To better prepare you here is an outline of the differences you will typically see between agencies. On the surface there is no “right” choice. There are pros and cons with each choice. Let’s see which choice may be best for you.

1. Large dominate players

These companies will have city wide coverage with a large number of multiple offices or several large mega offices that dominate their market area.   The real estate industry has been consolidating with the dominate players buying up smaller companies and gaining a larger market share. Consequently there will only be a few of these companies in each market but they will employ the majority of the agents. Some of these will be national brands or Franchises, like Century 21, Coldwell Banker, Re/Max and in most markets there will also be dominate local companies who have been around for quite some time.

Pros

• Have professional trainers and national training programs.

• Likely to have alternative training tools that are expensive to develop but make sense since the costs are spread out over a very large number of agents.

• A great deal of money is invested on marketing and promotional tools for agents to implement.  

• Strong branding and large market share as a result of their dominance and reinforced by large advertising budgets to promote the brand. They will have a high level of name recognition in their market.

• Their size creates a perception of success. By associating with them agents feel that will create a perception that they too are successful.

• Their size means they will have management structure. Some agents just feel more comfortable in this type of work environment.

Cons

• Bigger is not always better.

• Not an instant recipe for success. The company may be successful but it doesn’t mean that you will be.   

• High rate of turnover. The machine they have built needs large numbers of agents to make it work.

• A lot of internal competition. There may be a feeling of strength when working in an office with 70 or more agents but remember you are also competing with all of them. .

• You are more likely to viewed as part of the machine with less focus on you as an individual. This will depend a lot on the manager you end up with and can vary from office to office.

• Some agents are turned off by the size and layers of management.

 2. Second tier companies.

You will recognize these because individually they don’t dominate the region but collectively they will have the majority of the business. They will have strong local niches with either one large office or they may have several offices in a particular area of town. They will not have a city wide presence.  

Pros

• The broker or owner will be more directly involved.  It will have fewer layers of management, consequently the same person that hired you may also be involved in training and in managing your career.   

• More likely to receive personal attention with a hands on approach.

• If part of a national franchise they will have that training that is produced on a national level.

• Identity of the company is tied to the broker/owner.

• More known in a particular niche or geographic area. They aren’t always trying to be in all the markets.

• More selective about which markets to compete in.

• Depending on circumstances they may have lower turnover of agents. If true they will also hire fewer agents.

Cons

• Some of these are new concepts and not proven business models.

• Doesn’t have the same perception of success as the large dominate brokers.

• Lower brand awareness by the public. Many of these companies are franchises that are well known but the local franchisee won’t have the same recognition. 

• Not able to make the same investments in advertising as the larger tier companies.

• If part of national franchise they may have lots of well done training tools but the owner may not have a good training program. They may even be relying on the tools as a crutch and not developing a good local training program.

• Some have alternative compensation models that may not be appropriate for you. You may be keeping more of your commission but you may have more expenses as well.

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3. Niche players.

There are a large variety of agencies that will be niche players. Some are new and emerging on the market like discount, fee for service, internet based or buyer only brokerages. Typically these niche players will have one office and are very focused on one area or market. Depending on where you live it could be an urban area, campus, farm market, a particular suburb or even a large neighborhood. They could also be oriented to a particular demographic such as gay, ethnic or religion.

Pros

• The client base may be oriented to markets determined by ethnicity, religion, social and other factors. If you have one of these traits it can make it easier to break into the market.

• Focused on very micro but profitable markets.

• Smaller business environment, often family run. May fit in with your style.

• Often more relaxed and not as structured as other brokerages.

• Many long term agents with little turn over.

• They usually have a strong hold on their niche market, making it hard for other brokerages to gain a foothold.

• There may be options besides the residential market. This is where you see commercial brokerages.

Cons

• Because they have a strong hold on the market it may be very difficult for you as a new agent to also gain any market share.

• Old boy networks and attitudes are common. .

• Little to no formal training for new agents, since few are hired.

• More likely to be on your own with a sink or swim approach.

• It may be a must to “fit” in with their market. If they are marketing to gays you need to be gay. If they are marketing to Hispanics, you better speak Spanish.

The more that you fit in and are part of the market they are working in the better your chances. Since they have high barriers to entry few agents enter the market, which means you will have little formal training. Make sure you are able to work with that.

When thinking about where to work start with a simple analysis of your options.

·        Look at the pros and cons that I’ve outlined for each brokerage type. Now make remarks about how those impact you and fit in with your style and needs.  

·        Start ranking what is most important to you.

·        Start listing the names of the companies that match what you are looking for. If you are looking for that niche style of company this may take a little research and time.

·        Begin a casual investigation of the companies that interest you the most. Look at their web sites and talk to agents who work there.

·        As you learn more about each company update your notes on the pros and cons of each choice.

This will better prepare you to make an informed decision about where to work. And it puts you in control of the process. It’s important that you make a decision for the right reasons.  This part isn’t too complicated. You can keep a formal list or you may even just be doing it in your head.