Thanks for reading. I just saw a release of top brokerages by sales volume. Based on your experience, does the company make a difference on the quality of the agent?
Would love some advice in how to select the top agents given the 80/20 rule (20% of agents do 80% of the deals). It is challenging to gauge activity & deal flow by LoopNet /Costar.
The amount a company sells has absolutely no correlation to how good of an agent they are... especially when it comes to being an investor friendly agent. Many agents are brokered with a large brokerage but often work 100% independently as well. At that point in time it doesn't matter one bit with who they are with. So I would focus way more on the individual than what company they are with.
These are Macro stats that do not really mean anything.
It's like when someone says they did 10 million in volume but have a team of 10 people. You really didn't do it all by yourself.
Some of these brokerages are average 1 transaction a year per agent to less.
A lot of these big brokerages stick 3 to 4 agents on a team and pump out selling listings given to them by large REIT's and other sellers.
By choice I work with clients one on one and spend the time with them educating on the process. The other brokers are too busy working for peanuts.
They might take a 10 mill listing at 2% for their side. Then they have 3 agents on the team for a 50/50 split. 200,000 / 3 = 66,667 and the brokerage gets half so 33,333
Some even work for less than that. They try to throw whatever at buyers and quell objections to get the sale for the seller with junk pro-formas. Not all big companies are like this.
Plenty of independent guys like me. I am happy to do deals closely with my clients rather than volume. I tend to make more than the other guys running themselves ragged for volume.
You need to look to your micro market in the niche you want to invest in retail, multifamily, office, industrial, etc. and then seek out specialist.
I'm going to have to go with Colin on this one. Ultimately, individual agents close deals. I would have to say, Brokerage houses can make a difference with regard to things like overall market presence, dedicated marketing platforms, well supplied buyer pipeline based on advertising exposure, etc. A larger Broker may have a higher market saturation, thereby more visibility with potential buyers. Also, in Commercial RE there is a certain amount of credence, from both Sellers and Buyers, given to the "Marquee" firms, the CBRE's and such, that maybe wouldn't be afforded to a smaller brokerage house. Doesn't have anything to do with performance on an individual Agent by Agent basis. Just overall volume shifts. Try not to be swayed by the total tonnage moved, just the quality of the people who move it.
Hi @Angela Chen If you already know the area you are looking for properties, look who is very active in that market. Set up some interviews with those agents, ask them questions as "How many deals they've done in the area?","How long they've been in the business?", "Do they personally own property?", "Can they give you a list of references from the clients that they did business with?" "Do they have listings that are not on the market yet?", etc.
The agents that know the general market are great, as in commercial they might not sell necessary in the micro market. With your present experience you can gauge how good the agents are. You are correct in your assumption that 20% of agents do 80% of the business, and these agents could also give you a list of their transactions in the last several years if you ask them to.
Good luck to you!
Just remember sometimes that brokers can't give details on transactions with specific addresses because their clients are private. Some are individuals worth 7,8,9 figures so confidentiality is expected.
Having said that you should know right away if someone is blowing smoke or they have the skills.
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