09.25.18
Forbes: Before Switching Brokerage Firms, Read This
Whether you are a residential or commercial real estate broker, the grass can sometimes look greener at another firm. In 20-plus years of owning a multifamily brokerage firm, I’ve seen hundreds of brokers come and go. In my experience, a broker switching to the competition gives up to five consistent reasons for leaving.
Before you make your move to a competitor, consider these five elements of your work and company.
1. Reputation
When looking for a potential new brokerage firm, consider not only the company’s reputation, but also the reputation of the principals and other brokers at the firm. What do your clients say about them? What is their reputation in the press? What is their standing in the marketplace?
2. Company Culture
Clients benefit from an open culture where deals and information are shared not only between the brokers at the firm, but between the firm and other firms in the marketplace. The industry is beginning to understand this, so make sure you see if the potential firm is collaborative. Ask how many transactions have more than one broker involved. Although a good company will have an extensive reach and many times will be the only firm involved, it is also important to find out if the firm cooperates with other firms and under what conditions. I suggest steering clear of a firm that lacks a collaborative culture, where brokers are internally competitive and reluctant to work together.
3. Company Strength
Ask how much market share a brokerage firm has. Ask for current and past year(s) production levels (sale volume, gross revenue, etc.). Is it on track to beat or exceed last year’s production levels? Is its year-over-year growth sustainable? Understand the short- and long-term plans for the company before jumping ship. Are the principals committed to growth, and do they have a strategic plan for the company?
4. Splits Aren’t Everything
Earning a living is certainly a top priority for brokers; however, good brokers will be successful wherever they are. The search should be more about whether or not the platform the brokerage firm offers and broker support system will enable you to grow your business further. There is more to the equation than who is offering the biggest splits. Do you have to pay for your seat at the office? Do you get any admin or marketing support?
5. Beware Of Signing Bonuses
Most brokers make no salary and work on 100% commission. If you come across an opportunity for a draw and/or signing bonus, be skeptical. Many times firms are just trying to boost volume — sometimes for a potential sale — by bringing on big hitters by offering lucrative signing bonuses. As a broker, it’s about the long game, not the short game. The company offering short-term incentives may not have the long-term stability you are seeking. Often, taking less upfront means you make more later on. Select a firm where you can build the best business for yourself, not solely one paying you to join.
Many brokers hop from firm to firm without considering every piece of the equation. While the grass may look greener at another brokerage firm, consider not only what is best for your paycheck, but also for building long-term success in the industry.
