Today Nathan throws out a surprise topic for us to discuss. We talk about the questions people should ask when determining whether a brokerage is for them or not.
We want to know what you love best about your brokerage. In the comments tell us what your favorite part is!
Audio length 29:24
RTRE 48 – What to Ask When Choosing a Brokerage[music] [Chris]:Welcome to re:Think Real Estate, your educational and hopefully entertaining source for all things real estate, business, news and tech. [Christian]: I am Christian Harris in Seattle, Washington. [Nathan]: Hi, I am Nathan White in Columbus, Ohio. [Chris]: And I am Chris Lazarus in Atlanta, Georgia. Thanks for tuning in. [music] [Chris]: Everybody and welcome back to re:Think Real Estate. I am Chris Lazarus here with Nathan White and Christian Harris. Guys what’s going on guys? [Nathan]: Hey what’s happening? I am trying to stay warm in the polar vortex here but it’s only one day people so don’t panic, it’s not a week long. [Nathan]: How cold is it there right now? [Christian]: It’s about 7 degrees. It’s the end of January we’re recording this. [Chris]: It’s gone up a little bit since we talked last. Our entire state shut down for a little bit of rain so Georgia is closed now [laughter]. [Nathan]: And if it even gets flurries in Georgia it’s like the apocalypse like it’s hysterical. [Chris]: Well I mean no joke we are 5 years to the date from Snowmageddon. Like the time hop came up on Facebook “5 years to the date from Snowmageddon today”. And last time that happened I ended up having to walk 11 miles on icy roads back to the house because my car wasn’t getting me there. So…Yeah I mean Georgia does not know how to deal with that stuff. [Christian]: It’s legit. [Nathan]: Like 2 inches of snow or just a little ice? [Chris]: It wasn’t 2 inches but it was like a maybe a quarter inch of snow on top of an inch of ice. [Christian]: Ice will…Ice will mess up your day so… [Chris]: Yeah ice did it. [Nathan]: When you were talking about ice I saw that you were talking about something. [Chris]: No yeah so… [Nathan]: What are we gonna talk about? [Chris]: Nate is gonna surprise us with today’s topic. [Nathan]:[censored]. [Chris]: Nate what are we talking about today? [Nathan]: So you know we’ve talked about this before but I am gonna go to the…you know we’re in a public group. I think all 3 of us are on it. The…the Inman coast to coast and somebody earlier this week posted again about how to choose a brokerage. And I want to say maybe it was Tanya or somebody. I forget who put the…the questions to ask out there.
But did you guys see that about an agent going to choosing a brokerage? Because some of this I agree with, some I don’t agree with at all so I thought it might be good to go back and talk a little bit more about this. Maybe we have some new agents since we started doing this that you know are in that struggle bus of “Hey I am stuck here” or “I don’ know what to do. I didn’t…I didn’t choose right”. And so these questions…These questions [background noise] Whats that? Sorry.[Christian]: Did you just say struggle bus? [Nathan]: Yeah. Struggle bus. [laughter]. [Christian]: OK I just wanted to make sure I heard that right. OK. [Nathan]: Yeah so if you guys check your email I just sent you that. [Chris]: Yeah I am looking at it right now. [Nathan]: Right so like if you look through some of this like I don’t know if I agree with all of this. Of course I never agree with everything, right. [Chris]: You never agree with anything. [Christian]: You’re super agreeable. What are you talking about? [Nathan]: I am so… [Chris]: You’re the “Yes man”. [Nathan]: Oh my God you all are ridiculous. [laughter] [Christian]: I am…I looked over this a little bit… [Chris]: I am seeing this for the first time. Let’s talk through it. [Christian]: So you’re talking about…You’re talking about kind of the generic agent guide to choosing brokerage that is out there? [Nathan]: Yeah. [Chris]: Yeah. We’re not gonna say who it is put out by but there’s a guide out there. Alright so first step in this guide research. What’s this? “Pull MLS numbers for at least 3 years for the office. Volume, transaction count, map the transaction if your MLS offers that feature. Know how far from the office they are.”
I don’t know. If you’re a new agent, you don’t have access to the MLS.[Christian]: Yeah. So what I found in general is that whatever brokers you go to in you’re quote interviewing with them they’re going to spat out the stuff that makes them look best right? [Chris]: Yeah. [Christian]: So if they’re agent heavy they’re gonna be like “Oh we dominate the market by agent numbers”. If they’re you know actually killing it in volume or, you know, gross sales that’s what they’re gonna…that’s what they’re gonna highlight.
So you know the thing is if you’re a new agent how does the brokerage production help you? I mean it…it doesn’t directly. Now it might indirectly because OK maybe there is a lot of experienced agents that you can shadow or piggy back on. But just because they’re productive doesn’t mean it will help you do yours. They’re busy. You know and now they’re hinting like if you have in mind “OK I am gonna do open houses.” OK you’re gonna need an office that has listings , you know. Now you don’t need it in there they’re not here. You can call other agents and brokerages if they’re willing to collaborate…[Chris]: What they do that? [Christian]: Well it’s not…it’s not a culturally…I don’t know. Some do. You know if they have a more collaborative mind set. I mean I all about that but not…Most franchises don’t have that. Might be more in the “Protect your own” mind set. So…They’d rather not do an open house rather than have someone from another broker do their open house. [Chris]: That should never happen. Not in my state. [Nathan]: Well you know here’s another one on here that really tripped me up. This is a value aid and establish. “Why the office of the brokerage you’re interviewing with is or isn’t successful.”
How do you define success in a brokerage?[Christian]: Right what are your metrics success? [Nathan]: Right I mean. [Christian]: Numbers and profitability but you’re not gonna know the profitability numbers. [Nathan]: Right. I mean you know our brokerage doesn’t do a gazillion transactions but I believe the ones that we do do are very high quality. So, meaning from…you know from a client experience. So again I don’t know you know if that counts or not. It’s like saying “Oh I am hearing another party say look at agent reviews on yelp or Zillow”. I mean [censored] I am not interviewing like…That’s not applicable to me I guess so I struggle… [Christian]: But when it comes to researching a brokerage what would you say? I mean I don’t think these are super valid because they center around like on traditional like sales like…Do they do a lot of business? And that than quantifies whether they’re a good brokerage which I think has nothing to do with is a good brokerage or not. Maybe.
I mean I guess you could kind of determine market saturation or market share but again as a new agent is that really gonna help you I mean unless you’re in a small town and there is a dominant brokerages and a bunch of other small ones that don’t do anything. I mean here in Seattle there’s tons of brokerage and they all have their…they’re all getting those things. They’re all doing sales. You know it’s not one, It’s like crushing it you know.[Chris]: Well I think it all depends because everybody’s definition of success in real estate is different. [Christian]: Yeah. [Chris]: You know I was speaking to one of my agents about this the other day because as we bring in agents you know depending upon where they are in their life cycle they may have different goals. Like some of our agents are retired from one career. Do we expect that those agents are going to hustle and grind and built a massive business working hundreds of hours every month just for a few years? Probably not. You know those people are probably getting into this to do a few transactions a year, have a place to come, learn, hang out, interact with people and have fun.
And then we have some other people that are getting into this for the exact reason I just mentioned. They want to grow something big. And it’s not our job as the brokerage to define what that success is. That’s up to them. Our goal is to provide the infrastructure, the culture, the support necessary for them to build what they want to build. At least that’s my philosophy on it and you know…go ahead.[Christian]: Yeah I mean that’s a good point is that there’s not one definition of success as an agent. You know there’s gonna be the younger people that don’t have family and nothing better to do but grind it out for 80 hours a week. Other ones that are mostly, you know, full time, stay at home parents or something that are gonna do occasional job, you know. [Chris]: Absolutely. So this question that they ask in here, this bullet point I think is excellent which is “Ask the broker about his or her story as an agent, team lead, sales manager or broker owner. To what do they attribute their success? And you want to under…you want to uncover his or her core beliefs about what makes a successful agent”.
I think that is an excellent point. When you’re…when you’re looking for finding out what firm you want to work for it’s gonna be the team of people that you’re surrounding yourself with and knowing their core values. If they’re not transparent about it. If they’re transparent about it you should know their core values you know within you know the first round of interviews with them. But if they’re not asking questions like this would be fantastic as an agent looking to find a right…a different brokerage.[Nathan]: Yeah I agree. That’s…That’s a helpful question in there. Some of the ones like I said I struggled with. That one is good. I was talking to somebody the other day and they said “What about getting this person to come in and be a manager”. And I was like “Yeah but the problem with them managing is they don’t actually have any history”.
I have a big struggle on my struggle bus that there Mr. Harris [laughter] for people who coach or who lead that don’t have any history or is very minimal. And so how do you…Say somebody is running this office or brokerage X and they go in and they’re recruiting and you ask them you know “How’s your history” and they go “Well you know I stopped selling 10 years ago now I just coach”.
I kind of look at somebody like [censored]. Like that’s not even relevant now. 10 years I mean that’s like 100 years in real estate world so I don’t think you would be helpful. I think you have to be current and I think you need to be somewhat of a producing broker to a degree or one that is heavily involved with their agents’ development and still maybe…I don’t know you guys would probably tell me I am wrong since I am the agent you all are the brokers but you know you only have to do a couple transactions a year just to stay fresh I would feel like. But to tune out I think it would be a mistake.[Christian]: Yeah I think that’s kind of a good point in regards to like I was listening to…I had something in Inman Connects New York livestream this morning and someone was talking about the difference between the focus of the brokerage and the agent or specifically in that context the team. And the brokerage model, traditional brokerage model is head count. They focus solely on head count.
Now you may do that through you know training or some other low thing to lure agents in. But [cough] I think part of the brokerage responsibility is when you’re interviewing an agent flashing out “What are your goals for the expectations? Can we match that?” Or you know. Now maybe most brokerages don’t care. We’re smaller so I think we can kind of customize or at least make sure it’s gonna be a good fit. Because one of these questions in here is ask if you can ride along, you know basically shadow an experienced agent. Because I mean that’s a great way for a new agent to learn.
Now Chris I know you have like a required mentor program which is great but that’s one of the…as many awesome things to see on offers that’s one of our weak spots is that we’re not huge and so we don’t have a lot of agents that can you know that have enough business to be able to “Hey we have a new agent can they shadow you on your listing today?” Like…[Chris]: It took us a while to get to that. [Christian]: Yeah it’s gonna take a while. [Chris]: Yeah. [Christian]: But I think that’s good because I did…the one agent I had lost and you know there’s nothing I could have really done about it is just the nature of how big we are was they wanted to, you know, shadow someone’s business. Someone who is you know doing a lot of business. And we just don’t have a ton of agents doing you know huge amounts of business everyday. You know so they left so they can mentor under someone who was. And I totally get that, you know. Hopefully it won’t get to the pace where, you know, that won’t be an issue. But we’re small, new and scrappy so you know your strengths and you know your weaknesses. [Chris]: Yeah I think that I saw here a description of the office culture, head count, tenure of the agents, breaking it down into head count and turning it over rate, the agent or broker’s involvement in the local, regional NAR leadership. The broker agents’ involvement in state and national associations, outside or NAR and the broker and agent involvement in local community school boards, charities.
I think that’s a pretty good description of an office. Like if you can as a broker owner…If I am sitting down having a conversation with somebody these are things that I know and can recite you know in my sleep about who is doing what because these are things that we promote. But, you know, having an office that encourages involvement…A lot of offices don’t do it maybe because they’re afraid that when they put their agents around other agents the other agents are gonna try and recruit them.
That’s not necessarily the case because there are a lot of agents that I get around that I don’t want to recruit. Being in those positions. But it’s still important that when we’re in this industry that we do our best to support our industry and that when we are serving our communities we are doing the best to support our communities through local charities and organizations.
So having a company that supports that stuff goes to describe how their culture operates and it puts the priorities in perspective you know and just know that with turnover rate it’s not always…Sometimes that needs a description. Because for us right now we’re releasing agents 2 to 1 because we have become a lot more selective in who we are hiring than who we are letting go. We are letting a lot of licenses laps that are non-performers and that’s one of the reasons that our productivity has gone from like 300k per person to like 1.1 million per person. So there are other things in there that need to be picked and taken into account.[Christian]: Yeah and I would say that that focus on culture is because big I mean it’s really easy to quantify your split or you [cough] some of these other things that agents tend to focus on like how much money are they gonna be taking home. Now what that doesn’t take into account is well “Is the brokerage is gonna support me? Am I gonna flourish there? I am I gonna hate it when I am working around. Am I gonna hate doing the work you know into the office you know. Are you gonna be part of something bigger that you’re on board with?”
And I think all that closely ties into like the brand of the brokerage. What are they known for? Are they involved? Do they encourage agents involvement? And really if you hone that as a brokerage and you have a line with your agents and that’s what they’re drawn to you’re not gonna be afraid of losing them because a big franchise down the road that doesn’t have, you know, a healthy culture like that or doesn’t…Isn’t known for something other than name recognition of their franchise. Like there’s nothing there for them. Like they’re gonna love who they’re asked you know what you provide. You know it’s really hard to quantify that cultural experience, that feeling of satisfaction of knowing “Doing what I am doing, I am involved, I am helping, I am part of the listing and not just you know a number on the spreadsheet”.[Chris]: Absolutely. [Nathan]: Well you know if you look at this document I mean it’s great but I really think they could have skipped all the way to the bottom and point 4 like the bullet points there I think is perfect. “Do you fully understand what a brokerage is offering here?”.
What I find most agents even when they switch to another one still don’t understand what they’re getting offered. “Do you trust the broker?” You would be working with them. I think that’s important. “Do the claims of the brand line up with everything that is isn’t offered to agents and clients.” “Do the principals and beliefs align with those of brokers and managers?” That’s huge. “Does the brokerage provide what you need now in the future and for the development?” Like to me that sums up the only questions you need to answer almost but above the other stuff. Yeah.[Christian]: And I think it kind of makes sense. I mean I think it could be more concise but I mean those are kind of the…These are bottom line what you wanna make sure you’re getting and all the questions up above will help you get to those answers. [Nathan]: Right I mean those are the…That’s the guts of my struggle bus for those people. I…And the reason I say like when you don’t want people to make a switch…I’ve got a colleague who just made switch to another brokerage. And when she left her original one she thought you know “Hey you know I understand everything”.
She went to the new one and 6 months down the road she went “I didn’t really understand the numbers”. And I was like…you know I don’t want to use her name but “Hey Sussie how did you not of all people”. Like I expected her to really understand the numbers and she didn’t. I think she actually might have paid more at the new brokerage that she went to. You know because she originally left brokerage number 1 because her fees were so high. She goes the second one. Didn’t know the math well and ended up paying more.[Chris]: Sure. [Christian]: Well I think that tied into the “Do you trust the brokerage”. I had an agent who…who I think had made up her mind you know that she was gonna leave. You know it implements new monthly fee because we’re losing money on not producing brokers…not producing agents. And I am like “Kate you may think that you’re gonna pay less over here but let’s talk about this”.
And you know after talking about it and she talks to some other people about “Oh I didn’t realize that I had to be a member of the NAR which is another $600 every…” whatever, “I didn’t realize that they also did desk fee” and blah blah blah and than I was like “OK you actually have it really good here”.
You know and so…and maybe you know putting some of that back on media and brokerage. Can you get the value there and so she thought she would find it somewhere else. But half the time you know they end up leaving thinking the grass is greener. And than “Oh hey they were sold at fallen stolen goods” you know. You don’t realize it until after you leave. After you go somewhere else.[Nathan]: Right. Right they don’t understand it. [Chris]: I got that from a couple of agents. They left and now they want to come back and they were on like one of our old legacy plans and they don’t get that option anymore. And that they’re like “Oh [laughter] wow this is gonna cost me more?”. Like “Yeah yeah we’re doing a lot more now. You had it good. You lost”. So I mean that’s another thing for agents. If you’re thinking about making a move see what your broker can do.
If you’re moving…there was an article that came out a little while ago about why agents make a move. And a lot of brokers think that number 1 is because of the cost. But it’s not. I think one of the number 1 reasons is the number 1 and number 2 but it was “Is the broker in their corner? Does the broker have their back?” And then the other one was “What is the culture like at the office?”
Because if a lot of…for the most part brokers are gonna make relatively smaller amounts of money. And it’s all gonna depend on what they’re offering and what their expenses are but you know we’re gonna make our profit margin. Hopefully. That’s the goal. And if…[Christian]: Wait you’re profitable? That must be nice [laughter]. [Chris]: We’re investing a lot of it back into the company. But we are making what we need to be making off of them so that we can invest it back into the company and our agents see that but the second thing is culture. Are you working in an environment that you feel that you have the people around you supporting you?
And those 2 were the biggest reasons that agents make jumps. It’s not because of the desk fees. It’s not because of the NAR fees. It’s not because of the monthly fees. Sometimes it is but usually that’s when we see people going from very high splits to something that is a little bit more along the lines of the Indie broker margin. Kind of the Indie broker model. Where we have a little bit more flexibility there and we lose the franchise fees. But other than that it’s culture and is “Does the broker have my back? Is the office there to support me?”[Christian]: I definitely have to agree with that. I think a lot of agents lead with the cost but I mean in the grand scheme of things I mean there’s not…If you’re productive I mean what you’re gonna end up paying isn’t that different over you know a year. You know but it does come down to that culture and that…what was that other thing you said? [Chris]: Culture and support. [Christian]: Culture and? Support yes. Yeah that’s huge because I have had agents that come over you know who come over because they’re like “How available are you? I can’t get a hold of my broker when I have questions for 2 days.” And I am like “That’s ridiculous. What are they doing? It’s their job”. [laughter]
You know and so it being smaller and not having so many agents and you seeing my primary job and been in the office to support agents you know I mean that’s big you know. And just a tip. If you had an office you’re not really sure what their culture is, if you want to get a good gage of it pay attention to how they respond when an agent leaves. If they’re nasty and two faced get out of there. Get out of that office.
And that was my first office. Like day to day it was OK. It wasn’t openly hostile but as soon as you know…Someone who you know agent X was quote “friends” with and helping out one day and they left and the next day they’re “Oh that person I knew blah blah blah they’re terrible”. And you’re gonna be like “What aren’t we all in this together? What’s this brand loyalty to a franchise that doesn’t have your back? Like what do you care as an agent whether or not another agent left?” Like you know like they’re being personally, like a personal slide against you know the agent that another agent left.[Nathan]: Man the colleague that I was talking about earlier when she left her original team you know they went [laughter] Death Con 4 on her. I was like “You don’t want to be in a place like that”. Like… [Christian]: It shows your true colors either as an agent or you know as…Like if I hear that as a broker I squash that. I am like “No we are collaborative, we are all on this together. I want what’s best for them and if they feel going to another brokerage gives them what they need he no pep talk. I want to support them in there”. [Nathan]: That makes me think of Tracey Chambers, who is my first team lead. I was…the team lead at the office at Callow Aims [phonetics] and I will applaud her. When I told her I was leaving she said “Nathan I wish you all the best and if you ever want to come back here know the door is always opened and I will welcome you with open arms and if you have any questions feel free to call me”. I still call her. She was awesome and that tells you a lot about her. [Christian]: And speaks to character and that’s what’s gonna be the biggest differentiator and the difference between agents. It’s not skills, not experience, it’s character. Are you gonna do the right thing? [Nathan]: I don’t know if we answered any questions actually on this list of things. But I think it’s important to talk about again from just an agent perspective because again as a new agent and maybe even within the first year or 2 you just don’t know all the questions to ask. And it’s…and a lot of it is ambiguous because you can’t put value on certain things. [Christian]: Yeah I think it’s a good starting point. I mean I have had one agent who came in with questions and I loved it. You know it would be like “Hey these are some questions I have” and I think they kind of got them offline or you know another brokerage they were interviewing or something. And I am basically like “That question doesn’t matter because of this. This question is irrelevant because of that. That’s a good question. Let’s talk about it.”
You know. So it could be a good place to start but like you said as a new agent you’re not really sure what you need to be asking. What questions mater or not.[Chris]: Yeah so I mean we…I think the last time we talked about you know choosing a brokerage and how the brokerage works. That was like early early last year, right around when we just launched. [Nathan]: First 5 episodes maybe. [Chris]: Yeah yeah something like that but I think regardless of where you are in your career if you are new or if you are a seasoned veteran I think the message is you need to understand if there is…if your office is toxic, if your office is not fun to work in, if your leadership is undermining management, if your…if you’re not receiving the right support the message is there are brokers out there where that does not exist.
There are brokerages that do have proper support, that do have a good culture and that are fun to work at. And I think that a lot of the brokers who have quotas that they need to meet on the recruiting side I think that those…their attention is in the wrong place and that the broker owner does not have enough time to dedicate to the support of the office.
So that’s my message. If you’re in a position where you’re not sure what’s gonna happen with your career, if you’re not happy with the people that you’re working with my message is just go out and try and meet a few brokers because there are places that do exist where that’s not a problem.[Christian]: Yeah. [Nathan]: Yeah I mean I agree. That sums it up about as good as you can get. If you got questions you know what you can do? Email us. We’ll answer them [laughter]. [Christian]: I am interested and see what questions…you know…Yeah comments, you know. Leave comments. What are the questions? You know what are the questions that agents should be asking or brokerages should be asking to their agents to make sure it’s a good fit? [Chris]: And email us and tell us what you think about your brokerage. Why is your brokerage a great place to work? I think that… [Christian]: Yeah that’s good. [Chris]: What do you like most about your brokerage? We don’t want to hear the bad things. We hear the bad things all the time. Let us know what you think is the best part about your brokerage? I think that just about sums it up for this episode of re:Think Real Estate. Thank you so much for tuning in for this impromptu topic brought you by Nate. Thank you Nate. We’ll catch you next week. [music] [Chris]: Thanks for tuning in this week’s episode of the re:Think Real Estate Podcast. We would love to hear your feedback so please leave us a review on iTunes. Our music is curtesy of Dan Koch K-O-C-H, whose music can be explored and licensed for use at dankoch.net. Thank you Dan. Please like, share and follow. You can find us on Facebook at Facebook.com/rethinkpodcast. Thank you so much for tuning in everyone and have a great week. [music]