The brokerage you choose is one of the most significant decisions that you can make.
Change is inevitable, and if a place isn’t helping you grow and you are unhappy, then it might be time to move. But before you embark on a new journey, you have to do your homework.
At times, it may be difficult to assess the environment and culture of real estate brokerages properly. It is critical to learn as much as possible beforehand.
Many agents fall victim to emphasizing agent/broker splits, but you must look at other aspects. If a brokerage invests a lot of resources in agents, then it will most likely require more commission.
Finding the right broker is crucial to your long-term success and happiness. This article will detail everything about switching brokerages to help you find one that matches your long-term goals.
Finding a new brokerage
There is no perfect brokerage so you need to figure out what is most important to you. You must review the commission split, brokerage culture, support, reputation, and niche to find the best fit.
Are you currently stuck in a toxic and generally unsupportive work environment? Receiving a smaller commission split than desired? Have you simply outgrown your current situation?
If you answered yes to any of the above, it might be time to move.
The process of switching brokers
Changing brokerages isn’t a simple task. Switching brokerages may take a temporary toll on your business due to a transition gap. You may feel more unstable than anticipated. To aid your customers, get in touch with your list of contacts.
Ask your new brokerage if they offer support during new agent transitions. This may include broker, administrative, and marketing assistance.
Best time to change
When you consider switching brokerages, timing is important. You should give yourself one to two weeks of lead time and during times when the market isn’t quite busy, like the holidays.
Reasons to switch brokerages
From unfair commission splits to feeling like you’re stuck in a rut and not getting along with co-workers, a number of things can motivate agents to move. Here are several warning signs to look out for.
Non-ideal finances
A familiar rationale that makes agents move is an unattractive package. Examples include unfair commission splits, no commission splits, and fees that are too high. This is the case for a brokerage that offers more competitive fees.
Additionally, you have to find a brokerage that aligns with your long-term vision. The best place to start is by looking at reviews and speaking to agents in the area.
A flat transaction fee can be a good fit for freshly minted real estate agents that want to gain a couple of years of experience. However, that might not be great for more experienced agents.
Lack of a cultural fit
Fitting into a company and how you feel is important. If you aren’t jiving with co-workers or something feels off, it may relate to a cultural issue.
Things to consider include an open culture, diversity and inclusivity, and healthy and good relationships with others in the area.
Poor reputation
If you Google your brokerage, what comes up? Is it consistently attracting new real estate agents? Is it difficult for them to find and attract agents?
Low-quality leadership
Having low-quality leadership can make work unbearable. There are many ways this can be displayed. Examples include:
- Transparency and friendliness
- Tolerates poor performance or behavior.
- No recognition for top performers.
- The brokerage’s relationship with the local Board of REALTORS, how it works with the NAR, and its presence in the marketplace.
Little to no business support.
Not having adequate tools and business support makes for a poor working environment. Your success requires access to marketing materials and mentorship. If they aren’t available, it is harder to gain clients and maintain a successful business.
What kinds of marketing tools and materials are available? Are there affiliate programs set up?
Oftentimes, brokerages provide their agents and REALTORS with business technology. This includes CRMs and lead generation tools.
No training and educational opportunities
Training materials and education courses are an integral part of being a real estate agent or Realtor. Agents need to keep a close eye on market information and statistics in the local and tri-state area. Additionally, they can help you prepare for license renewal exams.
No room for growth
It may be time to leave if your current brokerage doesn’t have growth opportunities. This includes receiving support for expanding your business, mentorship, and building relationships with other industry professionals.
What you need to know before switching brokerages
There is some essential information one should know before the account transfer process.
How to officially leave
Have you found a better opportunity? Better commissions? A superior team? More freedom? Are you stuck in a rut? Or Been there too long?
With many brokerage options, you have to ensure that they match your goals.
Discuss with your current broker
It is essential to discuss this with your current broker to understand the process of transferring listings.
Listings that are currently on the market might not be able to be taken with you. Your broker may reassign these listings if the seller agrees to be represented by a new broker. Additionally, brokerages sometimes allow you to take listings at a price comparable to a referral fee.
Existing listings and transactions
If you can, work on the existing listings or deals prior to leaving. The best time to transition out is when you don’t have any current business.
Purge client data
While working with a brokerage, most real estate agents and Realtors have their own client data. If you’ve been using a CRM or other lead generation tool, download and remove client data. This downloaded information can be easily uploaded at your new workplace.
“Legally remove yourself from the brokerage”
You must notify the state that you’re switching. Forms can usually be found on a state’s department of real estate site. Contract clauses may exist in the agreement that you originally signed.
Transferring Your Brokerage Account
ACAT or in-kind transfer
This type of transfer allows you to transfer investments between brokers. It keeps your portfolio intact, so you don’t have to liquidate your portfolio.
When an account undergoes an in-kind or ACAT transfer, it transfers all of your shares, history, and cost basis to the new broker.
Many brokers accept in-kind or ACAT transfers. This makes it easy to switch accounts and you can avoid the tax consequences of selling off investments.
Cash transfer
This is a basic transfer, and it isn’t difficult. You sell all of your securities and then move the cash to the new brokerage.
Transferring brokerage accounts
The new broker will need information relating to the account number and type. This can be found on your most recent statement from the account.
Open an account
Most accounts at most brokers can be opened online. The account that is opened should match the account you’re transferring from. The transfer is completed in three to six business days.
Initiate the funding process
Most accounts can be transferred through an Automated Customer Account Transfer. You’ll go through a step-by-step process that includes filling out a transfer or ACAT form.
Review
The new broker will review the assets to determine if they can be transferred in kind. Additionally, it will speak to your old broker.
Brokerage transfer fees
You may have to deal with a $50 to $100 fee from your old broker. Although a momentary loss, if you are able to reduce trading commissions, then it is worth it.
Keep records
Statements from old accounts provide a history of IRA contributions. If you have a taxable account, statements will detail the original value of investments. This is important for tax time as you will need it to report a capital gain or loss.
You can reference these to ensure that assets are transferred completely and to help avoid delays.
Tax implications
Letting your new broker handle the account move has tax implications.
Avoid liquidating and cash transfer with the new broker because it could have tax implications. Selling securities that have been owned for one year or less may result in short-term capital gains tax. This is at a higher rate than the tax rate for securities owned for more than a year.
Other real estate checklists
Goal Setting
What are you trying to accomplish in the industry? Creating tangible goals, KPIs, and how much money you want to make is important so you can track, monitor, and analyze. You also have to create a plan and timeline so you can maximize your time and effort to ensure that your goals are met.
You have three different types—minimum, reach, and far-reach—to ensure that your needs are being met and the sky is within reach. Dream big—nothing can stop a determined mindset.
Become a member of an organization
Joining the right organizations and associations will help you gain more opportunities to network and boost your reputation.
Research and consider joining local or tri-state real estate associations. They are great for networking and can often bring in client referrals for you.
One of the first associations that any real estate agent should become a member of is NAR or the National Association of REALTORS®.
A REALTOR® is a member of the NAR. It is synonymous with an educated and ethical real estate agent. A membership displays that you hold yourself to a higher code of conduct.
Networking
Build relationships and network with not only industry professionals, real estate agents, and brokers, but with as many people as possible. With connections, come referrals!
- Networking ideas
- Local and tri-state business groups
- Meetup.org groups
- Facebook groups
Additionally, a large portion of new clients will come in the form of referrals from former ones. Your relationship with clients doesn’t end after a sale. Keep in touch with former colleagues throughout the year!
Getting mentors
This is one of the first things that you do after obtaining your real estate license and is critical for your career.
Aside from the office’s top-performing agents, you can search Facebook private groups, Reddit, Quora, forums, real estate, and business websites, and reach out to professors. If you don’t know any top-performing agents, ask your broker for recommendations.
Learn from more successful agents. From practical, procedural, and operational knowledge, you’ll develop the know-how to market, find and qualify new leads. They will also help you become more efficient and productive by showing you how they became successful.
State Realtors’ Association Conventions
These conventions have an incredible amount of free, current information and best practices for the industry. Many times, you can fulfill educational requirements here.
Not only will you be able to gain more exposure and network, but you might meet people who change how you view business.
Take the GRI Course
After your state-mandated real estate courses, it’s time to get your GRI Designation.
The GRI course (Graduate, Realtor Institute) provides actual, real-life, and applicable knowledge and is broken into three four-day courses and spans over 12 total days. You will learn the Code of Ethics, contracts, good business practices, and many other quintessential things to make you a great agent.
Lead Generation
Working for yourself means that you have to hustle and get your name out there. Business cards, suits, and social media profiles–the way that you present yourself–will be crucial to making and sustaining meaningful relationships with clients and industry professionals.
With various tools, you will save a great deal of time and money while making your daily operations more efficient. Real estate CRMs give you centrally organized databases for storing, filing, and tracking contacts for outreach, follow-ups, and reminders.
Technology:
- Document creation and management
- eSignature
- Email Marketing
Strategies include:
- Personal website
- Social Media
- Videos
- Broker provided
- Referral leads from agents or other platforms
- Platforms such as Zillow, Realtor, and others
Develop a personal brand.
What property type is your niche? What is your target market? Can you connect with a certain demographic? Create a logo or use a professional email account.
Subscribe to Inman.
Subscribing to Inman will keep you up to date with industry trends and important real estate news. It has robust resources and articles for agents and brokerages, including the latest technologies that can generate leads for many years to come.
Business Directories
List yourself and contact information as a real estate professional in online business directories to boost your SEO and generate traffic and leads.
Conclusion
You may wish to move to a new brokerage for a variety of reasons, such as exorbitant fees, subpar customer care, or a difficult-to-use website. Whatever the cause, you have the option of transferring your account in cash or in-kind.
Working on an in-kind transition with the new brokerage shouldn’t be too challenging. Just make sure you are well-informed and equipped before making the transfer.
Fortunately, when you start the procedure, your new brokerage will handle the majority of the labor-intensive tasks. And when they do, your upgraded account will be available for use.