Brokerage versus Team? Which way do you go?


What is your goal, besides helping people of course?

To reach a specific annual income? Isn’t that the bottom line? The question is, starting a brokerage versus a team. Do you need to have your own brokerage to reach your monetary goals, or would your own team suffice?Team Consulting 

For a time, I was the roving technology specialist for the RE/MAX Region of SEPA. I visited over 100 offices and met with the brokers to help in any way I could, to get them organized with tech. On my visits, I would often make it a point to ask them how and why they became brokers. In private, the majority of them said that in retrospect, they wished they had not done it. Many offered without prompting that it was ego driven and not worth it. This was not one or two brokers. This was dozens of them. Be honest with yourself. If you want a brokerage so you can have your name attached to it, you have lots of company, but most of them want out of the club.

I taught exam prep classes for years as well as real estate continuing education. I have a clear bias with regards to the topic of Brokerage versus Team. One reason is because I taught thousands of students going for their license or taking their MCE classes. It was positively frightening how little the vast majority of the experienced agents understood their profession in a legal context. The majority did not have a full understanding of agency, contract law, or Fair Housing Law for that matter. They are prime candidates to end up in court out of ignorance of the law. For this reason, as well as seeing other agents activities while I was doing transactions with them, I personally would not consider being a broker versus having a team. In class, I often brought up the brokerage conversation. If someone said that they wanted to be a broker, I would offer the following for consideration.

If you have your own office, unless you hire an office manager, you’re it.

You’re chief cook and bottle washer, recruiter (which is a never ending job), and on and on…. Your production takes a serious downturn or becomes zero because you have so much to deal with managing an office full of agents. In all of the offices I visited, the best ones had hired a manager. Being a producing broker and the office manager translates to a mediocre at best office most of the time. There are inherent problems with competing with your broker and not having them available to speak with because they are out doing business. 

Now that you’re a broker and your production has dropped, you’re now dependent upon your agents for your income instead of yourself. Who would you better at motivating, yourself or your agents? If you’re dependent upon their production then you have a vested interest in how well they perform. Is that what you enjoy? Do you enjoy managing and training people? Are you good at it?  Then maybe it is a good move for you. If not, might you instead want to continue to list and sell, but have people helping you do more of it? When you have a team to deal with the details, it frees you up to do an insane amount of high quality referral generating business if that is your desire. 

If you have a team, obviously you will have to manage and train them as well, but it’s a one at a time process, and you decide how quickly you want to grow. There is no pressure to grow quickly so you can eat. Your personal production is already there, so you don’t have to scramble to get a lot of agents feeding the cookie jar as soon as possible. Would you rather be doing 100 sales a year with primarily your own production and maybe a buyer agent or two? Or would you rather have to manage 20 agents to get 300 sales and net less income? Are these numbers realistic? No. It’s just a concept. But the concept is real.

Another consideration is that if you are a broker of record, you are legally responsible for your agent’s actions.

Every time you bring someone on, you have to pray that they will not get you into legal trouble. As a broker, you’re herding cats. As a team rainmaker, you can be the driver of a lean and mean machine. You make all of the decisions for how business gets done, legally. If you end up in court, it’s on you, not one of the cats.

We need people to be brokers and leaders. Of that there is no doubt.

The question is, are you cut out for it? There are people who are better at managing and training than they are at prospecting and selling. These are prime prospects to be brokers. God bless those who are there for us when we’re starting out. But after I knew what I was doing, it was a no-brainer. I wanted to build a small team with quality people in an organized and methodical way. I was better at production than management so it was never a question for me. What are your skill sets? Try to take ego out of it and then make your decision based on those skill sets. You’ll be a happier camper if you consider these things.

Brokerage versus Team? Which way do you go? Need help making this decision or getting your team organized and online? That’s what I’ve been doing for over 20 years. Contact me!

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