{"id":78931,"date":"2020-08-20T10:00:02","date_gmt":"2020-08-20T16:00:02","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=78931"},"modified":"2024-01-15T12:48:04","modified_gmt":"2024-01-15T19:48:04","slug":"real-estate-brokerage-pros-cons","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/real-estate-brokerage-pros-cons","title":{"rendered":"7 Pros and Cons of Big Name Brokerages for Real Estate Investor-Agents"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC2320042703&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p class=\"wp-block-paragraph\"><em>The broker.<\/em> If you\u2019re a real estate agent, you\u2019re probably reading this with seriously mixed feelings. Here you are, working like a madman to make a living or earn an extra buck, and as soon as some hard-earned cash comes your way, you have to part with it (or at least a piece of it). A big chunk of your cake is what I&#8217;m saying. But that broker does offer some pros, right?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Hopefully. Read on.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While brokers seem to offer plenty of advantages to young <a href=\"https:\/\/www.biggerpockets.com\/agent\/match?utm_source=blog&amp;utm_medium=blog-ad\" class=\"rank-math-link\" target=\"_blank\">real estate agents<\/a>, more often than not, they\u2019re the ones earning the real advantages. Agents are lured in by a good brand presence\u2014the other traps catch up with them later. It becomes a downward spiral. In fact, dealing with brokerages is a top reason why so many agents do not continue their work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But do real estate brokers really give nothing and take advantage\u2014or is there a bigger picture that agents need to consider when choosing a brokerage?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s weigh the pros and cons.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-investor-financial-freedom?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\">Quit Your Day Job and Find Financial Freedom: Here\u2019s How to Become a Real Estate Investor (Full-Time!)<\/a><\/em><\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/store.biggerpockets.com\/products\/sold-every-real-estate-agent-s-guide-to-building-a-profitable-business?utm_source=blog&amp;utm_medium=banner%20ad&amp;utm_campaign=sold\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"120\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner.jpg\" alt=\"\" class=\"wp-image-134120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">4 Cons of Working Under a Big Real Estate Brokerage<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1. Unfair practices<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">There are many stories out there of how real estate agents were duped out of their earnings because they associated with the wrong brokerage firms. Today, there are unscrupulous brokerage firms that take in young, ambitious agents and make them do all the hard work under the umbrella of their often very well-known brand name.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A brand name brokerage might offer good exposure, but agents often end up doing hard work for very low pay\u2014without ever receiving the promised exposure. For new agents, this can be a real morale-killer.<em><br \/><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Low commissions<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">There isn\u2019t much money to make when young agents associate themselves with well-known brokerage firms. As you know, an agent\u2019s pay comes from the commission they receive when a property is sold. Unfortunately, their brokerage association changes the figures drastically, because they have to split the commission.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These splits are usually unfair to the agents, who have very little say when it comes to commission splits at brokerage houses. This is&nbsp;especially true when the agent&nbsp;isn\u2019t getting much value from broker. That\u2019s a bitter pill to swallow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Not many leads<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You might think joining a high-profile brokerage will land you a waterfall of leads. Not so much.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Despite a high commission split, leads at big real estate brokerage firms are hard to come by\u2014especially the good ones. That\u2019s because a large team of agents is already in place, all of whom have their eyes on the next big deal. (Not to mention that many of said agents are experienced and mature\u2014and will get a big piece of the big deals.)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Despite being associated with a top brokerage firm, you could still be getting low-end deals. Some brokerages require floor time\u2014or two-hour chunks where you answer the phone, hoping to pick up a seller lead. That&#8217;s complete BS, in my opinion.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. High fees<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Besides the commission split, which is often pathetically low, agents are often also subject to high fees from brokerage houses. A large number of brokerage firms work with a flat fee that is &#8220;supposed&#8221; to cover fees for all services offered&#8230; but sometimes doesn&#8217;t. Inexperienced agents are hit with a range of other fees, too\u2014everything from office space to internet charges, paper, and advertising. You also may pay transaction fees, course fees, training fees, and many others.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some even end up as administrative assistants, doing nothing else than bringing in leads for senior agents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><strong>Related: <\/strong><a href=\"https:\/\/www.biggerpockets.com\/blog\/dont-get-real-estate-license?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\">Do You Need a Real Estate License to Flip Houses? Nope. Here\u2019s Why<\/a><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3 Cons of Working Under a Big Brokerage<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">While the commission structure for real estate agents is unfair, associating with big real estate brokerage firms is not always a bad idea. There&#8217;s a good side, too\u2014which is why many young agents join.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Brand presence<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Brokerage houses have been around for years. That strong presence means their brand enjoys a decent reputation and great brand recall. This is a great plus for inexperienced and beginning agents, who can form their network with less effort.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Networking<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These firms have been in the market for a long time, so they have created huge networks. While the brand name helps them get business, the network helps them identify, buy, and sell homes easily. Deals that would have been otherwise impossible for new agents to pull off are suddenly attainable with a strong brokerage network.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Training<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The real world out there is the best training ground\u2014but in a brokerage house, you can easily find experienced mentors. The learning curve is a lot flatter with a good mentor, because they can bring some invaluable insights to the table. What you learn at a brokerage firm with good reputation can shape your career up ahead. All you have to do is listen and keep an open mind.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n    \n  <div id=\"visibility-group-block_76a08720df6be31406ebc5523a4044cf\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_54e90adb22166c37c2772b3e3108a23c\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_43de1c33ede20b4419aaf59e5fe3f4b1 class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/agent\/match\"\n        x-on:click=\"window.analytics.track('Blog Block | B2C Marketplace Agent Finder', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/real-estate-brokerage-pros-cons',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/signup\"\n        x-on:click=\"window.analytics.track('Blog Block | Acquisition | Free Membership Signup', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/real-estate-brokerage-pros-cons',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">So What Should a Real Estate Agent Do?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Despite large brokerage&#8217;s low commissions and high fee structures, there are some clear advantages. Their experience and brand name can really be a stepping stone for young real estate agents. Just make sure you choose with care.<em><br \/><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Know what you want<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Do you want a network, or would you prefer a higher commission split? Would you like to be trained there? Usually, the more a real estate agent expects from a brokerage house, the lower their commission will be. So decide on what you want, and then set your expectations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also, choose the brokerage house selling the highest number of properties in your area of interest. That\u2019s where the highest number of deals will be.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-license-invest?itm_source=ibl&amp;itm_medium=related&amp;itm_campaign=opt\" target=\"_blank\">Real Estate Investors: Should You Become a Real Estate Agent?<\/a><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Look at your deal<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Knowing what you expect from the deal can go a long way in helping you make the right choice. So, a brokerage firm that provides training to young realtors may actually charge you more. This is because they are also charging you fees for the training they offer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Alternatively, the lower the amount of training a firm provides, the larger your commission may be. Additional services provided by the brokerage firm also cut into your commissions\u2014so decide what you require.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Expect the split of the commission to feel unfair<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The standing of the brokerage firm and their network is what got you a deal in the first place. Because you have to depend on these factors, the split will be uneven.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, having said that, don\u2019t agree to&nbsp;<em>too<\/em> low commissions. You\u2019ll lose your motivation\u2014and after all, you\u2019re supposed to have fun doing this as well.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Opt for transparency<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Choose a brokerage house that is open about their fee structures and commission splits. Look for information on what to expect when you really associate with them. You want a firm that clearly spells out the percentage of commission that you, as a real estate agent, will get\u2014regardless of who makes the purchase.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Make sure that there are no hidden costs involved. It needs to be clean and easy to understand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Know there are alternatives<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re an independent worker and have the grit to make things happen, there are smaller brokerage firms that follow a monthly fee structure instead. That means you won\u2019t be paying a percentage of your sales. Instead, you\u2019re keeping all of it. That&#8217;s right, 100 percent of the commissions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s not for everyone, though. If you\u2019re the kind of person who needs a framework to function well, you\u2019re probably better with a more traditional structure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Real estate brokers can be valuable resources. Though it isn\u2019t always easy to find a good brokerage firm, young agents should spend time and check with their network to identify the best firm for them. Good brokerage firms are well versed with the neighborhood, know about listings, and are familiar with what it takes to get a good deal. They have a good network, know how to identify genuine buyers and sellers, and know what to pick from the internet and what to ignore.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Young real estate agents learn faster when associated with experienced real estate brokers. However\u2014well versed as they may be\u2014brokerages can also be an agent&#8217;s nightmare, with their low commissions and ridiculous fees. The solution lies in choosing a brokerage firm that provides exactly what you&#8217;re looking for.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.biggerpockets.com\/real-estate-investment-calculator?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"85\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg\" alt=\"\" class=\"wp-image-91220\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-02-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Real estate agents: What&#8217;s your experience in working at a brokerage? Would you add anything to this list?<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Let me know with a comment!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Working with a big real estate brokerage can cost time and commissions\u2014but there are major advantages, too. Weigh the pros and cons here.<\/p>\n","protected":false},"author":1672,"featured_media":135283,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119,7353],"tags":[],"class_list":["post-78931","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily","category-real-estate-partnerships"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/78931","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1672"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=78931"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/78931\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/135283"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=78931"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=78931"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=78931"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}