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Back in 2006 when I first joined the Real Estate Industry, I decided to have my license held at the closest Real Estate Brokerage (Non-Franchised) to my home. I never interviewed the Broker-In-Charge. I never discussed the commission scale. I never asked about their tools that were offered. I literally went into this new industry like a cow treading toward the slaughter house. I did not know what I did not know. I just figured every brokerage was roughly the same so I thought I would join one for my driving convenience.

I have often said to myself that if I ever have the opportunity to guide and direct others I would help them figure out the brokerage “style” that best fits them, their personality, their business mindset, and ultimately what is best for their family.

Below you will find a comparison of three different styles of brokerages that will be discussed. Here is my disclaimer. I will only discuss what Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® offers and has because I work there. I will not make mention of other offerings or incentives from other brokerages, and I will not call out other company names. Every brokerage is different. They are all managed and directed different. I will never speak negatively about any of the below brokerage styles. Each brokerage style has its own positives and negatives that only YOU as an individual agent can decide if one fits you better more than another. This is simply a compiled list of things that I have found different between brokerages over my years experience within this industry.

I have found these three main styles of Brokerages in the Real Estate Industry!

Traditional | Hybrid | 100% Brokerages

Let’s start with the TRADITIONAL style brokerage. These are typically your large, brand name brokerages (can also be NON-Franchised, NON-Branded)
Some of the things that these style brokerages are known for are the following:

  • Higher support for Agents (At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – we have Agent Support Coordinator staff members that assist agents in daily activities and administrative duties)
  • Lower Commissions and Commission Schedules (However as agents increase their business and their sales commission amount does typically rise over time).
  • Monthly fees (Typically higher than the others because of the multi-faceted tools, support, and training along with office space)
  • Franchise Fees are paid on each sale to the Main Franchise. These costs help cover National and Global Branding along with providing multiple software and technical tools. (These vary between brokerages)
  • Many brokerages start around a 50/50 split or a 60/40 split (Depends upon brand)
  • Most do not charge a Transaction Fee (BUT – there are some that do – Brand Specific – At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – there is No Transaction Fee)
  • High Amount of Training (At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – there is a dedicated trainer that is totally committed to training our agents to help them develop into the best of the best)
  • Office Space provided to agents (This varies between brand whether agents pay an office rental fee – At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – there is No Office Rental Fee)
  • NON-COMPETING BROKERS-IN-CHARGE (This varies between size and brand of the brokerage – At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – Most of our Brokers-In-Charge are non competing – meaning they do not list or sell)
  • One on One Coaching from Brokers-In-Charge – Facetime with your Broker-In-Charge should be a high priority to look for when choosing a brokerage.
  • Branding Styles and colors are extremely important to keep consistency across the brokerage.
  • Signs and Lockboxes are typically provided by the Brokerage (At Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® – Signs and Lockboxes are provided to agents without charge)
  • Floor duty or opportunity time for agents to have inbound calls to the brokerage or website inquiries routed to them for leads. Many times this is how newer agents receive their first clients / customers.
  • Typically these brokerages have a large amount of market share within their geographic areas.

A HYBRID style brokerage is one that typically will have a lower split at the start of your particular fiscal year but once your sales hit a certain amount and you have paid a certain amount into the brokerage, your commission turns into 100% and typically there is only a small transaction fee to pay on each closing. Here are some things that these style of brokerages are known for:

  • A mix between 100% Brokerage and a Traditional Brokerage due to how commission changes within your fiscal year. This is known as your CAP. Once you CAP out in the amount paid from each commission into the brokerage your commission rate typically jumps to 100% (or roughly that amount depending upon the brokerage brand)
  • Your CAP amount resets every year (Could be on your Fiscal anniversary date or the traditional calendar year – January 1st – This is brand / brokerage specific as well).
  • Franchise Fees are typically present which vary in amount and paid on each sale until a certain amount is reached.
  • Transaction Fees are typically paid once an agent Caps – These Vary in amount
  • Branding is not as important in this style of brokerage. Agents typically have a little more leeway to brand themselves how they choose (Of Course Individual state Real Estate License Laws still must be adhered to).
  • Signs and Lockboxes are not typically provided by the brokerage and this becomes an agent expense.
  • Typically (Not All) these offices have a high number of agents within a single office.
  • Training is provided typically on a daily basis.
  • A profit – share system is typically in place. This system pays agents a certain percentage of the office profits if they have been successful in bringing agents / recruiting agents to the company. This is known as a down-line. The more agents that are brought into your down-line the more profit that can be made depending on the office profit amount and/or how well the agents in the agent’s personal downline are doing in their sales.
  • Brokers in Charge may be competing – depending upon brand and office specific.
  • Market share is strong in these style brokerages especially when brokerages / companies combine their numbers by Brand Name.

A 100% Style (In other words a high split brokerage) Brokerage is fairly new to the Real Estate Industry as a whole. Some of the nuances of these style brokerages are the following:

  • High Commission Rates – typically 90-100%
  • Most of the time Brokers in Charge are Competing
  • Transaction fees are how the majority of the profit is brought into the brokerage. These vary significantly depending upon brokerage / company.
  • Office space is either limited or virtual. Most agents work from home or rent office space for conducting business.
  • In some of the brokerages, Brokers-In-Charge are in another part of the state which limits facetime to only by technical means.
  • Very little support
  • Very little training.
  • Typically have little market share within a certain geographic region.

There are clearly other brokerage styles out there as the above is NOT exhaustive. There are brokerages out there that are a combination of all three. For the purpose of this BLOG I wanted to share the main three styles (My Opinion of course).

The above differences in brokerage styles can often make it difficult for an individual to decide which brokerage to thrive at. There are positives and negatives in each of these brokerage styles so allow me to offer some possible decisive factors to assist you.

I just had a discussion this morning with approximately 20 agents. (NOTE: The group of agents was made up of brand new agents to an agent that has been with our company for 28 years). I asked them to tell me the most important reason why they stay at their current company. Shockingly, none of them said commission. As a matter of fact, the commission schedule was hardly brought up at all.

Here is a list of the top things that this group stated was most important to them. Please note these are not in any order other. They are simply responses repeated over and over by this group of professionals.

  • Name Brand Recognition of C. Dan Joyner, REALTORS®
  • Name Brand Recognition of Berkshire Hathaway HomeServices
  • Access to the Broker-In-Charge
  • Office Environment and Culture
  • High Support
  • Emphasis on Training
  • Tools and technology provided to work efficiently

“Every time in my entire career that includes my careers before real estate, if I made a decision solely upon money it ended being the wrong decision!” ~ Andrew Brashier

Andrew Brashier who is currently an agent with Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® had once decided to leave Berkshire Hathaway HomeServices C. Dan Joyner, REALTORS® based solely on commission split. Andrew returned back to C. Dan Joyner, REALTORS® less than 4 months later

So what does all this mean? Well the very first thing you should know is that no two brokerages are exactly alike. You must look at all facets of the brokerage you are comparing because there is no Apples to Apples comparison.

You will need to find out what is ultimately important to you. It is a choice that you should know prior to joining a brokerage and even while you are at your current brokerage should something change within it.

I hope this has helped you whether you are just getting started or a seasoned veteran. Until Next time friends ~ MLT

Matthew