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You"re an Independent Contractor - It"s Your Real Estate Business

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I've only looked at the Highlights summary of the National Association of Realtors® 2012 Member Survey, but the bullet points under the "Office and Firm Affiliation of REALTORS" were interesting. My look at these bullets happened to coincide with an email from a new agent trying to decide between two brokerages, one with 25 agents and another with 6. His focus was on the number of agents and how that must be important in his selection process.

One of his comments about having more listings to show because there were 25 agents in the larger company took me by surprise. I confess to going a bit negative in my response, as I told him that he shouldn't be thinking about giving any priority to his own company's listings if he's supposed to be working in the best interests of his buyer. I'm a bit of a purist in this respect.

The other problem I had with the focus of his questions was the fact that there seemed to be some view of the larger group as some sort of a "team" that was better because it was bigger than the other brokerage. Where does a "team" concept come in when each and every member is self-employed, an independent contractor, and in competition with the others on a daily basis? I did mention that if the brokerage had a true and effective "mentor" program, that could be of value, but otherwise this was just a building with a large group of competitors sharing a logo and the space, but not much else. Some bullet points from the Member Survey include:

  • 8 of 10 members are independent contractors in their firms.
  • the typical firm had 23 agents and brokers.
  • the median tenure with firms was six years.
  • 72% of agents or brokers reported receiving no benefits through their firm.

I don't want to scream, so no CAPS, but I do want emphasis: You are an independent contractor, the owner of your own business, and just because rules require that you hang your license with a company, you shouldn't consider that brokerage as "your" business or uniquely necessary for your survival. Note that the median tenure in a brokerage is six years. That means that half of agents are with brokerages for less than that amount of time.

If you expect your career to last longer than that median, and I know that mine is well past that, you should be basing your business planning and marketing not on a certain brokerage or brand, but on your own brand and abilities. You and you alone are going to create your success or suffer your failures. Sure, take advantage of whatever benefits, marketing or services that your brokerage provides, but be constantly building your own marketing, CRM (Customer Relationship Management), and business procedures.

And, I'm not trying to create dissension among you and your peers, but let's face it; how many would voluntarily give you a deal and a sure commission tomorrow because you're one of the "team?" Being part of a brokerage with 25 agents instead of 6 merely means that you have 19 more competitors very close-by. Cooperation, brand identification, and synergy of people with a common objective all have value. However, your income is always going to be a direct result of your own knowledge, work ethic and marketing. It's not going to come to you just because you're part of a busy brokerage.

That said, if a certain brokerage manages to market for and snag a lot more buyers than others, then it could be a great place to hang your license and take your share. And, notice that nothing in this article so far has been about commission splits. You very likely will change brokerages within six or fewer years, so choose based on all of the factors involved, not just the commission split.
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