Top questions to ask a potential broker as a new agent?

[ISellRiverview]

OK I passed my Florida Real Estate Exam and I am planning to start interviewing brokers this week. I am compiling a list of important questions to ask the brokers, but would love your input!

1. What's the split like?
2. What office fees are there, if any?
3. What marketing materials are included?
4. Do I pay for my own signs, biz cards, etc.?
5. Can I use my own cell # and website on all my signs, biz cards, marketing materials or must I use the company's? (this is a dealbreaker for me - I want my own site)
6. Do you have a training program?
7. Are you willing to allow me to start part-time and still mentor me and answer my hundreds of questions?

WHAT ELSE?

[RESteve]

My #1:

- Explain to me your accountability programs; more specifically, do you have systems in place to help hold me accountable for my goals?

To me, without accountability, it's extremely tough to succeed in this business.

[ericbramlett]

Trade your #6 with your #1 & you're off to a great start!

[BrandonSternfield]

I don't know much about the questions, but wanted to congratulate you on passing the exam!

[Saodavi]

More important than the split is the cap. ("Cap" is a KW term ... not sure what others call it.) Basically, the cap is the maximum dollar amount that a broker will take from you in a given year.

For example around here, the KW and the ReMAX offer something approximating a 70/30 split. However, there is an $18,000 cap (plus office fees). That means, that after the broker has taken $18,000 from you (around $2 million in gross sales), you'll go to 100% commission for the rest of the year. The next year, you'll start over.

Thus the agent's actual value to the brokerage is $18,000 profit per year. The other fees just cover overhead and/or franchise fees.

So, a 50/50 split or a 100/0 split don't really mean much. The more the broker takes, the faster you get to the cap and thus 100%. Some brokers don't offer the cap and just take from you forever.

When you're interviewing, pay less attention to the split and/or cap and spend some time calculating the total annual costs of being in that brokerage. How much will you pay them over the course of a year to do business with them? Be sure to keep an eye out for office fees, desk fees, franchise fees, marketing fees, board/mls/keybox fees and other junk fees. Many brokers use them to offset the low cap or commission split. These extra fees can easily be in excess of $5000 per year.

[ISellRiverview]

Trade your #6 with your #1 & you're off to a great start!

They were in no particular order of importance, but you are right - training is key!

[RichardRocco]

Congratulations on passing the FL exam...I am considering taking that one myself. I recently had the same question that you asked here and I compiled a list taken from responses to my questions posted as well as various posts here and elsewhere.

In no particular order but my first RE class instructor recommended that a new agent should NEVER work for a brokerage that does not offer 1, 2 & 3; although 1a is nice to have Personally I feel number 2 is actually number 1 for new agents.

1. Written Contract - Do they offer a written independent contractor agreement?

1a. Active and pending listings - What happens to an agent’s active and pending listings, if agent were to leave the brokerage prior to closing? Go with me or stay at brokerage?

2. Training/Mentor - Do they offer organized training and/or mentor program? If so, what types and how much do they provide? Many of them have online classes. Ask to see what it looks like.

3. Written Policy Manual - Do they offer a written policy manual?

4. Lead Generation - What kind of leads will you get from the company, if any?

5. Commission split - Sliding scale or fixed? Rollbacks?

6. Desk Fees - What do you pay for and how much?

7. Administration Fees – Buyer or Seller, what do you pay and how much?

8. Other Fees - Board of realtors (local, state and national), MLS, Errors and Omissions Insurance, business cards, marketing, Internet access, copying documents, phone calls, voice mail, etc.

9. Marketing - Does the brokerage offer reimbursement for marketing? If so, how much and what type? What marketing strategy does the broker employ? Do they rely on print (newspaper) ads, invest in Internet marketing etc?

10. MLS - What kinds of programs and multiple listing services do they subscribe to?

11. Time in business - New brokerage or old-timer?

12. Market share - Most can run a quick market share query on MLS to show you their market position.

13. Office Structure - Is there an office manager or does the broker handle all issues within the office. Does the sales manager work with agents; do they cover the basics, computer/MLS training, marketing, negotiating, etc.?

14. IDX/VOW - Some brokerages will allow you to place MLS/VOW listings on your website, some won't. Some only allow the companies listings to be displayed some allow all listings.

From an IDX perspective, you need to make sure:

A: that raw data is available to brokers (This is actually a board issue not a broker issue)

B: that if it is available for agents (Upon broker signature) that your broker won’t mind signing for it. Try to get it in writing.

C: It's also nice to be able to list the entire office's inventory in your "listings" area without having to ask permission.

15. Technology - Do they have a website? What types of technology does the company employ? If the brokerage has a web site, you might ask for a link to your site (if it's a good enough site). What kind of rankings do they get in search engines like google for local real estate terms?

16. Community involvement - Some brokerages are very involved in the community some are not.

17. Agents longevity -
What’s the average length of time agents have been with broker?
What’s the longest time?
What’s the shortest?

18. Floor Time - Required or voluntary? Find out how it is handled.

19. Tuition Reimbursement - Some brokerages will reimburse you for pre-licensing course as well as continuing education courses, books, etc.

20. Group Health Insurance – Is there group health insurance available thru the brokerage or local association affiliation with the brokerage to enable GHI coverage.

21. Non-compete clauses - Whether agents in the company have exclusive rights to work specific areas.

Also, ask if you can speak to a few agents in the office. Get a feel for the people you will be seeing and working with on a daily basis and learn what they think (like and dislike) about the office.

Hope that helps and best of luck!

[SEO Dave]

Congrats on passing the exam!

SaoDavi - is that system specific to KW/ReMax, or do most/all brokerages do it (under a different name perhaps)?

[Commercial Realtor ®]

Research your desired market area. Do a search on Realtor.com for property listing. Prepare a list of the most active agents. Call the top agents and explain that you would like to get into the business and are looking for a mentor.

The best thing about this business is that once you are sucessful, you can name your own terms but the best way to suceed is with a good mentor.

[Saodavi]

Dave, most modern "big name" brokerages will have something similar to what I described. The splits/caps vary with the marketplace.

Older brokerages, "mom and pops" and independents will probably use either a fixed split (eg 70/30) that goes on forever or a sliding scale split (50/50 for the first $XX 60/40 for the next $XX, etc. up to around an 80/20). At the end of the year, you drop back two slots and start over.

The newest trend is 100% model. These brokerages will charge you some fixed amount per month ($350) and you get to keep 100% of your sales. Or they'll charge you a flat fee ($250?) per transaction. These new models are built on the broker making money by having a large number of agents and not the production volume of the agents. They are designed to compete against the split/cap formula used by most of the national franchises. The downside to these models is that there's not much internal office support or training, for obvious reasons. The agent is pretty much on their own. It works out well for agents who are established and don't need help, agents with a large referral base, agents who don't need "the brand", and agents who don't do much volume and don't want to pay all the fees.

Most brokerages with use either the first method (split/cap) or the third method (100%). The second method pretty much went obsolete with the development of the "mega agents" and the shift of power from the brokers to the agents in the brokerage.

Ultimately, you just have to tabulate your ANNUAL costs for doing business there. Compare them with the training and other benefits that you're getting (because you're really paying for them) and make a decision based on that.