By Kenneth Laroza

Brokerage interviews are usually 30-minute sales pitches to show why that brokerage is the best thing since sliced bread.

Those interviews are typically, for a lack of a better description, meant to sell you on their brokerage and company. You make money for them, so they want you playing for their team. Because of this, many brokerages are overwhelmingly positive, which is not a bad thing (this industry has plenty of negativity already) but they often avoid mentioning anything that could be perceived as a negative about them. They won’t tell you the bad stuff because they’re afraid you’ll think the bad stuff only happens at their brokerage.



If every brokerage says you’ll make $100,000 in your first year, but one brokerage’s manager tells you that you’d be lucky to hit $40,000, most people would probably think twice about joining that team. No one wants their dreams crushed, but sometimes dream crushing is exactly what you need.

So, allow me to do the crushing.

It’s hard and you may fail

Anyone who tells you “real estate is easy money” most likely has never done it. It looks awesome. One thing almost all salespeople are good at is looking successful, whether they actually are or not. It’s even worst now with social media. Unfortunately, real estate is not as easy money as a lot of people make it out to be. It requires an immense amount of hard work, patience and persistence. Sales representatives spent a lot of time doing a lot of work for often no money. There’s a lot of running around, researching, networking, following up, showing and offer submitting, all with people who could be ready to submit an offer one day and completely ghost on you another.

This business can defeat you if you’re not ready for it or have the support system needed to keep you moving forward.

The success rate in real estate can be pretty low and it’s possible that you may fail but knowing that it’s not a get-rich-quick scheme and that hard work is required means you’re better prepared than a lot of other would-be Realtors starting up.

You get what you pay for

Every brokerage has a fee. Charging agents to be a part of their brokerage is how real estate companies make money, whether it’s a monthly desk fee, a commission split, an annual fee or a combination of all three.

Just like in your business, the more you are able to charge, the more services, value and time you can provide. It’s incredibly difficult (if not impossible) to provide quality real estate services to your clients if you’re charging discount rates, and the same goes for brokerages.

The differences are like a Timex and a Rolex. Nothing wrong with a Timex. In fact, if all you need is something to tell time reliably, the Timex is a great watch and for a very affordable price, but it’s not a Rolex. No one goes into a Rolex dealer expecting to pay Timex prices, but for some reason agents think they can pay the lowest possible price and get the best possible service from a brokerage. If you expect your clients to not think the same of you, you should really consider how you think of your brokerage.

Be wary of brokerages that promise the moon for what seems like too good to be true prices because often that’s exactly what they are. Too good to be true.

You may be poor for a while

When you become a real estate agent, what you’re really doing is starting a real estate business, and if you’ve ever spoken to any business owner you’d know that in the beginning money is tight.

There’s a lot of upfront costs (though not as much as starting other businesses) and you haven’t made a dime. You may not make a dime for a few months, which can make this business incredibly scary.

You probably already know this, but no brokerage wants to be the one to tell you that if you don’t. They also don’t want to remind you of it, but much like the rest of the items on this list, it’s much better to be prepared and ready to handle it than to start questioning your life choices as your fridge empties. Don’t fret, though, success will come with the right guidance. Just make sure you have it! If you focus on the right things, giving service and value, business will follow. I’m a big believer in this. You just have to have a strong stomach for the valleys.

After you’ve completed every course and signed up for your brokerage, you may sit in your chair thinking, “Okay, now what?” That’s normal. Almost every agent has this moment at the beginning of their careers. No one mentions it, because every manager’s focus is trying to keep you from feeling this way. We establish training sessions, programs and schedules to help you avoid that feeling. But typically, it’s unavoidable. Don’t focus on it. It will pass.

Ultimately real estate is a tough industry and you may question your choices but, if you stick to it and focus, getting into this business can be the best thing you’ve done.

Kenneth Laroza is the broker of record at PSR Brokerage in Toronto. He has been immersed in the real estate industry for over 16 years. He takes a hands-on approach to his job to see that the company maintains a high level of integrity and works closely with governing associations to ensure the brokerage meets and surpasses industry standards. Visit his blog at kennethlaroza.com or email [email protected].

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5 COMMENTS

  1. A shake up is coming. Based on my personal knowledge of what I see happening in other parts of the world. The buyer broker will be almost extinct within the next 5-10 years. Some buyer brokers today do nothing more then to intercept on a deal and bring and offer forward on a property they have not shown or viewed. This causes mayhem to the deal and is not representation but a quick money grab. Recently I sold a property and the broker of record intercepted on a deal with an offer. When things went a little south, I reminded her politely that she did not visit the property and therefore was not in a position to comment. It appeared to cause stress and dissatisfaction for her client. My client was very happy with the end result.

  2. POYAS (is not by acronym as it was created by someone many CREA members from coast to coast know)

    Stop and think…..What Value Add does the current brokerage model offer in today’s world that cannot be provided better and cheaper than a $10,000 per side brokerage service?

    The ONLY Value add that has supported the currently brokerage model is the
    PAYMENT ONLY UPON A SALE structure,

    where “don’t worry you only pay if I sell your home”, allows consumers to hire without the need to apply any kind of critical comparison because they don’t need to worry about paying if their brokerage of choice fails to sell their home. The entire MLS system is built to support this business model and the least qualified members of the MLS in competing against the best.

    This Value Add has decreased annually as the National Average Commission Rate Charged has fallen since the late 80s. That Value Add is now easily debunked with data and sooner than later the veil of secrecy that has supported a business model where the Median agent will not sell one home in Canada this year will be pulled back.

    Today, convicted sex offenders, violent assault offenders, thieves and worse are allowed to Trade in Real Estate in Ontario. Broker Owners who stole 100s of thousands of their sales reps commissions are now working at other brokers offices where that broker of record is the board president. I mean you really cannot make this stuff up.

    What Value Add do you offer today? If you are relying on the POYAS or POYAP (purchase) your career is over and you should be seeking a new line of work. If you can answer this question and support your claims openly to customers before they become clients you may have a chance to survive.

    Of course CREA, BCREA, OREA, TREB etc will deny this reality as their articles of incorporation require their boards to do.

    Actually folks until a new independent organizational structure is created that no longer requires licensing the REALTOR trademark in order to run your business successfully you have no Value Add. I am sorry to say!

    • I joined my brokerage right out of “OREA school”. After interviewing with a number of brokerages, it came down to “gut feeling”. I think I made the right choice at the time because of the support and respect I get every day . And I thought there were “criminal background checks”….I surely had to get one. And don’t forget the agent that had broken so many rules and laws ended up paying off RECO to keep his license. I don’t think there is anything else that has made me so mad over the last decade (plus)

  3. The challenge is not The real estate industry it is the brokerages and how they have evolved. A brokerage is no longer in the real estate industry. A brokerage is in the business of renting space and charging for services. What this has resulted in is a diluted pool of inexperienced sales people. This will all change the next few years. As the educational process is now a two year program through Humber College the number of new sales people will decrease. Coupled with those that leave the business within the first two years and aging realtors that retire. The result will be a dwindling number of sales people. The business model of filling a Brokerage with anyone that can walk and chew gum at the same time may not work in the near future. Not to mention technology. I can now process a listing , create feature sheets, market evaluations and write up offers anywhere I want with my laptop. There is no need for a marketing department , staff to write up offers or input listing data. Agents can do that themselves very quickly these days. A shake up is coming in the industry but not so much with sales people but rather the brokerage models.

    • I agree the brokerage system can be problematic, but I believe the brokerage business evolved from the growth of agents and legislation that requires Agents to be a part of a brokerage. This requirement helps keep agents accountable to the consumer. I agree that individuals can do a lot of work that the brokerage can do for them, but the question I am thinking about is whether or not the individual WANTS to. There is a shake up coming, and I believe sales people and brokerages will see the effect of it. How that will pan out, is anyone’s guess but I do appreciate you leaving the comment!

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