Thinking about opening a real estate agency? We tell you what you need to know to get started.
Getting Started in Real Estate Agency Ownership
A real estate agency and brokerage business can be a great way for sales professionals to transition into small business ownership. Real estate agencies take a percentage of every sale their agents make and successful startups give owners the luxury of focusing their energies on business growth rather than selling individual properties.
If you're new to the real estate game, your first step is to get a real estate broker's license. Even if you don't plan on selling real estate yourself, the licensing process will educate you about the real estate industry and give you the ability to fill in for agents, when necessary.
Once you're licensed, you'll need to decide whether to buy into a real estate franchise or start an independent agency. Franchised real estate agencies and brokerage firms are attractive because they have name recognition and provide listing resources like online databases. But if you're convinced you can make a go of it on your own, an independent agency approach will ultimately leave more money in your pocket.
If you are thinking about buying into a franchise, please be sure to read our article Before Buying a Franchise!
Your next step is to participate in the local board of realtors. Real estate agencies rely heavily on their relationships with other realtors to move properties. But more importantly, your involvement with a local board of realtors will help you stay current on real estate laws and regulations.
If you have experience as a real estate agent, network with previous clients to pick up listing opportunities for your agency. If not, you'll need to start networking with your agents' client lists as well as your friends and other business contacts. The idea is to generate as much noise as you can about your real estate agency with people who are already familiar with your selling skills.
As you probably know, the real estate industry is full of legal pitfalls. Establish a relationship with an attorney early in the startup process to make sure you've covered all of your legal bases. On a go-forward basis, network with other attorneys to build relationships you can leverage during the course of transactions.
How to Create a Real Estate Brokerage Company Business Plan
There is no right way to write a real estate agency business plan – but there are plenty of wrong ones. Although you'll have a certain amount of liberty in the form and content of your real estate agency's business plan, you'll also want to make sure to cover the required material. Even small omissions can have radical implications for your company.
If you're unfamiliar with business plan essentials, you may want to think about purchasing business plan software. Robust software solutions incorporate best practices while streamlining the writing process, ensuring that your business plan reflects your company's commitment to quality.
Our list of business plan software packages offers a comprehensive guide to the best solutions on the market.
Before you open a real estate agency in your town, it's a smart move to determine how many competitors you have. Try our link below to generate a list of competitors in your city. Complete the form by entering your city, state and zip code to get a list of real estate agencies and brokerage businesses that are close by.
Before you open up shop, make sure you know what you will offer to your customers that provides a significant advantage over your competition's offering.
Learning More About the Industry
After you've evaluated your local competitors, be sure to learn from folks who are already in business. If you think your local competitors will give you advice, you're being overoptimistic. It'd be crazy for them to teach you the business.
On the other hand, an individual who has a real estate agency outside of your community may be willing to share their entrepreneurial wisdom with you, provided that you won't be directly competing with them. In fact, they are often very willing to share startup advice with you. It can take a while to find an entrepreneur who is willing to talk, but it's well worth the effort.
Where do you find a real estate agency manager who is willing to advise you because you live in different cities?
It's not that hard. Just use the handy link below and enter in a random city/state or zipcode.
Reasons to Pursue a Real Estate Brokerage Business Acquisition
Many would-be real estate agency owners are perplexed by those who encourage them to buy a business rather than starting one from scratch. But what's so great about a real estate agency acquisition?
The availability of acquisition capital should be a major factor in your decision. Investors and lenders have it and you need it. Yet many are hesitant to fund startups, preferring instead to fund business purchases.
Although there are a lot of factors to consider, the decision to buy a business to get acquisition capital almost always pays off.
Is Franchising the Right Option?
Franchises reduce the amount of time it takes to launch a business because they leverage the expertise of successful real estate agencies and brokerage businesses and enhance the visibility of your startup in the local market. While other startups are struggling to locate vendors and automate workflows, your business could be open for business.
The link below will take you to the Gaebler real estate franchise directory, a resource containing a list of real estate agencies and brokerage business franchise startup opportunities in your area.
These additional resources regarding starting a business may be of interest to you.
If you sell to real estate agencies and brokerage businesses, you're in the wrong place. These resources are more appropriate for you:
If you are still exploring all of your options, please browse our directory of guides below.