Advice for Choosing a Real Estate Broker

Advice on choosing your first real estate brokerage best real estate company to work for in Los Angeles best real estate office for new agents

Too many new real estate agents think a real estate broker choice is primarily based on commission splits. It’s not all about the split, as the final in-your-pocket income has to do with many variable services provided by brokers.

First, remember that you’re an independent contractor and own your own business. You may have to hang your shingle with a broker, but it’s your business and your success is up to you.

However, the brokerage you choose can make a major difference in your lifestyle.

It’s not all about the split!

New agents shouldn’t focus too much on the commission split aspect when choosing a real estate broker. There are so many services that are available from brokers and they may be things that you really need to get your start in the business. The end income result can be more in your pocket with a lower split depending on leads provided and service fees.

In today’s Internet dominated world, you’re in a bit of a dilemma. There’s something to be said for choosing a broker who is going to give you good exposure or a segment on their brokerage website. But, now the longer you stay, if it’s working for you, the more dependent you become on it. Even if you are offered a site, you really should be building your own that you can take with you as well.

Agents Switch Brokerages every 2-3 years

Real Estate Agents tends to be very transient and bounce around from brokerage to brokerage every 2-3 years. Always remember that it’s your business and that ultimately wherever you go, you’ll be bringing along the same work ethic and good or bad habits with you. Switching brokerages isn’t always the solution.

Company Culture

Company culture is huge. Are people genuinely happy there? Our profession can be stressful at times and there are plenty of variables that can unhinge a transaction. When you get punched in the face with bad news, will going to the office make it better or worse? My motto has been and will always be to “Leave your problems at the door when you walk in – they’ll be waiting for you when you leave.” In other words, I want our office to be a happy place. That doesn’t mean we don’t tackle challenges as they arise, it just means that we aren’t shackled by them.
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Truth is, if I don’t hear enough laughter in the office I know something is wrong. I want to hear laughter. I want to see smiles. I will personally walk though the office and greet each person there. Now mind you, I can do this now with a 150+ organization.  That could change as we grow, but for now I’ll continue this practice.

A Broker can temporarily buy loyalty from agents by offering high commission splits, but ultimately, if the environment isn’t one that people want to be a part of, that loyalty can be bought by someone else. I don’t believe in buying loyalty.  I’ve seen organizations fall when this was the glue that bound them together.

Determine your expenses so you’ll know what you need for income.

Before you can accurately compare the service offerings and commission splits of two real estate brokerages, you first should know your income needs based on personal expenses and projected new real estate agent business expenses.

Using the link to the free spreadsheet, get an idea of what you’ll need to survive and move your business forward. Then you have the knowledge to make better brokerage comparisons.

Personal & Business Expense Sheet

Is the broker going to give you some print ad space in regular large brokerage newspaper and homes magazine ads. They may be contracted for large ads and you can get some of that space, especially valuable for your listings when you get some. Print advertising is expensive.

Compare Broker Lead Generation & Distribution

Using the income funnel approach and the spreadsheet in the link, you can ask real estate brokers how you’ll receive leads and prospects. What are their projections for floor time leads, phone leads on up-time, web site leads, etc? Use these estimates to fill in your funnel sheet and see what income will come out the bottom.

As you’ll see, a 50/50 split in one place might be better than a 60/40 split in another based on the prospect leads you’ll be getting.

Real Estate Agent Income Funnel

Office & Incidental Expenses

Even some of the traditional real estate brokerages are now beginning to charge for things like copies,parking, phone services, corporate email, CRM’s, and websites. That’s because they’re having a harder time with profitability in today’s market as the cost of rent for office space increases and as agents (warranted or unwarranted) demand higher splits. Ask for a list of the office expenses upfront. Getting a higher commission split and being charged monthly fees for all those services eventually balances itself out and you may just opt out of the services they offer in lieu of a lower split.

You can save money by being a remote real estate agent who works from home, but like most people, it’s easy to get distracted at home, and personally I don’t think I am as effective when I work from the home office versus when I’m in my business office. I can get a good workout at home. I can get a better workout in the gym.

Make sure you factor in what the Broker is going to charge you for those items as well as Errors and Omissions Insurance and any other per-transaction charges.

Our firm doesn’t charge any service fees. We do have an Errors and Ommissions fee of 1% of the total commission check. So if the commission check is $10,000, our E&O fee would be $100. We also have a Transaction Fee of $350.00 that is paid for by the client and/or the agent depending how the agent negotiated it.  That’s it. Nothing else.

Mentoring and Training

Most new agents definitely need training in contracts, negotiating and procedures that are predominant in their market area. However, when it comes to sales/marketing training, or motivational things, your needs can be quite different than those of the next person.

Generally, mentoring comes with a cost. It could be a temporary lower split or even a per-transaction charge or percentage. Does the brokerage you are considering have a mentoring program for you as a new agent and ultimately can they provide veteran agents with a steady team of newer agents to mentor ala the Mega Agent team? There are some agents that prefer to work solo, and there are some agents who understand the power of leverage and are huge proponents of the “Team” concept in real estate.

My brokerage has Veteran Agents who always make themselves available for agents who need mentorship subject to their team concept. In addition we have a real estate school that can provide a steady stream of newly licensed agents to Veteran Agents looking to licensed assistants to buyers agents to their “Mega Team.”

If you are currently looking for a Brokerage to hang your real estate license under, here is my list of Top 10 Real Estate Brokerages in Los Angeles:


No. 1 - REH Real Estate


No. 2 - Lowell & Vanderbilt


No. 3 - Coldwell Banker Residential


No. 4 - Hilton & Hyland


No. 5 - The Agency


No. 6 - Sothebys


No. 7 - Rodeo Realty


No. 8 - Partners Trust


No. 9 - John Aaroe Group


No. 10 - Douglas Elliman