In today’s real estate market, so called “mercenary agents” are on the rise, switching firms in search of more deals and higher commissions. Typically independent contractors, many agents are constantly being recruited by and changing teams, joining competing firms in search of greener pastures.
Why the wanderlust?
- Low inventory
In hot markets, agents find themselves competing for dwindling listings. To put themselves at the head of the pack, many agents are for firms with a technical edge or other advantages.
- Commission rates
Commission rates seem to be constantly falling, from 6.1% in 1992 to an average of 5.2% today. With newer agents in particular, by the time proceeds are split with the brokerage and other parties, their share ends up looking pretty spindly. Gaining experience and then moving elsewhere as a senior agent can offer a much better return – as much as 80-90% of commissions.
- Improved marketing support
Leaving an agency with a miniscule marketing team in favor of a firm with a heard of support for posting listing and sending out materials can free up agent time.
Team oriented businesses may be more appealing to some than lone wolf style firms. A little bit of something is better than all of nothing.
- More control
Agents with a niche, such as the luxury market, may benefit from moving to other firms with additional promotion, marketing, and tech support.
Going out to pasture
Realtor trends point to about 30% of agents who have been with their firm for a year or less – up 18% from last year. In fact, it’s expected that in time big deals will be driven by brokers – not brokerages, putting the ball – and the brand – more frequently in the agent’s court.