Choosing to Work for a Big or Small Real Estate Broker
When considering a career in real estate, one of the first decisions you’ll need to make is what kind of broker you want to work for. There is no such thing as a one-size-fits-all broker. There are large organizations with thousands of agents across the country and small boutique brokerages with only a handful of employees.
Each type of brokerage offers its own set of benefits and drawbacks, and it really depends on a person’s personal preference and career goals. We take an in depth look at the pros and cons of both types of brokerages to see what would be the best fit for you.
Working For A Large Broker
- Brand recognition: A well-known brokerage can lend credibility to your business and help you attract clients. This is especially valuable for new agents who have no prior track record.
- Training and support: Large brokerages often have structured training programs and access to resources that can help you learn the ropes and develop your skills as an agent. Often times, the amount of support you get can make or break a career.
- Network: Working for a large brokerage can give you access to a wider network of agents, which can be beneficial for sharing leads and collaborating on deals. You will also get more exposure to agents with greater talent and hopefully, you will be able to get one of them to be your mentor.
- Technology: Large brokerages may have more robust technology platforms and tools to help you manage your business. This will not only help you manage your day-to-day client interactions, but also provide you with more in depth market research to share with your clients.
- High Fees and Commission Splits: Large brokerages often charge higher fees and commission splits, which can eat into your earnings as an agent. Commission splits are always negotiable. When you start out in the beginning, it is best to focus on getting more experience and a few deals under your belt. Once you achieve a solid track record, you can worry about getting a higher split later on.
- Limited Autonomy: Large brokerages, especially in commercial real estate, may have strict policies and procedures that limit your autonomy as an agent, such as requiring you to work specific hours or follow specific marketing guidelines.
- Competition among Agents: Large brokerages often have a high number of agents competing for the same listings and clients, which can make it harder to stand out and build your business. This type of environment makes you feel only as good as your last numbers and will force you to constantly push yourself to succeed.
Working For A Small Broker
- Autonomy: With fewer rules and regulations, you may have more freedom to operate your business as you see fit. If you want to truly feel like you are running your own business without the overhead costs, this would be a great way to do it. This may not always apply in niche markets such as luxury real estate.
- Niche expertise: If you are trying to break into a niche market, such as luxury homes, vacation property, or eco-friendly buildings, smaller firms are usually the experts and have the most comprehensive knowledge in those specialized markets, because their entire business revolves around those specific areas.
- Commission splits: Since you will not be provided with as much training as support compared to a large firm, you may be able to negotiate a more favorable commission split with a smaller brokerage. This is proportional to the amount of work you are expected to do to close deals.
- Culture: Boutique brokerages often have a more intimate, family-like culture that can be appealing to some people. They may be able to offer more personalized attention and support to help you succeed. You are not treated as a number but a human being. Consequently, they are usually more flexible and understanding if you have family commitments or other obligations outside of work.
- Limited resources: Smaller brokerages may not have the same level of resources or training programs as larger brokerages. This often makes it feel like a sink-or-swim proposition for new agents. Having a strong support system in the beginning not only helps you hit the ground running but also serves as emotional support to keep you motivated during tough times.
- Limited network: You may have a smaller pool of agents to collaborate with or seek advice from. You are stuck with whatever help you can get. With larger firms, not only are there more people available at the present time to learn from, but because there is higher turnover, the prospect of meeting someone new in the future is also greater.
- Brand recognition: A smaller brokerage may not have the same level of brand recognition as a larger brokerage, which could make it more challenging to attract clients. Since people will most likely not know anything about your company, you will have to serve as the face for your firm and use more interpersonal and selling skills to win deals.
- Equipment: Smaller brokerages may not have access to the same technology platforms and tools as larger brokerages, which could impact your ability to manage your business efficiently. Rather than going with the latest and greatest tools, small firms typically resort to using things that fit their limited budget.
While there is a lot to consider when choosing a real estate broker, it’s not something you should be losing sleep over. You are not committed to your broker for your entire career. In fact, it is not uncommon for agents to switch brokers several times over the course of their career. Although some agents may stay with one brokerage for their entire career, others change brokers every few years or even more frequently. What matters most at the end of the day is not the size of the brokerage firm, but whether they are helping you achieve your goals.