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As mentioned before each office is independently owned but there are common throughout the same brokerage brand.
I started with Remax when I was new and I went with that office because of their volume of production and the number of listings they have in the area where I want to work. And it was my worst mistake or may be a bad luck, they don't have any kind of training whatsoever and I couldn't find anyone to help me with the contracts and the paper work when I got my first buyer and lost the buyer because he didn't feel that I am confident enough (which was true! Had to learn the hard way). I interviewed another 4-5 Remax offices and when I asked about the training, they were like eeeh there are videos online (which were 4 years old at that time and didn't apply for the down market in 08-09) and they all have very high monthly fees to be in the 95-5 split.some of them were talking about $700 a month and will be working from home and if I want an office it "starts" at $1100 a month.
Then I went with Keller Williams, they have very reasonable monthly fees, their policy is 70-30 split until they make $16000 of that 30% then you move to 100% commission. I think they call it capping. BUT every year,on your starting day anniversary, you go back to zero and start the 70-30 split again until you cap again. The good thing that you pay as you go, the bad thing that you are 16k down every year. Some people don't mind that. To be fair, they have a lot of good trainings almost weekly. but after a while, they start being like the gurus, they give you a piece of information and to get full access you have to pay x amount. Join our coaching program very cheap $$$$ a month for 12 month. It is a good place to start and learn but don't spend money on the extras. Another good thing that you can have a mentor who can work closely with you and actually can be watching over your shoulder to help you with the process. The reason I left because I was working a lot of leases because it is faster in cash but they still have to go through the 70-30 split, so I was making $5000 a month and they took $1500 out of that. Maaan I needed that money.
I have interviewed coldwell banker but I wasn't impressed, I am not sure if they have the same policy everywhere or not, in the beginning you will be on 50-50 split and then after x amount of sales you move to 85-15.
Sorry for the long unorganized reply but I wish someone have told all of this instead of learning the hard way.
My personal recommendation is to start with Keller Williams and sacrifice a little bit for the split and then move a smaller local firm when you feel that you are comfortable working without a mentor. Clients don't really care which company you are with as long as you are providing a good service. Remax claiming that they are the best and selling millions of real estate because they are like subway, they have an office on each corner We can easily have 3-4 Remax offices in each zip code.
Good luck!!
A very good post. Excellent information contained.
Allow me, if I may to share a couple of notes about the difference in business models. Keller Williams operates with a "one large office" model, and their management is 90% involved in recruiting. Everything they do is done with a "who will this bring?" attitude. It is just as you explained, they must have that new year's split and newby agents are a very reliable source of that pre-cap money. As a broker-owner, I can assure you that every office has a set of fixed expenses which will occur no matter volume or number of agents and every deal, no matter how large or small has variable expense. Under the KW model, it's the uncapped producers that actually support the cappers. KW typically locates one office per 500,000 population.
RE/MAX on the other had does have a "single log makes a lousey fire" mentality. We operate many small offices rather than single mega shops; however, there are many RE/MAX offices with 200 or more associates. RE/MAX operates on a % of market share model. They understand that too many offices will harm everyone, but the right balance will add value to every RE/MAX affiliate.
Under the RE/MAX model, brokers charge agents a monthly set of expenses. These are fixed no matter how much business an agent produces. The more an agent produces the less cost per deal. The RE/MAX model also requires brokers to collect a minimum of 5% from each commission dollar as a service fee. This pays for the cost incurred by the increased business. Not all RE/MAX brokers follow the model, so you must interview each RE/MAX to determine their particular model.
By the way, we haven't discussed Coldwell Banker, C-21, Prudential, or the other national brands. I simply haven't enough "ink" to review each, but I assure you just as KW and RE/MAX each location has its good points, its bad points, and unfortunately, ugly points, too.
I hope this helps. Good luck! You are always welcome to call. I, too, am a native of the Evansville area.
And it was my worst mistake or may be a bad luck, they don't have any kind of training whatsoever and I couldn't find anyone to help me with the contracts and the paper work when I got my first buyer and lost the buyer because he didn't feel that I am confident enough (which was true! Had to learn the hard way).
This is exactly what I am afraid of! Frankly, after I've competed all of the pre-licensing coursework and passed the exams, I still feel like I know next-to-nothing about closing a deal. I keep hearing that training is critical for newbies, so I'm going to try to overlook the commission split (as hard as that is) and focus on who's got a solid training program.
Thanks for all of the info--keep it coming! Very useful stuff here.
No matter where you go, offer to be an unpaid administrative assistant / go-fer for a top producer. Spend three months, become their shadow. Listen, ask questions, learn how they do it and then do it for yourself. Learn, too, that their ways may not be the best way for you.
Listen to lots of people, study and burn shoe leather and cell phone minutes, then take time to reflect. What was right, what needed improvement, when was the time right, when was the time wrong. Keep a journal.
Keep your cool! This is a business you are embarking upon. While it can be a fun filled business, it is not about rah-rah and socializing.
Because you are new, I'd find an office/franchise that offers good training. A high commission split is worthless when you first start if you aren't taught the basic skills. There are quite a few companies without any formal training that will just let you flounder and you'll question whether you made the right decision even getting into real estate.
I have my own office, but when I first started somewhere around 20 year ago I went with CB because they a had formal training program that was actually very good. I think the training went for about a month. Their commission splits were lower, and I eventually left them because of that, but I never regretted starting with them.
Nonetheless, this is pretty much a local and regional thing and companies in your market will probably differ. Some offices have a formal mentoring program where an experienced agent can help you in exchange for part of the commission split. That can work out well too.
This is exactly what I am afraid of! Frankly, after I've competed all of the pre-licensing coursework and passed the exams, I still feel like I know next-to-nothing about closing a deal. I keep hearing that training is critical for newbies, so I'm going to try to overlook the commission split (as hard as that is) and focus on who's got a solid training program.
Actually it's not "Closing the deal" as much as the depth and knowledge of an experienced agent. That's what the public many times does not understand. They think you get a license and "Poof" you are now making the big bucks.
There is 2 types of knowledge. Book training which you need to get as much as possible and take every class offered. The 2nd is experience which can only be gotten with time. That's why you need someone to guide you with their experience and knowledge which is what everyone is saying.
FWIW, I did excatly what you're doing and selected my Broker for their Training & Support. I started out at a 50/50 split and have been at or near the top for the last 12 years. It took me about 2-3 years to reach my current split.
Don't let get fooled by a Broker telling you they have a high number of agents. There is a local office here that has about 300 agents which is way too saturated and 280 of them I would guess are probably selling very little RE.
My wife and I both received our license in the '04 time frame and after wasting 6 months with a C21 office that promised the world but in the end offered no training we moved to a local Coldwell Banker office boosting 160 agents. With CB's sliding commission split our first year we quickly moved to number 10 in the company receiving the CB Diamond Award, the following year moved to number 4 and again the Diamond Award.
Being entrepreneurial I opened my own successful small firm and Patty started with a developer that has since gone bankrupt leaving her with a decision and after looking at KW, ReMax, Watson, EXIT etc... she chose EXIT Realty.
Wanting to start her own team she felt the training on both a corporate level with video's and webinars and local level through the franchise with Team Up Tuesday's and Tech Thursday's would be a big help to new agents.
She also like the fact that no matter the agents experience EXIT Realty offers a starting base commission split of 70/30 going as high as 90/10 all with no desk fees. Another deciding factor is the EXIT Realty 10-7-5 Residual Program, based on concepts used in insurance and other industries.
Although you're located in Saint Louis, MO visit Patty's website Join Exit Realty in Orlando and preview the video 'Why EXIT Realty?'.
As a caveat I'm currently closing my firm to make the move to EXIT Realty and agents under me have already transferred their RE license to Exit Realty working with Patty's newly formed Team Orange.
The local office in Saint Louis, MO is EXIT Elite Realty and the brokers name is John Akers Office: (636) 464-3222
Call them just to see if they fit you and you fit them and tell them EXIT Realty agent Patty Lowe in Orlando, Florida recommend you contact them!
Btw: You might ask Greg, or any other broker you interview, if they have access to Brokermetrics or a similar product. I use Brokermetrics daily to monitor the productive activity of every Realtor firm and member of my local MLS. What you are looking for will be things such as average agent productivity in both volume and number of transactions. Any firm that touts its training should have very good results in both volume and number of transactions.
I can speak of two firms in particular here in the Louisville KY market. One is a franchise, the other is independent. Both have agents (especially the franchise office) with high average agent transactions sold, but extremely low volume per agent. This means that their agents aren't trained to sell the higher valued homes and are relegated to low priced properties. There are many other statistical deductions that one can deduct from Brokermetrics, but just one example. Don't edit the findings, just look at the numbers and often the picture is so brilliant the facts are obvious. Be sure to look for the "dog that didn't bark." Ask questions never volunteered.
All brokerages have fixed costs and prorate those costs to the brokers/agents in their office. This can and does vary, shop to shop.
All brokerages are in the business of recruiting new blood, all the time. The Realogy and KW brands tend to be more new agent friendly.
Given you are newly licensed go with the brokerage that offers you the most training at no incremental cost to you. The Realogy brands ( Coldwell Banker, C21, ERA) and KW specialize in new agents and training.
In my neck of the woods, KW offers the best split and least monthly/quaterly fixed costs to new ( not yet productive agents). Peer group training is top notch. I cannot say the same for outsourced training/coaching. The Realogy brands follow and ReMax comes in as the most costly and least training friendly, for new agents.
Alternatively, a small independent that holds a decent market share within the community is also worth investigating as are teams within any of the big box brokerages.
Remember, that offices within the brand can and do vary, as do their owners.
Thanks to everyone for the continued input! I love hearing the different perspectives. I met with Coldwell Bank and KW today and decided to rule KW out completely. Perhaps it was this particular office, but it seemed entirely too much like a big pyramid scheme. Basically, if you focus on recruiting new agents, you move up the pyramid and get a kickback. I also didn't care for their training--it seemed too theoretical, rather than practical--seminars like "The Personality Qualities that Top Producers Possess" and things of the like. Hey, I don't care about personality traits and recruiting; I'm here to learn the business and sell houses...which brings me to the point that KW barely mentioned closings, contracts, leads, or anything of the sort in almost an hour and a half. They did have a better split than Coldwell Banker (70/30 vs. 50/50), but KW nickel-and-dimes you for everything, whereas Coldwell Banker is full-service. As a new agent, I think I'd rather take a lower split than be on the hook for a million monthly fees. If I don't do any sales in a month, I'd actually be losing money with KW. Needless to say, I didn't care for their slick "used car salesman" approach to real estate. I'd be curious to know if anyone else felt the same way, or if it was just this particular office.
I've only worked for an NRT owned and operated agency (Coldwell Banker Residential Brokerage) and don't know if you interviewed with a Coldwell Banker franchise or an agency owned by NRT. There is a big difference (despite what the owner of a CB franchise keeps telling me when she recruits me). By working for an owned and operated shop, you will have access to Lead Router, Corporate Relocation and other leads that franchisees may not have access to. Some agents object to the large referral fees you must pay to participate, but the way I look at it, every deal counts and there will be more available to you at the company store than at a smaller franchise or mom and pop. If you do a good job for a client (regardless of how much you didn't earn on that deal) you have the opportunity to get referrals from them for years to come or buyers who call on your listings that don't have referral fees. As I posted earlier, and you agreed on your last post, having a great split but no deals isn't a great way to start your career. As you grow in your career, you'll have the opportunity to move that 50/50 split to a more favorable one or move on. Once you start making transactions the others will call you and you'll have the opportunity to stay or go.
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We can easily have 3-4 Remax offices in each zip code.
