Top 10 Questions You Should Ask When Interviewing with a Brokerage
Earning a real estate license is a significant accomplishment. You completed the class and passed the licensing exam -ou should be really proud of yourself! The next step is to find a brokerage that will give you the tools and support you need to thrive in this business. Every brokerage is different and every one has its own unique strengths. Unlike other jobs, you interview the brokerage just as much as they interview you. Finding the best fit is important - here are the top 10 questions to ask during an interview with a prospective brokerage: :
1. Commissions
2. Expenses
3. Training and Mentorship
4. Lead Generation
5. Benefits and Services
6. REALTOR®
7. Expectations
8. Office Profile
9. Culture
10. Support
1. Commissions
“How do commissions work here?”
This is a complicated question because the answer is usually complicated. Commissions may be a set split that applies to every agent and every transaction. There may be a cap. Commission may increase with experience and they may reset every year (or not). Some brokerages offer 100% commission to the agent with a monthly fee. Agents really need to know how commissions work in order to know how (and how much) they get paid.
Commission Basics
Let’s start at the beginning. Real estate licensees can be paid a few different ways. They may be employees who make a salary or hourly rates, or they may be independent contractors who work on commission (or a combination of some base pay and commission). Most real estate agents work strictly on commission. Their commission is based on some percentage of the sales they transact. The commission paid by the consumer is negotiable and may come from the buyer, seller, or both. Regardless of who pays the commission, it all goes to the brokerage where the real estate agent hangs their license. Most brokerages keep a portion of that commission to do things like cover administrative and technology costs.
For example:A real estate brokerage receives $100 in commission for a transaction conducted by Agent A. How much of that $100 commission does Agent A get paid?
Some examples include:
40% of the $100
40% of every commission that comes in until 5 transactions are completed. Then Agent A gets 50%. After an additional 5 completed transactions, Agent A keeps 60%, and so on, until Agent A is keeping 90% of the commission. This may or may not reset to 40% the following year.
60% of every commission minus a $5 transaction fee
72% of every commission until the brokerage share reaches $1,000, then Agent A keeps 100%. This is known as a cap.
100% of all commissions with a $20 per month desk fee.
Also ask if the brokerage offers options that may fit different agents better. If so, can an agent switch options later on?
2. Expenses
“What expenses do agents at this brokerage pay?”
Many people don’t realize the expenses that go into real estate transactions. Things like webpages, search engine optimization, advertising, training, software systems, franchise fees, administrative staff, office space (rent or mortgage and taxes), insurance, dues, broker supervision, and on and on and on. Individual agents face expenses too, like business cards, sign posts, photocopying, membership fees, advertising of their listings, online services, etc.
Here again, this is a complicated question. What would the brokerage charge to the agent? What is the agent responsible to pay for?
For example, is there a monthly desk fee or brokerage fee? Errors & Omissions Insurance is normally required when engaging in the practice of real estate. Who pays for that? Is it on a per transaction or per year basis?
Do agents pay for branded items, or does the brokerage provide them? Things like For Sale Signs, business cards, stationary, etc.
Get a good estimate of how much it will cost per month or per year to hang your license with this office. Think about the expenses vs. the potential commission earnings. Do they make sense to you?
3. Training and Mentorship
“What Training and Mentorship Opportunities are offered here?”
Your pre-licensing course probably taught you a lot of laws, and how to protect the consumer, but not much on how to thrive in this business. Training and/or mentorship is vital at the beginning of your real estate career and incredibly useful as you grow in this field.
What does the brokerage offer? Can you see their training schedule? What topics are covered? How often are classes offered? How are they delivered? How will the training help you build your business and flourish?
Mentoring can be very beneficial if new agents are matched with seasoned agents who are dedicated to helping the new agents learn the business. Does the brokerage train the mentors? Is there structure to the mentoring program?
Beyond the basics, does the brokerage offer training to grow your business to higher levels, such as building teams, opening new offices and building wealth for the agents?
4. Lead Generation Technology
“What technology do you offer to help me generate leads?”
Lead generation is key to thriving in the real estate business. Traditionally, agents were expected to have “desk time”. Time working the front desk, greeting people who walk into the brokerage and answering the telephone. Before the internet, desk time was often the best way to secure leads that turned into new clients. Today most people start their search for agents and properties online. Does the brokerage have a robust webpage? Do they offer agents personal web pages?
Simply having a webpage is no longer enough for agents to stand out and generate leads. The right technology is absolutely essential in today’s market. What other technology does the brokerage offer to help agents generate leads?
5. Benefits and Services
“What other benefits does this brokerage offer?”
Is there help with marketing? What technological services are available? Things like digital signatures, online transaction management, online customer relationship management systems are not only helpful, but essential for agents to stay organized and maximize their earning potential.
Does the office provide the agent with business cards, signs, a system to create listing and buyer presentations? Going further, some brokerages offer health benefits and profit or revenue sharing.
6. REALTOR®
“Do agents at this brokerage belong to the National Association of REALTORS®?”
The National Association of REALTORS® provides member agents with tools that no other trade association or service can match. They are affiliated with most Multiple Listing Services, and provide continuing education, plus dispute resolution, comradery, opportunities for public service and so much more. Brokerages are either members or they are not. Depending on what you want to focus on in your real estate career, being a REALTOR® member may be necessary (or not). For our coverage area, residential sales agents would have a difficult time without REALTOR® membership. Rental agents, property managers, and commercial agents also benefit, but the level of benefit is very location and property type specific. Those agents should carefully consider the advantages vs the cost of REALTOR® membership.
Brokerages are either REALTOR® members or not. Whatever the status of the brokerage, real estate licensees who hang their licenses with a brokerage follow the membership status of the brokerage. When interviewing with a brokerage, ask if they are members of the National Association REALTORS®.
7. Expectations
“What are the agent expectations at this brokerage?”
As mentioned earlier, desk time used to be a primary source of lead generation. Desk time can also be a time new agents learn the ropes of the business, since they are in the office while transactions are being negotiated and closed. Today, most buyers go online, rather than calling or stopping by a brokerage. Many agents work from home or the road more than from an office. In some cases desk time is still valuable, like if a brokerage has a prime location where there is a great deal of foot traffic. In other cases, desk time takes time away from more productive efforts. Does the brokerage require desk time?
What other expectations does the brokerage have? Is there a certain sales volume, attendance at weekly meetings, etc.? Are the expectations reasonable for your situation and experience level?
8. Office Profile and Strategy
“What is the brokerage annual sales volume, and what is the strategy going forward?”
How much sales volume did the brokerage do in the last 12 months and does the brokerage have enough sales volume to be recognizable? Does the brokerage tend to keep agents for a long time, or is there high turnover? It’s also important to see if the brokerage has an active plan or strategy for the future. Are they just existing, or do they hope to grow (and how)?
9. Culture
“Describe the brokerage culture”
Every brokerage is different. Every agent is different. What sort of culture does the brokerage foster? Is the brokerage a small boutique brokerage that specializes in a certain type of property? Is it a highly structured large corporate franchise? Ask if you can see the Policies and Procedures Manual for the brokerage. Find the brokerage culture that fits your personal style and goals.
10. Support
“What agent support do you offer?”
Last, but definitely not least, what sort of support is given to agents? Brokerages are required to provide adequate supervision of all agents. Brokers must be available to answer questions about specific transaction issues and assist real estate agents with day to day questions. In addition to that, is there support for technology and transaction management? How do agents ask questions and how fast are questions answered?
Putting all these components together is a recipe for finding the best fit for your situation. Be sure to do your homework and learn about the brokerage before committing to hanging your license there. Asking the right questions, getting a few different perspectives is key to finding the best fit for your real estate needs.
Contact us to learn more about what Bean Group has to offer you.
