New to the industry? Get started with everything you need to know about the early decisions that’ll shape your career, including choosing a brokerage, learning your market, creating an online presence, budgeting, getting leads, marketing listings and so much more. If you’re a team leader or broker-owner, New Agent Month will be jam-packed with resources to help your new hires navigate.
The allure of becoming a real estate agent can be quite intoxicating. You get to help people with the largest financial decision of their lives, you have the freedom to work when and where you want, you get to see a lot of houses, and if you sell enough of them, you get a pretty decent income to boot.
Focusing on the romantic side of things, most new agents forget one critical fact. Done right, real estate is not a job — it is a business.
Like any business, the initial steps are critical. In fact, most businesses need a fair amount of capital to launch effectively. While the startup costs for a real estate career are less than most other businesses, they are still very real.
You need to have the right equipment, a physical space of some kind and financial float large enough to get you through the lean startup months. You also need funds to begin advertising and making your presence known.
With this in mind, it is natural for new agents to try to get the highest split available to ensure that their potential income will have the smallest possible haircut. In fact, if you Google, “Questions to ask when selecting a real estate broker,” they all address splits first.
In my opinion, the lists are backward and have an inherent flaw — most brokerages offering the highest splits to newbies also provide the smallest amount of support. In other words, you may get to keep a larger portion of your commission, but will lack the support and systems required to generate the sales required to produce the income in the first place.
Most new agents have absolutely no idea what is actually required to build an effective real estate career. They also do not understand the amount of work required to get things up and running. Consequently, if they saddle up with a brokerage that provides minimal support, they will not get the assistance needed to effectively launch.
With real estate agent failure rates so high to begin with, it makes sense that new recruits stop looking at the split and start examining the level of support provided by any given brokerage. In fact, rather than look for a brokerage at all, they should also consider joining a well-established team.
My recommendation to new agents is to begin your career in an environment that will provide maximum support so your business can incubate successfully. Once you have a good grasp of the business and are well on your way, then you can start to shop splits.
Here is my list of top six questions to ask when looking for a place to park your shingle.
1. Do you have an in-house mentoring program?
When I began my real estate career, there was a massive gap between what I thought the business was about and reality. I signed up for an in-house mentoring program and had direct access to one of the top agents in the office. They not only answered all my questions, they provided ongoing support and helped me avoid rookie mistakes.
Normally, an in-house mentor will earn a part of any commissions generated for a predetermined period. Some offices allow you the opportunity to interview mentors to make sure they are a fit. Just because a prospective mentor has sold a lot of real estate does not necessarily mean they will be an effective mentor or coach.
2. Do you have someone I can contact 24/7 for instant support?
There will be times you will need instantaneous support. Whether your mentor, office manager, office productivity coach or broker, will someone be available to get you through your current crisis?
3. Do you provide in-house training?
When shopping for a brokerage for our team, I asked a recruiter from a large local brokerage, “What type of in-house training do you provide?” Their answer was typical of a lot of brokerages and was an immediate turnoff: “We have a vast online library of training resources.”
I wasn’t looking for online training — truth is, that’s readily available from many sources. I was looking for in-house, in-person training where I and my team members could interact with the trainer to get the answers we needed.
4. Do you provide leads?
While leads are the lifeblood of any successful business, many brokerages do not provide leads of any kind. This is the primary reason I’d recommend talking to teams in addition to brokerages since most teams understand the need to provide their team members with a supply of leads.
Additionally, extensive training should be available in managing leads and developing the ability to generate them on your own.
5. Do you provide a comprehensive CRM and the training to use it effectively?
Lead management is critical and the best tool for the job is a comprehensive customer relationship management (CRM). It is one thing to be provided with a CRM, but something entirely different to be trained on how to use it effectively.
In my mind, in-house training is critical along with access to someone who will be available to answer questions when you need answers.
6. Do you have any mega agents or large teams in your office?
If an office does not have any mega agents or large teams, that may be a clue that they lack the requisite resources to enable your success. Additionally, it is good to be around agents who are truly successful. Most mega agents I know are very willing to help new agents by answering questions and sharing resources when applicable.
While splits are important in the long-term scheme of things, rookie agents can make serious mistakes if they focus on splits alone. Since the success rate for newbies is so low, in my opinion go after support first. Once you have the fundamentals under your belt and have a proven track record, then you can work on fine-tuning your income.
Carl Medford is the CEO of The Medford Team.