3 Reasons Agents Leave Their Brokerage…And, What The Data Says

It’s been a long-known fact in real estate that Real Estate Agents can, will and do make brokerages changes. And, when those change occur it can be for a variety of reasons. However, there are generally a few major reasons why an agent would make a brokerage switch. We’ll explore what those reasons and are and see if there is anything we can learn from analyzing agent data.

Much like any other business, cultural fit is an important element when selecting a place of work. Real estate brokerages are no different. When agents are considering where to ‘hang their license’ it would be prudent for them to ask a few questions about culture. Is this a brokerage that expects their agents to come into the office regularly? For agents that value freedom and flexibility, this may not be a good fit. If the leadership is disorganized and detached, this may be a signal that the leadership may not be heavily invested in the success of the agent. Also, worthwhile to consider is how the leadership is viewed within the community. Do they have a good relationship with other brokerages in the area, with the local board?

Aside from just the leadership, what is the culture amongst agents like? Does there exist a cut-throat culture or do the agents share information and knowledge openly? If you’re finding that agents are friendly and supportive of one another, this is a good sign of a healthy culture. Being on the lookout for these small signals within your brokerage can lead to agents feeling confident in their decision to come onboard. The factors should all be considered and measured regularly to foster the right culture for your team and thereby reduce agent attrition.

A lack of adequate support, tools and resources can drive agents to go looking for greener pastures quickly. We are in unprecedented times. The agent recruitment landscape has changed dramatically and brokerages that can offer agents sleek tech, lead gen systems, coffee shop style co-working spaces, trainings and more are becoming the norm. Real Estate Agents are constantly being wooed and new brokerage models are cropping up quickly. To retain one’s own agents, we suggest that leaders invest in providing agents with the tools that will give them the advantage in the marketplace as they are competing for listing agreements and buyer loyalty. Additionally, providing ongoing support in the areas of admin support, training services and more goes a long way in helping the agent to feel valued and ultimately, rooted within the brokerage.

We’d be remiss if we didn’t include this one. Yes, culture is important, and the right tools and resources go a long way. However, at the end of the day, most agents are independent contractors, and it comes down to dollars and cents. I recall when I began my real estate career back on 2002, I started with a traditional brokerage and my split was 50/50. I joined the industry at the height of the market, so it didn’t take long for me to hit $4M in annual production. At the time, I was painfully young and a bit naïve and didn’t fully appreciate that agent splits could be negotiated. I made the decision to go looking for greener pastures and found them. When I advised my Broker/Owner that I would be leaving, he made me an offer I couldn’t refuse. I made the decision to stay with him. For me, at that time, it was about maximizing my earnings. Most agents are operating in the same manner. One of the major reasons we are drawn to this industry is the ability to control our income and for most agents, this is the most important element when deciding on a brokerage.

We also looked to what the data had to say about agent departures. When examining data and, the question was asked, “Why do agents leave their brokerage?” What we found was very interesting. We examined production stats across multiple markets and found that production actually had very little to do with agent departures. We also pulled birth records to explore whether age had anything to do with it. And agent age actually went a long way in suggesting when an agent would make a brokerage change. The departure rates start to increase ion the late twenties, hitting their peak in the late thirties and early forties and then topping out in mid-forties and stabilizing. Older agents rarely leave. However, we found that the biggest determining factor in agent departures was solely the number of years licensed. Year one agents almost never leave so trying to recruit them is largely fruitless. However, the numbers skyrocket years two and three, tapering off just a bit each year until they hit year eight when they drop off significantly and stabilize. Having this knowledge helps managers, leaders and recruiters direct their attention to focusing on year two and three agents knowing that they have the highest propensity to move.

Brokerage leaders should continually examine their office culture, office support systems and overall agent happiness. Understanding why agents make a move is the first step in cultivating the right atmosphere where agents can thrive. We always like to impress that retaining agents is always easier and more cost effective than recruiting new agents to the brokerage!