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Interviewing Real Estate Brokers? 10 Potential Red Flags To Look For

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It’s about that time of year again. Brokers are hard core for recruiting new agents, and agents are rethinking their happiness level with their current brokers. If you’re considering making a switch or being heavily recruited, it’s worth going into interviews with questions in hand. The right questions, or more so the way the interview broker answers them, can help you find out if it’s right for you.

Here are 10 red flags to look for when interviewing your next real estate agent. Be sure to inquire about these critical aspects of your business before committing.

1. A frugal commission split

The commission split is one of the considerations in deciding whether the broker is right for you.

The percentage that a broker takes home from a sale is relatively low. For example, 6 percent of the sale is split between the buying and selling agent. That 3 percent is further split with the brokers.

Most brokers will ask for a 60/40 split, but some will give more to the agent. Of course, the less the brokers take, the more the agent gets. In fact, if the brokers are asking for more than 40 percent, this can be a red flag unless the value they provide through training and leads is justified.

Keep in mind that some brokers will have a limit on commission splits. For example, a $100,000 limit means that if the agent earns $100,000 in sales, they no longer have to pay the brokerage distribution for the year. Having a low cap in place is another sign of a good opportunity.

All that being said, you cannot judge opportunities on breakups alone, as the other points mentioned here may be even more important.

2. A lack of growth support

Most brokers will provide their agents with some support. It comes in the form of training, marketingmaterial and more.

It is best to find a broker that offers the support you need, especially if you are a new agent. Otherwise, you may find yourself very lost.

3. Too many fees

It is typical for brokers to charge fees to their agents.

This includes:

  • Franchise fees
  • Office fees
  • MLS fees
  • Training fees
  • Marketing Materials Fees
  • Errors and Omissions Insurance (E&D)
  • Initiation Fees

These fees can take a significant amount of your income, especially if you are a new agent and not making many sales. If the broker charges exorbitant fees, you may want to look for another company.

4. No internet presence or poor marketing

The company you work for should be effective in helping you market yourself, so if they can’t even market themselves, you should have doubts about working for the company.

The brokers you are considering should have a nice website and social media to match. It should come up prominently when searching online. It can also provide separate web pages to agents.

Keep in mind that work for the greatest, most famous companies is not always the way to go. There are many benefits to working with mom-and-pop businesses, including individualized training and a more intimate atmosphere.

While these companies may not be able to compete with the big fish, they should still be able to carve a niche for themselves with attractive marketing materials.

5. No administrative support

Some brokers offer agents administrative support to do paperwork and handle MLS listings. The support often comes with extra fees, but if you dread dealing with paperwork, it can be worth it.

6. Bad reputation

Today, you can go online to find out about almost any business. When it comes to brokers, you can check out review sites to find out about the experiences agents have had with the company. If the broker has bad reviews, this can be a red flag.

In addition to finding out about agents’ experiences with the company, it’s important to find out how customers feel about working with them. Joining a broker that does not offer good customer service can damage your reputation in the industry.

7. The wrong culture

Culture is a huge factor in any workplace. This comes through in the appearance of the office, the way the co-workers are treated by management, and the way co-workers treat each other.

Some brokers are very hands-on and promote a family feel. Others prefer agents to be independent and do their thing.

There is no right and wrong when it comes to company culture. It’s just important to find the culture that works best for you.

8. They don’t allow for your specialty

Many agents strive to work their way up to a specialty. For example, they may want to specialize in luxury properties, multi-family properties, investment properties, etc.

Some brokers encourage specialty agents while others have strict guidelines against it. You need to make sure the broker you work with will allow you to pursue your specialty if you want to take things in a specific direction.

9. No mentor support

Most brokers offer some sort of training, but some go the extra mile by providing mentoring support.

A mentor will be an experienced agent providing you with personal one-on-one support. However, this often comes with additional fees. In general, mentor support is a good thing to have if you can afford it.

10. No referrals or leads

It is up to agents to generate their own leads. However, some brokers will help by providing lead generation tools or by referring entries and entries to specific agents.

Find out how the broker you are interested in handles leads. Do they provide lead sheets to agents? When customers walk in, are they referred to newer agents or veterans? Do the leads come at a cost?

The way leads are handled will give you some insight into whether the brokers are right for you.

Finding the right broker is an essential step in growing your real estate business. Now that you know the red flags to look out for, you have the tools to find the brokers that best suit your needs.

Chris Heller is a best-selling author and currently serves as the Chief Property Officer at Ojo Labs. He also serves as an advisor and editor-in-chief for AgentAdvice.com. Connect with him on Facebook and LinkedIn.

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