Red flag! 12 things agents should watch out for when being recruited


Here’s what some agents who have recently made strategic moves have to say about keeping one’s eye on the prize when it comes to negotiating contracts with a new brokerage.

It can be exciting and flattering for agents to be courted by a new brokerage when looking for a career change.

But it’s also important that agents remain level-headed throughout the process and not be easily distracted from their professional goals by shiny objects.

Here’s what some agents who have recently made strategic moves have to say about keeping one’s eye on the prize when it comes to negotiating contracts with a new brokerage.

Alignment with long- and short-term goals

When considering a transition to a new brokerage, Mallory Bogard of the Bogard New York Team at Serhant. told Inman that agents first need to consider what their goals are and how a new brokerage can help support those goals. After all, if your goals don’t align with how your potential new brokerage does business, then why would you move?

“Where could a new brokerage really help you in your deficiencies? Where can they provide guidance?” Bogard said. “Because after the dust settles, if you’re not using your toolbox to grow your business, then what are you moving for?”

Attractive splits aren’t everything, but worth noting

Agents Inman spoke with said that it’s important to get into the habit of reading the fine print on any new contract, particularly when it comes to how commissions might be split on deals in progress when an agent transitions to the new brokerage.

“I highly recommend anybody doing the change to read their contracts,” Bogard said. “We’ve talked to other people who have made moves and kind of underestimated what their take-home for the remaining deals was going to be.”

Still, Bogard added that splits are a less important factor than some others, including how much a new brokerage can support an agent’s goals and development for the future.

Starting date

When preparing to transition, agents should also time the start of their new contract well. Agents might experience a lull in business during this period as their sphere adjusts to their new affiliation and they themselves become adjusted (or if some of their former clients are coopted by their previous company), so planning ahead for a good time to make this transition — typically before the spring market hits full swing — will be helpful.

“You get set up at a new brokerage and you get established, you build your foundation, you learn all the new systems, and it’s just like, it takes a little bit of time,” Bogard said.

Chris Pollinger of RE Luxe Leaders in Sarasota, Florida, told Inman that agents should be prepared for a lull in business of three to nine months’ worth of funding, depending on the size of their business, so they should have some funds stocked up in advance.

“The bigger they are, the more they lose, so moving brokerages is not something that I would encourage agents to do lightly,” he said.

Noncompete agreements

“I would be very wary about anything in most contracts,” Pollinger said. “If someone’s trying to lock you in for a period of time, I would question as to why, and it would certainly have to be offset [by other benefits.]”

Pollinger added that noncompete agreements, specifically, raise big red flags for him and should also be something other agents keep an eye out for too, in whatever form they may take.

“When a contract that has a time frame on it has anything with a noncompete in it, that would be a red flag for me,” he said.

What happens when you leave

When just starting out at a new company, it can be hard to imagine ever wanting to leave. But agents need to plan ahead for this possibility and consider what the terms of departure would be in the future.

“Do you get to take your book of business with you if you leave?” Abby Palanca of the Abby Palanca Team at Serhant. in New York pointed out to Inman. “When you’re a newer agent, you might not think about that because you don’t have a book of business, so it’s not incredibly important to you and you’re just thinking about the immediate dollar. But this time around [when Palanca and her team moved from Compass to Serhant. in January], that was incredibly important to me.”

Justin Ziegler of the Common Ground Real Estate Team at Coldwell Banker in Atlanta (who recently made the switch from Keller Williams) told Inman that agents should particularly be on the lookout for such scenarios if they join a team, which tend to have policies about whether or not the team can continue marketing to an agent’s clients after they leave or who gets to retain the client in the future.

“Those contracts are also kind of like a marriage prenup,” Ziegler said. “They tell you what’s going to happen when you get divorced.”

Fees that add up

Brokerages that tout high agent splits or that seem to be recruiting left and right are worth taking a harder look at before signing up. The deals they’re offering tend to be soured later by miscellaneous fees that can add up quickly, including affiliation, desk and/or advertising fees.

An analysis of desk fee model brokerages by Inman contributor and real estate coach Bernice Ross, for instance, showed these models can cost agents up to $36,000 annually, although the brokerage may initially tout 95-5 splits.

“As [agents] are trying to figure out what they’re going to pay at the new brokerage and they’re looking at those splits, they need to get a good idea of what they’re going to spend at the new brokerage, but then also have a really solid idea of what they’re actually spending because most agents … we love to sell real estate, but most agents don’t love to do accounting or paperwork,” Ziegler pointed out. “So a lot of times we go in there not knowing exactly what those numbers mean.”

Company equity opportunities

Brokerages like Compass and eXp have wielded agent equity programs in recent years as a powerful recruiting tool. Taking advantage of your new brokerage’s stock investment options is a risk for agents that may or may not pay off, but is something that should certainly be considered seriously when moving to a new company.

When she first moved to Compass, Palanca said she was most attracted by the splits the brokerage offered. But in hindsight, she said that she wished she had considered more heavily the company equity program, which allows agents to convert some of their commission into company shares. “Maybe that should have made more of a difference to me,” she said.

However, a recent analysis by real estate advisor and tech expert Mike DelPrete argued that for Compass agents who invested in the company early on, it’s been a big gamble that hasn’t provided positive returns.

“Compass stock is worth less today than it was in 2019,” DelPrete wrote in Inman in July, “meaning agents who invested into the agent equity program since then have lost money on their investment (even accounting for a 10 percent company match).”

Contract language you don’t understand

Agents write and sign contracts all the time, but that doesn’t mean that they automatically will understand everything in a new contract that’s handed to them, Ziegler said. If there’s something you don’t fully understand, ask a trusted legal professional about it, he advised.

“I’ve told people before, ‘Go to your closing attorney,’” Ziegler said. “It’s not necessarily a real estate question, but have them look at this contract and ask them what this part of the contract means. Because, I think there’s a lot of things that people just kind of sign. It’s kind of like when you get a loan or when you buy a car — they ask you to sign the documents. Most of the time, you just want to drive your new car.”

Strings attached to partner companies

A significant part of any agent’s business is developing relationships with their partners, like mortgage brokers and title officers. After years of developing relationships with individuals you know you can count on for a quick response on the weekend or in the evenings, will a new brokerage make you give up those relationships to do business with their exclusive partners instead?

“I would also want to know what the partnerships look like with partner type organizations, like title companies or lenders,” Ziegler said. “So if you are going to someplace where perhaps it’s more of a discounted brokerage or they’re offering you some big carrot, does that come with a string? Like, you should be using this lender? Or we want you to close with this title company? Or we want you to sell these home warranties with all your new purchases?”

Being recruited by a recruiter and not the broker

Recruiters (like agents) are professional salespeople, and a real estate agent should never forget that they earn their money by getting people to accept job offers.

“I want to meet the person that if I have a challenge with a file or a challenging transaction, who’s the person I’m actually going to talk to?” Pollinger pointed out. “And are they available? … [Recruiters] are just purebred salespeople, right? So they tend to exaggerate quite a bit, highlight the amazing things that it is for them without necessarily thinking of whether it’s really in the other person’s best interest.”


As the industry grows more collaborative and team-focused, finding a brokerage culture that fits with an individual agent’s own values is becoming increasingly important, Palanca said.

“Who are the people that you’re working with?” she said. “How are they going to help you grow your business? Do you think that you’re going to learn here, grow here? I think that should be something that agents really take into consideration.”

Forget dangling carrots; focus on non-monetary value

When a brokerage waives flashy incentives in front of agents like big sign-on bonuses, chances are an agent will end up paying that money back to the brokerage in one form or another, so don’t be fooled, industry experts told Inman.

For instance, when Compass initially entered Northern California, they made waves with their attractive incentives that drew a lot of agents. But when Compass contracts started to expire, a number of agents and teams decided to look elsewhere.

“People were recruiting and they were writing big marketing dollars, and they were giving splits that made no sense,” Julie Del Santo of Dudum Real Estate Group in the East Bay Area told Inman in November, regarding additional impending Compass contract expirations. “That’s great, but look where they are now. It’s like golden handcuffs. So now [the agents] are released, and there’s not going to be much retention.”

Bogard said that she and her husband were most attracted to Serhant. because of the potential with the digital-first brokerage of growing their team’s digital presence — not because of any financial incentives.

“When anybody looks at offers other brokerages are giving them, I think the most important thing should always be the value they add that’s not a monetary offer,” she said.


Subscribe To Our Newsletter

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!