The Truth about Real Estate Companies

Mjpcorpflowers Most real estate offices have cubicles, offices and some kind of a room with a copier, fax, various forms and most importantly, coffee.

With all the technology available today agents work from their cars and home offices much of the time.  A real estate office with 100 agents can be housed in a small space. 

Which real estate company should you choose?   Real estate companies do not buy or sell real estate.  Most do not employ REALTORS either.  We are independent contractors.  We interview real estate companies and decide which one we want to work with.  Choose the agent not the company.

There are excellent agents and poor agents in every company.   The agent is the person that has the buyer or seller enter into a contract and the persons that sells homes.  It is the agent that finds clients, but sometimes they find us first.

Most of the local real estate companies are franchises, if you read the fine print it says "independently owned and operated".  After working with two  real estate companies through four different offices, I have found that offices within the same company can be very different. Some are well run and others are not. 

When people talk about real estate I hear statements like "did you notice XYZ company sold that house?" or "why did they choose that company?", or recently a buyer told me that he wanted to change real estate companies because he did not like the agent.  Why?

The real estate companies that have the highest number of sales, also have the most agents.  If the company sells more homes is it a better company?   As a buyer or seller you will have little contact with the company, it is the agent that will take care of your purchase or sale.  Picking a big brand company does not guarantee a great agent.   Real estate companies spend a lot of  resources recruiting.  The success rate among new agents is low, with an average of 80% not making it through their first year.

It is the agent that pays for the signs, lock boxes, and the contracts.  We pay for the newspaper ads, virtual tours and property fliers. If we make a mistake we pay for that too.  Real estate companies make money by keeping a percentage of the commission that real estate agents charge.  They also make money by selling various items to agents.

Some companies offer their agents better training.  Training is voluntary, some agents take advantage of it others don’t.  Training for agents is available through several sources, and on the internet.  I teach an internet marketing/blog class through Keller Williams. My classes  are open to agents from all companies, and they show up because it is the only class of it’s kind here in Minnesota.   Small business owners who do not work in the real estate industry show up too. 

For buyers, it does not matter which company has a home on the market, any agent can show the home and we all have the same information about it through the MLS.

My advice?  Find a good agent.  Ask friends, neighbors, relatives or co-workers who they worked with and if the agent did a good job, then interview a couple of the agents.

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17 Replies to “The Truth about Real Estate Companies”

  1. Hi Teresa,

    Fantastic blog and I particularly like this post. I live in Austin, TX so KW is THE big name. A little different situation I imagine than in St. Paul. Good for you on the blog training. I try to lead by example and teach what I can in my own classes. Maybe we’ll get to meet one day!

  2. Teresa… this is one of the best pieces I’ve seen written on this topic. No jargon… just the facts. I’ll ditto Larry as well. It’s the agent that makes the difference, every time.

  3. Thanks all. It is hard not to comment back I could tell scary real estate company stories. Even had one where they ordered a sign and put it in front of my next door neighbors house. Then there was the receptionist that lost the 15K earnest money check . . I guess that is already more than I want people to know. Real estate companies are made up of people and we all make mistakes. šŸ™‚

  4. The human element is crucial in Real Estate! When you hang your license with a broker you are doing one of two things (1) joining with the broker who will give you the best commission split regardless of their brand, service or office opportunities, or (2) sincerely trusting that you are joining a team that is capable of giving you all the tools you need to succeed (technology, training, etc) with a different split. Brokers/Team Leaders think that the agent needs them, but the opposite is true.

    Remember Teresa’s words, “Find a good agent. Ask friends, neighbors, relatives or co-workers who they worked with and if the agent did a good job, then interview a couple of the agents.”

  5. Austin realtors wife,
    I don’t need a real estate company for technology any more. What I really need is . . . technology has changed the business so much I am honestly not sure what the roll of the real estate company is. I think the world has changed but the brokerage – agent realtionship has stayed the same. new agents do need real estate companies, I get that.

  6. Excellent, short, sweet and to the point post about the subject.

    It’s funny how some people ask me who I work for when I tell them I’m in real estate. I began replying “Myself. I’m an Independent Contractor just like the rest of them”.

    They kind of look at me funny for a second and then a light bulb goes off above their head when they realize my point.

  7. For a consumer I agree, the agent means a lot more than the broker. I’ve seen some awesome agents that are broker-owners or work for small independents, as well as many that work for the big brokers in town too.

    Agent quality isn’t 100% determined by broker but it also isn’t completely indeterminate either. Some brokers focus more on education & support, some brokers focus on the lowest cost to their agents. The crucial point is that the agent chooses the broker that is right for their business needs.

    No matter what the DOJ says, this business is extremely competitive and we’re seeing some agents that just can’t afford to keep going in this type of market. Like you said, the best thing a consumer can do is get recommendations and then interview several agents to find the one that fits their needs the best.

  8. Does anyone know the comision split for first team realty for seasoned agents or is it the same as for new agents?

  9. 100% Dead on. A good agent can make a tough transaction go smoothly, and conversely a bad agent can take the simplest thing and make it into a mountain. Find an agent that specializes in whatever it is specifically that you are doing – and you will be way ahead.

  10. Finding someone that specializes in what you are doing in regard to real estate is very important. The agent that “sells houses” is unlikely to be able to provide much guidance on “30 story commercial official buildings”. Find the top agents that are do-ers in whatever area you are working.

  11. People make the difference – not only in real estate, but no matter what endeavor you are undertaking. Choose the individual thats competent and fair, and you can hardly go wrong.

  12. Teresa – this is a straight talking article that should really help consumers know what is important when looking to hire a real estate agent. Thanks

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  14. […] During times of high unemployment more people join
    our ranks and at the same time as home sales go down more agents
    leave the industry.  There is always churning because we
    are independent contractors and often brokerages (real estate
    companies) make the most money off of new agents.  (Also
    see The Truth About Real Estate Companies) […]

  15. […] Also see: The truth about real estate companies […]

  16. […] give agents training but they are on their own, real estate companies do not sell real estate. [see The Truth About real estate companies] […]

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