Big brokerages thrive on hiring as many sales people as they can to increase profits. Some will hire anyone and others are more picky, but some of the bigger corporate brokerages offer lots of training and support to new or unseasoned agents, which is a big lure when searching for a place to hang a real estate license. The support and mentoring provided by these firms tend to draw many to their doors. But could there be a new threat on the horizon for big brokerages?
The latest brokerage to hit the real estate market is called the “Freedom Brokerage” – virtual brokerages without brick and mortar offices, which allow agents to save lots of money in most cases. Keep in mind that brick and mortar companies have to pay for their building space, utilities and supplies, as well as online programs, printed materials, websites and insurance, to name a few. They have to shell out money to keep their agents learning and motivated so that they will make money for the brokerage, but most of that money that goes out is passed along to the agents in some way (office fees, seminar fees, supply fees, etc. – there are many names).
Freedom Brokerages allow agents to hang a license with a company that lacks the brick and mortar hub (which seems very passe in today’s real estate market anyway – why pay for an office when you can do everything from a home office or other space?) This keeps the costs down. The idea appeals to many agents, who want to avoid all of the big brokerage costs. But it also is probably not the best idea for new or unseasoned agents, unless they are self-starters and do not need any hand-holding.
I applaud the new ideas that are popping up to keep real estate exciting. Personally I do not think we need brick and mortar offices. There are many options available for those who need a true office space and do not want to meet clients at a home office or at Starbucks. There are hub offices, where space is shared with other members for a monthly fee, and there are executive suites – where you have your own office or might share it with one or several others, with a live human who answers your phone possibly included. These ideas allow an agent to have an office address and space for meeting when needed.
So if you are considering leaving a brick and mortar corporate brokerage, look into the options. If you are a seasoned agent and a self starter, or even a confident new agent with someone who can help mentor you (although personally I think new agents need extensive training, and may get it best from established brokerages), it is a great idea which will save much money. Why pay all your fees to a big brokerage if you don’t have to?