All Brokers are alike. Not true. All franchise Brokers are alike. Better.
The path to becoming a Realtor is well-worn. More of a rut really. With license in hand, brand new agents are told to go off and look for a Broker to be their sponsor. Anyone getting a license probably knows at least a half dozen realty brands by name. There are any number of reasons why agents choose the Brokerages they do but know this: they didn’t toss and turn over it.
Real estate school teaches new recruits that transferring between brokerages is common. They droned on about it for chapters. To most would-be agents the prospect of selecting a sponsoring brokerage isn’t all that dramatic. Everyone is kind of the same. Besides, you can always change and probably will.
Agents quickly sign on to brokerages in the excitement of starting their new real estate careers. There is a problem with this of course. Not readily apparent at the onset. Rule number one in real estate: words matter.
Agents may have been misled in completing a “Sponsorship Form”, that sponsorship in something may have been involved. That is not actually the case. The Sponsorship Form is more of a permission slip that allows for a third-party to realize “partnership” privileges. Make no mistake, signing on with a national franchise brokerage is agreeing to having a “partner”.
One of the greatest attractions in becoming a real estate agent is being your own, self-run, independent business. That is how the trade of real estate is sold to new agents. Yet the very first thing most new agents do when they get their license is to agree to have a partner. Doesn’t make a lot of sense, does it?
I also want to point out the concept of “partnership privileges”. It’s really NOT a partnership, in so far as it exclusively focuses on just the privileges’ part. Traditional partnerships are two-way streets. Meaning the participants in the partnership are more or less equal in their level of engagement.
Not in real estate. Franchise brokers don’t pay a dime toward any agent’s expense. Other than having a “known” name, franchise brokers do nothing to help an agent get clients. A franchise broker is solely focused on growing itself. Money is spent there, in recruiting, and NOT on individual agents or their concerns.
Broker participation in the sale cycle is insignificant. Yet franchise brokers can glean anywhere between 15%-25% of an agent’s income. A very cool deal for them. It’s almost as if they are saying “we earn our 25% because we allow you to earn your 75%”.
Agent commissions are based on a percentage of the home’s sales price. Sell a more expensive home, make more in commission. Real estate 101. But why does the Broker’s income rise with a higher priced home? Wynd Realty has sold thousands of homes. The paperwork process we go through from the Broker’s end is exactly the same for a $100K home as it is for a $850K home. We don’t make more money because the ink on the contract is written in a higher number.
Franchise sales agent are still stuck with some sort of “commission split”. Their Broker’s are locked into a national format and there isn’t anything they can do about it.
Atlanta, Atlanta, Atlanta
I know we are a broken record, but Atlanta is one of the only markets in the United States where real estate agents can pay a flat fee for brokerage services. Atlanta independent brokerages charge anywhere from $300-$500 dollars a transaction regardless of sales price. NO SPLITS!
The concept of “commission splits” had some credibility in the era before the computer. Why it still exits today is a topic for another blog. But, it does and it’s costing Atlanta agents a ton of money.
If you are closing out the year reviewing your expenses, how can you not notice the amount you paid out in undeserved “split commission”. Was it worth it?
Lose the “partner” and SAVE! Join an Atlanta independent brokerage today.