Brokers: How do you recruit realtors to your brokerage?
Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes
Brokers: How do you recruit realtors to your brokerage?
Most Popular Reply
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3yQuote from @Brandon Carlson:
Quote from @Russell Brazil:
Every brokerage (like any agent too) has their own value proposition to agents. For some it is lowest cost. For some it is highest service. For others it is well established brand.
You should understand though, that brokerage is an incredibly low margin business. Most good agents with good sales make more money than their brokers.
Thank you, Russell, for your input. What costs would you say are the main contributors that reduce the company's margins?
Let's take a typical situation with a high split agent, and your brokerage is a franchise. Of the 100% of the commission, 90% goes to the agent, 6% goes to the franchise free and only 4% of the gross commission becomes money to the broker....to cover staff, office space, marketing, e&o, liability insurance, technology, and all the other costs.
Many brokerages actually operate at a loss, and the brokerage becomes a loss leader to feed their other businesses such as title, lending and insurance where profit margins are not as thin.
District Invest Group545 Reviews
10 Replies
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes3y
Every brokerage (like any agent too) has their own value proposition to agents. For some it is lowest cost. For some it is highest service. For others it is well established brand.
You should understand though, that brokerage is an incredibly low margin business. Most good agents with good sales make more money than their brokers.
District Invest Group545 Reviews - Real Estate Agent · Brooklyn, NY · Member since 2022 · 55 posts · 28 votes3y
I think it really depends on what type of agent you are trying to attract.
New agents would likely value training.
Experienced and successful agents would likely value a favorable commission split.
Part time agents would likely value marketing and leads.
- CO · Member since 2022 · 588 posts · 426 votes3y
Coming from an Agent/team leader perspective I have found newer agents care about splits and contract support.
Gone are the days of office fees and marketing, most everything is online and newer agents learn so much from online realtor training gurus and programs. Plus most marketing is on social media these days and the newer (and younger) agents tend to excel in this area.
- Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes3y
1. Can you have a better mousetrap? Not sure about that, but find out what people don't like about the current brokerage and fix that.
2. Call and call and call and call...and network occasionally.
3. I think most brokerages want to be all things to all agents...1 transaction a year to 100 transactions a year. Maybe that is not a good thing. Hire new agents and you increase your risk, you have a big time suck, and you will need to provide lots of hand holding and supervision and training. Probably not in CA yet, but in Texas we just passed a law that says agents have to have mentorship on the first 3 transactions in each area of discipline. Doesn't have to be the broker, but has to be someone the broker trusts to provide supervision and mentorship. Think about how that will change brokerages. Potentially could be a big disruptor for some. If you just hire superstars then you probably need to provide superstar coaching to help them get bigger and also build wealth, not just transactions.
4. Some agents want the full deal...office, nice office, training room, full range of services like title, legal, accounting, marketing, transaction coordinator, insurance all in one stop shop, runner to put out signs and lockboxes. Some just want the lowest fee possible and none of that. So you have to figure which one of those you want to attract and which ones will be profitable for you and then how to attract them.
Just FYI at my old brokerage and this was a while ago, I used to say this or that was a hot market, why don't we open office there. The standard answer was, we have to hire the right team leader who will bring 35 productive agents with them to be able to make the numbers work. I would think that might be 50 or more now. Run your numbers....see how that works for you. I think in most cases you also have to be a recruiting machine. Lots of turnover.
One thing I suggest is if you think your are a superstar recruiter and you want to build a big office. Look at a brokerage like KW or your current broker and set up a deal to do that. At KW the system is already there, you can recruit locally, nationwide, worldwide, build expansion teams nationwide and earn profits on that, without having all the risks and headaches. Maybe you could do that at your current broker too in a way. You recruit and take a portion of the profits...if your normal office split is 70/30, maybe you cut 70/20/10 with you taking 10% of the agent profit you bring in and your broker of record gets the 20% split.
- Real Estate Broker · North Richland Hills, TX · Member since 2013 · 1k+ posts · 607 votes3y
I don't think brand awareness is that important, as agents should be focused on building their own brands and studies show that an agent's brokerage isn't a big factor in consumers' agent selection criteria.
Why do you want to start your own brokerage? Nowadays, there are several brokerages that enable you to recruit agents, provide leadership, support their productions, while shifting the liability and back-office operations to the brokerage. That's a much more attractive and more profitable way to go in my experience.
Before building your value stack, think hard about who is your ideal client (agent). Does he or she want minimal fees, flat fee commission structure, great coaching and training, equity, residual income opportunities, cutting-edge tech, great company culture, &/or something else?
What are ideal agents' goals, challenges, and dreams? Where is their current brokerage falling short? What solution(s) can you provide to get them to the next level and beyond?
Be specific, b/c if you try to be everything to everyone, your business model will likely be unprofitable. For whatever you want to do, how much production do you need to bring in to make the value stack work financially?
Get out in your market and build relationships. Build rapport and add value before you expect them to join...changing brokerages is a big decision for most agents. Be consistent in your follow up - many will say no @ first, but you want to be top of mind when their broker pisses them off or when business takes a downturn and they look for external drivers to boost their business.
I've recruited about 55 agents directly and built a global org of over 2,850 agents, and this has worked well for me.
- Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes3y
Quote from @Russell Brazil:
Every brokerage (like any agent too) has their own value proposition to agents. For some it is lowest cost. For some it is highest service. For others it is well established brand.
You should understand though, that brokerage is an incredibly low margin business. Most good agents with good sales make more money than their brokers.
Thank you, Russell, for your input. What costs would you say are the main contributors that reduce the company's margins?
- Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes3y
Quote from @Zalman Ives:
I think it really depends on what type of agent you are trying to attract.
New agents would likely value training.
Experienced and successful agents would likely value a favorable commission split.
Part time agents would likely value marketing and leads.
Thank you, Zalman, for your comment. Favorable commission splits may be the biggest driver when agents are deciding which brokerage to pursue.
- Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes3y
Quote from @Brett Deas:
Coming from an Agent/team leader perspective I have found newer agents care about splits and contract support.
Gone are the days of office fees and marketing, most everything is online and newer agents learn so much from online realtor training gurus and programs. Plus most marketing is on social media these days and the newer (and younger) agents tend to excel in this area.
Good point on the contract support!
- Real Estate Consultant · Glendora, CA · Member since 2019 · 314 posts · 95 votes3y
Quote from @Bruce Lynn:
1. Can you have a better mousetrap? Not sure about that, but find out what people don't like about the current brokerage and fix that.
2. Call and call and call and call...and network occasionally.
3. I think most brokerages want to be all things to all agents...1 transaction a year to 100 transactions a year. Maybe that is not a good thing. Hire new agents and you increase your risk, you have a big time suck, and you will need to provide lots of hand holding and supervision and training. Probably not in CA yet, but in Texas we just passed a law that says agents have to have mentorship on the first 3 transactions in each area of discipline. Doesn't have to be the broker, but has to be someone the broker trusts to provide supervision and mentorship. Think about how that will change brokerages. Potentially could be a big disruptor for some. If you just hire superstars then you probably need to provide superstar coaching to help them get bigger and also build wealth, not just transactions.
4. Some agents want the full deal...office, nice office, training room, full range of services like title, legal, accounting, marketing, transaction coordinator, insurance all in one stop shop, runner to put out signs and lockboxes. Some just want the lowest fee possible and none of that. So you have to figure which one of those you want to attract and which ones will be profitable for you and then how to attract them.
Just FYI at my old brokerage and this was a while ago, I used to say this or that was a hot market, why don't we open office there. The standard answer was, we have to hire the right team leader who will bring 35 productive agents with them to be able to make the numbers work. I would think that might be 50 or more now. Run your numbers....see how that works for you. I think in most cases you also have to be a recruiting machine. Lots of turnover.
One thing I suggest is if you think your are a superstar recruiter and you want to build a big office. Look at a brokerage like KW or your current broker and set up a deal to do that. At KW the system is already there, you can recruit locally, nationwide, worldwide, build expansion teams nationwide and earn profits on that, without having all the risks and headaches. Maybe you could do that at your current broker too in a way. You recruit and take a portion of the profits...if your normal office split is 70/30, maybe you cut 70/20/10 with you taking 10% of the agent profit you bring in and your broker of record gets the 20% split.
Thank you Bruce for all the great information. To your point, having a one-stop shop that can provide ancillary services (title, legal, marketing) can be a value proposition when recruiting agents.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes3y
Quote from @Brandon Carlson:
Quote from @Russell Brazil:
Every brokerage (like any agent too) has their own value proposition to agents. For some it is lowest cost. For some it is highest service. For others it is well established brand.
You should understand though, that brokerage is an incredibly low margin business. Most good agents with good sales make more money than their brokers.
Thank you, Russell, for your input. What costs would you say are the main contributors that reduce the company's margins?
Let's take a typical situation with a high split agent, and your brokerage is a franchise. Of the 100% of the commission, 90% goes to the agent, 6% goes to the franchise free and only 4% of the gross commission becomes money to the broker....to cover staff, office space, marketing, e&o, liability insurance, technology, and all the other costs.
Many brokerages actually operate at a loss, and the brokerage becomes a loss leader to feed their other businesses such as title, lending and insurance where profit margins are not as thin.
District Invest Group545 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.