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 Changing Brokers... Independent or Franchise (Part 2)
By: Darin "Sid" Cameron, CRS
Sat, Dec 8th, 2007 9:44 pm

An agent I know is thinking about changing brokerages and trying to decide if he should stay with a franchise or go independent.  Yesterday's blog was the first half of my response to him.

Here's the conclusion...

The next question I have to ask is what's going to happen to the other agents in your local office?  I can't imagine that every agent in your office isn't asking these same questions.  Spin offs are quite common when these kind of decisions are made.

For example, in 2002 the two largest brokerages in St Louis merged.

Together they briefly held 70% marketshare.  Then the spin-offs began.  My old Prudential office was created by 100+ agents who left as a group because they didn't like the merged company.  Several other office managers who lost their jobs in the merger started up another Prudential franchise that 5 years later is now the second largest brokerage in St Louis.  I also know a RE/MAX franchise that was created by an office manager who left because of that merger.

The point here is your solution may not exist just yet.

Also, is your office management 100% behind the change?  I find it hard to believe the franchise employee who sells franchises isn't working overtime trying to replace your franchise with someone from within your company so the agent's "follow" the franchise- especially if it ultimately means they're going to lose several offices and a whole lot of agent fees.  Even if you don't want to start up a franchise yourself, it might be worth your while to talk to the franchise sales rep just to find out if anyone is.

From personal experiences, Kimberly used to be an independent.  She worked for a brokerage owned by a builder selling the builder’s homes. When they got backlogged on building she tried to pick up traditional clients to supplement her income and heard over and over again (from buyers and sellers both) that they weren't comfortable working with a non-franchise agent (which is why she left for Prudential).

Before we left Prudential we talked to several of our internet/relocation clients and they all said that having a "known" franchise was extremely important to them- as in they never would have contacted us on the internet without it- but only one was loyal to the Prudential brand (and we've had a referral from him since).  Because internet leads are an important part of our business, we limited who we interviewed with to the Top 6 national franchises.

About 50% of our listings placed a lot of importance on having a franchise- even though they didn't know why- but when we really talked to them we found they wanted a franchise with a strong local presence, not national.  My belief is when sellers see those "other signs" it reinforces that they made the right choice because so many other sellers made the same one.  What was interesting was no one distinguished differences between brokerages within a franchise.  RE/MAX was RE/MAX; Prudential was Prudential; etc.

The NAR.org site has a lot of great information on brokerage start up costs.

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