10 Questions To Ask Before Deciding To Work For A Real Estate Broker
According to the National Association of Realtors, there are more than 100,000 real estate brokerages operating in the United States. However, only a few will be a perfect fit and play a massive role in your success. Thus, asking the right questions in a broker interview is crucial to see if they can help you skyrocket your real estate career.
Your list of questions must include inquiries on commission splits, brokerage-related fees, company culture, and training opportunities. Since there are vast differences among real estate brokerages, it is recommended to interview at least three of them to ensure you'll end up with the perfect fit.
In this article, we'll provide you with a list of questions to ask when choosing a real estate broker to work for. Keep in mind that every brokerage is different. Don't immediately rule them out if they give you a bad answer. Instead, ask follow-up questions for further clarity.
What Is the Commission Split?
A commission split is the percentage agents and brokers get when they help a seller or buyer close on a property. Commission splits can range from 50/50 to 100%. The number will depend on the firm's size and the number of agents a broker oversees.
No single type of commission split is more beneficial than others. Hence, making your decision depending on the largest commission split isn't the best route. Have each brokerage give you an accurate picture of your income and expenses if you will join them. But in any case, commission splits need to be reasonable and within the industry standard.
Commission Cap
Ask the brokerage if they offer a commission cap. It is the point at which the brokerage will no longer take a commission split and you'll receive 100% of the commissions.
Say, for instance, that the split is 60/40 and the cap is $25,000. The brokerage will get 40% of your commissions until the amount they have collected reaches $25,000. Once that happens, you will move to a 100% take on your transactions. Commission caps are typically restarted annually, either on the calendar year or the anniversary of your joining the firm.
What are the One-Time and Ongoing Fees?
Every business, regardless of its size, has operating costs. When you become a licensed real estate agent, you become the owner of your own small business. This means that no matter which brokerage you choose to work for, business costs will always be associated, such as membership and marketing fees.
Each brokerage has its way of handling expenses. You must ask for a detailed list of the fees – including the "hidden" ones – that you would be responsible for so you can budget accordingly. The last thing you need is to get surprised by fees months after you start working for the brokerage.
The most common type of brokerage-related cost is the desk fee. It is a payment you make to your brokerage for having physical space at an office. Many brokerages still require a desk fee even if you don't use the office, while other brokerages make it optional.
Brokerage-related fees include:
- Errors and Omissions Insurance (E&O)
- Annual National Association of Realtors (NAR) membership
- Monthly MLS fee
- Real estate signs
- Business cards
- Website hosting and IDX (MLS feed)
What Kind of Training Do You Provide?
Every new real estate agent needs all the help they can get to navigate the harsh waves of the industry. Hence, this is probably the most important question you should ask in a broker interview.
Some brokerages offer a pre-established training program. If that's the case, ask who designs the training curriculum. It is also best to ask for a sample of the training program content. Additionally, inquire whether the training will be done in the office or online and how often it would take.
Tip: Ask if you can sit in on some of their training classes. A good brokerage will see this as an opportunity to show you what they offer. If a broker won't let you experience their training unless you join the firm, consider it a clue to their company culture.
Agent Mentorship Program
An agent mentorship program is where an experienced real estate agent (the mentor) gives practical, hands-on guidance to a new agent (mentee). The guidance of a mentor will be one of the most valuable tools in your entire career. You can ask them questions, shadow their presentations, and even play client scenarios with them. The program usually lasts for your first 3 to 6 months in the business.
How Are Leads Distributed and Qualified?
There are many ways a brokerage can choose to distribute leads. For instance, many brokerages impartially distribute leads with round-robin routing. Other brokerages choose to route leads by city or zip code to help agents turn into neighborhood experts. Meanwhile, some brokerages distribute leads by agent expertise.
Your brokerage must have a transparent and fair method established. Otherwise, you will have a tiny chance of gaining many high-quality potential clients. Furthermore, this question will help you identify the management style of the brokerage.
What Support Can I Get From Your Firm?
As a new agent, you'll have a lot of questions. Thus, it is reasonable to expect a timely response from your broker when you have a concern – even when an urgent issue arises after 5 pm. Moreover, you want to work with a brokerage that will help you promote your listing and the brand itself.
Administrative support is also one of the things you must look for. This will help you save time and stay organized during your first few listings. Most brokerages have a real estate assistant who helps with clerical tasks to accomplish this. Other great brokerages don't have an assistant but implement procedures to balance everyone's workload.
How Experienced Are Your Agents?
From a team-building perspective, it might sound great to work with a brokerage wherein the majority are newly licensed real estate agents. But if you join a young firm like this one, you will miss out on mentorship opportunities. If you want to succeed in the industry, you will need the guidance and valuable expertise of experienced agents.
Are There Mandatory Meetings?
As a real estate agent, you have more freedom than a regular employee. However, this freedom is not absolute. You will still need to follow specific guidelines from your sponsoring brokerage, like mandatory meetings.
Do you love meeting with your co-workers and are excited to get training? If yes, the idea of mandatory meetings may fit your needs. But if you want complete freedom with your time, this will be one of the less exciting parts of your career.
What Is the Company Culture Like?
Company culture is one of the most important questions to ask a real estate broker as it can impact your performance and happiness on the job. Hence, you want to choose a brokerage that is right for you and prioritizes the wellness of its employees.
The things you should look for are:
- Work-life balance - for instance, you could ask how often they have team meetings, happy hours, lunch & learn sessions, etc.
- Realistic expectations - while each company assigns performance goals, expecting too much from their team members will likely spoil the work environment. Receiving incentives for completing performance goals is also a nice thing to have in a company.
- Aligned core values - if the brokerage doesn't have clearly defined core values, you should keep looking. Plus, the last thing you want is to work with a company that doesn't share your professional beliefs. For instance, some brokerages value competition more than camaraderie, and you will benefit from being aware of that in advance.
- Favorable reputation - this is one of the factors a client considers before doing business with you. The reputation of the brokerage you choose will essentially be your own too so you must take the time to review it.
- Growth opportunities - if there's a chance for you to get stuck without being able to advance your estate career, that's not great company culture.
It is impossible to judge everything from one meeting. Yet, you can get a good idea by observing the interactions within the office and by listening to how the broker describes the culture. Furthermore, ask follow-up questions about their history and values to see if you will fit in.
Does Your Brokerage Have A Dominant Internet Presence?
Gone are the days when a physical office plays a massive role in generating leads. A recent study showed that more than 93% of home buyers used an online website to search for their homes. This proves that an effective online marketing strategy is a must for success. Otherwise, you risk running out of leads and being seen as out-of-date.
There is no one-size-fits-all strategy. However, a great sponsoring broker deeply understands what marketing strategies do and do not work in your location. Regardless of the strategy a brokerage uses, it must be capable of generating and converting leads. The strategy should also grow your network and reputation.
What Tools Do You Provide?
If a brokerage doesn't use technology tools, keep looking. We're now living in a digital age, and a brokerage that still relies on legacy systems will go out of business soon.
Of course, you can still be extremely successful without having every tool in the market. However, ensure you know the most important tools and how your brokerage will help you. Great brokers can also tell you the exact tools they use and the specific reasons they chose them.
Conclusion
As a real estate agent, you usually work independently. Yet, you'll also need a supportive environment to find success in the industry. Struggling to find the broker who will provide that? Create your agent profile now and get connected with brokers in your local area.
Searching for the perfect brokerage might take some time, but making the right decision will surely make a massive difference to your success and happiness.