In this talk, Steve D. Valentine recounts his ten‑year experience owning a Realty Executives franchise brokerage, explaining why he ultimately folded it. He describes the operational complexities of running a brokerage—dual bookkeeping, liability exposure, E&O insurance, and the need to “babysit” the company for the DRE. He argues that today’s brokerage selection is fundamentally an investment decision, detailing how splits, caps, and equity rewards (e.g., Real Brokerage’s $12,000 cap and stock grants) affect an agent’s financial return. Valentine contrasts owning a brokerage with affiliating to cloud‑based models like Real or eXp, highlighting the levers agents can pull (training, office space, creative freedom, wholesaling, personal property sales). He offers a framework for agents to evaluate brokerages based on their business goals, liability tolerance, and identity, urging them to pause, assess burnout, and redefine their purpose. The talk concludes with a call to his “Build Not Bought” sessions and links to identity‑prompting resources.
Chapters
I used to own a brokerage until I didn't. And here's the reason I got out. You would think, well, if you have your own brokerage, you have control over all the things you want to do. You're right. You have two sets of books you're running. You have the liability and to basically babysit the company for the DRE. See, now choosing a brokerage is a little different than it was 20 years ago because now it's an investment decision. I used to own a brokerage until I didn't. And here's the reason I got out of owning a brokerage. So it goes like this. In 2009, we opened a small brokerage. It was a Realty Executives franchise. We were in the REO days and it served a purpose to have control over the REO accounts and the decision-making on it. That was the only reason that we did it. And it served well with my partner Dave and my wife Wendy. And we ran that for about 10 years. But then as the REO started to die, you started to realize like, this is working double business because I'm still a producing agent and so is my partner Dave. So you process the transaction and then you have to process it through the brokerage and you have two sets of books you're running because you got to account for the brokerage and the partnership there. And then you have to account for the agents. And then on top of it, you have the liabilities like you already have liability in the transaction as an agent. But then the broker as well has a liability because they're to protect the company and all the other pieces. That come with it and to basically babysit the company for the DRE. So why do we give up on the brokerage? You would think, well, if you have your own brokerage, you have control over all the things you want to do. You're right. There's the pros and the cons is that the brokerage gives you flexible, nimble. You can do all the things that you want to do to grow here. You can expand, you can go nationwide, you can do all kinds of things by owning your own brokerage. It also comes with a lot of back office, back end, and liabilities that come with it. So we chose to fold up and we took the amount of money that we were spending to run the brokerage and E&O insurance, liability, things that we couldn't see, and cost of, you know, insurance and just running the brokerage and the extra time to run it. And it didn't equal out with what we could do if we moved the operation into a current brokerage that was operating where the broker had the liability for the team and everything else, and we had less paperwork and less things to process. So from a business standpoint, that's why we did it. From a real estate agent standpoint, it gave me more time and flexibility to focus on the thing that I was good at, which was production. So that's the reason, like, owning a brokerage is not what it used to be unless you're in a quality of agents and you're really producing in a fact of it's almost like a small team or a team inside the brokerage. To where you really have a quality control over what's happening there. So that's kind of my opinion on owning a brokerage. If I was going to do it differently now, I would take that brokerage that we owned and I would fold it into something like Real Brokerage because of the additional levers that can be pulled with the agents, with the team in the investment standpoint. See, now choosing a brokerage is a little different than it was 20 years ago because now it's an investment decision. Now it's a support decision. So when you're making a choice on brokerages, whether you own one or you're an agent, you start to look at the brokerage is not just a, a place to house your license. It's actually a financial investment decision of where you're going because every brokerage you go to has a financial investment. They typically call them splits. So let's change the word. Let's change it that Real requires me to invest $12,000. That's my cap, 85/15. Real requires me to invest after my cap, $285 per transaction. Now, when I meet those metrics, I have rewards, I have an investment. So when I hit Elite and I pay my $6,000 in my cap, which is a total of 18, the brokerage rewards me with $16,000 in stock when I accomplish that in any given year. That's a financial decision. You see, I invested $18,000. I was returned $16,000 in stock that will continue to grow because of my production. You also look at those splits as to what does my broker do for me? You're investing in the company. So what are you investing in? What are you getting in return? Are you getting training? Are you getting office space? What abilities do you have there? Can you be creative? Can you do wholesaling? Can you invest on your own? Can you sell your own properties? All these are investment decisions in where you go next. You see, a brokerage move is not just what it makes you feel like in the split. It's everything that goes on afterwards that makes a difference. Because unlike what it was 20 years ago, where reputation tied to big brokerages was the end-all be-all and you wanted that reputation with the big brokerages, the international, especially during luxury. And now I don't think it matters as much. I think your reputation stays with you. The brokerage is a flag you fly under and it's an investment decision that you're making. And by the way, most brokerages you won't stay at for a lifetime. We've seen so many changes happen in the last 5 years that there's going to be constant movement. And now the movement is going to be based on, hey, what is the smartest investment decision I can make for my business where I want to grow? And by the way, When you look at these, as I've done some different prompting inside AI, is not everybody's business currently is a good fit for something like Real or eXp. It may be more of a smaller brokerage and team as they're learning because they're not ready for those other levers to be pulled, or it doesn't fit their business model. Some people's business model doesn't have to do with a lot of scaling and agent attraction or a lot of production. So it makes sense for them maybe to stay where they're at or move to a better collaborative environment that helps you grow in the purpose and the space that you're in. Don't let people drag you where they think you should be if they're not asking you questions about their business or about your business. Every agent I talk to, I'm constantly asking, so tell me about your business. Where do you want to go? What do you want to accomplish? So that I know what their goals are and then can give them the realistic facts in the investment side of, hey, I don't think this is a good idea. This is a good idea. Here's a couple of options that you should explore, but I might not be a right fit. The brokerage is such a different model these days, and it's one for you to choose carefully, and it's one for you to understand the logistics and the liability behind it, because you can also get into brokerages where you're building a multimillion-dollar company that could hinge on a broker's decision. You're right. If, if I do something wrong at DRE and I get a complaint and it doesn't align with the company, could I be out all of my investment? There's a lot of things that you need to factor into your business before you make these decisions, especially if this is your career, if this is what you're building. If you're not changing, you're choosing. And what that means is that if If you're not choosing to look at all the different models to figure out what works best for you, what environment works best for you, what levers you can be pulling for financial, and who you can be learning with and who you can be building with. Those are the things that you should be asking yourself in this day and age when you're considering a brokerage. And if you're kind of burnt out on owning a brokerage and you wanna figure out a path on how to make it better for yourself and your agents and reduce your liability. Love to have that conversation with you. Click the links below. By the way, the greatest way to understand in the brokerage side where you're at right now, if you are feeling burnt out, maybe your agents are leaving, maybe there's some different things. Pause. Just pause and start to identifying, you know, where you started and are you still on track with what the goal is? Did the market change? Did you change? Sometimes we don't evolve in these conversations and the same vision or goal that we had 10 years ago needs to be refined and redefined of what the purpose is. And then maybe you'll figure out what's next for your life. And, you know, I have the receipts to prove that sometimes we hang on to things too long and we need to cut them off. But because our identity is so rooted in what it is, we won't do it. It's too hard. If your brokerage or your team or your business is your identity, I'm going to encourage you to pause because you need to identify the who, which is you, and what you want from that business and that brokerage in order to move forward. So let's refine and redefine where you're going. And I've got a couple links below that will really help you in this space. One is the identity prompting, which is just prompting you with really great questions that make you think about where you are, who you are and what identity you want to emerge in your business. There's a business section of this too. If you want to get into personal and business, I highly recommend it as we're talking about business here. And then if you want to join just for the fun of it, I highly encourage it. If you're looking for change, join me on Build Not Bought, Wednesday mornings, 9 a.m. I'm just delivering ideations, blind spots, and showing agents what can be different and ways they can apply it to their life to build the life that they want through the business that they love so they're not trying to escape it at the end of the day. I'm Steve D Valentine, and we will catch up with you next time.
