- Not having signed trade records sheets
- Not making a strategic decision when moving to a new brokerage
- Trying too hard to lower your fee than to find ways to increase revenue
- Worrying too much about the splits being offered
- Thinking that changing a brokerage is no big deal
Not having signed trade record sheets
Its not secret, I had made a change in my career to a discount brokerage in order to save some money and after a year and half found out that it wasn't for me. My thought process was that I'm my own brand now and I don't need to have a big brand to rely on to get business. Well it backfired and I lost more than 50% of the business and my personal brand suffered as well.
The worst part was that the brokerage I joined had a policy that if you had any pending transactions when you left, your effective cost for the transaction would change and it became even more expensive than my most expensive deal when I was a junior at the big brand office.
Lesson: Make sure you have copies of the trade record sheets from your office before you proceed to making the move. Protect what is there!
Not making a strategic decision when moving to a new brokerage
This is a very important factor. Why are you looking to move? What's lacking in your current brokerage?
You have to be absolutely clear about what you want in your new brokerage and what you don't want. Make sure you visit the brokerage that you're planning on joining and spending a day there. Do they have trainings available? How are their trainings? Can you join them for a session?
Does the brand of the brokerage you're joining compliment with what you stand for? Is this change a step up or step down for you? Make sure you're not joining a brokerage because it's the "in brokerage" at the moment because of a recent large sale or because of the news coverage it's getting. Understand your business and your reasoning for moving and have a plan in place.
Trying to hard to lower your fee than to increase revenue
Have you wondered why some of the largest name is Real Estate are still associated with large real estate brokerages? Why don't they go to a smaller discount company and become more profitable?
The simple reason is that a strong brand from a larger brokerage network helps these producing agents gain trust of new buyers and sellers. It's not apparent to us as agents because we work in the industry but as a buyer or seller who is looking to work with an agent for the first time, a recognized name and brand goes a long way.
The nationally recognized brands is not a cheaper alternative and will offer you services that are over and above smaller discount brokerages. A simple example would be if the brand has referral network setup or if their website is big enough that it generates leads for you. In essence, the fee you're paying is being recouped by the leads the brand offers you and also helps you increase your revenue.
Worry too much about splits
Splits and transaction fees are only applicable when you're closing sales. If you're having a hard time generating leads for your business, then concentrate on getting with a brokerage that can help you generate business. Yes, you might pay a larger fee in the beginning but it's well worth it because of the learning you get from it.
Trying to save 5% and loosing out on generating $50,000 in additional business isn't the wisest thing. Concentrate on growing your base first before trying to find cost savings.
Thinking that changing a brokerage is no big deal
Another big mistake that agents make is that it's no big deal to change a brokerage. It costs way more than just paying $100 to RECO to get the brokerage changed. Your for sale signs, your websites, your advertising, your banner ads, your cards, your car graphic etc etc etc all need to be updated with the new information. I ended up creating a check list when I made my first move and keep adding to it all the places where I'm advertised to ensure my future advertising is compliant. It's an intense process so make sure you understand what you're getting in to with your new brokerage.
In conclusion, it's wise to really take your time to make a decision about changing brokerage. Think through the items that are listed above and make sure you have an action plan in place to tackle the issues. If you would like to learn more about how we do business at Re/max Active Realty, please feel free to leave a comment below or fill out the form for more information.