6 min read · August 10, 2022

Real Estate Broker Sponsorship: What to Expect From Your Broker Sponsor

What does a broker sponsor do and what should you expect from your sponsoring broker? You took the classes, studied hard, and now, you passed your real estate license test. But there’s one more thing you need to do before you’re ready to sell your first house: you need a real estate broker sponsor.

There are hundreds of brokerages in Texas keen to hire newly licensed agents, but you must try to find the right sponsor broker for you. When you make the perfect choice, your sponsor brokerage will guide you during the first few years of your career and help you reach your potential sooner.

What is a sponsoring broker, and what should you expect from the relationship? Keep reading to learn more.

What Is a Sponsoring Broker?

A sponsoring broker is an agent who has an employing broker’s license.

Why are they so important? You need a sponsor to activate your real estate license.

Your sponsoring broker will activate your license and help you navigate your first years of running your business.

Do you need a sponsor before you take your test? No, but you will need one to start selling.

What Are a Sponsor Broker’s Qualifications?

Not everyone can be a sponsor. Your sponsor needs at least 3,600 points in experience as reported to the Qualifying Experience Report. They also need at least four years of experience as an agent or broker (during the past 60 months) to apply.

Additionally, they need to complete 270 classroom hours of qualifying real estate courses as well as an additional 630 classroom hours.

Meeting the qualifications to become a broker or agent sponsor, doesn’t make all broker sponsors equal. Most agents are looking for experience and customer service when they decide who they will use for their agent sponsorship.

How Much Does a Real Estate Broker Sponsorship Cost?

Broker and agent sponsorship costs vary from broker to broker.

With most broker sponsors you split the commission on the homes you sell. Most sponsors ask for a 70-30 split (30 for the broker), but there may be some deviations.

The cost is one of the reasons you need financial security before you begin your career. You need to pay your fee every month regardless of whether you sell. And because your commissions will start small anyway, you need to be able to work with only 70 percent

Some broker and agent sponsors such as Pinnacle Realty Advisors allow you to keep 100% of your commissions and keep costs and fees low while maintaining excellent levels of broker support.

What Should You Expect from Your Sponsor Relationship?

What makes a good real estate broker sponsor and how can you tell?

During your first two years, you want someone who can provide time and resources for your training. Although you just successfully passed your licensing exam, you have so much to learn before you start building a successful sales track record.

For example, you learned about Texas real estate laws and regulations during your classes. But you won’t be an expert in filling out paperwork, running market analysis, or the subtleties of working with clients.

During the second two years, you want a sponsor who is rolling in leads. As a new agent, you won’t have a significant client list to work from, so you want someone generous with leads to help lift you up.

Both of these are the ideal because a sponsor’s income ties in with your success. Training and leads are essential, but you also want someone who meets your personality. Your sponsor should not only support you but mentor you.

How Should You Choose Your Managing Broker?

Your relationship with your broker sponsor begins with an interview. Interviews are essential because both sides want to know that they’ll be a good fit. After all, your incomes are tied to each other, especially if they provide you with leads.

Although these interviews are also general get-to-know-you conversations, you are the interviewer in this scenario. And there is a list of questions you need to ask at every meeting including:

• Is the brokerage a member of the MLS?
• Does the broker charge a desk fee?
• What is the commission split?
• What training program does the brokerage use?
• Does the company use mentorship-style training?
• Do new agents have access to the annual marketing budget?
• How does the brokerage help new agents promote their listings?
• Does the brokerage hire contractors or employees?
• What benefits does the brokerage provide?

You should also speak with other active agents in the office. They can provide you with more insight (directly or indirectly) about what it’s like to work with the office.

Keep in mind that you aren’t tied to a brokerage forever. Many people do choose to switch within the first one or two years to experience different environments and offices. Moving can help you pick a specialty and benefit from a range of different experiences.

Should You Choose Boutique or a National Brand?

The choice between a boutique brokerage and a brand name real estate brokerage is up to you. In some cases, your options may be limited, given your geographic location.

Both have pros and cons. For example, a Keller Williams office may have a less favorable commission split, but they may have a more structured training program and better community name recognition.

Which sponsorship is right for you? If you need more structure and you need someone guiding you and telling you what to do, you may be a really good fit for a national branded brokerage. There, you will be more like an employee and typically, you will earn less.

At a brokerage like Pinnacle Realty Advisors, you have the freedom to make your own business decisions, and you will earn more off of the back of your own hard work since you keep 100% of your commissions.

Do I Need to Work for Someone Else’s Brokerage?

You need a sponsoring broker to activate your license, but that doesn’t mean you need to go work for someone. After all, didn’t you become a real estate agent so that you can work for yourself?

There are options available that help you start as an LLC so that you can create your own company right off the bat. This works for those who are very familiar with the world of real estate and have a client list but who only recently obtained their sales license.

With an LLC, you can hire your own agents, market your brand, benefit from an in-house attorney, and keep 100 percent commission. With sponsorship, you don’t even need a brokerage license to get started.

Are You Ready to Start Your Career?

An agent sponsor or sponsoring broker will activate your real estate license. But you don’t need to hand over 30-40 percent of your commission forever.

A sponsor can teach you the practicalities of being a real estate agent and help you generate more leads than you can on your own. But you don’t need to tie yourself down to a brokerage forever.

Are you ready to strike out on your own? Click here to learn more about how Pinnacle Realty Advisors can help you ditch your broker or simply fill out the form below.