Pros and Cons of Switching Real Estate Brokerages
Pros and cons of switching brokerages
My real estate career began at Las Casas Realty, and my only brokerage change thus far was to REH Real Estate four years ago. I am very happy at REH, but I’d be lying if I said I weren’t enticed by the various offers I have received from competing brokerages.
Companies such as Sotheby’s with its incredible luxury branding and Compass with its cutting-edge technology make compelling cases for switching brokerages.
Although recruiting has always been around, I feel that it is at an all-time high right now with a resurgence of new brokerages and advancing technology. The days of real estate agents sticking to one company their whole careers seem to be over. But should they be?
Naturally, agents have questions running through their heads as they weigh the options of various brokerages. Will my clients care? What if I don’t like it when I get there? Will this hurt my marketing? How much more money will I make?
In typical Type-A fashion, I found this conversation easiest to navigate with a pros and cons list.
Better commission split (potentially)
They say it isn’t how much money you make, but how much money you keep. Many companies are offering significantly better commission splits than agents are currently getting.
It isn’t how much money you make, but how much money you keep.
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I have heard Mauricio Umansky, founder and CEO of The Agency, speak multiple times at various real estate conferences. Umansky emphasizes the services that a brokerage must offer its agents other than simply a commission split and logo on business cards. His focus with The Agency is to equip his agents with what they need to run their businesses successfully.
David Carson, a top agent in Miami, recently moved from Douglas Elliman to Compass. He says that his move to Compass opened up a world of new opportunities.
“Moving to Compass, for me, represented an opportunity to drive the industry forward,” he said. “I’m participating in a collaborative environment where my perspective is valued. I’m speaking publicly and making connections in all the major markets. Sure, there are growing pains, but isn’t that the what progress feels like? I like to think so.”
Revamp your image and marketing
Much like repositioning a stagnant listing by taking it off the market and then putting it back on with different pictures, joining a new company can provide an excellent opportunity to update an agent’s image, marketing and overall business practice.
Joining a new company is a chance to update image, marketing and overall business practice.
Inconsistency with clients
Steve Frankel, a top agent in Beverly Hills with over $1 billion in sales, has been with Coldwell Banker for 12 years.
“To me, there is a huge advantage to having a long-term relationship with a solid real estate firm,” he said. “It conveys stability and allows your brand to resonate with the buying public.”
It could get worse
Recently, a new brokerage entered my market of Santa Barbara, California, and a handful of agents quickly moved over. Within only a few months, all of the agents were back at their previous companies because of how poorly run the new brokerage was.
Apparently the grass is not always greener on the other side! That must have been an embarrassing conversation to have with clients after telling them the reason they moved to the new company was that the old company wasn’t good enough — but now it is.
The grass is not always greener on the other side!
Lose referral relationships
A good friend of mine at Sotheby’s told me that he would have a difficult time moving companies because he consistently gets referrals from other Sotheby’s agents around the nation who would not send him business if he left the company. That can impact one’s business in a big way.
So what is an agent to do in this new world of endless opportunities? I think that the best thing to do is to assess your current situation accurately: company, location, commission split, opportunities and services offered.
Next, figure out where you want your future business to be, and see if you are in a position to reach that goal. If not, you might want to consider switching companies.
Figure out where you want your future business to be, and see if you can reach that goal.
Before changing brokerages, look into all viable options and interview both managers and agents to gauge the new experience.
Overall, this is an exciting time when competition is growing within the real estate brokerage community. Competition is always welcomed because it benefits us as the agents, which in turn benefits our clients.