5 Mistakes Real Estate Agents Must Avoid When Switching or Joining a Brokerage

5 Mistakes Real Estate Agents Must Avoid

Are you a real estate agent who’s exploring a brokerage to place your license? Maybe you’re currently with a brokerage and thinking of switching to another. If so, read this first! The road to a good agent-brokerage relationship is full of potential pitfalls.


1. Signing a Contract.

I’ve been in the real estate business for just under 18 years, and I stayed at the same brokerage for 17 of those years. I never signed a contract. I also never felt the need to switch. That brokerage kept my loyalty because they took care of me and gave me the tools that I needed to be successful. Until they didn’t anymore.

Naturally, an ICA (independent contractor agreement) contract for the purpose of integrity and the following of rules/procedures for state and agency makes sense. However, a contract with a time constraint does not.

Always think twice before signing when a time commitment is included.

Look at it this way – if you want to hire an independent contractor to do some work on your property (repairs or lawn maintenance, for example,) would you expect this person to sign a 3-5 year contract? Of course not. You’d hire him for one job, and if he does great work, you’d keep hiring him. You’d probably even refer him to others.

Last year, I met with a top-producing agent who was working at a big-brand brokerage. Her 5-year contract was up for renewal. She didn’t feel comfortable signing another contract and wanted to look around before making a decision. Her current brokerage told her she could continue without renewing her contract, but her split would increase 5% and she would lose a significant amount of her marketing perks.

This interaction made her feel trapped; she felt like the manager did not care about her. So, after exploring a few other companies, she switched. The brokerage she chose offered her a much better split and didn’t require a contract.

If a brokerage asks you to sign a contract, give it plenty of consideration. You can also ask an attorney to review the contract for you before signing.

Don’t fall for the manager who says “Oh don’t worry about it, if you’re not happy here, we’ll let you out.” I’ve met with agents who were told that but then when it came up, there was a lapse in memory or a new manager started and knew nothing about the prior conversation. 

And don’t forget – you can negotiate! Ask for the highest possible split. Suggest that you try them out for 6 months before signing a contract, and see what they say to that. 


2. Sign-on Bonuses 

Can you say “hostage?”

A sign-on bonus is how brokerages get you to agree to a contract in the first place! They offer you a flashy bonus, then lock you in to make sure they make their money back.

Although bonuses are typically only offered to seasoned higher producing agents, this is something you should beware of.

These bonuses may be tempting at first, but they come with serious commitments. And they can seriously inhibit your ability to grow.

Over the years, I’ve spoken with far too many agents who wanted to make a change but couldn’t. It would have cost them thousands (sometimes tens of thousands) of dollars to leave their current brokerage. So they stayed, missing out on greater earning and growth opportunities elsewhere. Don’t let it happen to you!

Often, these “bonuses” are no bonuses at all. They’re actually advertising advances or reductions in commission. Beware of misleading wordplay.

Look at the big picture. I just spoke with an agent who was offered a $12,000.00 to move his business yet he was signing an agreement for 3 years. After speaking he realized that only 2 additional transactions would have earned him 12k and he was not stuck. He moved to another company with better training and is focusing on growth and doing more business.

When it comes to signing bonuses, stay away. Unless you’re 100% confident you’ll be ok staying for 3-5 years, but remember the first date when you thought “this may be the one”. 


3. Great Training 

“Or not so great”.

In our technologically interconnected world, training resources abound. You can watch YouTube videos, you can get training from the National Association of Realtors, and so much more. (And many of these are good options.) In addition, brokerages commonly offer “great training.”

Don’t settle for anything less than the best; a classic conundrum of quantity/quality. Here are some helpful questions to ask when a brokerage boasts great training:

  • Does the brokerage have a training system? Claims of real estate mentorship mean nothing without an actual system in place to facilitate that mentorship.
  • Is the training consistent? One-and-done won’t cut it here. You want a long-game strategy with advice for each new phase of your growth.
  • Does a training calendar exist? A calendar is proof of consistency and intentionality.
  • Who runs point on the training – the broker, or fellow agents? The person training you should actually have the time to train you!

When I was a team leader at KW I met an agent who had just gotten his license, he chose to join another brokerage because they promised him training and mentorship. What he learned right away was the mentor did not have time for him and the training was sporadic at best.

He stayed with them for 2 years and did ok, I guess, he was able to pay his bills. But as he started looking outside his company, he found methods and strategies that his brokerage never taught him. Methods and strategies that in the last year tripled his business upon implementation.

You can only be trained to the level of your trainer. If you want to do 20 million dollars worth of business, and you’re looking at joining an organization in which the top producer-only does 10 million, that’s not the organization that will get you to your goal.

A good brokerage should act as your platform, not your ceiling.


4. Promising Leads 

Or perhaps “Promises of leads.”

Sure, many companies will promise you leads. But this promise begs a few pertinent questions: are you interested in real estate sales or rental leads? Are these qualified leads? Have you ever worked internet leads before?

Our team has worked Zillow leads for years, and it’s not always a surefire win. Typically, for every 100 internet leads, you’ll find 1, 2, or maybe 3 (yes, only 1 – 3) qualified leads. And conversion at that rate still requires insanely effective follow-up work.

A good friend of mine signed on with a big brokerage. As “promised,” she got leads almost every day; rental leads. Tons of rental leads and a few very low price point leads that other agents did not take.

She did get a few decent leads after a while but with a caveat. She paid for those leads. Most cases an extra 25-50% yes I said “extra”, on top of her normal split.

Another friend of mine Justin worked for a big brand and when he took a lead, he would earn approximately 34% after everything. Yes, that’s before taxes.

Before agreeing to take leads from a brokerage, run a checklist. The type, source, and average price-point of all leads should be taken into account. The more clarity you can get, the better!

Ultimately, you’re the one who pays. Fees for leads are prevalent in the industry, but if you looked at the numbers it would make much more sense and can be more profitable to just buy your own Zillow or Realtor.com leads.

Be cautious when weighing the risks versus the benefits of taking leads.


5. Not Exploring Your Options. 

“I love what I hear, let’s do this!” 

I’m a born salesperson so don’t get me wrong when I say “this is a mistake.” I love a good salesperson! 

From my almost 18 years experience, I’ve seen most people sign with the first person they meet, whether it’s someone they know, someone who was referred, a company they looked at online, or it could be the neighborhood Realtor.

Remember you are talking with a salesperson, and most times their job is to get you to sign. 

The reason I say, “don’t get me wrong” is because I also encourage people to sign with me on a 1st meeting, however, I suggest they meet with another Realtor before me so they can make a comparison, plus we offer a guarantee.

This goes back to my first point, the contract, they can get out if we’re not a good fit.

The problem is in a competitive, and changing industry many brokerages are looking for bodies, don’t offer a guarantee, or have the resources to focus on the customer’s experience. 

Again don’t settle for anything less than the best; and the only way you’re going to know if it’s the best is to compare brokerages and do your homework. 


Thanks for reading this article! I’d love to hear from you with feedback or answer any questions you may have.

David I Hill
eXp Realty 

Please feel free and email call me direct 

You can also book 15-minutes on my calendar by going to book.davidihill.me 

Inspiring Millions 

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