Rethinking Your Life? 5 Questions To Ask Before Switching Brokerages
Jay Thompson is a former brokerage owner who spent over six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Real estate Facebook groups are full of posts and comments about agents considering changing brokerages. It seems like every week there’s an Inman headline about some large team or “top producer” making a switch. It’s practically unheard of for agents to spend their careers at a single brokerage.
Why? Why do agents switch brokerages, some seemingly doing so with every changing season? Financial reasons are probably what first comes to mind. Commission splits, caps, “100 percent” offices (which is quite the misnomer, by the way. Unless a real estate brokerage is operating as a non-profit, the broker is going to get some of your money, some way. They have bills to pay, just like you).
Maybe you want or need leads from your brokerage, which is just another financial reason. Leaving finances aside, perhaps you’re looking for more freedom and autonomy, a different culture. Or maybe your broker is just a jerk.
Although switching brokerages has always been a thing, the frequency seems amplified over the past year or so. Hmmmm, what’s been different in the past year? Oh, that pandemic thing.
Work offices of all flavors now resemble ghost towns. Major companies, including some in the real estate vertical, are implementing “remote workforce” options — aka “work from home.” The debate over whether agents will return to offices in “the new normal” rages on.
There’s little doubt in my mind that the pandemic has shifted the mindset of professionals everywhere, including agents, brokers, and team leaders and members. Most of us have paused at some point during this mess and asked ourselves: “Is this what is best for me (my family, and/or my business)?”
Unless you were alive during the 1918 pandemic, this is your first experience with a worldwide pandemic. No matter what your stance is on masks, social distancing, vaccines or the reality (or not) of COVID-19, it’s highly likely you’ve paused at times and pondered what has happened, will happen, and how all this has, will or could impact your life. That’s perfectly normal human behavior when faced with uncertainty.
Maybe the pandemic has got you thinking about switching brokerages. Or maybe just the course of normal life cycles has you considering a change. Whatever the case may be, here are some thoughts on what you might want to think about before you make a change.
It’s not just about the money
Back in the day, before I got into real estate, I was a human resources manager for a very large company. Like any other HR department, we spent a lot of time analyzing why people left the company. Employee turnover is very expensive, and if you can determine what causes people to leave, you can reduce that expense and the turmoil turnover tends to induce in the remaining workforce.
What we found, as have countless others, is that most people don’t leave a job or an employer because of the money. They leave for opportunity for growth, autonomy, better management and culture.
Sure, finances are important. After all, one does have to eat, pay taxes, pay your broker, alimony, rent, mortgage, the light bill and on and on. But let’s face it, there is not that much difference between commission plans, at least not enough to warrant a brokerage change on that alone.
One of the beautiful things about a real estate career is your income is directly related to how hard you work. Longing for that 10 percent increase in commission that newfangled brokerage down the street is selling? Increase your sales or average price by 10 percent instead of uprooting your business to work for an unknown entity.
Yep, that’ll take some additional work, but I bet if you’re selling 10 homes a year, you can sell 11. Or if you’re grinding out 50 transactions, bumping that to 55 isn’t a huge stretch.
Finances matter, but they aren’t the be-all-end-all of real estate. Or most other jobs. Hence the reason “better pay” consistently ranks below the other reasons people seek change in their job. Most people want a job that challenges them, makes them think and reach for success. They want a life, so the ever-elusive “work-life balance” is critical.
Real estate sales is hard. From living on 100 percent commission to waking up every day unemployed to no benefits like health insurance, paid time off, a stable paycheck or a 401(k), you are in a whole different world than a traditional employee.
Ask yourself: Outside of a higher commission split, what do I really need for a better business, and more importantly, a better life?
Opportunity for growth
Most real estate agents are driven people, always looking to grow and expand their business. It’s pretty much the nature of the beast. While some agents prefer a broker who is completely hands-off and only steps in for support when needed, many agents will appreciate a brokerage that provides an opportunity for growing their business.
Maybe that just means allowing you to build a team, structured as you deem best. Perhaps it’s a mentoring program with top-producing agents. Training, admin support, proprietary software — there are many ways a brokerage can help an agent grow their business.
Ask yourself: How can a broker help me grow my business over the long term?
Ability to run your business how you want to run it
Long ago, I wanted to add a “fire me” clause to my listing and buyer broker agreements. While I was completely confident that no buyer or seller would ever want or need to fire me, giving them that option could ease concern over making a long-term commitment to my services.
The idea was along the lines of, “Mr. Buyer, I understand the hesitancy to commit to an agreement when you don’t ever really know me. That’s why this clause lets you terminate the agreement at any time, for any reason. I’m confident you won’t want to do that, but the option is there for you.”
When I approached my broker with this idea, his response was swift and succinct, “Absolutely not.” Other ideas about developing my own brand, custom signage, conducting FSBO seminars and more were summarily rejected. Denying me the opportunity to run my business as I thought best (of course within legal and ethical bounds) was a significant factor in deciding to open my own brokerage.
Ask yourself: Rather than limit what I can do, could a different broker open up new possibilities and help me think — and work — outside the box?
New real estate agents usually have no idea what they need when it comes to broker support. Experienced agents often just want their broker to get the hell out of the way so they can close transactions.
Brokers need to understand that their agents need different things from them depending on the agent’s experience, motivation, drive, experience and goals. There is no “one size fits all” in this business.
You may think you know all there is to know about the real estate transaction. That you don’t need your broker’s “help.” Well, to be frank, you’re mistaken. No one knows everything about real estate.
With an emotional, complex, expensive, very personal transaction, the simple fact is anything can go wrong, sometimes remarkable swiftly. You need a supportive broker that has your back.
You need someone to shoulder legal responsibility, you need a sounding board with whom you can openly share and discuss not only transactional issues, details and minutia but also personal trials and tribulations.
Ask yourself: How could, and should, a broker support me and my business? What do I need from a broker that I am not getting now?
Ask 20 business and HR managers to define “culture,” and you’ll get 20 different answers. The problem with defining a company (or a business, or a team, or any population’s) “culture” is that it is a very nebulous, fuzzy thing.
Oh sure you can get, “Our culture is to put the client first, to provide impeccable customer service in all aspects of what we do,” blah blah blah. But what does that mean?
Let’s face it, when it comes to work, “culture” is not easy to define. Wikipedia tries with, “Culture is an umbrella term which encompasses the social behavior and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups.” More blah blah blah.
As hard as it is to define, “culture” is important in both our lives and work. In a nutshell, it really boils down to a feeling. Feelings of belonging, being a member of a team (or “tribe” to steal the trendy vernacular), having common beliefs, desires and goals.
Humans are social animals, and even the most introverted among us feels the need to be included. To surround ourselves with people of similar wants, desires and beliefs.
Culture is an important part of your soul, your psyche, your spirit. It’s more than kind of important. It may well be the most important aspect to consider if you’re thinking of a brokerage change.
Ask yourself: Do I fit in here? Do we have common wants, needs and desires? Are these my people?”
The bottom line
Changing brokers can be painful. There’s paperwork and seemingly endless tasks of changing social profiles. Getting new signs, cards and logos can make it expensive.
It can also be exhilarating and rewarding, and open new doors to all sorts of possibilities. There is much to ponder and contemplate when it comes to changing brokers. Ask yourself tough questions and thoroughly explore just what it is you’re looking for, long before you reach out and begin interview potential new brokers.
Jay Thompson is a real estate veteran and retiree living in the Texas Coastal Bend, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.