New business models are emerging every day in real estate brokerage, that constitute small changes from the norm in splits, training, office space and oversight.

While some new agents are daunted by the high fees that many large brokers and/or their franchises require to join a booming brokerage, they are turning to a new breed of "license-hanger" brokers who will let them join a firm for a small monthly office fee and higher splits than competitors would normally pay a beginner.

One agent in Scottsdale, Arizona says that she didn't realize that accepting a higher split meant that she would receive less attention from the broker.

"I am a new real estate agent in Scottdale, AZ," writes Mary. "I've been official since May 5th of this year. I was very excited entering my new career and felt I knew exactly what to do. I felt I had made the right choice by joining a well known real estate company in the area I was living. This company answered all my questions and was very supportive.

"I believe I made a big mistake when a young man in my real estate class approached me and told me about his father being a broker and having become very successful with this particular loan program than few lenders like to speak about. The entire program more or less is beneficial for investment properties. I don't know how he did it, but I ended up choosing him instead of the company that I was ready to join.

"This broker works out of his home and so do I, but I feel very lost as he has only gone over listings and purchase contracts with me, and that's it. I have no other agents to work with, no Open Houses (he doesn't believe in them), no floor time, etc. He is a nice person, but I feel I'm missing out on a lot. I believe my only option would be to go back to school and take courses on those items which I am not receiving. I did sign a contract with him that we could dissolve our working relationship at any time with notice. Do you think I should go with a more established company, or should I try this on my own? Your advice is greatly appreciated."

We wrote the agent back and asked if she were promised a larger commission.

"Yes, my broker does offer a larger split (70/30), but that really was not the reason I chose him," replied Mary. "He had promised me extensive one-on-one training, which I now realize is over after two sessions which actually covered purchase contracts and listings. I pretty much understood that already in my pre-licensing school. He really stresses a particular type of loan to his clients and literally flips their properties every two years. He has supposedly made his clients very wealthy through his advice, and they keep him pretty busy.

"I have made indications towards what else to expect, but he just says it takes time. I really do think he wouldn't talk to me at all if I didn't inquire on our home. The entire situation is a little more complicated in that I purchased a home for myself through his brokerage, and feel more or less committed until the end of our closing. Again, thanks for your advice. I am researching other companies, and am already attending renewal classes with the hope of finding an agent that will let me sit an open house for them. Wouldn't the seasoned agents give their open houses to their new licensees?"

Realty Times asked Dallas broker Elizabeth Newbury for insights. Newbury is in the process of starting a new "license-hanger" brokerage called Newbury Realty. Newbury explains that the concept is designed to appeal to agents who don't want to support two offices, and that good communication and follow-through are required for both the broker and agent to be successful.

Newbury advises, "Brokerages have personalities, and they design their policies around that. Some agents prefer to be energized by a busy office that has structured meetings and phone duties. Other agents find activity distracting and they just want to concentrate on what they need to do without interruptions. Many start developing their own graphics and mailers, so they don’t have to wait in line to get them from an overworked staffer who bumps their order in favor of a bigger producer. That’s why so many agents end up working out of their homes. So my question is - why pay for two offices?"

The business model, says Newbury, works on keeping company overhead low by outsourcing marketing to graphics and virtual tour firms, charging agents a low office fee for equipment use, and attracting agents with a 90/10 split.

"I can pay a higher commission to the agent without plateaus, sales quotas, or an investment on the part of the agent. The agent can order graphics from our outside providers or do their own from our templates. My company offers everything the large ones do, mortgage services, training, personal attention, a conference room, a desk, computer, phone, Website, etc. The agent pays for everything else, and no matter where they go, this is the case. I provide an environment where the agent can make as much commission as possible."

Newbury is also realistic about training - what Mary says she is not getting enough of from her present broker. She says she will provide hands-on, one-on-one training for any agent who needs help.

"Training is the most important area for any broker to follow through," says Newbury. "Without training, the agent has less confidence to go out in the marketplace, so the broker's job is to help build the agent's know-how, or otherwise, neither one will benefit from the relationship."

So Mary's job now is to decide how to get more training, and what the cost of that training should be. On one hand, she could join a larger firm with a training department, floor/phone time and other agents to interact with, or stay where she is and provide her own training.

In addition to training opportunities, a large brokerage often has floor/phone time or affiliate programs that funnel leads to fledgling agents. Because of the large referral fees involved, the agents won't make as much money, but they'll be gaining needed experience.

If Mary decides to stay where she is, she can turn to her local MLS and its local chapter meetings for help. MLS and Realtor associations frequently offer training classes, as well as meeting grounds to interact with other agents. Weekly tours are also a great way to meet other agents. Mary can offer her services to sit open houses with the agents or to sit for them in their places.

Published: June 10, 2004

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.