It’s not you. It’s me. (Or maybe it IS you!)
There are lots of reasons people decide to switch brokers. Maybe you are unhappy with what they provide or maybe it’s just that a different model fits your goals better. In most cases, as an independent contractor, switching brokerages can be easy and painless. First, let your broker know you are leaving. Believe it or not, TREC doesn’t always give us a heads-up when an agent moves their license to a different brokerage.
I know it can be an uncomfortable conversation. However, as a Broker who has received those breakup calls, I can tell you that I understand it’s business, not personal. When I receive one of those calls I wish the agent the best of luck and let them know they are welcome back anytime! After all, the grass isn’t always greener on the other side of the fence once you get over there.
On the other hand, if your broker does take it personally or makes it hard for you…well, then that’s probably a sign that you are making a good move. Next, the trickier part. Dealing with your active business.
All representation agreements (listings and buyers) belong to the broker so you will need to work that out. With the current broker’s permission the business can be transferred to your new brokerage OR the business will stay under the current brokerage. In this case, a different agent would need to be assigned to represent the client as you cannot represent the client of one broker while under the sponsorship of another broker.
Every broker will deal with this situation in different ways. If you are contemplating leaving your brokerage while you have an active business, I would recommend checking the company’s policy and procedure manual. Hopefully, your broker will have addressed that in their P&P. If not, again, it maybe a sign that you are making a good decision!
Otherwise, you will need to work with the broker directly to come to an agreement about how the active business will be handled. For StepStone Realty, if an agent leaves with active business on the table I will allow them to transfer the business with them to the new brokerage in return for a referral fee equal to what the broker fee would have been. So, if you are on a flat fee schedule then $600. Otherwise, 30%.
I know some of you may not think this is fair. After all, it’s your client! You did all the leg work to get the contract signed. However, don’t forget that I’ve already made a time and money commitment and my return are when you close transactions. I provided you with a platform for contracts, took on liability for your actions, and will pay E&O premiums on your behalf and developed and provided training, mentorship, and a community for you to grow your business.
If your broker did not specify in their P&P their policies for dealing with active business then suggest a referral fee equal to the broker fee. Most will find this fair. Sometimes, your new broker may even be willing to share some of those referral costs to make it easier for you to make the move (hint hint).
While moving brokerages while you have an active business can be a more challenging position it may be more costly to stay in a place that needs to meet your needs. And, if you wait until you have NO active business, well, that’s a grim prospect too.
I saw a tee shirt once that said, “Getting a divorce sucks. Being divorced doesn’t”. Sometimes making a change is painful but sometimes it’s the only way to get to a happier place.