Source: Inman —
For real estate agents who are looking for a chance to take their professional life to the next level, pursuing the role of real estate broker is a natural step. While part of the pursuit of this goal involves additional education and training, it also involves determining how you’ll use your broker’s license. If you’re thinking about becoming a broker owner, you’ll need to decide whether to work for a big-box real estate franchise or become an independent broker.
What is an independent broker and what does it take to become one? What are the pros and cons of being an independent broker and how can you decide which path is right for you — an independent or franchise brokerage?
Independent broker defined
An independent broker owns or manages an independent real estate brokerage. As such, they maintain a group of agents and staff members who provide real estate services to buyers and sellers in their area on behalf of the broker. An independent brokerage is in contrast to a franchise brokerage, where the brokerage is one office of many in a large real estate company.
How do independent brokers make money?
For the most part, an independent broker earns a portion of each commission generated by their real estate agents. Independent brokers may be competing or non-competing brokers, which means that they may or may not be working with their own clients while also managing agents who provide client services. Some independent brokerages also earn money on affiliated services, including title and escrow service providers which may be associated with the brokerage.
Advantages of an independent broker
Many independent brokers enjoy their independent status and see it as a distinct competitive advantage. Some of the upside potential of an indie brokerage comes from the following factors:
Wider range of brokerage options
An independent broker may have a great deal of freedom and may be able to structure their brokerage and its services as they choose. Because they are not constrained by the brand identity, requirements and fee structure of a franchisor, they are free to choose how they will conduct business and what market segment they will focus on.
For example, an independent broker who has developed a specialty in working with a particular real estate niche — like farm and land, coastal properties, or luxury estates — may be able to gear their branding, marketing and service offerings to clients in those specific niches.
Higher payout on commissions
