After getting your real estate license, the rule is that you have to choose an agency—usually in the form an LLC—to represent you. Choosing your first agency will likely be one of the more important decisions you’ll ever make in your real estate career. Your first agency is going to be the platform from which you launch your career, and, like first marriages, there will never be another one. It will also influence the rest of your marriages to come.
The reason for this rule is to keep you regulated. They’re claiming you. That way you don’t do something shady to give the industry a bad name, which obviously many agents manage to do anyway.
Below is a breakdown of what I believe are the 4 most important issues to consider before choosing that first agency.
Pay attention to the office during your interview. Are the phones ringing? Are agents laughing and smiling at one another, like they might actually enjoy each other’s company? Are the office managers friendly and helpful? Or do they scowl from any attempt at contact and treat frustration with screaming fits and Oscar-worthy room walkouts?
2. What is the commission structure?
Many agencies are going to want half your commission until you’ve proven yourself deserving more. 50% might sound like a lot, but considering the resources available to a new agent, the split could be worth it. A high commission company should be offering you something substantial for your money. Yes, you’re surrendering half your hard-earned money, but you’re also getting management consultations, consistent training, client referrals, discounted or free online advertising, and multiple office locations. It all depends on what works for you.
Agencies with more generous commission structures tend to be less generous when it comes to helping their agents. They also tend to have very few office locations, if any. (They’ll also hold holiday parties where the oeuvre derves are pork rinds, and the open bar is Schlitz Tallboys.) You get what you pay for.
I believe it’s best to start out 50%, so you have the guidance and tools available to gain experience. Once you have that experience, and no longer require too much head-patting or hand-holding, it would be wiser to change to an agency where your commission reflects what you know. What you’ve learned and earned.
BEWARE: Avoid “churn-n-burn” agencies at all costs. These are the agencies that lure you in by paying for your school. They promise you the moon, the stars, and Jupiter too. They then take 70% of your commission. This is an obvious recipe for failure, and they’re okay with that. Your career is of no concern, and it’s fine if you leave because you probably would’ve anyway. At least they got 70% off you!
3. Office Locations
Is your workspace a two-story, 3,000 square foot, modern office with floor-to-ceiling windows facing the ocean? Or is it a lean-to behind the interstate gas station facing the restroom? You want the office to show your clients that you work for a successful agency, not a struggling one. Of course this doesn’t necessarily mean that your office should be a luxury palace, but definitely a place that invites people to walk-in and feel comfortable.
Also, how many office locations are there? Do you need a two-hour drive to attend a meeting or two blocks?
Funny story: I attended a lease signing at a real estate office where the inside entrance was divided partway by a glass wall. It was a chic concept, but the wall was practically invisible. Everyone would walk into it! And this was your first sensation upon visiting this agency—getting smacked by an invisible wall. Go figure. (Maybe this was how they got their clients to always sign? Bop them, so they’re too dizzy to object?)
4. How good is the agency’s brand?
Or how professional is their website? I once considered joining an agency until I visited them online. Their site was a single black page with a flashing 16-bit American flag over a background of cascading dollars. Um, no thank you.
What do their reviews about the agency say? Glassdoor.com is an excellent source to check this. It’s a site where employees can review their jobs, past and present. (You’ll be astonished at how candid people can be about their current workplace.)
I believe that many agents are overpaying for the bells and whistles that come with working at a big name agency. You already know these agencies. They’re the ones who have a TV show in which their star agent previews three homes with a pottery teacher and his pet store clerk wife who somehow have $4 million budget. A couple of commercial breaks and PRESTO! The clients have the home they’ve always dreamed of.
Sure, an agency that’s a household name might impress certain clients that you’re pitching to (as well as the gold emblem folders with glossy info sheets inside), but in my experience, you’re paying far too much for that name recognition. Why work so hard to someone else’s success? Be your own champion.
I placed these issues in no particular order. You can certainly argue one’s importance over the other. What can’t be argued is that you want to choose a real estate agency that will pay you fairly, not be located too far away from home, and not embarrass you. It should also have nice people you want to be friends with. In other words, perhaps the same as at any other job you would ever work.