Starting a Brokerage vs Real estate team

5 Replies

I have been looking into Real estate for some time now. I have not been an agent in the past but I have interest in starting and managing a Real estate company. I have experience in marketing. However I am still looking into the right path to take. I see many agents starting "teams". My question is why. Wouldn't it be much better to build an asset you own that you can resell like a company?

How much do good broker's make ( With agents under them) on average. 

@Chris Lynch

I've been an agent for 4-5 years now, and so far the benefit of being a part of franchise or existing brokerage far outweighs the benefits.  Our office books are open, and we (as top producing agents) make much more money that the brokerage does.  It might make sense after you develop a team to open a brokerage, but there are so many things that make being a part of a bigger office worth it for now.

Zach Sikes, Real Estate Agent in OK (#157234)
(405) 471-1205

@Zach Sikes  

 Thanks for the response Zack. So you are saying you make more as an agent then a broker? I would never guess this due to the broker taking a cut from every agent.

@Chris Lynch  

That's exaclty what I'm saying. It's the old 80-20 rule. About 20% of the agents bring in 80% of the business (or even more in my market). In our market, there are several brokerages that will put a "cap" on what we pay in. For example, my office will take a cut out of the first $2,000,000 in sales. After that, I basically get to keep 100% of my commission for the remainder of the year.  If you are going to grow a business on real estate sales, why not grow a team? 

Zach Sikes, Real Estate Agent in OK (#157234)
(405) 471-1205

I believe in this state (NC) you have to hang your license under another broker for 2yrs before you can have your own brokerage. 

If I might, I realize I'm 3 years late to this party, but maybe someone else will read this and chime in.

First off. How much good broker's make is variable and dependent on multiple potential channels of revenue. They are all different. I care about what good brokers know. I've met a lot of brokers who "go to work", but they don't use their knowledge to secure a future for them other than showing up and making some coin from an agent's listing. 

If your interest is in making money (sounds more like a j.o.b. you're looking for), there are thousands of ways to do this. Real estate agent is one, broker is another. But in reality, those nickels are only earned after you or your agents have put in some elbow grease on a deal that will be owned by some John Doe who used your services. It's a one-and-done transaction. Am I right? You're effectively waiting for a deal that will or may not go through. 

Rather than catching nickels, learn the business and then use that knowledge to create your own investments. I plan on owning my own brokerage as well, but I also plan on utilizing that 80/20 rule like a fiend. Find that 20% and hone in on it. 

Either way, I feel like we're both feeling the same thing. Good luck to you! I hope these 3 years have proven fruitful.

Cheers!

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