Real estate agents are increasingly on the move. In search of more deals, greater brokerage support, and higher commissions, real estate professionals are switching brokerage firms in big numbers lately.
“There’s not a lot of brand loyalty,” Billy Rose, a real estate professional and co-founder of the Agency in Beverly Hills, Calif., told The Wall Street Journal.
Read more: Why I Left My Broker
Thirty percent of 6,750 agents surveyed said that they had been with their firm for a year or less – an increase from 18 percent the previous year, according to a 2014 survey by the National Association of REALTORS®. Turnover hasn’t been at this high of level since 1987 when 32 percent of respondents reported the same, according to NAR.
Adam DeSanctis, a spokesman for NAR, says the increase is partially due to new agents joining the ranks but the numbers also reflect agents switching firms.
Some agents say they’re being lured to the technology and the marketing support of other brokerages. For example, Jen Winston told The Wall Street Journal that she left her former brokerage last October to join the Agency. She says her big motivation for making the switch was the greater marketing support — the Agency has a team of 20 to handle every aspect of the marketing for the agent.
But real estate professionals may need to be cautious if they think their switch will result in higher commissions. Brian Buffini, a luxury real-estate coach, says he tells most clients not to switch brokers because the disruption typically costs agents 20 percent of their sales volume in the first year.
He says a more likely reason why some agents are switching: “They’re getting their ego stroked somewhere else,” Buffini says.
Sometimes it can get ugly when agents do switch firms. In March, the New York brokerage the Corcoran Group sued Compass when several of its former agents moved there. Corcoran Group alleged a “concerted, unrelenting effort to damage Corcoran’s flagship offices.” The lawsuit followed the departure of nearly 30 Corcoran agents and accused them of taking trade secrets and client leads with them. Compass denied any wrongdoing. The parties settled for an undisclosed amount in August.
Source: “The Rise of the Mercenary Real-Estate Agent,” The Wall Street Journal (Oct. 7, 2015)