Small Brokerage vs. BIG Franchise

[Iamanoak]

Hello Everyone,

I am 32 yrs old and a broker associate with my father's very small real estate brokerage. I came to work for him about two years ago after spending 10 years in the title insurance industry. I was a closing title officer when I left. He too spent time in the title industry as well and I worked for him then too. I come from a long line small independent brokers. Third generation to be specific. So small brokerages are really all I know, other than Title Insurance.

Last year was a really good year for me. This year has not been not been nearly as good, but I am still closing deals. Because of the slow down in my area, I have noticed that most of the big franchises and large brokerages are recruiting like crazy.

Last week I started recieving calls from a couple of the franchises and another large brokerage to come to work for them. The large brokerage that called made it a point to tell me that I was on a very short list and they wanted just me and not any of the agent thats I manage. Apparently they are opening a new branch office closer to home. They claimed that they could help me increase my production even more. Needless to say it was somewhat flattering.

I guess the question I am trying to pose is; would it be worth it for me to jump ship and try something new in this market, or, should I stay where I am. I will say the benefit of where I am now is that I have virtually no overhead except for advertizing and office supplies.

I should also mention that my wife is 9 months pregnate with our first and due this week, so we are headed for a large transition anyway. Please feel free to give me all the pro's and con's of a decision like this..

Sorry for such a long post....

Thanks,

Iamanoak

[kensmith]

The name that is behind you means little, what matters is what training they have that can increase your production. Then will you actually take the training and then follow it. Fair warning, many major brands have "great training" that is nothing you can't learn from a $20 book or worse it is so outdated they don't even include the web as part of how you should build your business.

Buy a copy of "The Millionaire Real Estate Agent" by Gary Keller. Read it, follow it, and you don't need to make any changes. Keep the low overhead and get training from the best. If there is a KW office in your area you might want to consider that as they have training for agents at ever level and it WILL increase your production. BTW, The training goes way beyond what is in the book.

Best of luck - Ken

[judyo]

I just left an independently owned franchise to join a new, small local brokerage because of the commission split & lack of franchise fees. There are several of these smaller companies popping up and some of them are doing very well.

The company I chose is continuing to grow and we keep getting agents from the large franchises joining us. Most of these agents are established with many years in the business, although my broker has recruited some new agents.

I felt stifled with my large franchise company as I couldn't compete with some of these new companies. Sure, I could match anyone's offer but then I didn't make enough money for it to be worth it. My new company is not a discount brokerage but I can at least compete with the discounters if I want to, which I just couldn't do before.

So I guess it depends on your area. I've seen agents go from company to company & blame the companies for their lack of success. I promote myself first & my many years of experience & then I introduce my company. It was a little difficult at first not being able to fall back on that popular franchise name but I have no problem now, especially since new companies are starting up all of the time.

How would your dad take it? I felt bad enough leaving my prior brokerage that I had been with for 22 years as that was like family. But we do have to think about ourselves.

I'd probably at least interview with the company & make sure you get all of the facts such as franchise fees, if any, your split/commission set-up and other expenses.

[ColumbusOnline]

If you want a piece of the internet, I would say go with the Big Franchise... I probably get a good 40-50% of my internet leads directly from the branding of big franchises. People see the big names on TV and then hop on the internet and do searches for local agents with that big company... a really good example is here in the Columbus market, the #1 keyword that I get traffic from has a franchise in it...

I know there is a lot of extra cost with those big named companies, but the branding and name recognition that you get from their advertisements is very valuable, especially in the new age of internet lead generation...

[Iamanoak]

Wow! Thanks guys.. I love the diverse opinions. Believe it or not, they all help in weighing out the pro's and con's. Ken, it is funny that you mentioned that book, because a friends of mine from Keller Williams SF just gave me a copy. I was just getting ready to sit down and read it before I started this post.

Another recomendation for training I recieved from several friends in the biz was to attend a Brian Bafini seminar. Apparently he focuses quite a bit on working your referal base.

It is like I said, I am not hurting this year. It has just not been nearly as good as the last two.

In answer to you queston Judy, I did talk to my Pop about it this weekend. He is on the verge of retiring in the next 5 or so years and has stated that he is going to turn the brokerage over to my brother-in-law and me when he does. I already manage all of his agents for him. He was not so much hurt as he was a little concerned about me leaving because he is pretty anti-franchise. His 20 or so years in the Title industry burned him on working for large companies. As far as turning it over if I left, my brother-in-law would be the one to get the keys.

I still have quite a bit to think about, Thanks again for your input. Anymore pros and cons will be welcomed.

[msgulfcoast]

I just made a transition from a franchise to an Independent. I also did a LOT of research comparing "major franchises". Several people, especially the brokers that I did not choose feel that I made a mistake.

I like to think for myself. I like to advertise as I see fit and deem apropriate. I believe in seeking out and paying for my own education. Many agents right now would rather be in your shoes.

NOW. is not the time to make the change. You know that.
THINK! You can make a go of the opportunity you already have. Being INDEPENDENT can be a strength. Capitalize on it. Develop mentors with Indepents not in your area. I would suggest communicating with Rebel Broker who can be found at www.agentsonline.net
Hopefully, you are reinvesting a percentage of your profits in advertising. Be visible.

I hope you will assess your current opportunity, develop it and make the most of it, then pass that opportunity on to your children if they are interested in Real Estate.

[Iamanoak]

How funny msgulfcoast,

It has been a while since I started this post. Quite a bit has changed since then. Namely, I went to a Brian Buffini Turning Point Retreat. I really don't subscibe to hype or motivational seminars, however, I feel I walked away with some really good tools on working my referral database alot more effectively. I have already started seeing changes in my business.

I have decided to stay a small independent and actually grow by recruitng. We'll see how well it flies.

[msgulfcoast]

Good Luck and keep us posted. Confirmation is always rewarding, right? PS: Do you have a point2agent website yet?

As an Independent you have a right to create, the right to think outside the box, the ability to quickly change to meet market changes.

The MLS and NAR give Independents many of the advantages of franchises.

[RealtorjoeM]

i started with century 21 and i was not getting the experience i wanted. Business was slow, and i was not happy being a small part of something big, the desks were small and i did not have m own office..

A year later i started working with my uncle who was a broker/owner of a small company. I had my own office and i was working with 2 other agents. my uncle game me all the books and tom hopkins video series etc.. he had an entire library at my disposal. I learned so much from him and made great money working with him..

two years after he sold his business to coldwell banker, we moved offices and i had to share a desk and drive further away for work. I did get a few good leads after a very long time of doing floor time, it was a 400,000 house that i listed and sold in a matter of months. The phones do ring at the large companies, but due to the large amounts of agents and lack of floor time it tends to balance out. i was not getting the individual attention and i was actually not happy at all, causing me to have a hard time getting new business for the company..

I felt i would leave and go with another large company in the north east. and that i did. once again i was dealing with small desk and large fees. the amount of money spend on fees would take away from my own personal marketing. I also felt small and i did not want to feed the machine, so i had less motivation to bring business into the company.

the floor time was just a few hours a week, and due to the high amount of listings, you really had to work hard on floor time and not really get much in return.

i am now going back to my uncle who is independent, i made the most money with him, felt good working in my own office, and floor time was for the entire day each week and sometimes two or three days a week.. the long floor time really makes a difference, and because we had only a few agents, plenty of business was able to go around..

I also love the feeling of having a stake in the company, the ability to come up with new ideas, and help my uncle make money with me. The advice i received from my uncle was priceless and i learned so much more from him because he was selling houses and not just managing the office..

if you have a business mindset and want to start your own business someday stick with the small independent office. you will have a ton more marketing money to promote yourself, and you will not get lost in the shuffle.

big box companies are like Walmart and target but with more fees vs less..

keep real estate local, keep it small and you will make good money in this business.

Joe.