{"id":68550,"date":"2020-06-02T04:58:09","date_gmt":"2020-06-02T09:58:09","guid":{"rendered":"https:\/\/www.zilculator.com\/blog\/?p=68550"},"modified":"2021-01-08T06:56:15","modified_gmt":"2021-01-08T11:56:15","slug":"whats-important-when-starting-own-brokerage","status":"publish","type":"post","link":"https:\/\/www.zilculator.com\/blog\/whats-important-when-starting-own-brokerage\/","title":{"rendered":"What\u2019s Important when Starting Own Brokerage?"},"content":{"rendered":"\n<blockquote class=\"wp-block-quote\"><p>I am thinking of starting my own brokerage. I haven&#8217;t been 100% pleased with my brokerage lately, for a variety of reasons, so I&#8217;m thinking of starting my own. I understand all the start up expenses, risks, etc. I&#8217;ll probably start as a solo operation, but I don&#8217;t necessarily want to stay a solo operation for long, so I&#8217;m seeking input from other agents on what you want and prioritize in your brokerage. This would likely not be a franchise of any kind, but rather an independent boutique-type brokerage.<br>Other than the commission split, what are the top 3 things that are important to you in a brokerage? If you want to elaborate on them or choose more than 3, that&#8217;s fine.<\/p><cite>Stevie Sloan <\/cite><\/blockquote>\n\n\n\n<p>Here is my answer. Among the top three things that that would be\u2014and, in fact, are\u2014important to me are:<\/p>\n\n\n\n<div id=\"toc_container\" class=\"toc_white no_bullets\"><p class=\"toc_title\">Contents<\/p><ul class=\"toc_list\"><li><a href=\"#Training\"><span class=\"toc_number toc_depth_1\">1<\/span> Training <\/a><\/li><li><a href=\"#Support_beyond_Training\"><span class=\"toc_number toc_depth_1\">2<\/span> Support (beyond Training)<\/a><\/li><li><a href=\"#Culture\"><span class=\"toc_number toc_depth_1\">3<\/span> Culture<\/a><\/li><li><a href=\"#Location\"><span class=\"toc_number toc_depth_1\">4<\/span> Location<\/a><\/li><\/ul><\/div>\n<h2><span id=\"Training\"><strong>Training <\/strong><\/span><\/h2>\n\n\n\n<p>Most\nagents would rank this as a high priority. The problem is: Training means\ndifferent things to different people. Let\u2019s break it down in four different\nareas:<\/p>\n\n\n\n<p><strong>How the brokerage operates.<\/strong> This includes the\ninternal procedures to follow when listing a property or when signing up a\nbuyer as a buyer\u2019s agent. What\u2019s the paperwork? What are the internal\nguidelines? Who receives what paperwork when? When you\u2019re a listing agent and\nreceive an earnest money deposit from a buyer, what do you do with it? And how\nquickly? Although commissions are negotiable, the brokerage may set a lower (or\nupper) limit on commissions. What are those? What flexibility does the agent\nhave in negotiating those commissions . . . considering that the broker must\napprove them. (Technically, in fact, all contracts are between the broker and\nthe buyer or seller; the agent is the broker\u2019s intermediary.)<\/p>\n\n\n\n<p>These\nprocedures also will be governed, in part, by external parties. For example, a\nlisting agent who gets a listing may be required by the local multiple listing\nservice to enter the information in the MLS within a specified number of hours.\nDoes the brokerage track the number of continuing education hours earned by the\nagent in order to renew his\/her license?<\/p>\n\n\n\n<p><strong>Laws and regulations.<\/strong> A small subset of\nthese are covered in the pre-licensing courses required by the states. These\nwill range from ethics to asbestos and lead testing to equal rights and\nnondiscrimination laws to landlord-tenant relations. Any one of these could\nconsume more time than is allocated to the entire pre-licensing program, and\u2014in\nfact\u2014those and many other topics are subjects of multi-day courses. Further,\nlaws and regulations are constantly changing. Brokerage training should help\nagents stay current on laws and regulations.<\/p>\n\n\n\n<p><strong>Customer and client relations.<\/strong> How should agents\nhandle customer leads? A broker undoubtedly has preferred procedures for agents\nto find clients\u2014whether that\u2019s farming a neighborhood, doing desk duty, or\nproviding leads to agents. But how does the agent convert those leads into\nclients? It turns out that different clients have different objectives (beyond\nsimply buying or selling a house). They also have different personalities and\nstyles. And so do agents. How does an agent relate to and work with customers\nand clients?<\/p>\n\n\n\n<p><strong>Shoring up \u201cweak\u201d areas.<\/strong> I\u2019ve known agents\nwho in a \u201cformer life\u201d were military officers, CPAs, teachers, editors,\ninformation technology professionals, and more. It\u2019s likely that those agents\nare strong in certain areas and not as strong in others. An agent may not need\nto be completely well-rounded in subjects ranging from sociology and ancient\nphilosophy to the latest programming language and calculus. But it\u2019s likely that\nmost agents will have some weaknesses. It\u2019s helpful if the broker can at least\nhelp identify those and provide information on how an agent can strengthen\nthose areas.<\/p>\n\n\n\n<h2><span id=\"Support_beyond_Training\"><strong>Support (beyond Training)<\/strong><\/span><\/h2>\n\n\n\n<p>The\nbroker should provide support to his\/her agents. Some of this will include the\nitems listed above under \u201cTraining.\u201d But there are at least two other important\nareas:<\/p>\n\n\n\n<p><strong>Support in marketing and business activities.<\/strong> A successful agent will need quick and smooth access to <a href=\"https:\/\/www.zilculator.com\/blog\/10-software-tools-for-real-estate-agents\/\">marketing and business tools<\/a>. Some of this is physical: \u201cFor Sale\u201d signs, \u201criders\u201d for the top of the signs, an installation and removal process for the signs, and so on. Many brokerages also provide templates for marketing materials, or access (at a reasonable cost) to services that can put together <a href=\"https:\/\/www.zilculator.com\/blog\/5-simple-tips-for-marketing-your-home-for-sale\/\">marketing<\/a> packages, mail postcards on a regular basis to the agent\u2019s farming area, access to a low-cost photo service both for agent headshots and for professional photos for a property listing, and so on. In addition, what sort of referral program does the brokerage have?<\/p>\n<!-- WP QUADS Content Ad Plugin v. 2.0.17 -->\n<div class=\"quads-location quads-ad2\" id=\"quads-ad2\" style=\"float:none;margin:0px;\">\n\n <!-- WP QUADS - Quick AdSense Reloaded v.2.0.17 Content AdSense async --> \n\n\n<script type=\"text\/javascript\" >\nvar quads_screen_width = document.body.clientWidth;\nif ( quads_screen_width >= 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 1024  && quads_screen_width < 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 768  && quads_screen_width < 1024 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width < 768 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }\n<\/script>\n\n <!-- end WP QUADS --> \n\n\n<\/div>\n\n\n\n\n<p><strong>Support in advice and guidance.<\/strong> Agents will have\nquestions about how to handle situations. Some of those may be situations that\narise regularly, but with which the agent has had little experience. Others\nwill be unusual situations, or new questions that didn\u2019t exist in years past.\n(A current example: How do you show a house during a pandemic? Or: How do you\nbest assist a buyer during a pandemic? If the agent is involved in handling a\nlease, how does one handle a potential client with a therapy animal? Or a\nservice animal? (The laws and regulations on the two are very different.)<\/p>\n\n\n\n<h2><span id=\"Culture\"><strong>Culture<\/strong><\/span><\/h2>\n\n\n\n<p>This\nmay be more difficult to define, especially in a brokerage with multiple\noffices, but it\u2019s necessary to examine.<\/p>\n\n\n\n<p>Some elements of \u201cculture\u201d in multiple-office situations are defined by the parent company (or the broker who may be in charge of the multiple locations). And this can be affected by whether the brokerage is part of a franchise or simply one office of many owned by the same parent company.<\/p>\n\n\n\n<p>Read Also: <a href=\"https:\/\/www.zilculator.com\/blog\/how-to-make-money-from-cheap-houses\/\">How To Make Money From Cheap Houses<\/a><\/p>\n\n\n\n<p>Because\nthe question asked about starting an independent brokerage and not a franchise,\nwe\u2019ll limit our answer to that.<\/p>\n\n\n\n<p>Part\nof the element of culture relates to the desired client. Some brokerages prefer\nto deal with high-end properties and wealthier buyers. Others target so-called\n\u201cbread and butter\u201d properties and middle-class (or lower) buyers. Some\nspecialize in retirement communities or condos. Legally, a brokerage can\u2019t\ndiscriminate in ways that would violate the law, nor can they \u201csteer\u201d clients.\nBut a brokerage that specializes in high-end properties likely will have a\ndifferent \u201cvibe\u201d or \u201cfeel\u201d than one that focuses on starter homes.<\/p>\n\n\n\n<p>Some\nbrokerages are very willing to work with investors, either as buyers or sellers.\nOthers choose to avoid them.<\/p>\n\n\n\n<p>Culture\nalso may be affected by the age of the agents and their years of experience. An\nagent in her 20s may be just as competent and knowledgeable as an agent in his\n60s. But a brokerage with mostly 20-somethings will have a different \u201cvibe\u201d\nthan one with most of its agents in their 60s.<\/p>\n\n\n\n<p>Culture\nis strongly affected by the broker. This may manifest itself in areas ranging\nfrom ethics to whether the brokerage engages in community outreach and support\nprograms.<\/p>\n\n\n\n<p><em>And a bonus fourth consideration:<\/em><\/p>\n\n\n\n<h2><span id=\"Location\"><strong>Location<\/strong><\/span><\/h2>\n\n\n\n<p>In\nmost cases, it\u2019s preferable if a brokerage is located close to the agents, and\nvice versa. Some of this is due to sheer convenience: If it\u2019s necessary for an\nagent to visit the office (perhaps for a weekly sales meeting, perhaps to meet\nwith clients in a conference room), an office that\u2019s a mile away is going to be\nmore convenient than one that\u2019s 15 miles away.<\/p>\n\n\n\n<p>Beyond\nthat, though, it\u2019s likely that the agent\u2019s farm area (if he\/she has one) is\nrelatively close to where he\/she lives. That\u2019s what the agent is familiar with.\nIt\u2019s more convenient for the agent to meet with clients who live within a few\nmiles than ones who live 15 miles away.<\/p>\n\n\n\n<p>Admittedly,\nwith distance-related technology (Skype, Zoom, Microsoft Teams, etc.), that\u2019s a\nbit less of an issue today. Further, the COVID-19 pandemic has conditioned more\npeople to use technology rather than to meet in person. Yet some in-person\nmeetings are likely to continue for quite a while.<\/p>\n\n\n\n<p>Further, although agents and brokers are <a href=\"https:\/\/www.zilculator.com\/blog\/is-it-worth-to-get-a-real-estate-license-as-an-investor\/\">licensed by the state<\/a> and therefore can practice anywhere within a state, other considerations\u2014such as MLS systems and the geographic range of the local Board of Realtors\u2014are more local. <\/p>\n\n\n\n<p>What this means for the broker is that much of his\/her business is likely to be very local, as are the agents at the brokerage. That means the broker should select a location that aligns with his\/her target market and with the availability of agents. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>Do you have a realtor\/investor question that you would like to ask? Send it to us via our <a href=\"https:\/\/zilculator.com\/contact\">contact form<\/a> .<\/p><\/blockquote>\n\n","protected":false},"excerpt":{"rendered":"<p>I am thinking of starting my own brokerage. I haven&#8217;t been 100% pleased with my brokerage lately, for a variety of reasons, so I&#8217;m thinking of starting my own. I&#8230;<\/p>\n","protected":false},"author":4,"featured_media":68699,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[199,214],"tags":[215,216,218,217,181],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v15.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What\u2019s Important when Starting Own Brokerage? | Zilculator: Real Estate Investment Analysis blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zilculator.com\/blog\/whats-important-when-starting-own-brokerage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What\u2019s Important when Starting Own Brokerage? | Zilculator: Real Estate Investment Analysis blog\" \/>\n<meta property=\"og:description\" content=\"I am thinking of starting my own brokerage. 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