If you have just finished your studies and now ready to get licensed your first step will be to find a brokerage. Most of the traditional brokerages are not selective. If you can bring a real estate license and credit card that works so that they can bill you are pretty much guaranteed to be accepted.
Why is it so easy to get hired? The answer is simple. The brokerage sees you as not much more than a ‘billing point’. They may talk about training and even lead generation programs. The truth is that in the larger brokerages these systems are very weak or in reality non-existent.
I talked to a very nice gentleman only yesterday who told me he jointed a REMAX franchise about a month ago believing that the brand would help launch his career and that they had training staff and even a lead generation system.
He told me that his training consisted of a senior REALTOR® showing him how to fill out a form. And the lead generation program (REMAX calls it Lead Street) amounted to one lead that was not even real. The ‘lead’ had registered on their system only so that he could vent about how expensive a certain home was. By our calculations and because these so-called leads are handed out on a rotation basis across the hundred or so agents in the brokerage, we estimated his next so ‘lead’ would show up in about 4 years’ time.
So, what are you to do? How will you start?
What Kind of REALTOR® Are You?
These REALTORS® are established and found in most traditional brokerages. If you have built up a tremendous following in another career (I remember one REALTOR® I worked with in Sherwood Park was an ex councilor) you may be well set up to build a nice client base all by yourself on the basis that you have demonstrated integrity and professionalism in your former life. If you are like this you will be a very rare individual indeed.
You are a hunter. You know how to identify potential clients and you have the intestinal fortitude to seek out and convert people to clients. People like this are most always chasing listings not buyer clients. Most REALTORS® in metro Edmonton might do some work like this but most mix it with other types of client acquisition.
For example, doing Open Houses can be an excellent way to meet prospective buyers in a friendly relaxed atmosphere. Your challenge will be getting the listings to hold open in the first place or finding a REALTOR® that will let you hold in Open House in their listing.
To be a marketer in the modern world requires an in-depth knowledge of social media marketing, Google advertising, direct marketing including direct mail and of course you will need to know how to set up a website and optimize it for Search Engine Optimization (SEO). Does this sound like a full-time job? At the start it will be extremely time consuming. I should also mention that you will need a healthy budget. Don’t be surprised if your initial start up costs for a website approaches $10,000. And your budget for marketing could easily exceed $5,000 a month and this a is conservative estimate.
This is by far the comfortable way to get started. You are provided with a steady supply of in bound enquiries. For the most part these will be buyer enquiries about specific homes for sale or they will be website registrations where someone has registered to see more information. The challenge here is that most brokerages do NOT offer enough of these leads to sustain you. And those rare brokerages that do offer leads will require big commission splits in their favour not yours.
What Kind of Culture Do You Enjoy?
Are you a collaborative individual who enjoys working in small groups in addition to independent work, or are you more of the lone ranger type?
Over the last 30 years or so the lone ranger type. The kind of person that would plaster their names on bus benches and in the newspapers dominated much of the market.
Over the last 5 to 10 years that has changed. Consumers demands for a better quality more consistent real estate buying or selling experience has resulted in the growth of boutique independent brokerages and in some cases teams within bigger traditional brokerages.
How Will You be Compensated?
First let’s look at the topic of compensation. In most cases, brokerages in our market do not pay salaries or provide benefits. You will be compensated based on revenue splits with your brokerage. Normally you will only generate revenues when a transaction closes, but there are some exceptions. Our brokerage for example charges enrollment fees to sellers when they list with us. This program generates instant revenue.
How much are those splits? The quick answer is that it depends.
Some brokerages charge as low as 20%. Some brokerages charge 60% but in exchange they cover many of your monthly and annual costs.
Most brokerages charge a monthly association or admin fee. In some cases, it will be just a few hundred dollars a month. In other cases, (REMAX for example) your monthly fee could be over $1500 a month even if you don’t do a transaction and not including all of the other costs associated with growing your business for example: cards, signs, a website, social media marketing and the like.
Still wondering how to get started?
Here some questions to ask any broker.
What differentiates your brokerage from all of the others?
How do your fees work?
What systems & tools do you have in place for me to use?
How many leads can I expect from you each month or year?
What level of conversion should I expect?
What other programs do you have in place to help me get more leads?
How many transactions can I expect to complete in my first year?
What about support and meetings? How often do these occur?
How will I learn my new profession with your brokerage?
If you would like me to answer these questions, please contact me by phone at 780-760-2014 ext. 3. If you get my voicemail please leave a message.
About the author:
You can read more about the author of this blog by clicking this link – Stuart Neal Broker Owner & REALTOR®
Want more information about careers with our team? Call Stuart or go to our Careers page Ambergate Realty Advisors Careers.