Changing companies can be a difficult thing to manage in our current real estate market. In the past, you could plan your transition between transactions. However, today, with short sales and home sale contingencies becoming the norm, it is harder for an agent to find an open window to make a smooth transition to another brokerage.
In addition, the rules involved with transitioning smoothly can some- times make leaving a brokerage on good terms harder when there are pending transactions and commissions involved. Even though an agent may be working at another company, maintaining a good working relationship with all brokers and agents is still necessary; burning bridges over a few bucks is a bad idea.
Most companies have transition rules for moving to another brokerage spelled out pretty clearly in either the independent contractor agreement and/or the company policy and procedure manual. With that said, there are several common situations that I have seen pop up over the years when agents move. Here’s how to best handle each situation.
- Pending Transactions – Generally, a pending transaction needs to stay with your current broker. Most companies have this situation spelled out pretty clearly in the independent contractor agreement or in the policy manual. Most companies do charge a management fee for maintaining the file in your absence. So,depending on the size of the transaction or the amount of pending transactions you have, you make want to plan your transition after the file or files close.
- Listings – According to law, the listings belong to your brokers company. So be careful how you handle this situation. If the listing was a referral from your current company, you probably will have a hard time taking it with you. If the listing is for a client that you generated on your own, the best time to make the move would be after the listing expires. If you try to transition before the listing expires, your broker could try to keep it until the listing expires and attempt to sell the property in order to recoup any marketing costs that were incurred for the listing. Every company has a different policy on how to handle listings of agents that leave the company. So be sure to review the company policy before you make your move.
- Buyers – Buyers are probably hardest to track. Generally, buyers can and are taken with the agent to the new company if they are still looking for a property. If they have purchased, then they would fall under the pending transaction category and would need to stay with the current company. If the buyer was a referral from the cur- rent company, you may be required to leave them with the company, or at the very least, pay a referral fee to your current company when you sell them a property while affiliated with your new company. Every company has a different interpretation on what constitutes a company referral, or company generated lead, so, again, be sure you are familiar with your current company policy before you plan your departure.
- Short Sales – You should have a discussion with your broker on any pending short sale files that are in your pipeline. Short Sales are difficult at best and are very management intensive. Chances are good that you are the one that is most familiar with all of the “players” that are a part of that transaction. Therefore, you are probably the most likely person to be able to “hold the deal together.” For this reason, the broker may not want to jump in midstream and take over a pending short sale file. One option you may want to discuss with your broker is to allow you to take the file with you and pay the former broker a referral fee once it closes. If you negotiate well with your new broker, the new broker may help with the cost of the referral fee.
Bottom line, you need to know your company policies before making a move. You need to have a good understanding of what business you can and cannot take with you. Figure out what timing will be the least costly and make your move.