Becoming a real estate agent is an exciting process. It’s the opportunity to take control of your professional destiny and truly build your career from the ground up. One of the most important steps in becoming a real estate agent (after passing your real estate exam, of course!) is choosing a sponsoring broker. Today, we examine the role of a sponsoring broker and the factors to consider in choosing the best option for you.
What is a Sponsoring Broker?
If you aren’t familiar with the concept of a sponsoring broker, we’ll quickly run everything down before we begin.
In the US and other countries, a sponsoring broker is necessary for becoming a licensed real estate agent. A sponsoring broker’s role is to help guide the novice agent and help them learn the skills and capabilities necessary to do the job (along with some other legal prerequisites). The agent will often sell real estate on behalf of the sponsoring broker, and the sponsoring broker will offer various services to guide them through their first months as an agent.
A sponsoring broker will need a broker’s license from the region where they are acting as a sponsoring broker. Typically, becoming a sponsoring broker will require taking various courses and testing (Broker Prep Guide) to prove they have the prerequisite knowledge.
Of course, a sponsoring broker won’t offer their services to new agents for free. Next, we’ll cover the most common cost structures.
Generally speaking, a sponsoring broker has two main types of cost structure – a flat fee and a commission split.
The type of fee largely depends on the services offered.
A flat fee is when an agent pays a sponsoring broker a set amount each month (or on an agreed-upon schedule). The fee is agreed upon beforehand, and the sponsoring brokers typically take less of a hands-on approach – often just offering the bare minimum required of the legal process.
A commission split is an agreement where the agent splits the commission on any sales with the sponsoring broker. The most common split is around 70-30 (in which the agent keeps 70%). In this scenario, the agent is typically employed by the broker. The broker goes above and beyond for the agent. They offer tools and expertise to help them sell because it is in their interest to do so.
As you can imagine, these two set-ups are different, and the ideal fee structure will depend on the type of work you are trying to pursue. Even within the different fee structures, there are many options for choosing a sponsoring broker. Below, we give you the top criteria to consider in choosing the best scenario for your own real estate goals.
How to Find a Sponsoring Broker
Now that you understand the role of a sponsoring broker, you are probably interested in one thing – what’s best for you? Deciding on a sponsoring broker depends on what is important to you in your real estate career.
Here are the factors to consider to pick the best sponsoring broker for your career:
Decide What Type of Firm You Want to Work For
Perhaps the most important consideration in choosing a sponsoring broker is whether you want a hands-on or a hands-off approach.
Joining a brokerage is the most common hands-on approach for new real estate agents. By having a brokerage as your sponsoring broker, you are essentially joining their team, meaning you benefit from their skills and expertise, and they give you the tools necessary to learn and succeed. They will also often partner you with a team leader or a mentor, who will provide you personalized advice and training. On top of all this, you benefit from this firm’s reputation. You are selling in their name, so you have that immediate legitimacy in the client’s eyes.
You have to weigh this against the drawbacks of splitting your commission with the brokerage, as examined above.
If you aren’t interested in joining a brokerage or splitting commission, then find a sponsoring broker which offers a flat fee (as explained above). This choice is for those who aren’t using their real estate license as the focal point of their career and want someone to handle the legal side of things and take them through the steps necessary to get accredited.
This approach is hands-off and allows you to pursue your license without dedicating your time and efforts to a brokerage. It might be the ideal choice for those who want to run their own business or those who need a real estate license to help with other aspects of their business.
As you can see, picking a sponsoring broker is all about deciding how you want your career to be structured!
Survey Firms and Options in Your Area
Once you settle on the type of real estate brokerage or sponsoring broker that interests you, it’s time to start looking around. Do a quick internet search to find some firms or brokers in your area, and do some digging! Check out job postings, check out their website, and see whether they’d be the right fit for you.
Finding a sponsoring is all about finding the right fit. Some firms offer a more hands-on approach as a sponsoring broker, giving you the proper tools, pairing you with a mentor, and more. But if you’re looking to join a brokerage, then it’s about more than what they offer as a sponsoring broker, it’s about what they offer as an employer!
Make a Short List
As a new real estate agent, you won’t always have the power to choose exactly where you want to work. But the more you research, and the more places you apply, the more your options will open up.
Make a shortlist of the options that interest you, and see whether they are accepting new agents. Check their website, or even give them a call! A sponsoring broker can offer more than just the prerequisite steps to becoming a real estate agent – many have the experience and expertise to help you get your career started the right way.