Most agents, whether new or experienced, don’t invest enough time evaluating and analyzing companies, owners, and key managers before they commit to a real estate firm.

Real estate firms come in five basic varieties. The following sections look at the differences between large firms with more than 200 active real estate agents, small firms with 20 to 200 agents, and boutique firms, which range anywhere in size from a single broker to a staff of about 20 agents. Within the variously sized firms, you can opt to work for an independent company based in your regional or local market area or for a franchised operation, which is the choice of most U.S. agents.

Large firms

Signing on with a large firm comes with a list of built-in advantages and a few challenges to watch for:

Large firms usually dominate their markets. Because they employ the greatest number of agents, they generally win the greatest share of the market’s business. It’s hard for smaller firms to beat the name recognition and market position that results from the sheer mass of agents working for the largest firms.

Joining a large firm usually means joining a company with a long history and good reputation in your market area. It takes years of successful operation and steady growth to become the company with the most agents.

The challenge with a large firm is that you can get lost in the crowd. You might receive excellent training for the first weeks while you’re getting up and running, but with hundreds of agents vying for your manager’s attention, you might get lost in the shuffle later when you need help the most.

Small firms

This company category spans the gamut from a few dozen to a few hundred agents, with few one-size-fits-all truths applying across the board. To select the right small firm for you, consider the following points:

Learn the company’s long-term vision. When you join a large firm, the vision is obvious: It’s to recruit and retain more agents to protect the existing market position. When it comes to small firms, though, some aspire to become large firms and some are happy where they are and want to stay there. Before joining, learn where the owners and executives want to take the company and be sure that’s where you want to go.

Learn the niche the small firm fills. Most successful small firms exist in small- to medium-sized marketplaces where they present a unique offering. They might specialize in a certain type of property or a certain geographic area, for instance. Some small firms are comprised predominantly of experienced agents who work on a higher commission structure in return for a lower level of company service. Obviously, this model is not effective for a new agent.

Boutique firms

With fewer than 20 agents, boutique firms are very exclusive. They usually revolve around a single veteran broker and are even more specialized and niche-oriented than small firms. Often, they cater to the higher segments of the price range in a marketplace.

Unless you are invited to work under the principle broker or the firm has an outstanding training program, they are rarely a good fit for a newer agent.

Independent firms

Independently owned real estate firms that are headquartered in and focused upon their local markets are becoming rare. Thirty-some years ago, they dominated the real estate arena – started by entrepreneurs who want to create their own businesses from the ground up. Today, nationally known, brand-name companies outnumber independent firms. Most that continue to exist are boutique companies serving specialty or niche markets.

Franchise firms

Most of the brand names you recognize in real estate – Century 21, Coldwell Banker, RE/MAX, ERA, Prudential, Keller Williams, and GMAC – are firms that franchise their systems, marketing, training, and operational procedures in return for an initial fee and ongoing payments. A local office, owned and operated by an individual or a small group, is granted permission to operate under the brand name in return for a fee. The fee, which usually equals around 6% of the gross sales commission on every transaction, provides the franchising firm’s major stream of revenue.

Expect vast differences in business practices between franchise offices that carry the same national brand name, even within the same local market area. Each one is owned and operated differently. Before signing on with a franchise office, do your homework and weigh your agency options.

Before you sign on with a real estate company, take time to look well below the surface and beyond first impressions to determine whether the company is, in fact, the right one for you.

Published: April 16, 2010

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Dirk Zeller is a sought out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. The Real Estate community has embraced and praised his six best-selling books; Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies®, Successful Time Management for Dummies®, and over 300 articles in print. To learn more regarding this article, please visit www.realestatechampions.com.