The Pros & Cons of Working Under a Broker as a Real Estate Agent (& How to Choose One!)


The broker. If you’re a real estate agent, you’re 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’m saying. But that broker does offer some advantages, right?

Well, hopefully. Read on.

See, while brokers seem to offer plenty of advantages to young real estate agents, more often than not, they’re the ones getting all the advantages from their agents. In the end, the agents are lured in by a good brand presence, and many other traps they didn’t think existed catch up with them later. It soon becomes a downward spiral and a top reason why so many do not continue their work as real estate agents. But do real estate brokers really give nothing and take advantage, or is there a bigger picture that agents need to look at while choosing the brokerage house to work for? Let’s weigh the pros and cons.

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The Cons

Unfair Practices

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 many 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.

While they may offer good exposure, the agents often ends up doing the hard work for very low pay while never even coming close to receiving the exposure that was promised. This can bring down the morale of the agent who just started out in the market.

Low Commissions

There also isn’t much money to make when young agents associate themselves with well known brokerage firms. As you know, an agent’s pay comes from the commission they receive when a property is sold. So, while they receive a commission after a property goes into settlement, association with a brokerage firm changes the figures drastically. They now have to split the commission that would have been theirs entirely had they been able to make the deal on their own.

These splits are usually unfair to the agents, who have very little say when it comes to commission splits at brokerage houses. This is especially true when the agent isn’t getting much value from broker. That’s a bitter pill to swallow.


Not Many Leads

Despite a high commission split, leads at big real estate brokerage firms are hard to come by, especially the good ones. That’s because a large team of agents is already in place and they all have their eyes on the next big deal. Also competing with the new real estate agents is a team of experienced and mature agents who will get a big piece of the big deals.

So keep in mind that despite being associated with a top brokerage firm, you could still be getting the low end deals. And you know what? The whole two hour allotted timeframe to answer the phone with the hopes of picking up a seller lead is complete BS in my opinion.

High Fees

Besides the commission split, which is often pathetically low, agents are often also subject to high fees from brokerage houses. The inexperienced agents are hit with a range of other fees, such as office space fees, internet charges, paper fees, advertising fees, transaction fees, course fees, training fees, toiler paper fees (that’s a joke), and many others.

Some even end up as administrative assistants or doing nothing else than bringing in leads. A large number of brokerage firms even work with a flat fee that is “supposed” to cover fees for all services offered.

The Pros

While the commission structure for real estate agents is unfair, associating with big real estate brokers — or rather brokerage firms — is not entirely a bad idea. Working with a big brokerage firm has a good side to it as well, and that’s the reason why many young agents would love to work with some brokerage firms.

Brand Presence

Brokerage houses have usually been around for years. They often come from agents with a lot of experience in the field who were able to really make a name for themselves. Their strong presence has been established over all that time, and their brand often enjoys a decent reputation and great brand recall among the people who live in the area. This is a great plus for inexperienced and beginning agents who can form their network with less effort.

Their Networks

As these firms have been in the market for a long time and are comprised of teams of people, they have often created huge networks within their value chain. So while the brand name gets them more business, the network helps them identify, buy, and sell homes easily and with less effort. Deals that would have been otherwise impossible for new agents to pull off are suddenly attainable with a network like this.

The Training

While the real world out there is the best training ground, brokerage houses are places where you can easily find experienced mentors. The learning curve is a lot flatter with these people around you. They often 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.

So What Should a Real Estate Agent Do?

Given the pros and cons of associating yourself with brokerage houses, one can conclude that despite the low commissions and high fee structures of brokerage houses, there are some very clear advantages. Their experience and brand name can really be a stepping stone for the career of young real estate agents. So while it is a great idea to associate with a brokerage firm, you need to choose the one you work for with care. But I do have some suggestions for those starting out in real estate.

Know what you want.

Real estate agents need to decide on what they want from the brokerage firm. Do they want the network or would they rather keep a higher commission split? Would they like to be trained there? Usually, the more a real estate agent expects from a brokerage house, the lower his/her commission will be. So decide on what you want, and then set your expectations. Also, choose the brokerage house selling the highest number of properties in your area of interest because that’s where the highest number of deals will be.

Look at your deal.

Keeping in mind 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. Alternatively, the lower the amount of training a firm provides, the larger would be your commission as well. Additional services provided by the brokerage firm would also cut into your commissions. So decide on what you require in the deal.


Expect the split of the commission to feel unfair.

The standing of the brokerage firm and their network is what got the deal in the first place. And because you have to depend on these factors, the split is going to be uneven. However, having said that, don’t agree to commissions that are too low. You’ll lose your motivation, and after all, you’re supposed to have fun doing this as well.

Opt for transparency.

Opt for a brokerage house that plays open cards regarding their fee structures and commission splits. Look for information on what to expect when you really associate with them. Work with a firm that spells out the percentage of commission that you as a real estate agent will get, regardless of who makes the purchase. Make sure that there are no hidden costs involved. It needs to be clean and easy to understand. And only when you’re sure about the deal, go for it.

Know there are alternatives.

If you’re an independent worker and have the grit to make things happen, there are brokerage firms that follow a monthly fee structure instead. That means you won’t be paying a percentage of your sales. Instead, you’re keeping all of it. That’s right, 100% of the commissions would be yours to keep. It’s not for everyone, though. If you’re that kind of person who really needs a framework to function well, you’re probably better with a different structure. Just keep in mind that it comes at a cost.

Real estate brokers can be extremely valuable resources, and though it isn’t always easy to find a good brokerage firm, young agents should spend time and check with their network to identify a good firm to join. Good brokerage firms are well versed with the neighborhood, know about listings more than locals, and are familiar with what it takes to get a good deal. They have a good network along the value chain as well, know how to identify the genuine buyers and sellers from the list, and also know what to pick from the internet and what to ignore.

It also goes without saying that young real estate agents will learn faster when associated with experienced real estate brokers. However, well versed as they may be, they can also be an agent’s nightmare by giving them low commissions and charging ridiculous fees while making them do the all the work. The solution lies in choosing a brokerage firm that provides what an agent is looking for.

Real estate agents: What’s your experience in working at a brokerage? Would you add anything to this list?

Let me know with a comment!

About Author

Engelo Rumora

Engelo Rumora is the CEO/Founder of Ohio Cashflow and a successful property investor that quit school at the age of 14. He is known for buying “Australia’s Cheapest House” and building a property portfolio valued at over $1,000,000 in only 6 months. To find out more go to


  1. John Bierly

    Think you need to consult practice laws before writing an article like this. In my state, and I think it many, an agent needs to work under a managing broker. Becoming a managing broker allows you to be an independent, as you have described, but requires a number of years of experience (varies by state), CE credits, and passing a more rigorous exam.

    Becoming an independent broker once you become a licensed agent is not an option open to new agents in many areas.

    • Engelo Rumora

      Thanks John and that is correct.

      My articles are meant to be thought provoking and not legal essays.

      I leave the legals up to the experts and anyone that doesn’t have a good legal team should not be in real estate.

      I think most will get the point of my article and that is that many real estate brokers suck and that its hard to find a good one.

      Much success

  2. I once wrote a book entitled “Rich Realtor® Poor Realtor®“ on just this subject, i.e. a newbie Realtor® entering the real estate arena and whether he/she should join a national well branded firm or perhaps a much smaller company that offered 100% commissions.

    The book was featured on my Rich Realtor® Poor Realtor®“ web site until NAR shut me down by threatening to sue me for using its registered word “Realtor” even though I was careful to use ® when ever I used the word Realtor®.

    To the point, big real estate companies successfully work on a premise of a grist mill, they entice lots and lots of fresh Realtors® into their company’s cog wheels and exploit their sphere of influence, e.g. mom and dad, uncle Joe, church members, co-workers etc. all the while giving them 50% of a deal less junk fees, archival fees etc. The big real estate know well that most newbies will sell maybe two to six deals before they quit, often within the first year.

    The real estate game is pro-active plain and simple. If you want a reactive job get hired as a Toll Booth Attendant where you can have the personality of a troll, be slovenly, impertinent and greet people with a scowl because they must deal with you to get down the road. Of course the trade off is you are trapped inside a 4’ x 4’ upright metal coffin earning $8.00 an hour.

    The truth is, and large real estate companies will rarely if ever admit this, a new to the game Realtor® needs the following after paying for study courses and licensing.

    1. Six months minimum personal living expenses
    2. Six months minimum seed money for lead generation whether it be a fancy web site or door hangers and postcards.

    So if Joe or Mary’s monthly nut, rent/house payment, car payment, groceries, utilities etc. is $3,000 monthly he/she will have at hand at least $18,000, hopefully more.

    And if Joe or Mary wants to successfully launch a marketing campaign like postcards, yellow letters, door hangers, Internet lead generation he/she needs at least another $10,000 as seed money for the first six months.

    The cold hard truth is most neophyte Realtors® simply don’t have this cash requirement of $28,000.

    Imagine a large real estate firm interviewing you and after chatting a while the Managing Broker looks at you and says: “Of course we will need to see your ‘Proof of funds’. Proof that you have $28,000 of liquid and available dollars to invest in your real estate career?”

    Large real estate firms, and small ones too, have never been that candid about the mortality rate of start up costs of new Realtors® and don’t expect them to be. Why should they, each month there is a crop of fresh and naïve Realtors® eager to enter the hallowed halls of real estate.

    Interestingly even during hard times a typical MLS will lose 20% of its Members each year but miraculously gain 20% in new faces looking for the real estate brass ring.

    And so the game goes on ….

  3. Anna Watkins

    This is what puzzles me entirely, and why, though I’m sure the book-learning wouldn’t be difficult, I’m not likely ever to pursue a RE license. If I ONLY want a license so I can be educated, and handle my own deals with credentials (especially if I have another full-time job like and want to keep), why would I want to indenture with a broker who’s probably mostly interested in owner-occupant customers, and interested in volume?

    I’m not sure of a good analogy — self-surgery w/o residency doesn’t sound too good — but can’t you be a licensed general contractor who only works for yourself? Different levels of license would be a way for the RE industry to make money off the licensing, and still control the level of experience or whatever. Class S license only qualifies an agent (who probably won’t ever become a trade-marked Realtor) to buy for her/himself. Class E for selling to everybody. Brokers stay top dog.

    • Depends on the state. In California, even if you get your license, “The state of California requires that you get a real estate license if you are planning to work under the supervision of a licensed broker. You can still get your license if you do not immediately plan to be employed by a broker; however, you will not be able to perform activities that require a license.” See that last line. What I would like is clarity about what tasks I may or may not perform if I have a license, but no relationship with a broker.

    • Engelo Rumora

      I like your idea but it might be a bit too complex to get the decision makers to wrap their head around it.

      I always said you don’t need a license to make money in real estate but there is no harm in getting one for sure 🙂

      Much success

  4. Anna,

    I do not see any compelling reason for your to spend the time and money to become a “Licensed” real estate agent when the required study course, testing, License Fees etc. can quickly set you back a thousand dollars.

    There are benefits to being licensed as a real estate agent; access to the MLS and “Commissions”.

    Also, when you become licensed in real estate you are under a whole different and more stringent set of rules and regulations established by the State you are licensed in, a MLS Board if you join one and so on. In fact in many states if you are licensed in real state and made an offer to a Seller you have to disclose that you are a licensed real estate agent. Some states even add you should state to the Seller that “Seller is aware Buyer (you) is a licensed real estate agent and may have superior knowledge”.

    • Engelo Rumora

      Yes and yes,

      I always wanted to roam freely and not have any restrictions.

      I did work as an agent in Australia and killed it tho.

      The principles are always the same tho.

      Hustle with cold calls, meetings and giving our cards.

      Network – Net Worth

      Much success

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