Needing advice on how to switch brokerages?
A broker, particularly your first managing broker, can be an excellent partner.
They can help you develop skills, build your book, and otherwise support you in your endeavors.
But sometimes it’s just time to move on.
Real estate is a “people-first” business. Even if you’re leaving, you probably don’t want to burn bridges.
Today, we’re going to take a look at how to switch brokerages — and how to know that you want to.
1. Time for a self-assessment: What are you looking for?
Before you take action to find a new real estate broker, consider what you want.
Are you moving away from something — a toxic work environment, a small commission split, or just a general lack of support?
Or are you moving toward something — better commissions, superior teams, more freedom?
Maybe it’s even both.
It’s important to think about what you want as a real estate agent. Sometimes agents switch brokerage firms because of “grass is greener” syndrome; it just feels like everyone is doing better. A little consideration could reveal that you don’t need to move at all.
By the same token, a little consideration could reveal that you should have moved away much sooner.
Make a list of what you want and make sure you’re getting it during your transition. If you aren’t, then you’re just going to end up unhappy. Talk to other professionals about what you want and whether it’s realistic. It’s possible that there’s more to consider than you might expect.
And think about whether you might be able to achieve some of those things at your current broker. You shouldn’t hesitate to move if you need to, but you might want to take the time to consider whether you really have to.
2. Start looking for your next brokerage.
Your next brokerage might not be for the rest of your life, but you probably want it to be more than a few months.
Look for a real estate brokerage that addresses all the issues you had with your prior broker. Be wary of going to a brokerage that shows red flags. If you think, in any way, that your new brokerage could be like your old brokerage, it could just be a waste of time.
Commission split, brokerage culture, support, reputation, niche; all of these matter. Take a look at the reviews. Talk to other agents. Find out what the pros and cons of the brokerage are.
You want a brokerage that aligns with your long-term goals. Whether you want to be a commercial salesperson or you want to help people find residential first-homes, you need a brokerage that represents you.
There’s no “right” answer. You can find a broker that offers limited support but high commission rates and that might be good for you because you’re a self-starter. You might be willing to forego high commission rates for better support because you’re just starting out.
There is no brokerage that is perfect. But there can be brokerages that just seem to fit where you are at the moment.
3. Tell your current and former clients that you intend to move.
Break out your digital rolodex.
It’s time to call all your current and former clients and let them know that you’re planning a big move.
They need to know before the account transfer takes place, so they know where to contact you.
Keep in mind, you may lose your current listings. You will still get your commission for sales that are in progress. But your current listings usually stay in the brokerage.
Still, you should tell your clients how they can follow you to your new broker. Once you’re at your new broker, you’ll want your book to settle in.
Keep in mind that even though your broker offers you support, you are still an independent agent. You don’t have a non-compete. Real estate is your business.
The contracts that you’ve already signed with clients likely tie them to the brokerage on a per-sale basis. But they can move wherever they wish to for their next transaction, whether it’s an investment in a rental home or their next dream home.
Most brokers today don’t provide leads to their real estate agents, though some still do. See our list of Top 5 Real Estate Lead Generation Companies in 2021.
4. Inform your broker that you’re going to move.
This is the hard part for many. A broker forms a very close relationship with their realtors. Even though you’re still essentially a sole proprietor, it can feel that you’re severing a personal relationship rather than a business one.
Make sure your old broker understands it isn’t personal. While it may take them some time to see it, they understand that sometimes it’s just time for a realtor or associate broker to make a move.
While they may be upset about your desire to move to a new brokerage, there’s nothing they can do to hold you back. They have to let you go.
Still, you don’t want to burn bridges. Even if you’ve had problems with your current broker, you should still be polite, albeit clear.
The real estate industry is fairly small. You don’t want to find yourself working with them again later at a disadvantage. And you especially don’t want to start developing a reputation for being difficult to work with.
5. (Optional) Consider their counter offer.
Most brokers are going to counter with another offer at this point.
If you’re a good realtor, they’re going to want to keep you. They might offer you more commission, more support — whatever you want.
But you should be wary of taking this offer.
First, it’s hard to guarantee an offer. While you can get a commission rate set in stone, they may not send you as many leads. While you can get leads forwarded to you, they may not be valuable ones.
An issue is that the “trust” has already been somewhat broken. Your broker now knows that you’re looking to leave. They may seek to punish you for it, even subconsciously, because they resent it.
And they may seek to protect themselves by leaning less heavily on you, lest you leave.
Once you’ve pulled the pin on an exit, you should probably continue to exit. Very little is usually gained by staying at your current firm.
There’s one exception. If your broker has previously been extremely trustworthy and if you feel they genuinely want to negotiate with you to keep you on, then you may want to reconsider.
You aren’t starting from scratch with a new broker, but you should do so when you have a lull in your listings. Consider giving your listing generation a boost afterward: How to Get Listings: 11 Creative Ways to Get More.
6. Discuss your current listings.
Ask your firm if they’re going to keep your listings.
For the most part, a brokerage is going to keep any listings that originated at it. It’s in your original paperwork.
But some brokerages will let you take your listings, for a fee. That fee is essentially a referral fee.
A brokerage may not want to take listings from you because you already know them well and are working on them. It’ll just be disruptive.
Consequently, they may be amenable to you taking them. After all, if they take a large enough referral fee, they’re still making the same amount they would have made when you were with the brokerage.
7. Take your license to your new brokerage.
Once your brokerage has been notified that you’re leaving, they will give you your license. Legally, they have to. There aren’t transfer fees. You own your own license. They just manage it.
You will then take your license to your new brokerage. After you’ve done that, you can begin settling in.
Onboarding your new brokerage should be no different from onboarding with your previous brokerage. They should be able to introduce you to the resources that they can provide for you. Then they will start to send you what leads they have promised.
It’s not uncommon for a realtor to go through a multitude of brokerages before settling on their “home.” And you may need different types of support throughout your career.
So, your new brokerage might not be your “forever broker.” But it should be the ideal solution for now.
Eventually, it may come time to start your own brokerage, too. Check out: How to Start a Real Estate Brokerage in 8 Steps.
8. Think about what a brokerage means to you.
You’re an agent. You’re your own business. You should be as independent as possible while still benefiting from the services that a brokerage provides.
If you found it difficult to switch brokers during this time, think about why. Did you start to rely on them too much? Did you find that your online presence was mostly tied to them? How clearly separated was your branding from theirs?
Especially with large chain brokerages, it’s very easy for a realtor to “disappear” into their brokerage’s own branding, identity, and culture. When this happens, it can become more difficult to remain agile — despite the fact that you’re doing all the work to bring in the leads.
By thinking this over, you can avoid a tumultuous exchange next time. You can remain free to develop your careers in the areas you want — and you can be continually on the lookout for new opportunities.
Is it time to switch brokerages?
It can be intimidating to switch brokerages. That’s especially true if it’s the first brokerage that you’ve been with during your career.
If you look up how to switch brokerage firms, you’ll get a lot of information about TD Ameritrade, Schwab, investors, trading, and more. You might be directed to close your trust account, brokerage account, or mutual fund.
Switching away from a real estate brokerage isn’t that different from switching away from a financial brokerage. You’re an asset. Your listings are assets. You bring money in.
If your managing brokerage isn’t giving you enough, it’s only natural to go after more. Similarly, retail investors and traders who aren’t making enough, or who don’t like their fees, may switch their broker.
As a licensee, you can switch your broker at any time. And it may be time for you to consider a shift now.
If your brokerage is no longer giving you the support that you need, it may be time to at least meet with other brokers.
Just remember: You shouldn’t tell your broker that you’re leaving before you’re actually leaving. And you should know what you want in a broker before you start your search.
How do you tell your brokerage you’re leaving?
Very carefully. You should notify your clients before you tell your broker that you’re leaving. You should also line up another brokerage before you quit. Once you’ve done your due diligence, you can have a meeting with your broker and discuss your options.
You can read my full post on how to tell your real estate broker you’re leaving here.
What happens to your listings when you switch brokerages?
Most listings will stay by the brokerage by default. But that doesn’t mean they have to. You can always ask your brokerage to turn over your listings. They will likely still take their fees but you’ll get what you were expecting from the account.
How long does it take to switch brokerages?
It shouldn’t take long to switch brokerages. Once you ask for your license, your brokerage is obligated to give it to you. You can then take your license to your new brokerage. It should take only a matter of days to switch to a brokerage. But you should know which broker you want to go to before you get started.
Would You Like To Partner With Me?
I’ve helped hundreds of real estate agents, team leaders, & brokers all over the country increase their sales, online presence, and create scalable systems. I would love the opportunity to work with you. Together, we can make this year your best yet!