Your Relationship With Your Broker
Whether you just need a handy spot to “hang your license”, or you’re looking for a generous commission split, one of the most significant business relationships you will have as an agent is with your broker. Perhaps you’re looking for a sounding wall or cheerleader, or maybe you just need the desk space. In the end, the ideal situation will be one with give-and-take, fair compensation and adaptability. As part of our ongoing series, “The Right Tools for New Agents,” we’ve broken down some of the basic elements that comprise the agent/broker relationship so that you can balance your expectations and find the situation that works best for you.
The Importance of Compromise
Any agent/broker relationship requires cooperation. Each side will have needs and expectations, mostly about earnings, and so it’s important to balance the hopes and desires of all the parties involved. As a new agent, it can be challenging to stand your ground when you are first establishing a rapport with your broker, but it’s important never to secede too much in the beginning. Adaptability is key. Otherwise, you may find yourself unable adjust and develop as your career evolves.
As we explained in our recent post, Compensation, Commission and Salary: A Starter Guide for Real Estate Professionals, there are several different ways that agents earn income. How much you earn will depend a lot on what your broker is willing to offer, and when you’re just starting out your negotiating power will be minimal. Nevertheless, it makes sense to be aware of traditional compensation setups as well as whatever new options may be available.
The dominant compensation split set up has the advantage of allowing the broker to assume the risk of giving a new agent a chance while also allowing the agent to manage – and expand – earnings based on effort. On the other hand, a 100% commission fee arrangement, a commission cap or even the salary option all have their pros and cons.
In the end, it will be up to you to decide what works best for your situation. If you are willing to forgo steady income for the possibility of a big payout, then you will want to negotiate for a commission split that leans closer to 50/50 or more. If you feel like stability is paramount, then salary or a commission cap may work out better in the long run.
To Desk or Not to Desk
Historically, agents took up desk duty in an office presided over by a broker, but that modeled has continued to evolve and change. The latest technologies, including the increasing influence of online tools and paperless documents, have pushed agents outside the office and into a busy, outcome-oriented sales atmosphere where clients continually push for immediate responses and zero-hassle transactions.
Most homebuyers begin their search online, meaning time spent waiting for walk-in traffic is squandered, but sometimes parking at your desk can have unexpected benefits. For example, you can learn a lot from your colleagues, and the ability to bounce ideas off one another and network is invaluable. Additionally, your broker will be available to review your paperwork and guide you through unexpected challenges including demanding clients and surprise setbacks.
Ultimately, only you can decide how much time you need to spend in the office to be productive. When choosing a brokerage, make sure your expectations align with what the broker requires. Some of you may want flexible hours and the ability to make your own schedule. Others may find it more beneficial to have a set schedule that allows you to easily prioritize tasks and plan your day.
The Right Relationship
You and your broker are linked, by income and ambition. Your broker depends on you to bring in clients, close transactions and supply the negotiated compensation. In truth, brokers want good agents and are often competing with other firms to seize the best candidates.
Brokers are not so much your boss, as your business partner. In many circumstances, the broker is assuming some, if not all, of the financial risk. In return, agents are expected to uphold their end of the bargain. However, as the marketplace changes and the balance of power shifts, agents are gaining more control over their destiny. As you advance in your real estate career, you will likely interact with all types of brokers. Your priorities will shift, and your values will change, and you will begin to understand exactly how to balance your needs with the opportunities and mentorship provided by your brokerage.
Energized and ready to learn more? Here’s a collection of our most recent blog posts with quick tips and tricks for new agents:
How is your broker/agent relationship?
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