As a brand real estate new agent, you never join a brokerage with the intention of leaving. After all, you did choose the broker willing to offer the highest split, the best new agent training, or mentorship alongside a high volume sales agent in your office. But what happens when you want to change brokerage firms later on?
My experience with changing real estate brokerage firms has been a learning process. I made the switch with listings under contract, a loss of $12,000. But I made the switch learning “Win-Win or No Deal.” If my broker isn’t supporting my listings and its benefits, it’s not worth it.
I’ve been in the real estate world for 20 years, and during my tenure, I’ve made plenty of mistakes. One of the worst was choosing the wrong brokerage during my first year, so I eventually had to change firms to keep my career moving forward. Continue reading to learn about my experience changing real estate brokerage firms.
The Early Days of My Career
I got into real estate as a second career at the age of 33, and boy, was I excited to get my new career off the ground. I already had a potential client ready and willing to work with me as soon as I was granted access to the MLS.
As soon as I finished the pre-licensing course, passed the real estate exam, and got my license in-hand, I did what any new agent would do—I joined the brokerage firm that sponsored the real estate school I attended. It was the easiest option, and it felt right at the time.
Looking back, maybe I was wrong to assume that affiliating with one of the top brokerages in the area would give me a leg up in my first year as a new agent. But it wasn’t long before I realized I had made a terrible mistake.
The negatives began greatly outweighing the positives.
The first sign that things were amiss with the company happened within my first two weeks. All new agents had to attend mandatory new agent training, with the caveat that we weren’t allowed to sell listings or take on new clients during the program. So I reluctantly submitted the referral for the hot lead I was so excited to work with, a lead that never even got a callback.
At the time, my broker wasn’t just uninterested in helping me catapult my career but was also competing against me for the same clients as I was.
I had to attend weekly hour-long meetings in the office that did nothing more than eat up my lead generation time with the same topics of conversation, week in and week out.
My 80/20 commission split by the end of year one suddenly dropped back down to 60/40 at the beginning of year two, meaning I would have to work my way back up.
Training was hardly offered. The company was skimming an additional 20% off my commission checks. I wasn’t allowed to send mailers to any of the “protected” farming areas of agents who had been with the company for years. And the company name was more important than the individual agent.
I was done, and I wanted out.
The Fine Print
They don’t teach you in real estate school how to make a clean break from the brokerage firm that’s keeping you from your true potential. So when I finally had enough and wanted to leave, I did what any real estate agent does best—I scoured through the legal documents (my contract with my broker) and analyzed the fine print.
What I found was surprising yet not unexpected. As it turned out, I owed my broker what those in the real estate industry call “blood money.” That meant my broker was entitled to a much greater share of my commission on outstanding deals that I had under contract.
I was on an 80/20 split at the time and consistently selling multiple listings each month, but leaving the brokerage before the deal closed meant I was down to a 50/50 split and that I owed my broker an additional $500 for each property transition fee.
It felt as if I had a pair of handcuffs around both of my wrists. I had three options, and none of them were ideal in any sense. They were:
- Staying with the brokerage firm despite the dissatisfaction I was going through (which wasn’t an option in my book)
- Waiting out each sale that was under contract, while also not taking on any new listings so I could get my full commission and make a clean break (which would hold my career back an extra few months) This can be extremely important if you are working with properties and luxury clients in the higher price ranges.
- Bite the bullet, cut my losses, run fast, and don’t look back
So I did what was best for my career in the long run, a decision that also cost me $12,000 in commission. I left the brokerage right then and there, took the 30% loss in commission on my outstanding deals, and paid the $500 property transition fees on each listing under contract.
But despite what I ended up losing upon leaving my first brokerage firm, the only regret was not making this choice a year sooner. And fortunately, it only took me six months with my new brokerage to make back what I lost in the most expensive decision of my new career.
I don’t regret it in the least!
What I Learned
Most real estate brokerages are good in their own right, but the first brokerage firm I joined couldn’t have been a worse match for me. And now, two decades into my real estate career, I’ve come away with a world of knowledge that has altered my real estate career for the better.
So what exactly did I learn in the time since?
The most important thing I took away from my switch was “Win-Win or No Deal.”
This quote is based around the idea that neither you nor your broker (or company) can succeed without a positive partnership between the two of you. You should never join a brokerage or real estate company that doesn’t value the role agents play in its success. Remember, agents are the lifeline of an office, and also sole earners of the commission checks your broker cashes.
Any brokerage that puts a firm limit on your listings, commission splits, and ability to run your business as you please is only hindering your career.
I also learned that this relationship should never be punitive.
No agent should feel they have to stick with a brokerage because they “owe” them “blood money” for leaving the brokerage while deals are under contract. That’s especially the case when you’ve made attempts to negotiate a new and fair commission split that was never even considered for a single second. You should never feel guilted into staying.
It’s always better to feel that possibility and growth are viable options rather than settling for a relationship based on fear. And some brokerages offer all the support agents need to succeed—trust me. I found one!
Keller Williams is always a good choice for new agents and a company I wish I affiliated with earlier. New agents at KW attend Ignite, a program that will give you the skills and knowledge you need to catapult your career from the get-go. Take a look at this brief introduction video:
The one takeaway here is that you never have to settle for less than you deserve.
If you think you’re being lowballed by your broker regarding commission and feel your real estate company is hindering your success, you’re not stuck!
Take out your signed contract, read every single word, and make a decision.
You might have to lose your current listings and a fraction of your commissions, but your future real estate career may just be on the line if you don’t.