Everyone joins the real estate workforce for a different reason. Some to flip houses, others to represent buyers, and so forth. And most are happy with their broker of choice, but for others, the itch to become a broker becomes so great that it cannot be ignored.
But how do you know when it’s time to become a broker? Maybe it’s time for a new broker because you’re unhappy, but it’s also possible that you have the skills and drive to lead your own company.
To find out, we asked three brokers with thriving businesses:
Jennifer Archambeault is the Broker/Owner of Urban Provision, REALTORS®, a growing Texas brokerage.
We asked her how to know when it’s time to create your own brokerage:
It is time to create your own brokerage when the limitations of your current brokerage restrict your personal or professional growth, hinders your ability to serve your clientele at the highest level or you are no longer able to see the value your current broker brings to the table.
Regardless of the reason, it is important to be mindful of your competency and ability to handle the responsibilities involved with running a brokerage and/or managing or mentoring agents.
Is there a tipping point?
There are often many tipping points causing an agent/broker to dream about having their own brokerage, but they often only clue in on one when they are parting ways. A lack of respect or dissatisfaction within your current company, the inability to come to terms on differences with management, not seeing eye to eye on the company’s mission or vision, and not being able to serve clients to the desired standard often top the list of tipping points if the agent leaves disgruntled.
However, there are times it is purely a natural transition having nothing to do with any reason mentioned above and solely taking your career and income to the next level.
Is it better to do so because of a gap in the market or because someone’s independent streak is unavoidable?
Personally, I think it is the latter more than the former. Gaps in the market will change over time but often the desire to be independent doesn’t ebb and flow as easily. If someone’s independent streak is unavoidable they often exude qualities that allow extreme focus to continuously keep their eyes on a prize.
There are benefits of having your own brokerage, but there are also limitations as well. Some people’s independence can be a hindrance to their business especially when they want to start their own brokerage because they simply do not like or cannot continually follow the rules.
I believe it is better to part ways to build your own brokerage or brand because it satisfies a personal or professional growth need rather than leaving your previous company disgruntled. The latter generally allows for a flawed mindset.
What do you wish you had known before starting a brokerage?
Do not always focus on Plan A because often you’ll end up with the most perfect fit with Plan D.
Being nimble is a must-have quality for anyone in the real estate industry, but owning a brokerage often requires stretching far beyond being nimble and reaching for superhero status. Initially, I believed every agent could be molded into a specific model or a way of doing business but quickly realized that there is a not a one size fits all brokerage regardless of what someone with decades of experience said so.
The perception of a brokerage with a large number of agents on the surface implies success. However, the old saying quality over quantity rings very true in a brokerage setting. Stop worrying about what others are doing – be different because that’s how you get noticed. Do what you do well and what works with your clients, for your personality or in your marketplace.
Tyler Forte, Co-Founder & CEO of Felix Homes saw a need to marry technology and real estate.
Here is his take on starting a brokerage:
Prior to starting Felix, I was a venture capital investor and I can tell you that any successful business, whether or not it’s a brokerage, is started because the status quo does not solve the market’s distinct needs.
Speaking specifically to why we started Felix, home sellers are facing a number of challenges that the traditional brokerage model does not address. When I sold my home last year, I saw firsthand how the home selling process is broken. I knew that starting a disruptive real estate brokerage was what I needed to do in order to make the experience of selling a home better.
The challenges homeowners currently face include hiring an agent who does not have their best interest in mind, to the uncertainty of not knowing if their home will be sold and for what price. At Felix, we are looking to provide consumers with the best home-selling experience period.
As far as the challenges we faced when starting a new brokerage, there are many. For one, the real estate industry is slow to adopt new innovative models. This is because current incumbents have built moats around the data and distribution of homes all at the consumer’s expense. In addition, because real estate is governed on a state-by-state basis, educating ourselves on the laws and regulations of each state was a challenge.
Jeff Brown, Owner of BawldGuy Investing has been a broker for decades and is never ever EVER shy about telling it like it is.
How do you know when it’s time to create your own brokerage?
I’ve always contended Dad was right, as you always thought most folks didn’t know when to create their own firm. Over the years I’ve spoken with countless brokerage owners about this very question.
Roughly a third of ‘em actually thought they knew the right time. Me? I did it WAY to soon, though in my defense, I had my dad’s infinite brokerage experience IN the office daily to back my rookie play, stop mistakes BEFORE I made ‘em, and generally mentor the crud outa me.
Most brokers told me they knew when decisions made by their broker bosses just were not what they would’ve done. They usually came a tipping point, where the decision made itself. But again, that was just a third of those with whom I talked. The rest just did what I did, rush in willy-nilly. The huge advantage I had was a decades experienced brokerage owner mentoring me daily, in real-time, and who, you know, actually gave a damn about me.
So what is that tipping point?
The most often heard tipping point was the feeling of being constrained by their boss’s operating policies. For example, a gigantic tipping point was a friend of mine who wanted to run his own office using the Broker-Centric model, not the Agent-Centric model run by the broker for whom he worked.
Is it better to do so because of a gap in the market or because someone’s independent streak is unavoidable?
The latter is merely personality. Sometimes it works to break away, and sometimes it’s been catastrophic. Being independent has nothing whatsoever to do with knowing what you’re doing as the person in charge.
The whole ‘gap in the market’ thing has always puzzled me as a reason to open a brokerage. The exception clearly would be that the policies of operation under which you’d run your own office would substantially improve your chances of taking advantage of whatever market gap you perceived. I find that to be uncommon, at least in my experience.
What do you wish you had known before starting a brokerage?
Without even a hint of maybe having a doubt, I wish I’d understood the good news/bad news joke that says: “Well, Jeff, the good news is you’re now the Go-To Guy. The bad news? See the good news.” 🙂
The difference between signing the backs of checks and the front of those checks cannot be overstated. Every single buck stops at your desk, period, end of sentence, over ’n out. Some folks find that to be too daunting.
This story was first published in May 2018.
Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.
