Advice to New Real Estate Agents
Ricardo Parente∴
Lic. Real Estate Agent in the Greater Orlando area with Coldwell Banker Realty, helping buyers and sellers to fulfill their dreams.
I am going to tell you what happens when you are a recent certified real estate agent searching for a brokerage company to work with, but no experience with contracts.
NEVER sign a contract with a brokerage company that holds you for a certain period with penalties for breaking the contract before its expiration date. This means you cannot switch brokerage companies without paying a fine to your current one.
Brokers are supposed to work for the agent, not the other way around. Brokers are supposed to give you training, leads, and more than that, support. If you are not satisfied with your broker, it is your right to search for another one that will fit your needs. But, if you signed a contract with penalties, you’re are doomed.
This is my experience:
In 2018 I passed in the State exam for Real Estate Agent. Several brokerage companies presented their cases during my classes, so I chose one of them to work with. Their promises were fantastic: training, leads and support. I was told that the contract they made me sign was standard in the market. The contract contained a clause requiring me to pay $1,450 as penalty for breaking the contract.
Well, I signed it, and received basic training, bad support and no leads. The only leads I received came from a service which sent me only bad leads. I spent the entire year of 2018 and sold only one property, that came directly from a friend of mine. Okay, I realize that it was my fault for being new and not recognized in the market yet, and I marketed vacation homes abroad, instead of residential homes locally.
I discovered, at the end of 2018 that this brokerage company took 6 month to register me at DBPR as their agent, and registered me only after I complained. So I decided to switch brokerage companies and had to fight the penalty, because losing six months of my right to become a broker was not fair.
I was surprise to receive a call from a collection agency in the end of 2019 with a bill of $3.450 for breaking my contract. That bill stated several charges, not in the contract, such as:
- Use of Gmail account $129 (Google charges $60/year)
- Google for work applications $149 (included in the $60/year above)
- Keys to the office $56 (I never got a key)
- Business cards $176 (I was told that they were free and it costs $70 normally)
- Company shirt $59 (also told free)
- Car magnetic posts $169
- Company name badge $59 (supposed to be free)
- Company’s Manual $499 (which I returned to the manager when leaving)
- Penalty for breaking contract $1,450
- Plus interest and collection fees
So I contested it, explained the reasons and called my lawyer, who advised me not to pay and wait.
Finally, last month, January 2021, I decided to make a deal and not extend the case anymore, so I offered $900 and they took it.
My colleagues, learn from my mistake, DO NOT sign any contract that ties you with a brokerage company. You are an independent agent, a self-employed, and the broker needs you to bring sales to his company, although few only give back to you leads and support.
Analyze your costs when joining a real estate franchise or a single brokerage company, your monthly fees, insurance, what you get back as support and training, but never accept a penalty for getting out.
I hope my bad experience will help the new agents.
Thanks for reading.
Ricardo Parente, Realtor?