Choosing to start your own real estate brokerage is a big decision. For a lot of real estate professionals, the transition from being an agent to being a broker marks an important step in their career. As a broker, you often have more control and freedom over your business approach and financial future — but it isn’t always easy to get your brokerage off the ground!
Just like agents need to find the best real estate company to work for, brokers should spend time researching which real estate company is the best to franchise. There are pros and cons to opening a franchise for each major real estate company, as well as to going completely independent. To learn more and see which option is best for you, make sure to read below:
Pros To Being an Independent Broker
By far, the biggest benefit to starting a completely independent real estate brokerage is the freedom that it allows you. When you begin your own business, rather than opening a franchise of a larger company, you have total creative control over your business plan, branding, and corporate culture. Rather than having to constrain yourself to limitations set by the central office, you are able to run your brokerage in a way that is 100% you.
This means that you can be completely in control of making sure your real estate company has the best training options possible, be innovative and adaptive with your branding and advertising, and create a financial compensation structure that is best for you and your agents!
Many new brokers are also attracted to the independent option because it often means more money for them. When you open a franchise, a cut of each deal will go to the central broker, as well as any ongoing franchising fees that you have to pay. So, even if you manage to find the real estate company with the best commission splits, you will still be taking home a smaller percentage of each deal than you would as an independent broker.
This doesn’t mean that being independent is all positives, of course…
The Cons to Being an Independent Broker
If going independent gives you more up-front freedom, starting a franchise affords you far more pre-placed structure. As an independent brokerage, you might have to make a lot of tough decisions that are already taken care of for franchisees. This includes things like:
- Creating a concrete business plan
- Establishing coherent branding and growing your brand awareness
- Setting up a full system of marketing, both digital and physical
whiWhen you open up a franchise of an established brokerage, you pay for the right to use their name and branding for your own business — and just seeing that familiar name can have a calming effect on real estate clients!
Essentially, going independent requires a lot of hard work and hard decisions up front; but in return, you have more creative and financial control over your real estate business in the long run. So, which one is the better choice?
Like a lot of things in real estate, there is no cut-and-dry answer. Your decision on whether to go independent or open a franchise will depend largely on the details of your business and goals. With that said, there is another decision to make if you choose to open a franchise: which big box brokerage is right for you?
To help you make this choice, we decided to break down the pros and cons of some of the most popular and recognizable real estate companies, so you can be as informed as possible!
The Pros and Cons of RE/MAX
With their agent-friendly commission model, RE/MAX has quickly grown from a single office in Denver to one of the largest real estate brokerage firms in the world. They are almost always brought up in conversations about real estate commission split comparisons — but are they as favorable for franchising brokers? Here are some of the pros and cons to franchising with RE/MAX:
- Instantly recognizable branding
- Pre-packaged training for agents
- Less time spent actively recruiting
- Potential for very high franchising costs
- Lower splits for the broker
- Lack of freedom in marketing and recruiting
The Pros and Cons of Keller Williams
Keller Williams is the nation’s top-selling franchise and has the most number of agents of any real estate company in the world. But you might be asking yourself — does that success come at the expense of franchisees?
- Flat fee for ad royalty, rather than a percentage
- High agent count and established recruiting
- Opportunities for rapid growth
- High Franchise fee
- The central office takes a large part of each split
- Relatively little training for franchise brokers
The Pros and Cons of Century 21
Century 21 is one of the most recognizable names in real estate sales, with franchises in 80 different countries. Here are some of the pros and cons of opening your own Century 21 franchise:
- Well-established brand awareness
- 50/50 splits are favorable for the broker
- Simple franchising application process
- Net Worth Requirement of $100,000
- High ad royalty fee for broker
- High start-up costs
The Pros and Cons of Coldwell Banker
As the oldest real estate company on this list — and one of the oldest real estate companies still around — Coldwell Banker was originally founded in 1906. Does that storied history translate to success for brokers who run a Coldwell Banker franchise?
- Long-established name in real estate
- Relatively lower Royalty Fee
- Many franchise opportunities
- Expensive initial investment costs
- High net worth and liquid cash requirements
- Very high ad royalty fee
There is Another Way
If you are a real estate agent who is considering opening your own brokerage in order to make more money and have more freedom, then you are in luck! Rather than dealing with the headaches and start-up costs of opening your own brokerage, you can hypercharge your real estate success by working with a 100% Commission Real Estate brokerage!
When you join a 100% Commission Real Estate company like beREAL, you get access to enviable training, marketing materials, and complete creative control over your home selling business — all without having to pay costly commission splits!
This means that beREAL is the best real estate company for part-time agents and full time home sellers alike. Agents who work with beREAL have the freedom to customize their branding and run their business without restrictive guidelines from the brokerage. On top of this, beREAL partners with HyperFast Agent to provide top-tier training through the HyperFast Academy, so every beREAL agent can have the support and guidance that they need to sell more homes, help more families, and make more money!
If you want to learn more about beREAL or how you can get started taking home 100% of your commissions, then we want to speak with you! Just click here to schedule a time to speak with us about how you can get involved!