After long years of experience, don’t you feel like you deserve to take the next step? Trying to make the switch between two challenging careers can be a lot to handle. However, this transition is definitely achievable, with the right preparation and the right research. When starting a real estate brokerage, building a team, budgeting, assessing the competition, and marketing are important things to consider. Here are a few trusted and tested tips to help get you going.
For you to begin a real estate brokerage, you need to have a real estate agent license, as well as a broker license. Each state varies on the regulations and requirements to obtain both licenses. You knew the precautions and steps that you went through before acquiring your real estate license. Now, you need to acquire a broker license.
Meeting with a Broker
There are professionals in this industry who have successfully run brokerages themselves. You should consider the process and possible challenges of starting a brokerage. Certainly, industry professionals will have insight into steps that can only be gathered through experience, and they will be familiar with the area. If you are a person who loves challenges, you can always step beyond your comfort zone and contact someone who is willing to give you some tips.
Checking out the competition around you is the smart thing to do when you are getting started. Making market estimates in the surrounding area will help you determine which part of town to set up shop. Conducting thorough research on both the market and major players around you in the real estate brokerage industry is crucial. This will help you stay ahead of the updates and happenings in the market. Additionally, you will get to know your competitors’ weaknesses and strengths.
As a real estate broker, budgeting for yourself is essential. Securing a business loan or going into partnership with an investor are ways to help yourself get started. For budgeting, always have this list when negotiating funding:
- Marketing costs
- Wages for employees
- Security deposit for office space
- Rent for the month
- Impromptu daily expenses
There are two main types of brokerages to consider. One type is a franchise brokerage. Alternatively, the other type is an independent brokerage.
Franchise brokerages operate like chains. Thus, they provide widely recognized training and receive assistance from sister franchises across the country. Additionally, they follow a standard protocol for financial decisions, like commission splits between agents.
Independent brokerages can be considered boutique. Due to their independence, they offer flexibility and exceptional control over operations. However, they typically cannot afford the funding that comes with bigger franchise brokerages. Such freedom calls for more responsibility in keeping the business afloat.
When starting out, there are lots of ways to structure a brokerage. Some of the factors to consider include legal organization and agent compensation. The NAR simplifies these decisions in a helpful and visually representative way.
Brokerages can fall into several categories, but the most common category is LLC. When starting out a brokerage, the most widely approved way to protect yourself is to register your company as an LLC, or a limited liability company. A single party or multiple parties can own an LLC. The aim of the LLC is to guarantee that your business pays taxes when it is appropriate. Additionally, the LLC serves as a shield from lawsuits. Other legal registrations could include:
- Sole Proprietorship
Designating an office space for your daily activities should be one of the first things that you do. You can choose to rent an office or work from the confines of your vacant room at home. However, consider that meeting potential clients and having your employees work in a vibrant environment can give your brokerage the sense of value that it deserves.
Your team will impact the perception of your brokerage, so assembling the right group of professionals and competent agents should be a top priority for you. Before hiring, secure other major members of the team to help make the workload easier. You can have an assistant and a listing specialist keep things running, while you go on a hunt for other professionals to join the team. Once you build your team, channel all of your energy into building relationships with your surrounding community.
Word of Mouth
Advertise your new brokerage to your surrounding community. For a new brokerage, this is the time to make all the noise that you can and build awareness of your company. You can achieve this with the aid of business cards, ads on various local publications, or ads on public transit. Additionally, word of mouth works very well in close-knit communities.
There are many ways to start a real estate brokerage quickly and painlessly. So, start a real estate brokerage now.