Tis the season for real estate brokerage moves. And if you’re a broker or sales person, no doubt you’ve been getting courted by one or more firms offering you the moon and the stars. But, is the grass really greener, and how can you be sure you don’t get caught in a bait-and-switch?
Here are 5 questions you should ask any prospective firm before signing on. Also, I recommend interviewing at least 3 places so you can compare and contrast. That will help you make the best business decision for your *business*.
1)Technology: What is it, how does it work, What does it cost me?
Every brokerage has tech tools that may help your business. And every brokerage will sing their praises and tell you that they are the best thing since sliced bread. But are their offerings actually any different than what you have at your current brokerage? Are they actually going to benefit you, and more importantly, will you actually use them? Are they just flashier versions of what you already have (and, like most of us, probably don’t use?).
Are there any costs associated with their use? Sometimes basic systems will be offered for free, but in order to get increased functionality or more robust parts of a platform, you need to pay. Ask that question.
2)Public or Private?
This is a question you may not have considered. Having worked at a brokerage that was publicly traded, and now one that’s privately held, there is certainly a difference. If the firm is publicly traded, do some research into its stock price and read articles about their performance on Wall Street. It does affect you. When a company is publicly traded, they will usually satisfy shareholders first.
If they are privately held, delve into whether they plan to go public or sell. Ask questions about the quantity of staff and overhead expenses. Remember that when a company wants to go public, their balance sheets need to look profitable for Wall Street…..if the company has too much overhead, will those positions be cut (and services for agents be diminished) as a result, to shore up finances?
I’ve seen that happen…and it’s a question few agents likely ask when they move. With the rash of start-ups and tech focused brokerages that are buoyed by lots of investor money, it’s a very important question to ask right now before you sign on.
3)Manager – Who Are They?
Does the manager sell (meaning will you be competing with him or her for sales)? How often are they in the office? In my experience the best managers spend a solid majority of their time, each week, being in the office and, plain & simple, being available! Is there an assistant manager? What experience does the manager have in growing an agent’s business. Ask for concrete examples. The managing broker is an important piece of your team as you grow your business.
Better yet, ask 3-5 agents of varying production levels, in that office, how they view the manager. Take them to coffee and delve in on what they like and what they don’t. In my experience, people will be very candid in this environment.
Spend a lot of time getting to know this manager as well – get to know their family if you can. As one of my coaches once said, if they are married to crazy, they are probably crazy!
4)Marketing – How Much Can You Customize?
Most Brokerages offer many marketing options, and most are said to be customizable. But be careful with that word. How much can you customize? If you have a new idea, do they have a graphics team that can create full custom pieces for you? And if so, is that included or do they charge you for that?
And if they charge, how is it billed? Per Hour? Per Project? Make sure to get those costs up front and in writing. You don’t want to end up in a situation where you earn a higher split, but have to put that extra money (and then some) into creating marketing pieces.
If you are a broker/team that does a lot of marketing (like I do), insist on a meeting w/ the marketing team before signing on. Get a sense of how they will be to work with.
Be sure to find out what is included in your split, and if the firm has any additional monthly or annual marketing fees.
5)To Equity or Not To Equity?
Newer brokerages are known to offer equity or profit sharing as a recruiting tool. This can be a great incentive/benefit, if it pays off. You want to ask how many total shares will be offered (so you know what % is yours), and, if it’s equity, what the plan for going public is. Keep in mind that not all stock options are the same and it is important that you fully understand the offer in front of you!
If the brokerage is offering profit sharing, you want to dive into their books and know how profitable they are. Ask to see the last two full years Profit & Loss (P&L) Statements, as well as a year-to-date report. Make sure you get confirmation on what your profit share would have looked like for those time periods, and get it in writing.
Remember that this is a business decision. And you should treat it like such. Make sure the place you plan to call home meets your needs and the reason to move is compelling. Do it for the right reasons and keep your eyes wide open. Peel back layers 2, 3 and 4…don’t just look at the top layer. You want to know exactly what you are getting in to. Good luck!