How Hard is It to Change Real Estate Brokerages?

From the broker's perspective, it is straightforward for them to give you your license so you can take it to another broker. Another option is to complete the RE-11 form to make your transfer official through the state. For you, the agent, it's challenging because you must ensure you finalize all your business before you move to another broker. 

Real estate agents are free to move anywhere they want, anytime. Just complete any deals you have with the current brokerage before leaving and see if you can take active current listings to your new broker. You may still be able to get paid for a deal in progress, but your previous broker will collect fees and other monetary benefits. 

How Do I Get My First Broker?

Your first broker will be your sponsoring broker. This is the first broker you work with when you become an agent. This brokerage, which you will list on your real estate exam, will receive your real estate license once you pass. 

As a real estate agent, you will be an independent contractor. However, you can't set up your own real estate brokerage and run it in the way that most independent contractors can. This is because the IRS classifies real estate agents as statutory non-employees

A statutory non-employee means that agents have control over how they report their taxes and when they come to work. However, they must be under the jurisdiction of a broker who oversees their work and pays them from the commission earned on a real estate deal. The broker will typically divvy the money earned from closing on a home in a commission split, which vary from broker to broker.

Why Should I Inform My Broker of the Change?

After working for your sponsoring or employing broker for some time, you may decide to change brokerages. When you leave one brokerage, your current broker must transfer you to another brokerhouse. So, informing your current broker of your decision to move is a good idea. 

Unlike with a regular job, your current broker still has your license with them. So, if you don't follow the proper procedure for moving your license to your new broker, you won't be able to get paid by your new broker. 

Typical Reasons For Switching Real Estate Brokerages

Before you decide to move, you may want to consider some of the reasons real estate agents change real estate brokerages. Here are a few common ones. 

Better Commission Splits

One of the most essential reasons real estate agents leave one firm for another is the promise of a better commission split. Some agents may offer better payouts than others and may even stop splits once agents reach a particular financial milestone in a given year or if you pay a fee. 

More Training and Support

While many agents may leave for monetary reasons, some may leave due to a lack of support from their broker. As a real estate agent, you are responsible for drumming up your business. However, having a broker who cares enough to train agents and provide the support necessary to be successful is helpful. 

Specialization

Another reason some real estate agents may leave is the more significant opportunities that another firm may have. For instance, your firm may be limited to home buying and selling, but another firm may have opportunities to grow as a luxury home agent or a vacation rental specialist. 

Better Company Culture

Let's face it: some work environments are toxic. Additionally, your company or particular location may have a bad reputation in the community, which could hurt your business. So, it may be in your best interest to choose another brokerage.

Reasons Why You Shouldn't Leave a Brokerage

It may be easy to leave your brokerage, but it may not always be a wise decision. Here are a few reasons you shouldn't bail out on a broker.

Hearsay

You may be tempted to leave where you're at because you think the "grass is greener" at another real estate brokerage. However, you must remember that what you know about another broker may only be hearsay. As a result, you may still have the same issues at the new broker as at the old broker. Likewise, you may have the same pay. So, it's never a good idea to leave because you heard through the grapevine that another brokerage is better. Instead, it would help if you did some investigating for yourself. 

Grudges

Another reason you should refrain from bailing out on your broker is because of a misunderstanding and subsequently holding a grudge. The world of real estate is very close-knit. So you want to avoid gaining a reputation by brokers as someone who is difficult. Try to squash any petty differences and remain professional. A  broker can't force you to stay, but they can influence how you're perceived in the industry. Always keep changing from one broker to the next, an amicable one. 

Key Takeaways

  • Assess your goals to ensure that making the change is right for you. Avoid making spur-of-the-moment decisions that could jeopardize your reputation in the industry. Be clear on your reasons for switching to another broker. 
  • Ensure you protect your assets. As an independent contractor, you will have to close out business transactions properly. Abandoning the job could have dire consequences on your ability to receive money owed to you and your ability to make money with the new firm. As a small business owner, ensure you make the transfer seamless by following proper procedures. 
  • Make your exit when you have a limited amount of obligations. Being in the middle of closing several deals may cause many problems with pay. Try to close out all transactions before moving to the new brokerage. 

Frequently Asked Questions

What happens if a real estate agent doesn't take the proper steps to switch real estate brokerages?

Not meeting with your current broker and moving your license to the new broker can delay making money with your new brokerage. You could also lose money from your previous broker if you don't go through the transfer process properly. 

It is ideal to inform your current and new broker about your move. It is also a good idea to tell your clientele about your changes. 

Does the state of Florida require a waiting period before transferring to a new brokerage?

No. In Florida, you can transfer whenever you like. 

If I want to change brokerages within the same company, will I still have to inform my current broker?

Yes. You will still need to follow the same procedure as if the brokerage firms aren't the same company. You will need to get your license from your current broker and take it to the new broker.