Questions to ask when Choosing a Broker for Real Estate
Choosing a Real Estate Broker to Work For: Advice for Newly Licensed Agents
The first step to your successful career in real estate is choosing the right real estate broker to work for and knowing what questions to ask. There are wide differences among real estate brokerages, both in what they will offer you as well as the commission splits, expectations and culture. Many new real estate agents base their decision on the best commission split and that usually isn’t the best route, especially when you are new to the industry.
We highly recommend that you meet with at least three different brokerages — and do your research on each one before hand (see Researching the best Real Estate Brokers). Once you find the three (or four) that look the most appealing to you, schedule time to meet and ask the following questions:
1. What are your commission splits? (i.e. does the broker get 40% and you take 60%of the commission earned) Don’t decide which office you’ll first join based solely on the commission split, writes Colorado agent Debbie Laity. She did, and ended up belonging to four offices in two years. Focus on education, training and finding a mentor to help show you the ins and outs of the industry.
2. Are there any franchise fees? Many large real estate brokerages charge a 3% to 8% “franchise fee” on top of the commission split above, so using the example above, the broker would receive 40% , the franchise fee would be 5% and you would receive 55%).
3. Do you offer a commission cap? a commission cap is the maximum amount of commission that the brokerage will deep each year. For example, if the “cap” is $200,000 in gross commission, you will net $180,000. If an agent cap is NOT offered and you are on a 60/40 commission split, then $80,000 would go to the broker and you would net $120,000.
4. Are there any other brokerage-related fees? A few common ones include:
- Monthly office fee
- Monthly MLS fee
- Errors and Omissions Insurance (E&O)
- Education fee (often charged for the new licensee course they offer)
- Start up fee
- Desk fee
5. What other expenses might I be responsible for? Examples include:
- eKey (to access property lockboxes)
- Business cards
- REALTOR designation (usually $400+ per year)
- Website hosting and IDX (MLS feed)
BROKER BENEFITS & OFFERINGS
6. Do you offer any of the following:
- Business Cards
- Stand-alone website of page on broker’s website (fyi: a stand-alone is a big plus)
- Home buyer of home seller leads provided? if so, ask the following important questions:
- How are the distributed among the agents?
- Is there a referral fee of up front charge?
- How many leads can I expect each week or month?
- Are the leads website registrations or are they actually inquiring about a specific property?
- What is the typical conversion rate on your leads (i.e. what percentage of the leads end up buying or selling)
- Closing coordinator
- Technology support team
- Continuing education classes (for CE Credits)
- eSignature tools — DocuSign, DotLoop, etc
- Paid at Closing option
- Customer Relationship Management (CRM) system
- Discounts with local vendors
- Marketing resources (try to get lots of details about what is available)
- Meeting space (to meet with your clients)
- Clerical or administrative support
EDUCATION & SUPPORT
7. What type of classes do you offer and how often?
Also ask if there is a cost for the classes. Many brokers offer lots of classes, but most are taught by agents in the office (i.e. your local competitors). The good classes that are taught by the brokerage may cost between $200 – $1000 per class.
8. Are the classes all in person or do you offer online courses? (that you can view at your convenience)
9. Who can I contact if I have questions about a contract? Are they available after 5 pm if I have an urgent issue?
10. Do you have a mentor program? If so, how does it work?
Typically the agent mentor program will last for your first 3 to 6 months in the business (or the first few transactions) and you may share a percentage of your sales commission with your mentor in exchange for their guidance.
BROKERAGE ENVIRONMENT & EXPECTATIONS
11. How many real estate agents are in the office?
12. How often do you have team meetings, happy hours, lunch & learn sessions, etc?
13. Are there any meetings that are mandatory attendance?
14. Do you promote our listings, the office, and the agents?
15. Is desk or phone duty required for each agent? If so, how many hours a week?
16. Are you involved with the surrounding communities?
17. What are your expectations for me? Is there anything else that I’m required to do as an agent under your real estate brokerage? This could include selling a certain number of homes each year, being a full-time agent, attending certain meetings, etc.
18. Can you describe the atmosphere of the office?
19. Would it be possible to get a tour of the brokerage and meet some of the agents and staff?
20. Can I have the phone numbers of 3 to 5 agents who work in the office? (It’s always beneficial to have a private discussion with the other real estate agents!)
21. Can I sit in on an upcoming training session or team meeting?
FYI: While it may be difficult to determine the atmosphere and company culture of a real estate brokerage, it is critical to learn as much as possible beforehand. As a real estate agent, you work independently much of the time, but also need a supportive environment when issues arise and/or when you want to take your business to the next level. It can make a BIG difference to your success and happiness!
When you are researching different real estate brokers, be sure to check out what The Toth Team Worldwide Network has to offer!