Being a mortgage broker can be a rewarding job with good pay, but it will take some time and education before you can get there.
If you are a new real estate agent and looking to get started in the industry you have likely been faced with the decision of joining a brokerage. The brokerage you choose to work with as a real estate agent can have a big impact on the course of your real estate career, so it is good to understand just what the decision entails. Especially in the early days of your real estate career, getting off on the right foot with a brokerage that supports your growth can be a major benefit.
Just what are brokerages, what do they mean for clients and real estate agents, and how can you decide which one to join?
A real estate brokerage is essentially a real estate company that oversees real estate purchases and sales and manages a team of real estate agents. While real estate agents do most of the work involved in making sales, the brokerage is the larger company for which they work. The use of brokerages offers numerous benefits. For one, brokerages offer a level of oversight over real estate agents to ensure they are complying with local regulations and good business practices.
They also offer standardized practices for conducting transactions. Standardization makes things easier for both clients and real estate agents and helps sales to go more smoothly and be more secure. They also offer some level of confidence for clients, as large brokers often develop a reputation for the work they do.
There is one major reason you should work with a broker as a real estate agent and that is that it is required to practice your profession. Legally, real estate agents are required to work for a real estate company or brokerage in order to conduct real estate sales after receiving their real estate license. However, just because it is required doesn't mean that working for a brokerage isn't beneficial for a real estate agent.
For one, working with a brokerage means working with many other real estate professionals in your field, both newcomers and experienced agents. This can help you network very effectively, and open up new doors for you. It is also a great way to very rapidly expand your knowledge in the field as you learn from others and through occupational training that may be offered by your brokerage. You may even find opportunities for advancement within the brokerage you choose, and many experienced agents end up sticking with some brokerage for the course of their careers.
Brokerages also have lead generation systems in place to help their agents find and connect with clients more easily, meaning you will be able to do more business and make more sales.
Another thing that can help you get more sales is your brokerage's reputation that you can utilize. Each real estate company has its own reputation and specialties, and you will be able to use their name and image when marketing yourself as an agent working with them. They may also be able to offer you services to assist with your own personal advertising and marketing.
So, you know you need to work with a brokerage in order to practice real estate, but how do you choose which one is right for you? And what sorts of differences differentiate the many real estate companies?
There are many different sizes and types of real estate brokerages, from small teams to massive corporations, each with its own benefits and drawbacks. Generally, larger real estate companies will have more robust support networks, better opportunities for networking, and a better reputation, as well as a wider reach. However, small companies may offer you a lot of freedom in terms of how you want to work and offer you great opportunities for moving up within a developing company.
You should also consider what sort of real estate you want to specialize in. Many brokerages work generally in all types of real estate, while others focus specifically on real estate segments such as residential or commercial, as well as specific real estate types like condos or cottages.
If you intend to work in a specific real estate segment, it can help you hit the ground running to work for a broker that specializes in that field. Conversely however if you aren't sure what real estate niche you want to work in, working for a more general brokerage can help you get general knowledge or help you try different markets to find what is best for you.
Location may also play a role in your decision. You may want to look at a broker that is well established in your local market or has a presence in an area you want to work in. Though agents spend a lot of time in the field, you will sometimes need to go into the office for one reason or another, and having a convenient location can make a lot of difference.
Another thing to consider is your compensation. As a real estate salesperson, you help the deal go through, but you do not get paid directly from the sale. Rather, your sales will be handled through your brokerage, who takes in the sale commissions and then provides you with a cut of the money. Different brokerages offer different payment structures that can affect how much you take in from each sale.
Most brokerages operate with what is called a commission split. Under this format, the brokerage receives the commission from any sales, then splits it between the brokerage and the agent. These splits can vary in size. While you may think that the agent should get the full share for conducting the sale, they also get the many benefits from the brokerage, which also has operating costs to cover. Commissions operate on the principle that agents are meant to sell homes, so they only get paid when they successfully close a sale. This can also be a motivator for those who want to earn more to work even harder.
However, it also means that, especially for new agents, there can be periods where no sales go through and so you do not get paid. This means commissions are in some ways high risk but high reward.
Some brokerages operate on different payment structures such as providing a salary to agents, and others will give them the full commission and require the payment of an office fee to cover brokerage expenses. Others may also have a profit or revenue sharing program in which employees can receive a portion of the profits the company collects and may be used to incentivize referrals of new real estate agents.
Generally, every brokerage does its best to be appealing and equitable for its agents, so the main difference in choosing how you are compensated should come down to your personal work style, or where you think you can earn the most money.
You should know though that at the start of their careers most real estate agents often earn fewer commissions until they become more established and develop a history with the company. In this way, choosing a brokerage can be important as it is in your interest to remain with the same brokerage for many years.
Finally, company culture may be a deciding factor. Generally, company culture is hard to fully quantify, especially as someone on the outside. If you care a lot about company culture, try to speak to an agent with the brokerage, or read reviews to get an idea of the kind of culture the company fosters.
These large brokers are some of the biggest players in the real estate business, and you are very likely familiar with their names and brands. Though there are also many smaller brokers in the real estate world, these large companies tend to have many smaller franchises across the country, so are among the most likely to operate in any given area. It is hard to say what the best real estate companies are, as these companies are in close competition and offer many of the same benefits. Since each company will appeal to different agents for different reasons, there is no single best real estate company, and this list is presented in no particular order.
RE/MAX is one of the largest brokers in Canada and also operates in many countries around the world, and works with both commercial and residential real estate. Agents who work with REMAX have access to a highly recognizable real estate brand, career training, and the opportunity to operate their own franchised real estate business one day.
The Royal Lepage company was founded in Canada and has over 100 years of experience as a national brokerage. Their teams are spread across the country and welcome new agents to work for them. They offer a lot to their agents, such as professional development resources, and the ability to start your own team. Royal Lepage prides itself on its fully Canadian heritage.
Century 21 runs its brokerage on a principle of "putting agents first." According to them, this means providing everything their agents need from "the moment they enter the industry until the day they retire." Century 21 offers training programs, marketing resources, multiple technology tools, and a global referral network. They are based in Vancouver but have local franchises across the country.
Keller Williams is an international brokerage that operates in countries around the world. In Canada, they have local teams in all provinces. As with the other companies mentioned, Keller Williams offers agent training, marketing tools, and technology, and the opportunity to create your own franchise. They claim their company culture creates a "Sense of family" for everyone who works there. The company also has divisions for luxury homes and commercial real estate.
Coldwell Banker is a U.S.-based company with extensive operations in Canada. Unsurprisingly, they offer their agents marketing tools, technology solutions, and training and education programs. They describe their company culture as a "culture of awesomeness."
As you can see, most of these large brokerages are competitive with one another and offer similarly vague information about what it means to work for them. Ultimately, you can be successful with any brokerages, but if you want more specific information about them or any other brokerages, don't be afraid to reach out to an agent or the brokerage themselves to learn more.
Many seasoned real estate agents decide to take their careers to the next level and train to become real estate brokers. The regulations for real estate brokers will vary between provinces, but generally, to become a real estate broker, you are first required to be an agent or salesperson for at least two years. This is to make sure you are somewhat established in your job and have real-world experience.
You will then generally need to complete a few educational courses to teach you more about the duties and responsibilities of a broker. Finally, you may apply to get your certification as a real estate broker.
As a real estate broker, you can still work for a brokerage, but you can also work independently and make sales all on your own. You will even be able to start your own brokerage. As the manager of a brokerage, you will be in charge of overseeing all the agents who work in your brokerage, as well as overseeing all the deals that the brokerage completes.
Though brokers have increased responsibilities, they also have the potential to make more money as a result of their higher positions.
As a broker, you can start your own brokerage from the ground up, which will present many new challenges for you but also offer you great potential. You will have full control over your brand, your practices, who is on your real estate team, and more.
Alternatively, you may choose to begin a franchise under one of the large brokerages mentioned above. This offers you some control over how your team operates, but also provides you with the marketing, support, and brand recognition of the major companies.
Each company will have different rules for their franchises, as well as different processes to attaining a franchise, so be sure to check with different brokerages to find what works for you.
When it comes to your real estate career, choosing a brokerage is the first step on a long journey. We hope this article gives you some things to start thinking about and can help you make the best decisions for your career. Good luck!
Commission isn't everything. You should also take other things into consideration such as the cost of marketing, licensing, renting an office, and splitting commissions with the brokerage.
As a member of CREA, you can use REALTOR® in your advertisements but there are a few basic rules that you should follow in order to use the trademark correctly.
A personal real estate corporation (PREC) belongs to an individual agent or a broker. There can be many benefits to starting your own PREC in Ontario.
Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs
Social media has emerged as one of the foremost marketing tools for real estate agents looking to reach more clients.
Being a mortgage broker can be a rewarding job with good pay, but it will take some time and education before you can get there.
As a real estate agent, you have a duty to your clients to act in their best interest when it comes to buying a home.
With the Canadian economy on course for a recession as interest rates rise, the business of real estate is going to look very different in the near future. Are you prepared with the skills you need to succeed?
Anyone in the real estate field is acutely aware of the changing conditions in markets across the country.
One of the biggest draws of a career in real estate is the ability for anyone to get into the field and find their own unique path to success.
Signup for our weekly newsletter to get the latest news, updates and amazing offers and delivered directly in your inbox.
Real Estate Professional is a new online publication dedicated to Canadian real estate agents, brokers, Realtors and sales representatives.
© 2021 Rep Magazine. All Rights Reserved.