Before You Join a Real Estate Brokerage, Things You Must Know
When most individuals first approach a real estate broker or sales manager about a position as a real estate salesperson, they don’t know the right questions to ask or the right way to ask them. They are used to traditional job interviews where the person doing the hiring asks the questions, and they try to figure out the answers the interviewer wants to hear in order to get the job. With real estate sales, this process is different.
In essence, the real estate salesperson job interview is basically a person going to a sophisticated professional and proposing a “partnership.” The broker provides the professional environment within which the work is conducted. In return, the salesperson provides professional services and, typically, the resources and activity to make consumers aware of the professional services. Each makes a contribution, and each shares in the fruits of the endeavor.
The potential salesperson should go into the discussion knowing two things that will help both the broker and the salesperson know if the “partnership” is going to be successful and profitable: (1) what they want to make in their first year; and (2) how much time they are willing to invest to earn it. With that information, the broker can answer the following two questions that should be uppermost in the salesperson’s mind.
My goal is to earn $X in my first year, working Y hours. To do that, what would my daily activity in your organization consist of?
The broker is the expert in her marketplace. She probably already has an agent making the amount of money you want to make and working the number of hours you want to work. She should be able to specifically describe what you would be doing on a daily basis in order to make that amount of money. You will want to listen carefully and be prepared to take some notes. The daily activity may be different from one brokerage to another. You will want to evaluate if what the broker describes sounds like tasks that you feel you could (or would want to) perform.
Trust your instincts. If your gut tells you that you wouldn’t want to do what the broker tells you is necessary in her marketplace, maybe you need to check with some other brokers. Different brokers have different business models and operate in different marketplaces. The wonderful thing about the real estate business is that there is a place and a broker that is right for every single person. Sometimes, the challenge is finding that place and person. It is much better to find it at the beginning of your career instead of wasting time and resources jumping from one brokerage to another. Speaking of resources, that leads us to your next question for the broker.
What kind of resources do I need (and what will be provided) to perform these daily activities?
Most people are aware that there are certain costs associated with obtaining a real estate license, including: qualifying education, license fees, local association fees, multiple listing service fees, and so on. A local broker knows these amounts. What most people don’t think about is that the daily activities that lead to real estate sales often involve expenditures and resources as well.
For example, most people think it would be great to obtain a listing on a multi-million dollar property. The commission on a $5 million dollar property could amount to $60,000 or more share for the agent. What new agents often don’t understand is what it takes to get, and to sell, that caliber of property. In a particular marketplace, your competition may be offering to run full-page ads promoting such a property in local publications. Such an ad might cost $10,000, which the salesperson is expected to pay, in cash, up front. This type of ad will probably have professional photos of the property. Someone has to pay the professional photographer, which may constitute another $1,000. More and more, videos of property are being delivered via the internet on a salesperson’s dedicated website, perhaps taken overhead by a drone. This can take even more money and equipment.
The broker you are interviewing knows what is necessary to be competitive in his marketplace. He will be the one with the answers to your questions, which will enable you to decide if this is the right marketplace and brokerage for you. Knowledge is power. Arm yourself with the right questions, and the right answers to the broker’s questions, before you go out to interview brokers. You will be the most powerful prospective agent the broker has ever encountered.