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.
Choosing a broker is decidedly one the biggest decisions in an agent’s career, and it isn’t always an easy choice. No two brokerages are exactly alike, although they can share many similarities. But which type of brokerage is right for you?
The pandemic has made us completely rethink how we work, connect with others and serve customers.The same is true for choosing a broker. Some brokerages were better prepared to handle the changes and have managed to keep finding themselves at the closing table despite the coronavirus. Ideally, that’s where you want to be.
Here’s a closer look at the three main types of brokerages and how the pandemic could impact their performance.
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 and have very sizable operating budgets. They are also usually at the cutting edge of technology in an effort to stay competitive, which benefits agents in a time when tech is helping overcome physical limitations.
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 - even while stay at home orders are in effect.
Ample resources help agents save some money upfront, but the commission split is often the downside. National brokerages tend to have a less favorable split, particularly if you’re a rookie. Think of it as exchanging income for education and access to virtual tools that make it easier to work remotely.
A boutique brokerage is a small, very localized firm. Everything is highly personalized in terms of how the brokerage works with clients and agents. Not surprisingly, a boutique brokerage is a tight-knit group where everyone works together. However, the benefit of the camaraderie is limited when people are primarily working from home during the pandemic.
There normally aren’t a lot of people in and out of a boutique brokerage, which many clients actually prefer while coronavirus is still a concern. And some people like the short list of clients in general because it means each client is given ample attention.
For an agent that’s just starting out and wants a true mentor, a boutique brokerage may be the way to go. The brokers at a boutique firm will find creative ways to help you be successful during uncertain times because that’s part of having a long-term career in real estate.
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 send your way. That can be a real problem for a new agent during a pandemic. There’s also a higher possibility that you’ll have to pay monthly office fees and the commission split might not be much better than a national brokerage.
One downside of a boutique brokerage during a pandemic is their lack of technology. Boutique firms tend to do business the old-school way with amazing in-person service. Some boutique brokerages may not be able to invest in the technology infrastructure that’s needed during a period of social distancing.
For years, Aceable Real Estate School has been helping professionals get a real estate license virtually from the safety and comfort of their homes. It’s mostly business as usual during the COVID-19 pandemic for us, which has been ideal for thousands of people that are quarantining and social distancing at home.
Real estate tech has finally made its way to brokerages. Virtual brokerages, also known as cloud brokerages, are online only with no physical location. Since most agents do the bulk of their work from 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.
Clearly these are all upsides during a health crisis that necessitates minimal contact.
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. If they’ve continued to handle the same sales volume during the pandemic that’s a good sign agents have the support they need to work through a downturn.
Finding a broker during an unprecedented pandemic can be challenging and stressful, especially when in-person activity is limited. Some experts anticipate that the increase in high-tech virtual home showings, drone videos, 3D mapping and Zoom conference calls will continue after the pandemic has ran its course. You have to make sure the brokerage you choose is prepared to make the post-pandemic pivot.
Even though it seems like much of the country has shut down, real estate markets across the country remain active. People are still buying and selling homes. Some areas have even seen appreciation. Right now, buyers and sellers need sound guidance more than ever.
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 a broker license and create a brokerage of your own.
*This article was updated on 9/10/2020