On your journey to becoming a licensed real estate salesperson, one of the most important decisions you will have to make is choosing the right real estate broker.
This choice will significantly impact your career success and professional growth, as the right broker can open doors to valuable opportunities, offer guidance, and provide the resources you need to thrive in the real estate industry.
In this How to Choose the Right Real Estate Broker guide, we will break down everything you need to know in order to make an informed decision, including how to assess your broker’s market presence, commission structure, training programs, and overall business values.
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Do I Need a Sponsoring Broker?
All licensed real estate agents are required to be under the supervision of a Sponsoring Broker, which is often referred to as a “Managing Broker” or “Supervising Broker” depending on the state in question.
This is usually done before obtaining a license; however, a few states allow agents to secure a sponsoring broker after their license has been issued — albeit in “inactive” status.
Your broker will be in charge of overseeing your work in order to ensure that all transactions comply with state laws and industry standards, safeguarding both you (as the agent) and your clients.
Selecting the Right Broker
Below, we have outlined an effective four step strategy that you can use to find the right real estate broker for your professional goals.
Step 1: Decide Between National Chains or Independent Agencies
When choosing a broker, the first decision you will have to make is whether to go with a national chain or an independent broker, with each option offering its own distinct advantages.
National Chains
If you choose to partner with a national chain, you’ll benefit from vast resources, extensive training programs, and a wide network of potential client referrals.
These features are ideal for new agents who need substantial support and a steady flow of leads, although the trade-off may be less personalized attention and potentially lower commissions.
Independent Agencies
If you choose to partner with an independent agency, you’ll typically find that they offer more personalized mentoring, as well as a higher degree of flexibility in business practices.
These agencies are often better suited for agents who value autonomy and direct support, and who wish to tailor their strategies to fit unique market niches.
Step 2: Evaluate the Brokerage’s Culture and Values
Although often overlooked, a brokerage’s culture is extremely important because it directly influences your daily work experience and overall job satisfaction.
The culture of a brokerage will manifest in real-world situations, impacting how you interact with colleagues and navigate complex professional challenges.
Therefore, make sure to keep in mind the following questions when evaluating potential brokers:
- Do the brokerage’s core values align with your own? This alignment is essential because it influences how you and your brokerage will interact with clients and manage business transactions
- How well does the brokerage support its agents? Look for comprehensive training programs, robust marketing support, and advanced technology tools, as these are crucial for your growth and ability to compete effectively in the real estate market
Note: Remember that choosing a brokerage with a strong industry reputation and active community involvement can expand your networking opportunities and accelerate your professional growth.
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Step 3: Understand the Commission Structure
You will need to thoroughly understand the financial arrangements of each prospective brokerage (e.g., commission splits, desk fees, etc) as these can vary widely and will significantly impact your income:
- Commission Splits: You will find that some brokerages offer higher splits in exchange for monthly desk fees or annual dues, while others provide lower splits but include more marketing and administrative support. You will need to evaluate which structure aligns best with your financial goals and business model
- Hidden fees: You will need to ask about any hidden fees, such as marketing, transaction, or technology fees, and understand all potential expenses before making your decision
Note: Always opt for a brokerage with a transparent and equitable commission model. A clear, albeit potentially lower, commission structure is often more advantageous than a higher one that’s clouded by ambiguity.
Step 4: Assess Market Presence and Resources
You will need to assess the size of the brokerage in the local market and the resources it offers, as these factors can significantly affect your ability to list and sell homes.
Market Presence
Understanding the market presence of a brokerage is an important factor when selecting your professional home.
A brokerage with a strong local presence offers more opportunities for listings and closings, and it enhances your exposure to potential clients, which can accelerate your growth as a real estate professional.
You should thoroughly investigate the brokerage’s market share, analyze recent sales data, and read through client testimonials to effectively gauge their visibility and credibility, as these factors are critical indicators of a brokerage’s performance and reliability in the market.
Resources and Tools
You will also need to consider the resources the brokerage provides, such as marketing support, technology tools, and training programs.
Keep in mind that access to advanced software, CRM systems, and marketing materials can enhance your efficiency and effectiveness in managing listings and interacting with clients.
Therefore, the brokerage you choose should be one that invests in the latest technology and provides ongoing training to help you stay competitive in the market.
How to Become a Real Estate Agent
If you still haven’t started the licensing process and are interested in a career in real estate, you’ll need to get licensed as a real estate agent.
Even though this process is state-specific, you’ll generally need to complete the following steps:
- Ensure You Meet Your State’s Eligibility Requirements
- Complete the Mandatory Pre-Licensing Education
- Pass Your State’s Real Estate Exam
- Complete a Criminal Background Check
- Find a Sponsoring Broker
- Submit Your License Application
Keep in mind that this process is not the exact same in every state; in fact, certain specificities — such as the amount of required education or the details of the background checks — will often vary, and so we recommend having a look at your state’s specific regulations.
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How to Choose the Right Real Estate Broker FAQ
What should I consider when choosing a broker?
When selecting a broker, you should consider their market presence, commission structure, resources, and culture and values.
You will need to assess whether these elements match your professional objectives, especially regarding the type of support they offer, and whether their business model suits your financial expectations.
How do I know which broker to choose?
The right real estate brokerage for one person might not suit another, as this depends on factors such as the type of support and training you personally require, the level of transparency you need to feel comfortable with commission structures, the market presence you believe will benefit you, and how well their values and culture resonate with your own.
See our How to Choose the Right Real Estate Broker article for more information.
How do you know if you have a good broker?
A good broker will consistently provide substantial support through training and resources, ensure transparency in financial dealings, and foster a positive work environment.
For more information on broker requirements across every state, you can have a look at our state-specific How to Become Broker guide.
How to choose which brokerage to work for?
Newly licensed real estate professionals should actively seek out a real estate brokerage that offers continuous support and training, has a strong market presence, maintains a transparent commission structure, and aligns with their culture and values.
Interested in getting a real estate license? You can check out our How to Become a Real Estate Agent article.
How do real estate brokers help you succeed?
Real estate brokers provide essential tools and resources to help you succeed, such as access to a multiple listing service (MLS) and customer relationship management (CRM) systems.
Moreover, working through your brokerage’s real estate office is one of the best ways to connect with other real estate agents, enhancing your network and opportunities in the industry.
What steps should you take to start a new real estate career?
When starting a new real estate career, it’s essential to affiliate with reputable real estate companies that provide robust training and support.
Regardless of whether you are working as a buyer’s agent or in another role, you should also network with other real estate professionals in order to gain valuable insights into the industry.