How to Start a Successful Real Estate Brokerage in 2021

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• Lead generation helps fill your sales funnel with targeted leads.
• Make sure that any broker you hire has a current, active license.
• All of these attributes make independent brokerages successful, so think about whether you’ve got enough experience to make this business model work.
• If you’re an established brokerage, you’ll need to slowly transition to a virtual model, giving you time to get around any teething problems.
• In this structure, agents intentionally operate more like a team—a small group of highly productive and focused real estate agents.
• Don’t forget to develop a high-quality, SEO-optimized website, so your customers can easily find you.

It feels like the time is right to start a brokerage of your own. But if you don’t know how to start a real estate brokerage, it starting a brokerage firm can seem like a daunting task. Ask any real estate agent how they market their business, and you’ll find that “SEO” and “a good web presence” are common responses. Beyond the required networking you’ll need to do, maintaining an online presence in your real estate niche is key to your success.

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All of your future branding and rebranding decisions should expand on these ideas. Your business name, company logo, and real estate website design should all grow from the concepts you laid out here. When you start a new business, even a home-based real estate business, understanding the numbers involved is crucial. Here’s a good read on the different insurance types you should consider as a real estate business owner. Today, most marketing and sales materials are sent digitally, saving much money on color printing costs. This is not required if you’re a sole owner and don’t have employees.

Establish good habits for lasting success

Recruiting listing agents won’t be easy, but investing the time, effort, and money into recruiting them will be worth it. Every new listing agent you can recruit helps build your brand. Financing can be trickier in this industry than it is in others. Real estate brokerages don’t have large assets to lend against—only desks and a few computers. That means banks don’t have the same security they do when they make loans to other entrepreneurs.

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Start by creating a budget that outlines your expenses and revenue projections. This will help you stay on top of your finances and make informed business decisions. Alternatively, you may specialize in a particular type of client, such as first-time homebuyers, retirees, or investors. The latest real estate investing content delivered straight to your inbox. There are several types of properties to specialize in, such as commercial, residential or industrial. For a $500,000 property, this would be a $25,000-$30,000 commission.

The Essential Checklist for Setting Up Your Virtual Real Estate Brokerage

As with other personality-driven fields (like real estate sales and other creative services), people are not just buying your services but purchasing a relationship with you. Many real estate businesses will regularly use an outside bookkeeper, paid hourly, in the office to handle all entries, pay all the bills, and manage invoicing and receivables. Having help with this aspect of managing a small company can be indispensable, and the time it can free for a busy owner is invaluable. Plan for all of the necessary legal and logistical business considerations, and you’ll create a strong foundation for the prosperous future of your successful real estate business. 100-page business plans are not standard in the real estate business. Keep your business plan short, and focus on the essential details.

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If you really want to succeed, you’re going to have to dig a little deeper than money as a source of motivation. Maybe you really crave independence or want to prove something to yourself. Maybe your commission checks aren’t creating the lifestyle you want for your family. Whatever your reason, you better know what it is before you get started. Trustworthy is an online service providing legal forms and information.

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And that’s if you’re bootstrapping it and jumping in with the bare essentials. Costs can easily hit $200,000, and that doesn’t include the ongoing fees you’ll be liable for like license renewals. Even if you have everything planned out to the finest detail, the first year (or two) owning a brokerage can be rocky. So, you must have a safety net to see you through, as well as enough financial backing to give your brokerage a shot at being successful. To mitigate the risk of going bankrupt, you need to have enough savings in the bank to last you for at least a year without income.

The length of business plans vary, but they generally outline between one and five years. Few agents are able to fully develop their business in only a year, while planning five years into the future can be very speculative. For most new agents, three years is a reasonable time frame for achieving a degree of financial success and establishing a viable career in the industry. Virtual brokerages, also known as cloud brokerages, are online only with no physical location. Since most agents do the bulk of their work from a home office, a virtual brokerage makes a lot of sense.

Here are some tips for transforming your existing brick-and-mortar brokerage into a remote one. Free software may suffice, but once business picks up and you manage a significant pipeline, get a CRM with advanced features. Investing in a remote server or cloud storage platform will allow you and all of your employees to access and work on the same documents from different locations at any time of day. Not everyone finds their home to be the ideal work environment. For some people, home is too full of distractions and other responsibilities for them to focus on work fully.

Once you’ve created a business plan and secured funding, you’ll need to start hiring agents. These agents then work with you, and you’ll take a share of their commissions on their sales. It can be a ton of work, and it’s not easy, but it’s possible to build a successful brokerage from the ground up. In this article, we will provide you with 12 tips to help you start a successful real estate business in 2023. Most real estate agents are self-employed business owners affiliated with a licensed real estate brokerage firm. In this case, real estate licensees (agents) run independent businesses under a licensed managing broker’s supervision.

The companies that manage these spaces often provide all the infrastructure you need to work, such as Wi-Fi. You can also usually reserve meeting spaces, presentation venues, or conference rooms when required. This is problematic on the occasions when in-person meetings are necessary. It’s suitable for agents, too, which may make recruiting easier. Instead of commuting to the office, they can work at home and go straight to meet clients, possibly saving hours each day. If you choose to go down the franchise route, you will often be required to have an office as part of your agreement.

Yes, you will show houses to prospective buyers, create marketing materials on behalf of sellers, and maybe go to a few networking events. But real estate agents who have created successful businesses will tell you that those activities are just a small portion of what they do each day. If you’re wondering how to start a real estate brokerage, the first step is to get your broker’s license — then you can have other brokers work under you. After that, it’s all a matter of finding the right brokers and giving them the right support regarding administrative efforts and sales teams. When opening a real estate brokerage in Florida, hiring an experienced business and real estate attorney can pay dividends.

The requirements for obtaining the licenses vary by state, so you can research your state’s specific criteria and go from there. The other downside of owning a real estate brokerage is the huge responsibility placed on your shoulders. You are in charge of finding the sellers and buyers, negotiating prices and fees, hiring agents, managing them, obtaining your broker’s license if you haven’t already, and so on. With your business entity set up, it’s time to put pen to paper on your first deal. A virtual minimum viable brokerage with you performing the role of agent requires the least amount of money. You’ll have to cover business registration, insurance, essential equipment, and reliable transaction management software.

Depending on your strategy, the existence of one dominant brokerage in your city can be an opportunity for you to give consumers a new choice. In order to find out whether or not your vision makes sense for your area, look at the current competition. Evaluate what successful brokerages are doing right—and more importantly, what they’re doing wrong that you could do better.

Competition is hard enough – make it easier to stand out with a specialty when you start a real estate company. Over the long term, a real estate career can be a lucrative small business. Our best expert advice on how to grow your business — from attracting new customers to keeping existing customers happy and having the capital to do it.