The debate between the value of working under the umbrella of a big-name brokerage and opening your own brokerage under a “boutique” name goes back as far as when the first broker negotiated a plot of land for two sheep and a goat. The broker then took home wool and goat milk as the commission.
Your brokerage’s name versus your success
On one hand, the brand recognition value of a large real estate franchise cannot be understated. You have immediate recognition as a real estate professional when you use the name of the franchise brokerage, whereas the boutique brokerage name might not have that type of distinctiveness about it.
Of course, individual effort and accountability factors are often overshadowed when tied to the name brand. The advantage of professionalism and success is more on the side of the boutique brokerage owner and entrepreneur and the reputation he or she has built.
In Ontario and many other locales, a real estate salesperson starts a career at a brokerage. They must be employed for a minimum of two years prior to being eligible to take the “real estate broker course.” Upon successful completion, they become a registered broker and can open their own brokerage to become the “Broker of Record.”
In real estate, your expertise is learned under the wing of someone that has walked the same path. Yet, they have achieved what many real estate professionals do not aspire to, which is owning their brokerage.
Earned, not given
Remember, an individual’s success is earned — not handed to them.
Client leads through the brokerage office are not arriving on your desk fast and furiously. You must network, meet and greet, market and push your individual identity to become a reputable broker. Every contact is a potential client, if not today or tomorrow, then maybe years down the road. Referrals are based on your initiative and connectedness, not by virtue of someone else’s name.
Often real estate salespeople shift from one brokerage to another because of lack of sales training, nonexistent support through challenging times and unfulfilled promises of leads being provided while monthly brokerage fees increase. Changing brokerages and maintaining your sales volume is a good indication that it’s your sales ability and work ethic that provide the foundation for your success, not your brokerage’s name.
You understand what works for you and try to find the right employment to ensure that what you need to continue your success is available to you.
As you seek out alternatives to your current brokerage, you might ask yourself:
- Will the promises of the new brokerage be fulfilled?
- Can I build my reputation under this new brokerage name?
Which leads us to the question about your real estate career: Do you see yourself still selling real estate in 10, 20 or even 30 years?
Shifting from brokerage to brokerage seeking long-term sales success might not be in your best interest.
At some point in their career, every real estate professional must answer the question (if not to others, then certainly to themselves), “Do I have what it takes to own a real estate brokerage?”
It’s easy to find the answer, just look at your past income statements. If you’re paying too much tax compared to other professions with comparable incomes (your accountant can help you with that answer), then yes — your sales are established and your income needs protecting from the tax man.
Franchise or boutique?
The next answer you need is whether to open a franchise brokerage or a boutique brokerage.
The benefits of each are varied but almost always start with two questions:
- Do my name and reputation have what it takes to be the sole influence on my marketing efforts of a boutique brokerage?
- Does a franchise brokerage offer the support and sales territory I need to continue my sales volume?
With these answers the undertaking of moving to a different brokerage, and maybe even opening your own brokerage, will become crystal clear.
You are now starting the journey to becoming a true entrepreneur by adding business owner to your list of real estate achievements.
James Hussaini is the founder and president of Realty Point.