In some ways modern real estate brokerages are a lot like professional sports teams. In that players, like real estate agents, sometimes play for many teams during their careers. The one difference of course is real estate agents are the ones who chose where they play. Regardless, as an industry we must get comfortable with the fact that over the years key players at our company will come and go. As sad as it is for us to see members of our real estate family move on, it is an inevitable part of real estate life. With that in mind, it makes sense for brokerages to help agents transition into, and/or out of, our companies as efficiently as possible.
This article is written for those agents who feel firm in their decision to make a move after comparing the Cultures, Leadership & Reputations between their current company and the one(s) they are considering. Many previous articles have been written about taking those crucial things into account when contemplating a brokerage move, so in this article I will be focusing on what comes next.
When helping an agent with their brokerage transition I’m often surprised that there are many issues, beyond Culture, Leadership & Reputation, that they didn’t realize needed attention before moving their license. For this reason, I aim to be as thorough as possible in outlining the issues that you should address during your next brokerage move. Moreover, my hope is that this article will prove invaluable as you contemplate your next transition.
As acknowledged, you, the real estate agent, will have many reasons for wanting to change brokerages and all are to be respected. Accordingly, I suggest that when you tell your managers you’re moving your license you be honest with the reasons. If done properly this is a nice parting gift to give your former manager because it gives them concrete feedback that the company can work on to improve in the future.
The main reason I hear stated most often is simply, “I will take home more money at the new company.” Assuming I have been told the actual reason in these cases, I notice agents frequently forget to consider all variables in their decision making process. Because too often I see this not bear out in the long run. Included in the obvious expenses at play, agents don’t seem to take into account the seldom seen benefits their current company is providing them (and how to transition those benefits).
A higher commission split than what you currently have is always appealing, but when everything else is added up you may actually find you take home more money at your current company. Commission splits are just one facet of a company’s total commission structure that you should consider, nevertheless, it remains the main selling point that most agent recruiters sell agents on. A higher split is nice but I urge you to compose a detailed spreadsheet when calculating your options. This should include all the pros & cons, as well as, every conceivable expense that might be in play.
Besides splits, here are some of the expenses that should be thought about in future earnings calculations:
- Are there ongoing monthly charges? For example, Desk Fees or Marketing Fees.
- Are there monthly marketing obligations? For instance, some companies require agents to participate in company advertising spends.
- Are there per transaction fees? And do they vary based on the price of the sale?
- Is there a fee tied to utilizing a Transaction Coordinator? Or will you need to contract with a TC on the side?
- Are there overrides, like Franchise Fees? Or are royalties due for company affiliations? If so, what clout, services or tools come with the affiliation?
- Does the company charge for in-house printing/copies?
- Do they charge for business cards or company stationary?
- Do they provide no-cost marketing materials like Listing & Buyer Presentation Packets?
- How about Yardsign production, installation and takedown? These things can really add up in time or expense.
- Do they pass on credit card merchant fees to you for agent bill-backs?
- Do they charge late fees on late agent bills?
- Are they willing to provide commission advances? If so, do they come at an interest cost to you?
- Do they charge an extra percentage for business closed through the company lead generation systems?
- Lastly, but no less important, does the new company markup the things they do bill you back for, like outside printing, E&O insurance, MLS service, continuing education, software, listing photography, custom design services, newspaper/magazine advertising, Realtor memberships, etc?
There’s a wide range of ways a real estate company might be generating revenue that their agents would be unaware of on the surface, so do your research to insure you know the full picture involved in any brokerage move.
I know an agent who moved to new company believing if they did the same business with the higher split they offered them they would take home $18,000 more per year at the new company. After moving they soon discovered at the new company they would be charged for the essential real estate software programs they needed and charged for training on the new company systems too. On top of that, the new company dramatically marked up many bill-back items the agent required such as printing, E&O insurance, as well as, those essential programs that their former company provided them at no cost. In the end, their money based decision to move became a breakeven at best. I suggest you choose a move that is motivated by long-term career growth and all facets have been thoroughly evaluated.
So you’ve taken the time to analyze all these factors and are still convinced that it’s time to make the move, now what?
First off, be aware that in most states, the minute you move your license your Employing Broker will be notified of the change. By rule, your old company must then immediately turn you off of all of their systems. That includes the company email, VPNs, remote logins, websites, lead systems, training platforms, CRMs, etc. So make sure you have all your ducks in a row before you go to the state licensure website to move your license.
Before you meet with your manager in person to inform them of your decision to make a change do the following:
- Review your Agent Policy Manual to make sure you know how your old brokerage will handle any active listings or contracts. By regulation, these policies need to be spelled out in every real estate company Policy Manual. Also be aware of how any relocation, or company referred clients, will be handled - this includes internet leads assigned to you.
- Be careful who you confide in about your move because you don’t want word getting back to your manager before you are ready to move. I’ve seen companies deactivate agent licenses and subscriptions before the moving agent has a chance to move their license. This practice seems deliberately punitive to me because it needlessly adds extra reactivation fees to the agent’s move.
- Have you thought about what to do if you utilize their email service or server? You would be surprised how often moving agents fail to consider this question. If you do use the company email server, you’re going to want to create an auto-reply stating that you’ve moved. Chances are that even though your old brokerage must block you from accessing their email server after you move your license they will still leave the account active for 30 to 90 days before deleting it entirely. For that time period you should also create a Forwarding Rule to direct any emails to your new email address. Also consider exporting of all your contacts and emails. The export can then be imported into your new email server so that you won’t lose any prior correspondences with your clients - although this is sometimes easier said than done.
- Copy any reviews or testimonials that might exist on the old brokerage website. In most cases these things are not saved offline so when they delete you off the old company website any reviews you have will also be permanently deleted.
- Backup any files you created and may need from company servers.
- Download or copy any photographs you have the rights to. This may include your profile pics or past listing, and sold property, pictures. You may want these for future marketing.
- Are there any company paid tools like BoomTown, Constant Contact, CTM eContracts, Homebot, MailChimp, MLS access, OpCity, Updater, Zillow, etc, to keep in mind? If you wish to continue on these services you’ll need to contact the provider directly to change billing info and insure all data is maintained and the transition is seamless.
- Export your contacts from the company CRM if it’s not one you can continue with at your cost.
- Are there any company paid memberships that you would like to continue? Like Realtor Associations or Chambers of Commerce.
- Are you taking advantage of a company provided or partnered agent website? What will happen to that?
- Does your new company have a website or affiliate website that provides global exposure for your listings? If not, you might need to find a solution to accomplish this for your seller clients.
- Start making a plan to replace any relationships or partnerships that may be severed when you change brokerages. These may include builder relationships, referral partners, or community sponsorships that have benefited you.
- Are the any stocks or stock options at play? Stock has real value to consider so you need to know the implications a move might have on your vesting. Whereas, stock options may not have any actual monetary value.
- Is your agent bill at a zero balance? And all commission advances paid off?
- Don’t forget about those seldom seen company paid disability, life, or other insurance plans. E&O too. You’ll probably need to contact someone to continue these on your own if possible. And if it’s not possible to continue them, what will your expense be to replace them on the open market?
- Lastly, please meet with your manager in person to inform them of your decision before changing your license with the state. I’m a firm believer that it’s always best to make any brokerage move with courage, gratitude and grace. If the person on the other side doesn’t allow you to move away with gratitude and grace then you know moving on was the best decision.
Avoid burning any bridges, because in this industry you never know how you and your former co-workers lives might intersect in the future. You see, the person you are breaking up with today could be negotiating with you on the other side of a purchase contract tomorrow. In fact, I’ve seen it happen that a few years down the road they end up being your new manager, or owner, of the brokerage you’ve moved to.
Congratulations! You’re not quite done yet though.
After your move is official don’t neglect updating all of the following items with your new company name as soon as possible:
- Mobile voicemail greeting
- Email signature
- E&O Insurance
- Facebook Business Page
- Google My Business
Finally, don’t forget to let all your friends and clients know that you’ve moved. Always convey your confidence and excitement. The reason why you moved will also be important to your clients. You may find a few of your clients tell you they are loyal to the brand you moved away from. In these cases, suggest an agent at the old company that you think they will work well with, and wish them the best.
If you’ve considered all the above mentioned suggestions, I have no doubt that the transition to your new brokerage will go smoothly and any negative impacts will be mitigated. I know there probably are some issues I forgot to mention so please do add those that come to your mind in the comments section below. Thank you!
P.S. If it turns out you regret moving, rest assured, your old brokerage will welcome you back with open arms.