Need advice from PROS

[erikh]

Every day that I spend in real estate, I find it harder and harder to rationalize why I should be paying the splits I am paying to my brokerage. I'm sure everyone goes through the same thing, but seriously, my brokerage is absolutely useless to me. All of the tools that I need to succeed in this business are already at my disposal. I'm speaking specifically about having access to information. Getting the business has always been and always will be up to the agent. So why do agents stay with these big name brokerages when most people admit that they do business with the realtor because of the realtor and not the brokerage? I'm asking because there is a brokerage in my area that charges $250 a transaction up to a maximum cap of $4000 for the entire year. Those are very tempting numbers. Any advice would be appreciated.

[Jennifer Allan]

There is a lot of Old School nonsense alive and well in real estate. And Big Brokerages with Big Splits might be included in that. They think they're earning their money from you, but, sadly, not even close.

If you don't think you're getting your money's worth, you're not. Yes, a brokerage needs to make some money from you, but they also need to be worth that money.

It's really not a big deal to move... so if you feel strongly that it's time... just do it.

[Bill Saunders]

Hey Erikh,

Jennifer is, of course, right . It is easy to move. There are good sections in her books on choosing a brokerage. Lots of reasons, and many of us didn't interview around, but went with someone we knew, etc. There is also a book probably on half.com or ebay: 21 Things I Wish My Broker Had Told Me, and there might be some in the local library with sections on how to choose a brokerage. Jennifer's are obviously the best, or we wouldn't be here...

There are the good, the bad and the ugly like in any business. If you are paying a high desk fee like some, you should be getting something in return in my opinion. That "Something" should translate directly into making you either a better agent, result in business NOW or a good deal of business in your pipeline for future use.

There currently is a brokerage in my town that is picking up agents right and left. The fees are reportedly high, but they give you a better split to offset their fees...they offer a GREAT deal of specific training and that is a big selling point to many of their new agents...and when I say "new" I mean experienced agents that are new to the firm that have left another brokerage. The broker is highly respected, and all the agents I talk to are happy as clams.

Another consideration is web presence. Another brokerage in town is consistently #1 on google when you key in Hot Springs homes for sale, etc. They are far cheaper than the previous mentioned. I would imagine floor duty is productive because of that. The split will be less, and possibly the training, but then in our neck of the woods, fairly specific CE training can be had for between 25-65 dollars. If your brokerages there provide E&O insurance and almost all of them do in the world, consider that. To provide your own can cost up to $1,700.00 annually.

The point is, you might want to visit with some other agents that you know that are with other firms. If you have a realtor caravan, go to it every time you can and make relationships with other realtors in town and listen to what they are saying. Keep in mind that you might also be viewed as merely an "income stream" so to use a good phrase I heard somewhere, "keep your antenna up."

Just my penny...well...maybe more..Lol

[erikh]

Thanks for the advice. I did some research on my own and here is what I came up with. There is definitely a correlation between homes listed at $1,000,000+ and their association with big name brokerages. They dominate listings in that price range. In the sub $200k market it doesn't seem to matter as much. So I'm thinking, and correct me if I'm wrong, that high priced clientele are more likely to list with an agent that is with a big name brokerage. If that is true, that fact alone would keep me with a big name brokerage because those are the types of clients that are already in my SOI.

[Jennifer Allan]

I have no experience with high-priced clientele, but I'm guessing that it's the agents who are drawing the listings, not the company? Or are the listings distributed among the agents in the Big Name company?

And to confirm - your SOI is ALREADY rich folks? You're not saying that you want to break into that market - you already are, to a degree?

I find that when I'm frustrated with something and am considering making a switch; if I can find a rationale for staying where I am that serves ME, I can get over my frustrations. Maybe that's what will happen here. You'll decide that the trade-off is worth it and won't fret anymore about it.

[Susan Haughton]

At the end of the day, everyone has to evaluate what makes them the most comfortable.  I love my managing broker, he leaves me alone, I'm very happy with my split and what the brokerage provides in terms of marketing, advertising, postage allowance, etc. 

Our office is in the heart of the area, which matters in terms of convenience and admittedly, a little prestige - but more importantly, I get a garage parking space in the best part of town which is convenient for dinners out, events, etc when parking is at a premium - LOL.   Could I go somewhere else and net more $$?  Probably, but I'm happy now so why risk the change?  My marketing materials are already designed to complement the brokerage colors...I could go on and on but at the end of the day, I have no motivation whatsoever to make a change. 

There are brokerages that offer a higher split but they don't have the cache of the brokerage where I am now...there are boutique agencies with prestigious profiles but they insist on their agents being somewhat uniform in their appearance and marketing materials and well, that doesn't work for me.  The split isn't even a factor.

At the end of the day, we all need to be in a brokerage where we are absolutely content with the culture.  Is my split lower than it may be somewhere else?  Possibly - but in order to go somewhere with a higher split, I will pay for it in terms of a lower profile brokerage which does no image advertising -- which means I'll end up "paying" for it one way or the other.