Finding Your Brokerage “Fit” (part 1 of 2) | The Zebra Blog

Finding Your Brokerage “Fit” (part 1 of 2)

Not a week goes by that I don’t get a question, comment, or complaint from an agent who’s thinking of switching offices.

I’m always eager to hear why an agent feels the grass is greener somewhere else.  It’s human nature to feel that there is something better out there!

And sometimes there is.  We’ve seen a lot of agent movement in the real estate industry in recent years.  Sometimes the move is beneficial; often it is not.  That’s because agents often don’t ask the right questions before making a move.

But I’m getting ahead of myself!  (Don’t worry – I’ll come back to those questions later.)

Historically, our industry offered three business models:

  1. The Lone Ranger – it’s just you and your lonesome.  You are the broker, and you are the only sales person.  Lone Rangers bear the cost of overhead, E&O insurance, keeping up on all the nuances of running a brokerage, and more.  It’s a good thing Lone Rangers don’t have to share commission with anyone, because by the time they pay all the expenses there’s not much left over.  And of course, being a Lone Ranger is, well, lonely!  No colleagues in the office to bounce ideas off, get energy from, or commiserate with.
  2. The “split” or “plateau” office.  Agents in these offices split their commissions with their brokers at a predetermined ratio (50/50, 60/40, 70/30, 80/20, or 90/10) until an agreed upon amount, or “plateau” is reached.  In many plateau offices, agents are often capped at 90/10 so they never reach a full 100% — the broker continues to receive a percentage of each commission check, even though plateau is reached.  There are often additional monthly expenses (usually $100 to $300) as well as transaction fees ($50 to $250 per transaction).  However, these offices provide a pretty full complement of services to agents, which might include a desk, computer, landline, fax machine, receptionist, floor time, referrals, training/mentoring, office tour, and regularly scheduled sales meetings.  Newer agents often find themselves at plateau offices, which are a good fit for agents building their business who want to limit their monthly outlay.
  3. The “fee” or “desk fee” office.  Commissions aren’t shared with the broker in these offices; the agent typically retains 100% of the commissions they earn.  However, a monthly fee is due to the broker regardless of the level of business the agent has closed.  Desk fees typically run from $1,000 to $2,500, and agents in these offices often also have transaction fees assessed with closings ($50 to $250 per transaction).  While agents are provided with a desk, phone, and fax, desk fee offices often appeal to more established agents, and services for agents may be limited.  Many don’t offer floor time, referrals, training/mentoring, and office tours – and sales meetings may occur less regularly or not at all.

While these three models have worked for many, many years in recent years they have increasingly come under question by agents who are feeling the pinch financially after several slow years.  This has led to the development of a fourth business model – the virtual real estate office.

Virtual offices do not provide desk spaces, landlines, computers, faxes, or other similar services to agents.  Sales meetings, if held at all, are typically done virtually through a service such as “GoToMeeting”.  Virtual offices often house a large number of agents, many of whom have never met one another!

Because virtual offices have low overhead costs, they typically charge very low fees.  Many of these offices have invested heavily in technology, both to provide services to their agents and also to provide access to services their agents can provide buyers and sellers.  But of course, there’s a trade-off.  Agents in virtual offices rarely have access to training and support.  They also miss out on the synergy of a “live” office.  Unfortunately, many brokers in these offices provide little leadership or direction for their agents.

Over the past several years, I’ve seen more and more agents reevaluating the benefits their current brokerage offers relative to that agent’s needs – and budget!  When I talk with agents about why they’re considering moving offices, I get a range of responses, all of which usually boil down to three issues.

  1. Leadership is poor, weak, or non-existent.  
  2. The perception of value has changed.  
  3. The broker doesn’t understand or support an agent’s uniqueness or their business plan.

All three of these issues are legitimate ones which will factor into an agent’s willingness to hang their license elsewhere.  Let’s take a look at each of these issues.

Nothing kills a company more quickly than poor leadership – unless it’s no leadership at all.  Unfortunately, many real estate offices are owned or operated by former real estate agents.  While many of them may have been phenomenal sales people, our industry is loaded with managing brokers who bring little management expertise to the table.  Being a great salesperson rarely equates to being a good manager!

I hear this time and time again from agents, “Denise, my fees are higher than ever before … but my broker keeps cutting services.  I get less for my money than I did last year, and much less than I did five years ago.”  In fact, the majority of agents I talk to feel that costs have remained the same or increased while services have decreased.  No doubt this is true in some offices, but it’s very easy to forget about services you are offered that you don’t “see” every day.  For example, your company may no longer run newspaper ads or send mailers … but do they offer you listing syndication, or your own page on a company website or blog?  These services aren’t as visual as newspapers and mailing pieces, but they can impact your business in a positive way.  It’s important to remember that brokers have seen their costs increase too!  That might be in the form of increased rent, higher costs for equipment, wages to support staff, and big investments in technology.  And they have had to pay those expenses in a period during which many agents are not closing transactions – meaning that plateau offices have less coming in via commission and desk fee offices may be looking at non-payment from some of their agents.  Times have been hard for brokers and owners too!

Finally, sometimes a broker simply doesn’t “get” where his or her agent is coming from (and headed).  Do you feel like a square peg trying to fit into a round hole?  For example, your broker may insist on open houses for lead generation … and that may not work for you for a number of reasons.  Or there may be a part of the office culture that doesn’t match your own.  If you’re a middle-aged woman with teenagers at home and your office peers are 20- and 30-somethings who are excited about a weekly TGIF party at a local bar, you may be feeling a disconnect.  What if you are a “Promoter” and your broker is an “Analytical”?  Could be trouble!  What if you want to focus on an unusual niche or marketing strategy, and your broker is unwilling to support your efforts to do so?  Maybe you feel your want (or deserve) a private office, and none are available.

Let’s imagine one or more of these three scenarios applies to your situation … and you’re thinking of leaving.   First, ask yourself the 23 questions that I’m going to share with you next week.  If you still think moving is your best option, you owe it to yourself and your broker to sit down and discuss the reason for your move.  Before you jump ship, make sure you’ve not done so because you’ve let anger and frustration get the best of you.  You may actually be able to negotiate what you want from your current broker.  At the very least, you’ll have the opportunity to explain your decision … rather than leaving it open to interpretation.

Remember I mentioned earlier how common it is for people to feel the grass is always greener somewhere else?  My brother told me years ago that the grass is always greenest where you water it.  And he was right.

Think about it.  That’s a pretty powerful statement: the grass is always greenest where you water it!

Have you been watering the grass at your brokerage?


As I mentioned above, next week I’m going to finish up this two-part series on finding the right brokerage fit with a review of the 23 questions I think every agent should be asking before they make a move.  If you’re even remotely fantasizing about a different office you’ll want to see that list!

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4 Responses to “Finding Your Brokerage “Fit” (part 1 of 2)”

  1. […] week in my Zebra Report I talked about finding your right “fit” at a real estate brokerage … and the three reasons […]

  2. […] week in my Zebra Report I talked about finding your right “fit” at a real estate brokerage and the three reasons why […]

  3. bernsiao says:

    Hi! If you may allow me, I’ll just get some excerpts from your blog to use on my masters degree thesis research about real estates and properties Well written, anyway. ☺ Good job!

    • Denise Lones says:

      Bernsiao – Yes! You can quote our blog for your thesis. We’d also be happy to answer any questions you have if you need additional information. Thanks for asking!

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