Does the Agent Brokerage Matter?

General Real Estate Investing
1

Ok, so here’s a question that I haven’t seen raised. Does it matter to you which brokerage an agent is affiliated with? Keller Williams, Coldwell Banker, a commercial brokerage, etc.?

I’ve been with Keller Williams since 2004, but realized today that I haven’t gotten much. I specialize in working with investors, so their systems and processes aren’t really made for me. I also have my broker’s license, own branding, own phone, office, etc.

I sort of stepped back and thought…does it matter to investors if I stay with them? current clients could care less, but not sure if I just run my own company if it makes a difference. I pretty-much run my own company anyway.

2

As a former Working for Hire Agent/Broker… And Active Investor my answer is a profound NO.

To me the only things that matter are the following

  1. Can the Agent do the Job at hand?

  2. Will they reduce their commission on the listing side and offer more to the Selling side

  3. Will the field my referrals aggressively

  4. Will they feed me the Expired list so we can co-market?

  5. Are they one of the Top Agent in their field? I would want top 10

  6. Is their advertising Budget large enough to consistently run Ads?

  7. Are they respected amongst their peers and looked at as a “Gets the job done” Agent

  8. Are they willing to and do they understand Investors Strategy

  9. Do they have sufficient Buyers agent employed to double the transaction?

  10. Are their vendors willing to service my needs as aggressively as theirs?

3

Dee,

Answer, as always, is it depends. Primarily in this case, it depends on whether you’re acting solely as a buyer’s agent for your group of investors or do you also list properties for sell for them/others?

From a more personal standpoint, can you manage a firm AND still do what you do now as an agent? Would you be able to hire additional agents for your firm? What would their feelings be about a competing BIC? Have you compared costs of being with KW vs. costs of operating a company independently?

Finally, can you determine HOW your investors find you? Is it through your advertising or the company’s? If yours, was it because you were with a franchise or was it you (in other words, would they have called if you were not with KW)?

To Michael’s response:

4) Will they feed me the Expired list so we can co-market?
I’d have to check ethics code, but I believe that would be a violation.

5) Are they one of the Top Agent in their field? I would want top 10
I have NEVER seen a top ten agent in any area that was NOT with some franchise or Large NAMED for the area company. I HAVE seen top ten agents drop out of the ten because they went out on their own, though.

9) Do they have sufficient Buyers agent employed to double the transaction?
Another biggie when dealing with independent companies. Can a new company hire experienced agents from other established firms? What can an independent offer BETTER than a franchise when marketing to buyers?

4

The franchise does not make the agent, the agent makes themselves.

5

If I find an agent that works well with me, I will follow that agent to whatever brokerage firm he/she chooses to be affiliated with. I have done that in the past.

My longest active relationship with an agent is 13 years and counting.

6

Roger…

I think you will find that most boards are allowing the expired list to be marketed by agents and that agent can allow anyone else to advertise with them…

Heck some boards are now allowing the list to be freely distributed to “potential” buyers

As for top 10 agents running their own office… Happens all of the time… These agents are niche agents… Specializing in an area. Therefore they can create the perception of knowledge that franchise firms cant.

Real estate agents are whores… We go where we can make the most amount of money and working for a top 10 agent will feed us better than going on our own…

Michael

7

I have never done a deal with an agent that is at a major broker Remax Century 21… I also deal with brokers that are older (just shakes out like that) I bet they found out that they really didn’t need to big banner.

For instance if I were in Austin I would be dealing with you Dee no matter what your sign said. You actually know what a house that makes money looks like. That is what I look for more than a brand.

8

MQ,

Realtors have always been able to market themselves to expired as far as I know. Now, co-marketing, sharing, selling expired…well, I guess I’ll just say that apparently, it’s different rules for different boards and leave it at that.

As to top ten agents, I guess it depends on what exactly you mean by “top ten.” If you mean the top ten agents that deal with investors/REOS/etc, then yes, I’d agree that it “happens all the time.” If, however, you mean one of the top ten agents within their market, then no, it doesn’t happen all the time. It’s RARE that a top ten agent is NOT with a franchise company. But then again, it’s rare that a top ten agent works primarily with investors, too.

However, none of this really matters to the question posed. I don’t believe Dee was asking what it takes to be a “top ten” agent. So, what you do for your clients may well determine if it’s a good idea to “go it alone” or not.

I’ve seen too many agents believe that they could do much better on their own, but fail miserably in doing so. More than not, they simply weren’t cut out to run a RE company (running the company vs. “just” being an agent are vastly different). And too late, they realize that the franchise WAS actually providing something to them, just not in a easily definable way.

Not saying anything is wrong with being independent vs. a franchise either. Just think that you should consider your options very carefully before making a decision.

Raj

9

Some words of advice on my end.

Running a company is like a pyramid. (We all know what MLM is, bring 3 people in and they each bring 3 people in and eventually you have a large team under you making you money while you do nothing)

So being an agent, you will never have anyone under you. Your at the bottom of the pyramid. Become a broker and you get to the top. You can then have 5, 10,15,20 or more agents working in your office. Each agent will be paying you to work there. Wether it is a 5,10,20,30% commission cut you get out of each deal or a flat rate fee of $500 a month for them to hang their license in your office. You will make money from them. Yes you will have more headaches, have to follow certain prodecures and laws and spend some more time on marketing the company, building a website and providing certain services to your agents but in the end it can pay off for more money.

10

I just checked with my board 4 of the top 10 are self employed brokers at mom and pop shops…

I think it is all about the drive of the agent that really determines if they are going to be top 10 or not…

11

You’re really hung up on this top ten thing, MQ. It’s not even important to the intitial question. Heck, the only reason it was brought up was that you mentioned that you’d only work with a top ten agent. I simply pointed out that IF that is the kind of client Dee is in search for, it’s much harder to be a top ten agent if you’re not with a franchise. Personally, getting a top ten agent for an investor’s buyer’s agent isn’t that important to me. Now, if they’re selling your properties that’s a different story, but then again, so is being franchised or not.

As to your 4 in 10 of your market. You say that they are “mom and pops.” Don’t know your area but I’d wager that they are much more than that. In my market, 3 of 10 are independents. Only one breaks the top 5 and there is a large price difference between 5 and 10. The top 5 is a niche agent, specializing in foreclosures and investor sales (Yay!). And though she has a couple agents that work for her, it’s HER business. She does it all.
Next is a builder that builds custom million dollar homes AND is also the agent. Nice to get a million plus sale AND double up on the dollar amount/commission reported. Also, doesn’t take alot of sales and though a “niche” in name, not really an active agent.
And finally, the third, who opened an office in a county with NO realtor offices (hence the only one there) and therefore became a LARGE NAME for the area. Again, all the sales of the office are counted to the owner/agent, not the agents working for her.

Big difference, imo, between a “mom and pops” and companies like these above.

Since Dee hasn’t responded as of yet, I can only guess at her duties with her current clients (buyers agent only, or buyer and seller agent), or if she works exclusively with investors or represents “normal” clients as well.

If you’re simply acting as a buyers agent for investors, then it’s probably better to NOT be at a franchise company and be on your own. You don’t need a big name, you don’t need a big office, and you don’t need a large staff.

If you are acting as their listing agent, then you’d have to determine what you can provide as an independent vs. what a franchise offers to listers. Personally speaking, I think that KW offers alot LESS than most other franchises in promoting listings and giving effective marketing tools to their agents, but that’s just me. I’m biased. If you are also listing foreclosures, then it would be prudent to ask your bank IF they are continue with you IF you decide to go it alone. A local agent here that handled alot of REOs decided to start her own company and left a franchise to do it and lost about half of her business because the lenders used her BECAUSE she was with a franchise.

If you represent others as well, then you need to seriously consider what a company offers vs. what you can offer as an independent. In the day of the internet, it’s tough for an independent to compete with franchises on what they offer a listing client. Something to think.

Raj

12

Here is why a top 10 agent is important…

  1. They can afford you.
  2. They have the infrastructure necessary to do multiple deals efficiently and without procrastination
  3. They have access to and they do a ton of advertising which you could piggy back on… They typically buy full page ads and can sell/give you a small corner to promote your business, not to mention that they can advertise your resells more than by just using the MLS alone.
  4. They always want to double end the transaction. Which means you have buyers agents “Pushing” your property
  5. They know the difference between escrows started and escrows closed. Most new agents don’t.
  6. They are a source of funds when you need them for a concurrent close… The top ten typically make a 1,000,000 a year in earned commissions and most are extremely frugal. Having someone attached to the outcome is very nice.
  7. The perks they receive from the vendors will reduce your costs… i.e. free inspections, quick turnaround time etc.
  8. They won’t steal your deals or steal your business model. They are happy right where they are.
  9. They tend to see the big picture more.
  10. THE MOST IMPORTANT QUALITY; they have a reputation for getting the job done. Other agents know this and know when they enter a deal it will close. No BS
13

Here is why a top 10 agent is important…

Good points on why they are important to YOU. However, alot of what you mention would not be beneficial to probably the majority of investors in an area UNLESS they do 20+ houses a year. Most investors don’t. A new investor or even an experienced investor that buys 2-5 houses a year would likely not even make the cut to be able to work with a top ten agent. And in my experience most top ten agents don’t even work with investors, but that is a whole other issue, too.

I guess that this is only important to the question at hand if Dee is a top ten agent or plans to be in the near future.

Raj