A brokerage has a positive market valuation, while having a negligible book value. Options theory is used to value the firm. The firm writes an option by taking a contingent claim on income generated, through the commission split. The firm holds other options, including the right to modify the commission split. A valuation model for the firm permits a hiring strategy to be developed.
Brokers vary by characteristics such as experience.
Whether it is better to hire an experienced licensee over a rookie depends on the expected future career with the firm, commissions generated, and the achievement of sales targets. The value of a superstar to the firm is determined, to permit incentive structures on the commission to be generated. The theory of human capital suggests that one's wage varies positively with ones formal education and informal training. A common proxy for informal training is experience. In the real estate industry, other measures of skills include being a broker, working in fields other than residential, and being a manager.