So, you think you have what it takes to be a real estate magnate? Real estate can be a tricky business, with the market steadily fluctuating. If you think you’re ready, here are 10 steps to starting your own real estate brokerage business:
Determine the type of business you want
There are three basic types of real estate brokerage:
There are more types of real estate, of course. Choose the one you know you can work with best. Take into account your possible market, your contacts, and your competition.
Update your knowledge
Review everything you know in the real estate business. It doesn’t hurt also to do advanced research on the latest developments in the market.
Update your knowledge, and keep learning even after you’ve started your business.
Make a list of contacts
It’s time to use your Facebook, Twitter and other social networking accounts wisely. Check your contacts for possible clients.
Expand your network and keep in touch.
Study the target market
While you’re talking to your friends and classmates, look at your target market. Study their wants and needs.
You can use all this information when you go to the planning stage.
Study the competition
Keep your friends close, and your enemies closer. Study the competition’s works and their marketing strategy.
Take note of their shortcomings, and what they DON’T offer.
Settle all legal and money matters
Check your funds. If you need money, you can request funding from private investors and banks.
Remember, you will need to spend on licenses, legal fees and errors and omissions insurance. You’ll need to open a few accounts for your business, like a broker trust account.
Forbes.com released a superb article on the legal matters you need to know.
Write a detailed business plan that’s good for the next three to five years. Visualize and create your marketing strategy; make a list of expenses, your expected income, the expansion of your market, and your employees’ growth and development.
Search the internet for sample business plans that you can use as a guide.
Secure all requirements
Check the licenses you need to get. The requirements vary per state, so you better do your homework carefully.
Invest in a lawyer to help you with all legal matters. It might cost you a bit more, but you can’t do everything alone. Get a corporate lawyer you can trust.
Start hiring agents
Screen your agents personally. Find people who have the same vision and enthusiasm as you. Develop an independent contractor agreement for your agents.
Talk to your lawyer about the policies in line with your code of ethics.
Prepare Plan B
Lastly, prepare a contingency plan. It’s always best to prepare for the worst. Using your own development and business plan, try to find leaks and possible problems. Work out solutions.
Always create a branch of options.
Owning a real estate brokerage business is a giant leap. It takes passion, patience and a lot of perseverance to make it work. Always challenge yourself and your agents. Never settle for anything less than what you envisioned your company to be.