What to look for in a real estate brokerage in Toronto?
If you are looking to buy or sell houses in Toronto, you need the services of a real estate brokerage in Toronto. Many people wrongly assume that the choice of a real estate broker is a factor of the percentage of the commission split. Sure, the commission splits are essential. However, learning how to choose a real stage brokerage in Toronto means that you have to get acquainted with several factors.
Firstly, you have to know why you are on the hunt for a real estate brokerage. Are you a real estate agent looking to build a career selling houses in the Toronto area? Or are you looking for a reputable brokerage business to help you sell/ buy a home? The answer to the why do you need a real estate brokerage in Toronto question will determine your approach.
For real estate agents, it is a different ball game. It is not only a matter of the commission split. Your final take-home income is based on many factors determined by the broker in Toronto. You may have to pitch your tent with a real estate brokerage, but your business as an agent is still yours. Therefore, this choice of business will determine your success and career path.
For sellers and buyers, choosing the right brokerage business to sell or buy a house in Toronto is a different matter entirely. So many people choose a brokerage agency based on personal recommendations from family and friends. There is nothing wrong with personal recommendations. We love them. However, you have to keep in mind that what works for your friend may not work for you.
As a homeowner looking to sell, you have to conduct due diligence on your own. You have to make sure that you are making the best decision for your pockets. That is why we are writing this article. In this article, we will discuss how to select the right real estate brokerage in Toronto. We will also discuss the different types of real estate brokerages that are out there, what to look out for in one and how to make an informed decision.
What is a real estate brokerage business?
In Toronto, a real estate brokerage is a licensed business that is allowed to hire, work with and manage real estate agents. That’s not all. A real estate broker can represent sellers and buyers alike in real estate transactions. There are certain requirements and educational training that a real estate broker must process.
The duties of a real estate brokerage
The obligations and functions of a real estate brokerage depending on your needs. It also depends on the type of real estate brokerage. In Toronto, associate brokers manage realty transactions, market homes and negotiate with prospective buyers. This type of real estate brokerage can also hold open houses, represent buyers and show homes to people looking to buy. They can also rent out commercial as well as residential units.
Designated brokers, as well as managing brokers, work differently from their associate counterparts. They are usually involved in high-level management, supervision, contract renewal, lead distribution, the establishment of escrow accounts and government liaising. They also manage agents, market brokerage, recruit agents and resolve realty conflicts. Sometimes, they may even be involved in property management.
As we mentioned earlier, choosing the right real estate brokerage is based on your peculiar needs. In this article, we will discuss how agents and home sellers can choose the right real estate brokerage to work within Toronto.
Choosing the right real estate brokerage in Toronto – Agents
There is a reason why so many agents do not remain with their first real estate brokerage for very long. It’s because they chose the wrong one. Pursuing a career in real estate can be a tantalizing prospect if you select the right agency.
The first step to choosing the right agency to work with is assessing the type of agency you want to work for. There are three major types of real estate brokerages in Toronto namely
- National Franchise
- Boutique Brokerage
- Virtual Brokerage
Each real estate brokerage has its owns pros and cons. These pros and cons can determine your commission split, your running expenses and the kinds of the home leads you will get. In the next section, we will take a look at the different types of brokerages.
National Franchise Brokerages
Sometimes called franchise brokerages, these businesses are large companies that sell the right to use their branding and names to other smaller brokers. After selling their names and brands to a broker, they also charge the broker for every real estate deal made.
Franchise brokerages are usually owned independently. However, they do have to follow the rules and regulations set by the head office. Let’s take a look at the cons and pros of a real estate agent working with a franchise brokerage.
Benefits of working for a franchise brokerage
Here are the main advantages of pitching your tent with a national franchise as a real estate agent.
The main reason why a real estate agent should choose to work with a national franchise is brand recognition. Working with a franchise means that you will get instant credibility. The franchise has done all of the hard work of building brand recognition, trust and name. Your prospective customer base already knows and trusts the brand you are affiliated with. Instant reputation and credibility can go a long way with meeting and building relationships with clients.
National franchises always have a lot of offices nationwide. Asides from offices in Toronto, they have offices in Vancouver, Ottawa and other cities. You can make use of offices in other cities. It is also convenient for the people you are trying to sell to. You can easily connect them with branch offices in other cities. Finally, this also means you can transition, relocate and move your business easily.
In today’s world, tech support is hugely important. National franchises have a lot more leeway when it comes to getting tech support compared to other types of brokerage. A national franchise brokerage will mean that you have easy access to the best transaction, site-building and CRM software.
You may not enjoy this benefit with a boutique brokerage. They usually offer 24/7 tech support. This means that you don’t have to spend your valuable time working out how to send an important email because the server has crashed.
TurnKey Marketing Solutions
Creating marketing content can be a satisfying endeavour. However, sometimes you want to start at full speed. Most real estate franchises offer TurnKey marketing solutions. Some provide free mailing and advertising templates. Others provide you with website building tools and campaigns. You don’t have to come up with designs of your own. You can use their real estate materials to start reaching out to clients on the very first day.
Although they may not pay you a lot of individual attention, large franchises often have intensive training programs. This way, you start working and selling homes while improving your arsenal at the foot of the very best.
The cons of working for a national franchise
There is only one major drawback of doing business with a franchise brokerage as an agent. It is their sheer size. Some real estate agents believe that they are much more impersonal. Some people may opine that a franchise brokerage will not value their growth and development as smaller businesses would. However, if you are capable of working on your own, a national franchise may be a good deal for you as a real estate agent.
Boutique brokerages are much smaller in size when compared to a franchise brokerage. They are usually owned by a small company and are sometimes managed by one broker. You may think that their small size equals less success. Don’t be fooled. There are boutique brokerages in Toronto that have yearly sales volumes over $10 million! Of course, just like a franchise brokerage, a boutique brokerage has several advantages as well as disadvantages.
The pros of a boutique brokerage
The benefits of a real estate agent working with a boutique brokerage are numerous. They include:
If you want individual attention, the best place to get it is with a boutique brokerage. They are much smaller than the franchise business. Therefore your contribution to the bottom line is essential. Brokers at this kind of companies spend the bulk of their time nurturing and coaching new agents.
At boutique brokerages, there is usually less competition to get the best leads. Even if you are a newbie agent, the odds are high that the managing broker will give you reasonable leads early on in the business. Experienced agents are also more inclined to allow you to handle new leads. With national franchises, leads are distributed by management and the competition is always fierce.
With boutique firms, there is always a sense of camaraderie and togetherness. This often leads to quality teamwork. At a national franchise, collaboration is a foreign concept. Boutique real estate businesses always foster a cooperative environment.
Less red tape to deal with
At franchise businesses, you have to answer to the head office. It is possible that management can make a big decision that will affect your working routines without warning. Real estate and marketing policies can be changed anytime. At boutique businesses, this is highly unlikely. Real estate agents are a part of the decision making the process.
Creative license and flexibility
Real estate brokerages in Toronto have specific guidelines for marketing and creative tasks. While these rules are rigid with national franchises, they are far less strict in boutique firms. You can enjoy more creative control when it comes to building a brand of your own.
The cons of working with a boutique real estate brokerage
Boutique brokerages are small in size. Most of the time, this usually equals smaller marketing budgets, lower traffic and fewer resources for you as an agent. Also, they have little brand recognition. You have to be quick on your feet and persistent to cut it with a boutique brokerage.
These are a recent development in the world of real estate. The development of SAAS software for real estate and the reliance on digital and online advertising has made this a possibility. Virtual brokerages are an option for experienced, independent real estate professionals.
They usually don’t have to worry about paying for expensive office running costs. All they need is an online “office” generally in the form of an e-commerce website.
The pros of working with a virtual brokerage
The major pros of pitching your tent with a virtual real estate brokerage include
Higher commission splits
One of the significant advantages of a virtual brokerage is that they offer very attractive commission splits. They do not have to worry about the costs of covering the overhead for an office. Therefore, they are usually more generous with the commission ratio.
Lower desk fees
Most traditional brokerage firms charge real estate agents desk fees of about $150-$400. These fees may not be expensive to a successful agent. However, at a virtual firm, they are used for marketing and generation of credible leads. A few hundred dollars on efficient marketing agents can increase your ROI substantially.
Better tech tools
Virtual brokerages do not work out of an office. Therefore, they usually make up for it by providing their agents with the best in terms of real estate transaction software. Their websites, transaction management tools and CRM are typically top-shelf.
Technically, a real estate agent is still an independent contractor. However, there are certain guidelines and obligations that you have to get used to when working out of the office. Sales meetings, social gatherings, conferences and the likes are not optional. As a part of a virtual real estate firm, you are your own boss.
The cons of working with a virtual brokerage
Working for a virtual brokerage usually means better commission tools and online software. However, the independence that this brings is usually not for everybody. Many people love working in an office. There is something about an office culture that gets them going. If this is the case for you, a virtual brokerage is not the best fit.
Factors that real agents should consider when choosing a real estate brokerage in Toronto
Now that you know the type of real estate brokerage that you want to work for, you can narrow your choice down using a unique set of factors. These factors include
When deciding the brokerage firm to work with, it is imperative that you consider the commission split. Although it is not the most critical factor, it is still critical. You should be able to know the percentage that you will take home with you following a successful sale. Be careful when interviewing with prospective companies. It is more likely that they will sell the company to you by ignoring the negatives.
Don’t let them. Get cold hard figures that you can use to make an informed decision. Generally, different commission plans may be offered by a real estate agency. They include:
This plan means that you will get a higher percentage of every commission paid to your parent brokerage. The percentage of this split ranges from 70% to as high as 100%. This looks like a great deal, right? However, companies that offer this plan have other ways of recouping their expenses. They do this by charging monthly deal fees to their agents. These fees are like rent, and you must pay them no matter how much money you are making.
Traditional split plans
This is the quintessential 50/50 split. This means that you will always get 50% of the commission on every sale. These plans usually come with low or zero desk fees. While the trade-off is a smaller split percentage, you don’t have to worry about coming up with desk fees every month.
Hybrid plans are the middle point between traditional and high-split plans. Most high split plans usually offer an agent 70% split at the beginning. Over time, with an increase in productivity, your split can go up to 100%.
While we can’t exactly tell you the best plans for you to go with, hybrid programs offer you the best leeway. However, it all depends on your personal preference. If you want a 100% split from the get-go, you can easily opt to work with a firm offering a high-split plan.
Look out for their “other fees.”
Brokerages also charge their real estate agents some other fees that are different from commission splits and desk fees. Sometimes, franchise brokers may charge a franchise fee on each deal. Some boutique firms may charge you an “advertising” fee. Find out about all of these types of fees before choosing a real estate brokerage in Toronto.
Consider their reputation
No matter the type of real estate brokerage that you will be working with, their reputation as well as market share are essential factors to be considered. To establish trust with your client, your brokerage agency must have a good reputation. In Toronto, there are several ways through which you can determine the reputation of a real estate brokerage. They include
Online reviews are a great way to ascertain the reputation of a real estate brokerage. Although online reviews need to be taken with a grain of salt, a high number of negative online reviews is a red flag. You can be sure that prospective clients will see them before attempting to do business with you.
Word of mouth
Do you know people that have worked with the real estate brokerage? Have you heard of the company in the past? Ask your friends and family living in Toronto about their experiences with the company.
Press and newspaper mentions
A quick Google search can help you here. Before you sign a contract with a real estate brokerage, you must find out what kind of press they have been getting. Local newspapers and online news websites usually contain info on businesses in the area.
An excellent real estate brokerage firm will always have awards on its sites? Additionally, their membership is usually a good indication of their reputations. Make sure they are a part of a national association or of local boards. Fellowships and awards are generally an indicator of the firm’s reputation.
Consider their market share
Before setting sail with a real estate brokerage in Toronto, it is essential that you make sure that they have a high number of listings compared with other agencies in their area. Beware, the overall number of listings is not as important as the number of listings. If at least one agent has a listing, then this can be taken as a good sign.
Look out for the level of exposure
As mentioned earlier, working with a real estate brokerage is not all about the commission split. There are so many other things that a real estate agent needs to make it in this business. Even with a 100% split, if you don’t have a lot of exposure and leads, your take-home may be lower than you projected.
It is advised that you work with a real estate agency that offers you the best exposure and leads. Work with a brokerage that will allow you to build contacts and relationships of your own. At the end of the day, you will not work with that brokerage forever. These contacts can be useful when you strike out on your own.
Calculate your expenses
Before making a decision about a real estate brokerage business, you should make sure that you have all of the figures related to your personal expenses. You may need to pay for marketing and advertising out of pocket.
Will the broker give you ad space or do you have to pay for them yourself? Do they have an outstanding contract with a media agency that you can use? Get familiar with all of these and weigh it carefully to determine whether this real estate brokerage is the best for you.
Training and mentoring
It is always important to keep developing in the real estate business. Most real estate agents often forget to factor in coaching and mentoring when determining how to choose a real estate brokerage business in Toronto.
Generally, training and mentoring can come at a cost. If a firm is improving your real estate skills, it may be coming at a cost such as a reduced commission split.
You must determine whether or not you want to get trained before making a decision. You should remember that you are still an independent contractor. Therefore, you may need to move your business in the future. Often times, this training may be the difference between success and failure when you start on your own.
If you are a new agent, the first year of practice could be made better by credible training. Therefore you should consider this fact when determining the real estate business in Toronto to work for. This applies even if you have years of experience. You may think you have attained the pinnacle of the real estate agency game. However, there is still always room for growth. You can always benefit from coaching.
Do you own research on coaching
Every real estate brokerage business always claims to offer the best training in Toronto. Enquire by yourself. When interviewing with them, ask them about the kind of training that is offered to agents. Ask them about how often this training is dispensed. Make sure that you are doing business with a brokerage firm that can provide you with the kind of business that you deserve.
Make sure that they use the internet efficiently
Today, everything is online. Prospective clients now use the internet to search for a real estate brokerage firm. Make sure that your firm can connect you with credible leads via the internet. Generating leads online is the best way for you to increase your conversion rates today.
Make sure that you can build an online presence under the umbrella of your real estate brokerage firm. Also, make sure that this online presence is unique to you. It may be a blog, or it may be a column. However small, it can help you reel in clients.
Ensure that they provide you with accounting help
Selling real estate in Toronto in one thing. Learning how to manage and account for the commission coming in from deals is another thing. As a real estate agent, it is crucial that you get familiar with the nuances of the accounting business. You can’t do this without help. Make sure that the real estate business you want to work with can provide you with professional accounting help.
Ask about lead referrals
It is important to know how leads will be provided for you. There is no point in working with an agency if leads will be provided in a way that you won’t be able to convert them. Some agencies offer phone leads on up-time, others offer website and floor time leads. Ask for an estimate of these leads and get some assurances in the documentation. That way, you will be able to calculate an accurate income projection.
Don’t forget to consider office and other incidental expenses
A real estate brokerage business in Toronto may charge you for the privilege of making calls and copies at the office. Factor this into your decision-making process. Before pitching your tent with a real estate agency, be sure to ask about all office and incidental expenses that you will be likely to incur.
How agents can choose a real estate brokerage business: Conclusion
The first step to success in any business is making very good business decisions. The real estate business also follows this same principle. The most important part of becoming a real estate agent in Toronto is finding the right real estate brokerage in Toronto to sponsor you. This singular decision will affect the direction of your career.
Weigh all of the pros and cons of the different types of real estate businesses listed above. Consider all the factors above and use them to determine a trajectory for your career. Planning ahead is the best way to choose the right real estate brokerage to launch your career as an agent in Toronto.
How to choose the right real estate brokerage in Toronto: The homeowner’s perspective
As a homeowner looking to sell your home, the rules for selecting a real estate brokerage in Toronto are different. There are various factors that you have to consider. Like a real estate agent, you have to consider the commission split.
However, you do not have to bother with factors such as exposure, desk fees and the likes.
Selecting the right real estate brokerage for your peculiar needs can be broken down into three significant steps. These steps will be discussed in this section. They include:
- Scout the area
- Narrow down your search
- Conduct an interview with the real estate brokerage
Scouting the area
The first step to choosing the right real estate brokerage in Toronto is to scout the area. If you are an out-of-towner, this step is especially important for you. Stop by different real estate brokerages to inquire about their services and get a brochure. Also, you can talk to active agents working at different brokerages. This way, you can get an opinion and insight into happenings at local offices.
Narrow down your search
By now, following the success of your scouting efforts, the next step is to narrow down your search to the best real estate brokerage in Toronto. You can do this by providing answers to the following questions:
- What is the broker’s reputation both locally and nationally?
- Are they a well-established firm?
- Do they specialize in certain areas of the real estate business?
- What is the quality and reach of their contacts on the internet and in the press?
- How effective are their promotion strategies for their offices, agents and properties?
- How many real estate agents do they have working for them?
- Do they serve an audience in your target market?
Interview with the broker
After narrowing down your search to a few agencies, the next step is to meet with them. It is essential that you meet with different real estate agents before choosing one. Wondering how to choose a real estate broker? Then you should know that interviews allow you to ask vital questions, learn about their real estate experience and determine their professionalism.
You want to work with a brokerage that has agents that show up on time, make the best deals and will help you solve all of your concerns. Interviews also give you an opportunity to ask for references. A serious real estate brokerage in Toronto will have no problem providing you with these.
With recommendations, you can get valuable information from the people they have worked in the past. An interview will help you make sure that you are making the right choice.
Factors to consider when choosing a real estate brokerage in Toronto: The buyer/seller’s perspective
Choosing a real estate brokerage to buy or sell from can be a tough task. There is no doubt about it. Selling or buying a home may be the biggest financial transaction that you will make in your life. You want to make sure that the business you are working with can get the job done.
The steps discussed in the previous section are vital to your decision-making process. However, there are a few factors that you should look out for. If you don’t know what to look out for, an interview may be a pointless endeavour. These factors include:
Make sure your brokerage is an expert in the Toronto real estate market
Your broker should be able to give you confident answers about the real estate market in Toronto. They should be able to easily differentiate what homes and property in different areas look like.
They should be able to tell you all about the accessibility of various amenities in different areas in Toronto. Most importantly, they should be able to give you a near accurate price range of the property you want to buy or sell.
Take all of their answers, do your research and make comparisons. An expert, real estate brokerage, should be able to give you accurate answers on demand.
Make sure your real estate brokerage can work with your schedule.
There is no point in doing business with a business that won’t be available when you are. Usually, the availability of agents belonging to a particular real estate brokerage will show you their level of involvement and professionalism.
Full-time agents are your best bet. Full-time agents usually have the flexibility that is needed to work based on your schedule. If a brokerage can’t work with your flexibility and time, then there is no point in working with them.
Additionally, your brokerage must always be accessible. Ensure that they reply to your urgent emails and calls immediately. Timelines are an important concept in the real estate world. Sometimes, a missed call can prevent you from making the sale of a lifetime. If your agent can’t communicate effectively with you, that’s not a good sign. It may mean that they are doing it to other professionals that will be involved in the sale or purchase of your home.
Work with a tech-savvy brokerage firm
Technology always involves the productivity of a real estate brokerage. It is vital that you align yourself with a business that knows how to use technology effectively. How can you tell? Check their website. How attractive is it? Is it easy to use?
Are they active on social media? Do they use this to their advantage? Do they offer multiple communication channels? Do they offer your programs that support electronic signatures for documents? The answers to these questions will show you just how tech-savvy a real estate brokerage in Toronto is.
Make sure they have a solid presentation
Whether you want to buy or sell property, a real estate brokerage should always have a plan of events. They should be able to show you what makes them different from other real estate brokers in the business. Make them impress you. They want your business, let them show you that they are serious enough to get it.
Work with an agent with a likeable personality
It is evident that you are going to spend a lot of time working with an agent from your brokerage firm. Make sure that you work with one with whom you have a connection. It’s not a difficult prospect. An excellent real estate agent will want to build a bond that reverberates with you. While contacts and experience are important, make sure that they understand your specific needs and expectations.
You should look to work with someone whose personality meshes with yours. You, your brokerage and agent, have to work in tandem to make sure that you get the best value for money. You should be able to agree with your agent in the best way to market/negotiate for a property. Coordinating all of this can be a complicated prospect. However, if you are working with someone who understands you, the process becomes overwhelming simpler.
Work with a broker willing to offer good advice
The best real estate brokerage firms in Toronto know how to sell houses. They know the locations to buy homes in Toronto. They know where the up and coming neighbourhoods. They know how to market the properties of different types.
During an interview with a real estate brokerage, note whether or not they offer credible suggestions. It may be something as small as an improvement you can make to your house to increase its purchase price. The best brokers offer sound advice without any prodding.
Don’t sign exclusivity agreements
Even if you think you have found the best broker for your housing and property needs, keep your options open. Do not sign exclusivity agreements without thinking twice. As a seller, the more agents that can show your home, the higher your odds for a good sale. Unless there are circumstances beyond your control, retain a brokerage firm but always avoid signing exclusivity documents.
Choosing the best real estate brokerage in Toronto: The question checklist
Buying and selling a home is a big deal. To do this, you need the right real estate brokerage. Although this may be a daunting prospect, you need to take responsibility for your choice. We have decided to help you come up with a checklist to make the right choice. Here are the questions you need to ask your real estate brokerage.
What is your experience in the real estate business-like?
The answer to this question does not necessarily mean how long your real estate brokerage has been in business. The answer to this question will show you how well they are acquainted with the local market. You can start by asking them when last they dealt with property in the Toronto area you want to do business.
Ask them if they have ever had to reduce the price of a property to sell it. If you are looking to buy, ask them about their experience will negotiation. The right brokerage will not agree to take on a property that may be overpriced.
Reliable brokers usually have price info at hand. They always keep up with trends in the market and are well acquainted with the musings of the market. Don’t be swept away by the fact that they may have worked with celebrities in the past. The only information you need is how they can help you.
What is your plan to market this home?
This question should only be for people looking to sell a property. You need to have detailed information about everything your broker is going to do to put your business out there. Do they have creative ideas that can work? How do they plan to tell agents and prospective buyers about your property?
Digital marketing is an important factor that you have to consider. They should show you samples of properties they have marketed similarly to the way they plan to market yours. Also, a professional real estate photographer must be included in their budget. Not every buyer will have the opportunity to travel to come to see your home. Be sure they hire an expert that can capture every important architectural detail of your home.
What is the plan for efficient communication?
Efficient communication between yourself and your real estate broker is important. You need to be kept abreast via a communication channel. Some people prefer phone calls or emails. You should know that texting is not recommended for legal communication.
Ask your real estate broker to come up with a regular communication schedule that you are comfortable with. You should also find out the best channel to reach them in the event of emergency updates. Find out if there will be somebody to cover for your agent if they are not available.
What percentage of the sales prices is your commission?
Real estate brokers always take a commission of your sales price. Usually, this commission is not a fixed amount. It all depends on your ability to negotiate. Ask for a budget. Make sure that you and your broker are clear on the expenses that will come from their commission and from your cut.
How broad is your reach?
A broker’s reach will determine how quickly you can buy or sell a property. When picking a real estate brokerage in Toronto, be sure to find out if they have connections with other professionals in the business. Make sure that they have relationships with lawyers, stagers, photographers and digital advertising agencies that can speed up your transaction.
To sum it up
A real estate brokerage in Toronto can help you with all of your property and real estate needs. Selecting a proper real estate brokerage in Toronto can be the difference between buying or selling a property at the best prices.
Also, if you have an aspiring career as a real estate agent, you need to select the proper brokerage to work with. Follow the tips above to make sure that you are picking the best real estate brokerage for your needs.
We are available to help you with all of your real estate brokerage needs in Toronto. Call us today!