I Passed My State Test – Now What?
Once you’ve completed your 75 hour licensing course and passed your state exam, you are ready to begin your search to find the best brokerage company for your personal situation and career goals.
Keep in mind, you obtain ONE real estate license at a time (per state) and that license must “hang” at ONE real estate brokerage company. All real estate activity you do that requires a license must be done through that brokerage company.
For example, if you want to work in residential resale as well as property management, you need to make sure you can do both through the brokerage company you go to work for. Most brokerage companies specialize in certain areas, so communication is key when interviewing.
Before the interview… investigate the reputation of any brokerage company you are considering.
This is an important step for a brand-new licensee. While you may not yet have any real experience as an agent, you can gain instant credibility by working for a brokerage company with a sparkling reputation and great brand recognition!
How is the brokerage company perceived in the marketplace? Do some research as if you are a home buyer or seller! Look at yard signs and open houses in the towns or neighborhoods you want to work. Check out the free real estate guides in local stores. Do an online search to evaluate the brokerage company’s website and social media presence.
- How does the company market their listings and their brokerage services?
- Do the services offered include all the types of business you want to conduct?
- Peek at their directory of agents – is there anyone you know? Give them a call.
Talk to agents at other local brokerage companies as well. Does the brokerage have a good reputation in the community and with other real estate professionals?
Finally, go to the NJ Real Estate Commission website and look at the Enforcement page. If a real estate licensee has any infractions against his or her license, the violation is published online. You can use that information to determine if the brokerage or their licensees have repeated violations.
HINT: Do your research first. Then, interview with at least 3 different brokerage companies before choosing the one that is the best fit for you.
Before the interview… Understand how real estate agents get paid.
There are salaried positions available in real estate, as well as some positions that offer salary plus commission options. (This often depends upon the career path you have chosen.) However, most real estate agents are paid on commission basis. In fact, most of the top earners in the industry are straight commission salespeople.
Real estate brokerage commissions are split between the brokerage company and the salesperson:
- Historically the traditional rookie split was a 50%/50% commission split with no “desk fees” and very little out of pocket cost to the agent
- Other popular plans include things like 70%/30% split with the salesperson retaining 70% of the commission but perhaps paying $2,000 to $4,000 in annual desk fees
- More experienced agents may prefer a 95%/5% split so they retain 95% of the commission but perhaps pay $750 or more per month in desk fees
- Compensation plans are negotiable between the brokerage and the agent. These figures are simply examples to illustrate the basic concept.
Putting it in Perspective:
Brokerage companies that provide more services and support to agents may offer somewhat lower commission splits; brokers who offer very high commission splits may be providing a virtual office, online training and very little else. You need to do your research. Like all businesses, brokerage companies must make a profit to survive! When brokers are spending the money to provide agents the highest levels of support, there may be somewhat less money left to pay out in agent commissions. What do full-service brokers provide to their agents? Things like:
- Ample training and oversight
- Administrative and processing support
- Offices in prime locations
- National advertising programs
- Online lead generation
Keep in mind, a lower commission split doesn’t necessarily mean the agents make less money. As a new agent, you may find that you close more business when you work for a company with great brand recognition and agent support. You are going to come out ahead closing 30 deals at a 50% split as opposed to closing 15 deals at a 70% split. On the other hand, if you have a strong “sphere of influence” to market your services and are confident about your skill level, you may come out ahead on a higher split program.
HINT: Don’t over focus on commission splits! As a brand-new agent, you want to find the brokerage that provides the best possible training and support to get your new business endeavor up and running.
*See follow up post “Choosing the Right Broker – The Interview”
Property of THE Real Estate School LLC. All rights reserved.