Real estate brokerages are where agents, brokers, and other staff work. They come in many forms: office buildings, small boutique stores, and even exist entirely digital.
When you become an agent, knowing where to hang your license might be intimidating. There’s a lot of uncertainties with brokerage. This article will tell you everything you need to know about brokerages.
What is a Real Estate Brokerage?
A real estate brokerage is a firm or business entity where real estate professionals work under a licensed real estate broker.
These brokerages are commonly referred to as “real estate firms” or “real estate companies.”
The brokerage serves as the central hub for agents to carry out real estate transactions, including buying, selling, and leasing properties.
It’s also a hub for transaction coordinators, office managers, marketing specialists, assistants, trainers, coaches, legal teams, and property managers.
Brokerages also function like a storefront. Home buyers and home sellers are welcome to enter when they need real estate services.
How Many Real Estate Brokerages are in the U.S.?
In the U.S., there are thousands of real estate brokerages operating nationwide. As of recent estimates, there are over 100,000 real estate brokerages in the country.
They range from large national firms to smaller, independent agencies.
Each brokerage varies in size and scope, but they all share the same fundamental goal: helping clients with professionals.
What are the Costs of Working at a Brokerage?
After agents have successfully made sales, the brokerages make money by taking a split of the real estate agent’s commission.
Brokerages may also charge fees for office spaces, marketing, and other resources.
These costs depend largely on the brokerage, available resources, and agent’s experience level.
Some brokerages may offer a 60/40 or 70/30 split. However, the better an agent is at closing deals, the better the split they are offered.
What is a 100% Commission Real Estate Brokerage?
A 100% commission brokerage is a brokerage that gives real estate agents all their commission on every successful transaction.
100% commissions help agents make more money from closing deals.
However, these brokerages still charge fees. Otherwise, they cannot exist. These fees include: office support services, marketing, legal liability, and more.
Typically, 100% commission brokerages are online. That way, they have little to no overhead cost.
This way, they can keep expenses low and get their money by charging flat fees. Depending on your broker, these fees can range from very low to very high.
How to Choose a Real Estate Brokerage?
Choosing a real estate brokerage is critical to the success of a real estate agent. If you would like to pick the best brokerage, you should know one thing:
What’s your goal? Each agent has different goals based on their experience level.
New agents may have the goal of learning as much as they can. In that case, they should choose big brand brokerages as they provide more resources.
Experienced agents may have the goal of elevating their brand. So they may choose a brokerage that specializes in luxury real estate.
Take careful consideration into where you are in your career. To help you determine the best brokerage.
What are the Best Real Estate Brokerages for New Agents?
New agents should pick a brokerage that provides training and resources. If you’re just starting your career, you need to focus on two things: building your network and learning.
Find a brokerage that will offer you resources like::
- Training and education
- Office space
- Technology
- Access to networks and collaborators
- Administrative staff to support agents
- Mentorship programs
- Marketing and advertising
Since real estate brokerages want to maintain the integrity of their reputation, they will want their agents to become the best of the best.
Good brokerages understand this and feel incentivized to invest in you.
Training, Coaching, and Mentorship
Brokerages often offer training and educational aids to their agents so that they stay up-to-date on the best practices.
A wide range of possible topics is covered during these training sessions, like understanding contracts, best sales practices, or connecting with your sphere of influence.
Big brand brokerages also offer coaching and mentor programs. The difference between coaches and mentors comes down to your needs.
Coaches will drill specific routines and activities. They help you refine and perfect your practice. A coach can help you perfect a cold calling approach.
Mentors provide deeper wisdom and education into your career. For example, they can provide insight and guidance in what to do during a transaction.
How to Change a Real Estate Brokerage
You can always change your real estate brokerage. This process requires filing paperwork with the state’s real estate commission, brokerage, and current brokerage.
If you don’t like your brokerage or your goals change, you can always switch to a different brokerage.
Are All Brokerages the Same?
Every brokerage is different. They range from brands to boutique; brick and mortar to online.
The real estate industry is always evolving and changing. With it, the structure and operation of brokerages.
Even brokerages under the same brand (like Century21 or Keller Williams) will differ. Here are few traits you should consider with a brokerage:
Culture Fit
Culture fit is an important factor when figuring out what brokerage to work at. How an agent melds with a brokerage’s culture will determine how well they perform and how long they stay.
In other words, if the culture of a brokerage doesn't fit your work style, then it makes going to the office and working with others harder.
Training Resources
The real estate industry is ever changing. To stay relevant you must keep learning and remain up-to-date with the current trends.
Working at a brokerage that offers training resources to its agents is the best way to do this. Some brokerages provide little training. Otherwise invest deeply in it.
Leadership
When considering a brokerage, you should always prioritize brokerages that have good leadership.
Leadership is important because it helps dictate the brand, reputation, and direction the brokerage takes. If it’s aligned with your career plans, it’s a good match.
Difference Between Broker and Broker Associate
What is the difference between a broker and broker associate? Broker associates are licensed brokers who work at a brokerage.
Just because you have a broker’s license, doesn’t mean you have to become a broker. There are a lot of benefits to being a broker associate.
Some of these benefits include:
- Better reputation
- Broker assumes legal liability
- Access to brokerage resources
- Assume the brand reputation
- Leverage for higher commission cuts
If you have a broker’s license, you can also choose to be self representing. In other words, start your own brokerage.
How Do You Start a Real Estate Brokerage?
Starting a real estate brokerage involves a combination of strategic planning, legal steps, and a solid understanding of the real estate industry.
First, you'll need to be a licensed real estate broker, which means completing the necessary educational requirements and gaining experience as a real estate agent.
Once you're licensed, you can move forward with setting up your brokerage firm, hiring agents, and creating a business plan.
How to start a real estate brokerage successfully involves complying with state regulations, securing financing, and marketing your services to attract clients.
Here are the key steps to how to open a real estate brokerage:
- Obtain Your Broker's License
- Choose Your Brokerage Model. Decide whether you want to run an independent brokerage or join a franchise.
- Register Your Brokerage.Form your legal business entity (such as LLC or corporation), and register it with the appropriate state agencies.
- Secure Financing
- Set Up Office Space (or digital presence and workflow)
- Hire Agents and Staff (if necessary)
Is owning a real estate brokerage profitable? It can be highly profitable if managed effectively.
The average earnings for a real estate brokerage can vary significantly depending on market conditions, the size of the brokerage, and its success rate.
On average, real estate brokers can make between $100,000 to $500,000 per year or more from running their brokerage. This amount is compounded even more when they represent clients.
Final Thoughts on Working at a Real Estate Brokerage
Agents are legally required to work at a real estate brokerage. That means, if you’re an agent, you have to choose one to work for.
Take careful consideration into which brokerage you choose. The decision can have a major impact on your career.
Look for brokerages with the right culture and resources for you. Make sure it aligns with your goals and career plan.
When you’re ready for the next level in your career, you can get your broker’s license. With a license, you can become a broker associate or owner.
