When you are ready for your state real estate exam, you already know that you will need to choose a real estate broker to work for. The most obvious consideration in choosing a broker for many is the commission. There are, however, a number of other important things to take into account when deciding which broker you will choose to hold your real estate license. There are several issues that will contribute to your bottom line beyond the percentage of the commission split. It is crucial to your success as a real estate agent to review all of these items before you sign on with any real estate company.
Generating leads is one of the biggest challenges starting out as a real estate agent. If you have no leads of your own to get started, perhaps choosing a broker that offers solid leads at a 60/40 commission split might be more lucrative than one offering a 50/50 split. At the end of the day a 60/40 commission of actual sales is more than 50% of no sales at all.
Evaluate your ability to be able to hit the ground running in real estate. If you think that you might benefit from additional training on the job or possibly a mentoring program then it might be beneficial to find a real estate company that offers these services for new agents. Having a lower commission percentage, even if it is temporary while you are learning, can make you more money in the long run. Whether you need help developing your marketing skills, negotiation techniques, or just help in how to write up a listing agreement or contract properly, the added training can give you skills that will more than make up for the temporary cut in commission.
An important step before choosing a real estate company should be to determine what your personal expenses are. You will have to be able to cover your regular living expenses on the commissions that you bring in, so you should know how much you will need to make in commissions before you sign with any broker. Once you have determined your living expenses, estimate as realistically as possible what your business expenses will be.
Marketing is among the most important business expenses you will have in a successful real estate career. Do research to estimate as close as possible what your marketing expenses will be. Financial discipline is crucial when you are a commission only real estate agent. Getting your name out there will be costly, but as they say, you have to spend money to make money. If all of this seems too much, then you will probably achieve greater success with a broker that may pay lower commissions but offers marketing services for their agents.
Find out what portion of the everyday cost of doing business is covered by your broker. These days there are some real estate companies that charge for basic office supplies or photocopies. Find out exactly what the companies you are looking into working with will provide for you or what you will need to provide yourself. Any of these incidental business expenses that you will have to cover for yourself will need to be figured into your finances.
Once everything you need from a real estate company has been determined, you should also be clear on what they will expect from you in return. Some companies will have minimum commissions; others have sales goals or mandatory office hours. Before deciding what real estate company to work for, be clear on their expectations of you as well as your expectations from them.
Want to find out if you have what it takes to be a Real Estate Agent or Broker?