Q: Why would a real estate agent working for an established agency leave to pursue a business as an independent real estate agent?
A: Many real estate agents eventually leave real estate agencies or firms to become independent real estate agents for more freedom, flexibility, and the opportunity to create their own businesses as independent real estate solopreneurs. Technology and a digital-first, flexible workplace economy are helping independent real estate contractors succeed.
- Booming Real Estate Market Attracts Real Estate Agents
- Property Ownership and the American Dream
- The Evolving Market and Independent Real Estate Agents
Owning a piece of property or home has been a part of the American dream ever since Europeans and other brave individuals set sail to the new world in search of new opportunities.
It’s no wonder why so many graduates and career changers find real estate a diverse and challenging career space to enter.
According to The New York Times,“in 2021, there were a record number of real estate agents in the United States, according to the National Association of Realtors. More than 156,000 people joined their ranks in 2021 and 2020 combined — nearly 60 percent more than did in the two years prior.”
While not all of these new real estate agents will succeed, those that do prove themselves will likely find themselves working for a real estate franchise or brokerage. Others will decide to pursue a career as independent real estate agents.
While real estate laws and regulations vary widely across the world, one thing is for certain: as long as there is a property for sale on the open market, there will be customers interested in purchasing it.
The price they are willing to pay for it, however, often remains uncertain.
Real estate prices fluctuate mysteriously, often baffling experts. While real estate and property values adhere to many standard economic laws like supply and demand, other factors can contribute to the price.
Additionally, what might appear to be a relatively simple business transaction can become a complex dance involving multiple interests.
Traditionally, real estate agencies, realtors, brokers, bankers, lawyers, mortgage writers, property inspectors, insurers, and others, like hungry sharks smelling blood in the water, circle the property owner and potential real estate buyers, all hoping for a bite of a profitable real estate sale.
In the U.S., most real estate agents work for larger real estate companies and agencies that take a cut of the agent’s commissions.
Real estate agents forfeit a portion of their profits from facilitating property sales in exchange for the higher visibility, brand recognition, and technology that the real estate agencies have traditionally provided them.
Recently, this trend is changing. Many real estate agents are leaving traditional property franchises and real estate brokers to pursue careers as independent real estate agents.
And the above are just to name a few. Find out more below.
First, a little background on property rights and the real estate market – particularly in the U.S.
Property Ownership as Cornerstone of the American Dream
Scottish economist and moral philosopher Adam Smith wrote about the perils and benefits of property ownership in his famous book, An Inquiry into the Nature and Causes of the Wealth of Nations, published a few months before America’s founding in 1776.
“As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce. ”
Adam Smith’s opus is loathed by some and loved by others, but its obstinate title has since been abbreviated and is more widely known as, simply, The Wealth of Nations.
The pursuit of property ownership of one kind or another has been a vital component of the American dream (or myth?) ever since.
These ‘rights’ have been interpreted in various ways through the cloudy lens of history.
The British enlightenment philosopher John Locke and the French philosophy of Rosseau, among many other white European thinkers, are considered by history buffs to be the largest influence on the ideas that paved the way for the American Revolution and the U.S. Constitution.
It’s hard to understand how these rights were “unalienable” when the government promoting them allowed the slavery of millions of Africans kidnapped from their homelands and shipped over from Africa.
Additionally, “the property” was seized from native tribes and those indigenous people living on the continent when the first freedom-seeking Europeans sailed to North America.
Perhaps that is why Rosseau, whose philosophy and book The Social Contract heavily influenced early American ideas about government, offered this caveat: “Man is born free, and everywhere he is in chains.”
The Evolving Market and Independent Real Estate Agents
As a red hot real estate market scorches the United States like climate change is scorching much of the planet, the demand for real estate professionals is growing.
Thousands of real estate agents are leaving relatively safe and successful careers at real estate firms and property franchises where they’ve worked for years.
While the real estate brokerage or franchise offers agents, some perks, technology, and changing views on the nature of work are challenging the standard real estate broker and agent relationship.
Independent real estate agents who leave the perceived safety of the franchise face a lot of competition, and they must handle the complexities of real estate sales on their own.
Some work with a spouse or partner who is a broker.
The internet has made it possible for people in every industry to operate on their own.
They can connect with new clients through digital marketing and can operate from their homes, helping them build their businesses without massive overhead.
Other independent real estate agents contract out some of the legal and business transactions that are out of their scope.
They are able to find success running a full or part-time real estate business from their own home and utilize a virtual office.
Other real estate professionals enjoy the flexibility and camaraderie that comes with a flexible workspace or coworking space.
Since they are no longer paying out a sizable percentage of their real estate commissions to a real estate franchise or brokerage, independent agents can allocate savings to growing their own independent real estate business.
During the pandemic, with half the country working from home, this wasn’t uncommon.
Now, as many traditional workers return to the office, independent real estate agents may choose to work from home and use a virtual office address or virtual office plan.
Many join professional associations and use online networking tools specifically for real estate.
The Downside to Going Solo as a Real Estate Agent
One of the biggest challenges of going solo is surrendering the certainty that comes with an agency.
You lose the guarantee that you’ll make money, which can be turbulent and stressful.
You also have to learn to run all elements of your business.
You lose the support of your administration, leaving you to handle your phones, your finances, your marketing, and every other element of running your business.
How to Succeed as an Independent Real Estate Agent
There are clearly pros and cons of becoming a solo or independent real estate agency.
With the Great Resignation, people are realizing they hold power to demand better pay or take their careers into their own hands.
This has led to increased interest in going independent as a real estate agent.
Real estate professionals who want to break free from property brokerages and real estate franchises must do their due diligence first.
Some choose to pursue real estate part-time as solo agents.
For example, real estate agents who retire but maintain their licensure, like other retired professionals, may desire to work on their own post-retirement.
They may not desire the restraints and lack of flexibility that real estate franchises require.
Becoming an independent real estate agent can provide a multitude of benefits:
- You can work when and where you want, as long as you adhere to specific state regulations. One of the biggest benefits of going solo is you can set your own schedule. You’re free to work as much or as little as you want, meaning you can directly manage your work-life balance.
- You can set up your business how you want and work the way that works best for you. You will not have a director telling you how to do your work or how to run your career.
- You can focus on areas of the real estate market that interest you most. You can choose what skills you excel at and pursue those areas instead of the franchise dictating where and how you work.
- You’re able to focus on the areas of real estate that most interest you. You take on the clients you want to and can pivot in your career any time you feel like it. You gain flexibility and freedom with your career.
- Entrepreneurial Freedom
- Another benefit of being independent is you are in control of your income. You can set your rates and work as much as you’d like, allowing you to get paid what you’re worth.
In fact, many industry experts suggest treating your independent real estate career as a business instead of a job.
Since you will be working independently of a franchise that can provide direction, leads, and messaging, solo real estate agents should be agile and business-minded professionals.
Forbes Councils Member Dave Panozzo writes:“Believe me, there are many solo agents who are very successful and should be commended for the hell of a job that they do. That being said, the average solo agent may be faced with circumstances in the coming year unless they treat being a real estate agent like a business, instead of like a career. In fact, before I got my real estate license and built my real estate team from scratch, my wife had been a solo agent for 14 years. “
Should You Become an Independent Real Estate Agent?
It’s no secret that real estate can be a competitive and even cutthroat business.
Those who are considering going into a real estate career should do their research.
Real estate will always entice entrepreneurial personality types because of the opportunities and the ability to build your own business.
Many independent real estate agents gain experience working for a franchise and then branch off on their own to form their own brand and real estate agency.
- Should You Start as an Independent Real Estate Agent or Join a Team?
- Franchises vs. Independents
- Real Estate Agent vs. Broker: What’s the Difference
The internet and the great resignation have empowered professionals of all backgrounds to go into business for themselves.
While going independent as a real estate agent can be stressful, it also opens up the potential to make more money and take charge of your career.
If you’ve been considering going independent, now is a great time to do so.
Today, there are fewer barriers to starting your own business. A virtual office address means you do not need to sign an expensive lease to have a professional address or workspace.
A professional business address in a commercial part of town can help you gain the visibility and brand recognition needed to grow and market your independent real estate agent services.
Investing in a website, a bit of digital marketing, and a virtual office plan will streamline the process and get your business going quickly.
Make sure you have the proper LLC and purchase a virtual office plan that helps set you up for success.
As your business grows, Alliance Virtual Offices is there to provide you with access to live virtual receptionists, meeting rooms, a virtual phone number, and a professional business address as you scale up your business.