When you are running a real estate business, you are basically running a real estate brokerage where you lease an office and have sales agents working for you in that office. But it is not as simple as getting sales agents to do all the selling for you. As the business owner, you need to create a business that knows how to target customers with real estate that they will want to buy.
While there are many factors to consider while selling your home, running a real estate brokerage needs a lot more effort and knowledge. And since real estate is such a big investment for most buyers, you cannot expect to make any money within the first couple of months of your business being open.
To help you get on the right track when starting your real estate business, here are the 7 steps you should take to build this business into a success.
1. Market Research
Before you do anything else, you need to research the real estate market in the area where your business will be opening. What type of real estate are you going to be selling in this area? Condos? Single-family homes? Both? The answer may depend on the type of real estate which is in the most demand for that area. Once you figure this out, research the demographics of people who are purchasing this real estate. For example, if you were opening up a business in the American state of Florida, then you would be targeting retirees and senior citizens.
2. Write a Business Plan
Now that you know your market demographic, you need to write a business plan which outlines all the information about your business. This plan will continue an outline of the company’s overall objective, business description, income & expense projections, market analysis, sales strategies, and organization management. The benefit of having all this figured out is that you can look back on it in the future as you’re running your business.
3. Creating the Business
Creating the actual business entity for the company is easier than you think. In the United States, you would just fill out an application to create the entity and then submit the application to the Secretary of State office in the state where the business will be based. There will likely be a small application fee of under $150.
Remember that the company name you choose will be the brand of your company. Make sure you choose a good brand name that people will remember.
4. Obtain Licenses and Permits
Running a real estate business will require you to be a licensed broker and sales agent. This means you need to go through a broker real estate course and pass the license exam if you haven’t already done so.
There may also be local permits that you’ll need as well, depending on the city and state that you’re in. Check with your local City Hall to find out more details on this.
5. Obtain Financing
If you’re not using your own money as startup capital for your business, you will need to obtain financing from either a bank or third-party investor or venture capitalist. This will require you to present them with your business plan, so they can see what they’re potentially investing in. So, make sure your business plan is well organized.
6. Set Up the Business
If you have obtained the financing and all the other licenses and permits that you need, now is the time to search for office space. There are cheaper companies which rent out shared office space while others let you lease the entire office. Use whatever option is most affordable and set up the base of your business there. Then, you can start hiring sales agents and start making connections in the real estate world.
7. Market the Business
All that you can do now is market your business to both real estate buyers and sellers. You’ll want to connect with the sellers first and get them to sign a contract where they agree to sell their property through your brokerage. Use the MLS system to get their listings into a statewide database that is shared with other agents and brokers. That way, they can help sell your property listing and then split the commission with you. Use every other form of marketing that you can, such as social media, flyers, email newsletters, websites, etc.
If you’ve done your market research properly, you’ll be advertising to targeted demographics who will be interested in purchasing the properties that you’re selling.