stan cropped web“So, now that I have my broker’s licence, I’m going to make a ton of money. But should I go big or should I go small?”

Many times throughout my years in the business I’ve received calls from agents who have attained their broker licence.  The calls are usually about whether they should open up their own offices and whether or not to be an independent or buy into a brand.

The answer is somewhat complex. If they are thinking of going independent, I ask them, “What is going to be your market niche?”

If they’re going to be condo or new homes specialists, I usually endorse that approach because they have a vision of where they’re going. I also know of many small independents who have carved out a sizeable market share in the high-end homes market.

Regardless of those choices, the financial burden is the main stumbling block.  Rent, staffing, administration, business taxes and board memberships are to be considered before going into business as an independent.

They also have to decide on how large or small they’re going to be.



The independent broker will always be a part of this business. A small office can be successful as long as they keep the ever-increasing costs of operation in line with the production of their sales team.

What is the advantage of a new broker for buying into a brand?  For starters, the name recognition is a big benefit. It makes it easier to recruit.  However, with brands come fees and other charges related to buying into it.

When comparing relative start-up costs to those of a smaller office, it becomes a balance of economics.

The independent must decide if he’s going to be a selling broker and compete with his sales team.  If he chooses not to sell, he’s going to have to have deep pockets as it may be two to four months before he sees a dime out of the agents’ production.

It’s always a matter of the vision that the fledging broker has of his future. Normally it takes, on average, five years before a broker will see a return on his investments.

Now that agents are able to incorporate in some parts of the country, there lurks a danger. What happens if the agent’s corporation goes bankrupt?  What, if any, liability does the broker face?

The real answer of how to go into the brokerage business depends on how much steel the broker has in his willingness to tough it out in the bad times and how he can profit from his mistakes in the early years in the business.

It seems that more and more agents are willing to take the jump.  Be aware that there are no safety nets in either choice.

Whichever way you go, remember that your closings taper off in December and you have to weather the winter months.

The bottom line in either choice is to recruit, recruit and recruit and retain good people.  Training them is essential and training never stops.

Finally, whatever you do, make sure you have a good accountant.

Stan Albert, broker/manager, ABR, ASA at Re/Max Crossroads’ iRealty office in Toronto can be reached for consultation at [email protected]. Stan is now celebrating his 44th year as an active real estate professional.

2 COMMENTS

  1. Stan, (as it applies to Ontario)
    RECO has radically changed the way Sales Reps are allowed to operate, over the last 4 years and those changes have caused a lessened benefit to opening your own brokerage. It also caused a lessened benefit to belonging to any Franchise Brand where the Franchisor made business decisions that brought it new Franchisees but hurt the long term business of their their existing brand users.

    In many ways MLS associations have followed this pattern to a point where the REALTOR brand now legally means FSBO in a few provinces.

    Again everything goes back to VISION and LEADERSHIP, which ironically is what a BROKERAGE should really be all about.

  2. Hi Stan, what do you think of these teams who sell hundreds of homes per year just becoming a brokerage- so no real recruiting, keep it at the team size, just need to replace people once in awhile as they leave the team. I think these teams are basically operating as brokerages within brokerages- so why not actually be a small boutique brokerage?

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