
So whether you’re new to real estate and picking your first brokerage to work at or you’ve been at your current brokerage for years and are starting to think about making a switch, or you’re perfectly happy where you are, you should always know what else is at least out there. Now I’m going to be covering a lot of detail in this episode so if you’re interested I’ve created a checklist that you can use to help you compare brokerages and a cheatsheet with all the questions you should be asking. You can download it from the show notes for this episode.
So when it comes to brokerages, what are your options these days?
Should you go to a big well-known national franchise brokerage or a local boutique independent brokerage or a global virtual brokerage? I started my career at two national franchises and then ran my own boutique brokerage for 5 years and now I’m at a global virtual brokerage, so I can share some insights on this topic.
Depending on the city you live in, you may have
dozens of brokerages to choose from or only a
handful. My advice is to invest the time and check out all of your options before making a decision. How do you know what’s out there unless you compare and contrast?
It used to be that national franchise brokerages provided instant credibility and that was a big draw for new agents. That has changed dramatically in recent years and while that may still be true in smaller communities, sometimes it can actually work against you in big urban centres.
In order to stand out in real estate, you’ve got to differentiate yourself. When you predominantly use your brokerage’s branding, it makes it impossible to stand out when everyone else is using the same branding. People are 100 times more likely to remember or recognize visual cues from logos, colours and fonts, than they are able to remember someone’s name. So you’ve got to uniquely brand yourself if you want to stand out.
When you work for a big franchise bricks and mortar brokerage you definitely do feel like you’re part of something bigger and there’s something to be said for that. You have somewhere to physically go to see, talk and mingle with people. They have big office meetings, holiday parties and national conferences. Real estate can be a lonely business and these things can make it a little less isolating. However sometimes they’re so big, that you can end up feeling a little lost in the crowd and disconnected. Covid has certainly taught many realtors that they don’t actually need or in some cases, even want to go into the office. The culture at the first brokerage I worked at was so toxic that I only stepped foot in the office to pick up my commission cheques. But we’ll talk about culture more in a minute.
This is why virtual brokerages have had such explosive growth in the last year. For agents that aren’t using or don’t want to use the brokerage’s office, a virtual option with the substantial cost savings is a great choice.
Lastly, what about a local independent boutique brokerage? These types of brokerages tend to operate with a much more team-like culture, with more individual attention and can be a great fit for some agents. The key here is that you have choices and you should explore all three to really know what’s out there for you.
Regardless of which of these options appeals to you, there are critical questions you need to ask when you’re looking at brokerages.
QUESTION 1 – What are the Commission Splits & Fees?
First and foremost is the obvious one – what are the Fees, Splits and often brushed over hidden costs? Brokerages are infamous for complicating this, making it extremely confusing to compare brokerages. But it’s often all smoke and mirrors, so make sure you do an actual spreadsheet to compare apples to apples. Look at various commission thresholds and calculate what your bottom line would be with all costs factored in. So if you made $5ok or $100k or $250k or $500k and above. To do this you’ll have to look at your average commissions and average number of annual transactions or if you’re new you can guestimatte them by average sale price. You’ve got to make sure you’re looking at everything combined – commission split thresholds, capping rates, desk fees, transaction fees, royalty fees, marketing fees, secret fees.
Make sure you also look at things like capping rules. Many brokerages will put you on a higher commission split on the assumption that you will cap out, but if you don’t, they will claw back your commissions and that can be a nasty surprise where you end up owing them money you weren’t expecting. What about desk space or meeting rooms? Will you get access, are there any added costs? Will it be shared or dedicated? How is it managed?
Question 2 – What Training, Mentoring & Coaching is Available?
The next really important question, especially for new agents is around Training. A lot of brokerages will position their training program as the most cutting edge training out there. Don’t take their word for it. You need to ask lots of questions about the type and frequency of training. Is it in-house or outside training? one on one? group? online or in person? How often? What is the training on? Can you see the schedule? Who is it taught by?
I can’t tell you the number of agents that reach out to me in despair after joining a brokerage that promised incredible training only for the agent to find out that the training was all about door knocking and cold calling and bugging their friends and family constantly asking for business. Training and coaching is only good if it’s training that you’re actually going to implement and use. If it doesn’t align with how you want to build your business, you’re either going to resent doing it and feel crappy all the time or you won’t do it period….but won’t know what to do instead. Where’s that going to get you? No where fast.
What about Mentoring? Do they have a program, what’s involved and how much does it cost? Same goes for Coaching? Remember that training, mentoring and coaching are three different things. Dive into all three and understand their programs in detail.
Question 3 – What Technology & Services are Provided?
Alright the next critical question you need to explore is around the technology & services the brokerage provides its agents. This is a tricky one that you need to be careful with because Brokerages will try to sell you on the advantages of the technology and services that they offer their agents, but you don’t actually want to take advantage of some platforms your brokerage provides. Why not? Because they can handcuff you and make it really difficult if you ever want to leave. So the two pieces of technology provided by your brokerage that I don’t recommend you use are 1) your website and 2) in some cases your CRM platform either.
Now you might be wondering why you wouldn’t want to take advantage of a done for you website to get you up and running as quickly as possible? Because if you ever leave, you will lose everything. I explain a lot more about real estate websites and what you need to have on them to start getting found online in other podcast episodes and I’ll link to them in the show notes but essentially you will lose all your content, all your listings and all your search engine rankings. You will have to start over from scratch and that can honestly destroy your online lead generation. You need to own your website from day one and I promise you it is not nearly as hard or as expensive as you think. I teach women how to build a WordPress real estate website from scratch in under a week for a fraction of what people will try to charge you.
The other tech you might want to reconsider using from your brokerage is your CRM platform. Now if you’re just starting out and don’t have a ton of leads, you can use it temporarily. But as you start to grow adding leads and creating workflows and sequences you’re going to want to invest in your own CRM system that you own. Again what happens to all those leads and all that information if you ever want to leave? Do you get to take it with you? Unlikely! Basically when it comes to the tech that a brokerage is providing ask yourself if it will matter if you lose the content if you change brokerages. If the answer is yes, you don’t want it anyway.
However there are other types of tech that are hugely advantageous and if the brokerage provides them, it’s a huge asset. I’ll give you just a few examples:
- tech that can be used to send property deposits to the brokerage’s trust account using an app on your phone? Uh ya. Sign me up
- Online appointment booking software that makes it easy for you, for other agents and for your clients to manage showings. Yes please.
- Mobile apps to manage the electronic signing in at open houses that automatically sends the buyer the property details and your contact information? That’s helpful,
- Weekly Online training through a virtual world. Heck yes.
If it’s technology that’s going to make you and your client’s lives easier and more efficient, but you won’t lose critical data if you leave the brokerage, then it’s a great asset. On the flip side, be wary of brokerages that don’t provide any technology or they run outdated tech. There are incredible platforms out there that you absolutely should be taking advantage of and being handcuffed by a brokerage that is behind the times, can be a big liability in your business.
When it comes to services that the brokerage offers and this is usually in the form of marketing materials and advertising programs, there is often a bit of a misleading benefit. If the brokerage provides an in-house service to design your marketing materials, but it’s cookie cutter and looks the exact same as everyone else in your brokerage, that isn’t a competitive advantage. Similarly if your brokerage provides generic content such as blog articles about the buying and selling process, not only does this not differentiate you, it can actually hurt you if you include these blogs on your website. Google penalizes websites that use content that can be found on other websites. If you want your content to work for you and to help you get found when people are searching for real estate related content, it has to be fresh, unique content using your voice and insight.
What about advertising services? If the brokerage has an in-house provider that can manage online google and Facebook ads, what’s the cost and what do you get for it? When it comes to that stuff, the sales tactic they use, is that you should be leaving that stuff to the experts to manage so that you can free up your time to focus on what matters in your business. Well in my opinion one of the biggest things that matters in your business, is learning how to generate online leads on your own. Once you’ve got a steady stream of high quality leads coming in that are generating consistent business, then by all means outsource the stuff that isn’t in your genius zone.
The last type of service that some brokerages are offering and again, there’s a cost to it, but it’s administrative help with drafting offers and submitting all the required paperwork. I don’t know about you, but the paperwork side of this business is the Bain of my existence. I cannot stand it, so any reasonably priced service that is able to do it for me is a complete no brainer.
QUESTION 4 – How Much Autonomy is Allowed?
Alright the next critical question you need to ask a brokerage you are considering, is around how much Autonomy you’ll have. Brokerages run the gamut on this from not caring about any thing you do, to controlling absolutely every thing you do. I am a control freak myself, so I don’t like being told what I can and can’t do. Understanding upfront what their rules are is really important. – will you be allowed to brand yourself and have your own branded marketing materials? Are you allowed to have your own website? What about a YouTube Channel? What about the commissions you charge? Do you get to set them? I know of brokerages that charge commission splits based on you charging full commissions, even if you didn’t get full commission.
QUESTION 5 – Are Leads Provided?
The next question that you need to ask is about Leads. Does the brokerage ever provide them, if so, how often and how are they distributed? If they are provided, is the commission split different? Is there an opportunity to do desk duty where you’re the agent on duty and any walk-in or call-in leads are directed to you? What about open houses – what system do they use, if any, to communicate opportunities to host open houses for other agents? Typically in big brokerages you’ll rarely get leads because there’s just too many agents to distribute them amongst, but in smaller boutique brokerages you may get regular leads.
QUESTION 6 – What is the Culture Like?
The next question you need to ask the hiring broker is about the brokerage culture. Is it collaborative & supportive or combative & competitive? Gossipy or team spirited? Are the more seasoned agents willing to help new agents out? Or do they actually try to hinder your success? Don’t underestimate the impact the brokerage’s culture – it can truly make or break your happiness. You are going to come across all sorts of characters in this business and it’s really important to surround yourself with supportive, like-minded people who have a mindset of abundance and not scarcity.
It’s one of the things I absolutely love about the brokerage I’m at. It is structured to not only encourage, but actually reward agents for helping develop others at the brokerage. The revenue share model of when you do well, I do well is the exact model brokerages need to help develop great agents.
But know that when you ask these questions, the broker is going to try and tell you that the culture is great, they’re not likely to be honest if it’s a toxic office, so I recommend you ask to speak with some new agents that have been there for about a year and see what they have to say. They’re more likely to give you the straight goods.
QUESTION 7 – What Benefits Are Provided?
Alright the next area you need to ask is about other Benefits that they offer. And I’m not just talking about the obvious like health benefits, but what about the less well-known benefits that brokerages are starting to implement for attraction and retention? Is it a publicly traded company and are there any stock option benefits? I am a huge believer in diversifying your income stream – especially in real estate when incomes can go up and down so much. It can be really hard to put money away for retirement and stock option programs are a great solution, provided of course that it’s a solid company with great growth potential. What about revenue or profit sharing? The way some companies are structured, like the brokerage I work at, there are revenue share programs that allow you to earn passive income in your sleep. What about rewards? Are there any other benefits provided that could be of benefit to you?
QUESTION 8 – What Changes When I Scale My Business?
Alright moving along, the next critical question you need to ask a brokerage you’re considering is what will happen if you want to bring on a partner or start scaling your business and build a team? You might not be there yet, but you need to know how it will be handled if and when you get there. What happens with your splits, transaction fees and any other costs? If it’s a partnership, are your sales allocated evenly or does only one of you get the credit? Are there any other implications that could affect things? I know of one partnership that split up and because all of their sales were allocated to just her partner, when she left to join another brokerage she didn’t qualify for their highest commission split plan, even though she would have, if she’d been on her own. These are important things to consider and keep in mind.
QUESTION 9 – What’s Included In The Contract?
Alright the last and most critical topic you need to cover is what happens if and when you want to leave? When you join any brokerage, partnership or team, you always have to have an exit strategy in place. You may choose to never leave, but when you don’t have a viable exit strategy, you lose your power and you become stuck and trapped. It’s not a good place to be. A better place is to know you can leave and that you’ll be fine if you do leave. When you know you have choices, you make better choices. So join every brokerage preparing to leave and know exactly what will happen if you do. Ask questions about how much notice you need to give? What happens to any pending deals? When I left my first brokerage I was on a 90 / 10 split and had about $75 grand in commissions on pending deals when I switched companies. Well they put me on a 60/40 split for all those deals under the rationale that I was no longer on a plan and so it reverted to their standard split for those deals. That was a big hit but when I looked at the small print in my contract – it was there, so there was nothing I could do about it. So that’s one warning to look out for, but what about capping requirements? Will they claw anything back if you’re mid-contract? Also, What happens to any leads in your CRM, will you be able to download them all and take them with you?
The bottom line is to Make sure you have everything is in writing, read your contract carefully and make sure you understand what you’re signing. It’s never a bad idea to get a lawyer to read it over as well. Also if you’ve discussed something that isn’t in the contract, add it and get them to initial. Don’t leave anything up to a verbal agreement. It’s just like real estate, if it’s not in writing, it doesn’t exist.
So as you can see there’s a lot of things to consider when you’re researching brokerages. It is a competitive business and brokerages are getting more and more creative when it comes to attracting agents. If you don’t know what’s out there, you could be missing out on an opportunity to join a brokerage that offers way more than you’re even aware of. As I said at the beginning of this episode I’ve been at 4 brokerages throughout my real estate career and every one of them was completely different. As some of you may know, I’m at EXP realty now. If you’re in the united states I’d be very surprised if you have’t heard of them, but for those listeners in Canada you may not be as familiar because it’s newer here. For me personally, after hearing the business model I was immediately a hell-yes. I have always been entrepreneurial by nature. I’m always looking for ways to diversify my income stream and make passive income anywhere I can, so EXP was a no brainer. So I joined in the fall of 2020 and until now I haven’t spoken publicly about it. Why? Because I do not and will not endorse anything that I haven’t personally tried and liked. I needed to make sure that first and foremost EXP was a great real estate brokerage. The company and its agents will only do well, if it’s a great company and if it attracts great agents. I am not going to endorse something I don’t believe, which is why I never tried to attract anyone until I knew what they’d be getting into.
I will say that EXP has developed a bit of a reputation out there and in all honestly it’s really unfortunate. It’s an incredible business opportunity, but unfortunately great opportunities usually attract agents who end up giving it a bad name in their overzealous excitement and that can sometimes overshadow the opportunity. People get turned off by some of the aggressive recruiting tactics and don’t even take the time to understand the opportunity and that’s really unfortunate.
We’ve created an amazing community of women at EXP and meet every monday morning for support, coaching & accountability. It has ended up being the perfect fit for me and I personally couldn’t be happier. Is it for everyone? No of course not, but if you’re curious and want to learn more about the company and just get the straight goods without all the hype, I did create a video explaining what EXP is all about. I’ll link to it in the show notes for this episode.
Also don’t forget if you want that checklist and cheatsheet, you can download it in the shownotes or from my website at womenrockingrealestate.
If you haven’t checked out the real estate brokerage EXP, do yourself a favour and watch this video and if you’re new to real estate and want to know what the heck to focus on after you’ve picked a brokerage, check out this video for my first year in real estate roadmap.
I’ll see you there and remember, the more you learn the more you’ll earn.