You might be an independent contractor, but as a real estate agent you can’t go it completely alone. If you want to help clients buy and sell homes you’ve got to have a broker. But which type of brokerage is right for you?
A national brokerage has a presence across the entire U.S. They’re your Coldwell Bankers, Keller Williams and RE/MAX brokerage firms that handle thousands of transactions a year.
Name recognition is one of the biggest benefits of joining a national brokerage. This is highly beneficial for new agents that haven’t made a name for themselves yet and professionals that want to take their business to the next level. A national brokerage should also have significant resources to help agents advance their career, learn the ropes and work leads.
Ample resources help save some money upfront, but the commission split is often the downside. National brokerage firms tend to have a less favorable split, particularly if you’re a rookie. Think of it as exchanging income for education.
A boutique brokerage is a small, very localized firm. Everything is highly personalized in terms of dealing with clients and agents. Not surprisingly, a boutique brokerage is a tight-knit group where everyone works together.
For an agent that’s just starting out and wants a true mentor, a boutique brokerage may be the way to go. Unlike national firms, boutique brokerages have a limited number of agents and one-on-one training is the norm. It’s also a good career move if you specialize in a niche that a boutique brokerage has cornered.
However, boutique brokerages sometimes have less structure and fewer leads to throw your way. There’s also a higher possibility that you’ll have to fork over monthly office fees and the commission split might not be much better than a national brokerage.
The newest type of firm is the virtual brokerage, also known as a cloud brokerage. As the name suggests, it’s an online brokerage without a physical location. Since most agents do the bulk of their work at a home office, a virtual brokerage makes a lot of sense. This is especially true for seasoned agents that have an extensive contact list and don’t need as much training.
The benefits of joining a virtual brokerage include:
- Typically a better commission split.
- Large community of agents and brokers to tap into.
- All your tools and paperwork are available on your mobile devices.
- Investment in the latest technology.
You don’t have to be the most tech savvy agent to jump on board a virtual brokerage, but there may be a learning curve by completely moving to paperless transactions . Another downside is that the concept is still relatively new so clients may be a little hesitant to sign with a virtual brokerage.
You also have to heavily vet virtual brokerages to make sure they’re 100% legit. Look for brokerages like Real that have a solid track record and are well established.
At the end of the day, there’s no right or wrong brokerage model. It ultimately depends on the type of support you need - and yes, the commission split is important. Of course, if you aren’t finding the ideal solution you could always get your broker license.
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