Congratulations on obtaining your real estate license! Now it’s time to pick a firm. As you embark on this journey as a new agent, selecting the right firm to affiliate with is a crucial decision. In this guide, we’ll break down the key considerations for making this choice.
#1 Splits & Fees
When evaluating different real estate companies, it’s essential to understand their split and fee structures. Here are some common models:
- Fixed Split: Some firms have a set split percentage that you pay for every deal, regardless of your annual sales volume. Meaning every sale you pay the same amount, like 20% or 10%, whatever it is, into the firm.
- Cap Structure: Other companies implement a cap on the split. For instance, you might start with an 80-20 split, but once you pay the firm a certain amount (e.g., $8,000 or $16,000), your split improves in your favor.
While a higher split means more money in your pocket per deal, it often comes with less coaching, training, and support. Whereas investing in a firm with a slightly less favorable split can accelerate your learning and growth, which is very important, because let’s face it — as new agent there’s a lot you don’t know!
It is well worth investing into a firm that maybe has a little less favorable split in order for you to learn faster, fast forward your success, and be able to grow your business quicker.
For me personally, I prefer the cap structure because I know that I’m going to sell enough each year that I’m going to pay a smaller amount to eXp overall, versus at a firm where I pay a lesser amount on EVERY deal, but can add up fast to a much larger amount overall. If you’re like me and plan on selling a lot of homes, a cap structure might be best for you too.
#2 Affiliation & Mentorship
Your choice of firm also involves aligning yourself with successful mentors and role models. What you want to do is structure your business in a similar way to someone who has done it before. They can tell you the pitfalls to avoid and the success stories that are going to align with how you want to run your business. Make sure you are aligning yourself with the right person.
This is where networking comes into play. If you’re on social media or going to real estate events and you see an agent there who has a business that’s similar to what you always pictured your business looking like — go network with them. Talk to them and build a relationship with that agent because for all you know they may be looking for a new agent to mentor or looking to expand their team.
Now when it comes to the firm itself, you want to make sure that the firm actually has successful agents who are high producing and can mentor you and want to mentor you, because that’s going to be critical in your success initially.
One quick side note about networking and aligning yourself with the right people — it also gives you access to the best people. If you’re aligned with the right person, they can open the door and give you access to the people that they’ve connected with. That’s a huge thing as a new agent because you’re going to run into a lot of roadblocks, and the biggest thing for you is how fast can you get through those roadblocks. How fast can you pick up the phone and get those questions answered, so you can keep moving forward and keep working on building your business?
#3 Long Term Benefits & Incentives
The last thing to think about as a brand new agent when looking for a new firm is — what are the long terms benefits and incentives to being at a great firm? If you build up a great business and then you stop selling houses in 3 years or 5 years, or you decide to change firms, is there any long term incentive or benefit for being at that firm? Say something happens, are you allowed to heir down your business to your kids?
These are all really important things to think about because a lot of firms DO offer incentives for sticking around, and a lot of firms DON’T. That might not be important for all agents, but if it is for you, it’s a good thing to think about. If you’re looking to build out ancillary income opportunities while still selling houses — there are a lot of great firms for that.
One other thing to think about — the more a firm is recruiting or offering recruiting incentives, the more it offers a culture of providing value. At eXp, our recruiting structure drives a culture of — who can drive the most amount of value? Versus — who can provide the lowest splits and cheapest service?
If you are a new agent looking for a new firm, the biggest thing to think about is — where can I go where I can get the most amount of value to build my business?
We’ll see you next week for Part 2, where we’ll delve deeper into the process of affiliating with the right firm and setting yourself up for success.
Additional Resources For New Agents:
If you’re a real estate agent looking to join your first firm or switch firms, here are some additional resources that can help you: