Choosing the best real estate brokerage to work for can be challenging. In Toronto, given it’s the most competitive real estate market in the world, there are plenty of options to choose from.
Find the right brokerage that is best for you based on your priorities and goals, as each agent has many factors to consider.
So whether you’re new just getting started or an experienced agent looking to keep up with the changing environment here are some of the key factors to help make the right decision when choosing a brokerage in 2022.
Table of Contents
What is a Real Estate Brokerage?
A real estate brokerage is a company licensed to represent consumers’ best interest in their real estate transaction needs. Salespeople are representatives of the brokerage. It’s the brokerage that is authorized to handle the real estate transaction.
Real Estate Brokerage Desk Fees
Fees are a fact of life in real estate. A brokerage charges agents a desk fee for services that include marketing and technology services. Usually, desk fees include access to a website publishing platform, CRM or customer relationship manager, and other marketing services.
The fees for being a real estate agent add up fast. You have to pay OREA, CREA, TREB, insurance fees and desk fees just to maintain your license. So at the end of the month, you’ll want to keep as much money in your pocket as possible.
Desk fees can range from under $65 to over $800 depending on the brokerage and which services are included. Should you go for a low desk fee or a high desk fee? It depends on your needs and where you are in your business.
A brokerage charging a higher fee will likely give you more leads. These brokerages spend a lot of money on institutional advertising to attract buyers and sellers. When you pay a high desk fee you’re paying into that marketing system and in exchange, you’ll receive leads.
Commission Split
Most real estate brokerages offer new agents different commission split options. A commission split is often represented as an 80/20 or 90/10, which means out of the total gross commission you will keep 80 percent and your brokerage takes 20 percent. Some brokerages offer an annual maximum cap, where they only take their side of the split until you reach the benchmark cap, where afterward you get to keep 100% of earned commission, which is pretty sweet. Other discount brokerages may operate on a flat fee model where you only pay a set fee for every transaction you do.
Doing Marketing and Lead Generation
Do you want to join a brokerage that does all your marketing and lead generation for you or do you want full control to build your own business and brand?
If you want a real estate brokerage to do your marketing and lead generation for you you may like companies like ReMax or Royal Lepage. They have a large share of the market due to their institutional advertising. One of the drawbacks however from these brands is that the marketing is very generic and you may end up looking like everyone else.
You can expect to pay more to a brokerage that does your marketing and lead generation.
If building your own business and brand from the ground up where you have full control over your marketing and total responsibility for generating leads, then companies like Keller Williams or eXp Realty might be a better fit for you.
When you’re new you don’t have any clients so you’ll need to figure out how to generate leads on your own. If you don’t want to spend money, are good at marketing, and have time to spend you might want to keep your desk fee low.
On the other hand, if you have don’t have time to figure out a marketing funnel from scratch and you want to start receiving leads right away you might be better off going with a brokerage that offers a lot of leads in exchange for the higher fees.
Technology Provided by Brokerage
Technology is driving change in the real estate industry.
Some brokerages are trying to use technology as a major selling point to differentiate from the competition. And since technology changes so fast you’ll want to be with a company that offers a robust and up-to-date technology package.
Many agents don’t like the services included with their brokerage and end up setting up their own systems and marketing funnel. This option is great as it can give you full flexibility over your systems but it can also get very expensive as the average CRM costs about $65 per month.
The key components of technology offered by a brokerage which are often covered in the desk fees are:
- Customer Relationship Management: a central database to store contract records, track activities, conduct marketing, and managing opportunities.
- Marketing & Communication: email service, text messaging, calendar, and website. How well these services integrate into your CRM is important. The issue is keeping your contacts in sync across your marketing funnel and database.
- File Management: services for e-signatures like DocuSign start at $13/month.
Pro Tip: There are so many apps and tools to choose from for your real estate business. You could end up wasting hours trying to set up and integrate them together. Keep it simple and don’t lose and spend a lot of your time trying to figure out your CRM and marketing technology. Stay focused on what’s important – being in front of customers.
Are Discount Brokerages Right for You?
Discount brokerages often have the lowest desk fees and commission splits but as a new agent, this might not be what’s most beneficial to your new career.
There is a huge learning curve to become an experienced real estate agent. But most new agents will become professional faster under the guidance of a traditional brokerage. Often the training and guidance with a discount brokerage are limited.
A seasoned real estate agent who’s doing a lot of transactions will carefully analyze the cost and benefits of switching to a discount brokerage.
Training and Education
If you’re new to Real Estate you’ll likely need a lot of training because running your own real estate business can be a bit overwhelming. A lot of new agents feel lost where to start.
You may face quite a learning curve, especially if you’ve never worked as a straight commissioned salesperson before.
The Humber real estate education programs provide you with a lot of technical and legal aspects of the real estate industry. These courses don’t go into the practical day-to-day operations of running a real estate business.
What does “how to do real estate” mean? How are you going to find new customers? And how will you work with them through the process of buying or selling a home? Like hunting – you need to develop the necessary skills or you might go hungry until you figure out how to do it.
Are you prepared to knock on doors or make cold calls over the phone for several hours per day? What will you say to these prospective clients to have them choose you to help them in their next real estate transaction?
Activities like generating leads, qualifying buyers and sellers, researching properties, handling customer objections, etc. are a few topics where you can learn from the experience of others who’ve come before you.
How Do You Want to Attend Training?
Make sure you find out what kind of training the brokerage offers. Moreover, will there be a training program specifically for new reps? And is there ongoing training to help you improve your skills?
Do you like the social aspect of learning in a classroom or are you busy with family and prefer to learn at your own pace at home by watching recordings of class training on your own time?
Each brokerage will have its own requirement for new agents. Do they require new agents to attend mandatory training that takes place during weekdays or is there flexible options for learning online?
Some brokerages will require new agents to attend a mandatory training session when you start. That could be a challenge for some who work full or part-time at other jobs.
If you plan to transition into real estate from another career and can’t make it to in-class training sessions then you may want to join a brokerage that offers online training.
Location of Brokerage
How far do you want to travel each time you need to swing by the office? Many agents spend a lot of time working from home. But if you plan to work from the office and want to reduce your travel time then location will play a greater role in your decision making.
If you plan on being all over the city you might want to choose a brokerage that has multiple offices where you can stop in and take care of business.
Company Culture in the Brokerage
Everyone wants a friendly and open place to work. The real estate industry is notorious for cut-throat competition. You’ll need to learn a lot on your own but when you have questions it’s important that you’re with a company that promotes sharing information.
The company culture at a real estate brokerage plays a big part in the interpersonal dynamics between co-workers at a brokerage.
If you have any questions about choosing a real estate brokerage in Toronto contact me here. I’m happy to share my experience with you.
