5 Tips For Starting Up A Real Estate Brokerage

If you’ve always had a passion for selling property and want to get in on a nearly $226 billion industry where you could earn as much as $160,000 a year, starting your own real estate brokerage makes complete sense.

However, while this seems like a pretty dream, reality can be quite another thing! From getting your license to finally launching your firm to running it successfully, there’s a lot to cover in the process.

If you’re making your dream a reality and working towards starting up a real estate brokerage, here are five tips that’ll come in extremely handy.

Tips to Start Your Real Estate Brokerage

In the world of real estate and “homes or condos for sale”, you can easily drown and let the competition get one over you if a few basics aren’t in place. Here’s what you need to keep in mind.

1. License to Sell

Getting licensed is non-negotiable and necessary for opening up your own real estate brokerage.

Even if it wasn’t compulsory, think about it—potential homeowners will more easily approach and trust you if they know you can walk the talk. Your qualifications are the first thing that most homeowners will look for and one of the primary indicators of your efficiency and reliability as a broker.

While the process varies from state to state, the most basic process for obtaining a license is to complete your pre-licensing education (typically 45 hours of study before a candidate can apply for the license), gaining at least 2 years of experience (some states require you to sign off on a predefined number of transactions to be eligible), passing the broker’s exam, and paying the license fees (usually between $150 and $200).

Completing the above will get you your license.

2. Plan It Out

Even with a license, you won’t get far without a solid plan for your brokerage. This involves figuring out a lot of things:

Budget: Running your own brokerage is going to be expensive. Some things to consider include your marketing costs, operational costs (phone expenses, fuel, software, internet expenses, office rent), wages/salaries for anyone you plan to hire, your website, and insurance.

Even for a small, new firm, this could easily amount to around $9,000 a month. Planning your expenses right at the beginning and having a reserve for any unforeseen expenses is a wise idea.
Your Business Model: This involves deciding on the type of brokerage you want to run (franchise or independent?) as well as planning your finances and marketing strategies, implementing these strategies, assessing their impacts, and making any revisions. A vision is highly helpful, as this is what will drive your brokerage for the next five years, at least.
The Legal Structure: There are legal structures that you can consider for your brokerage. Do you want to be a corporation (this makes your brokerage a separate entity from you)?

Or do you want to be a sole proprietor? How about a limited liability company (LLC) or a partnership? Each system has its own benefits and disadvantages; research these carefully before deciding. Once you decide on the legal structure, make sure you register your business.

3. Keep Your Competition Close

Given how lucrative the real estate industry is, you’re going to face a lot of competition.

While being a blinkered horse has its benefits, it’s much more advantageous to know your competition and understand exactly what you’re up against, so that you can tailor your strategies accordingly.

Additionally, your competition’s commission rates will influence yours. You can rest assured that before contacting you, your client has shopped around and is aware of the kind of commissions and fees that realtors in an area are charging.

Being aware beforehand of the rates offered by the competition will help you offer competitive rates.

4. Your Identity

Build a strong identity for your brokerage.

Find an easily recognizable but unique name—do you want to simply name it after yourself or do you have partners to consider? Keep it simple. There are several name generators that can also help.

Similarly, find a catchy logo and slogan. Your logo will be your visual identity. You can generate one using Canvas (for free), but it’s recommended that you invest in a professional who will listen to your needs and customize a logo for you.

5. Technology Is Your Marketing Friend

While traditional marketing strategies are still essential (signages, flyers, business cards, mailers, brochures, etc.), digital marketing is the marketing star of today.

With the internet widely available and used, it’s more likely that buyers will find you easily online.

Some basic digital tools that can considerably increase your leads each month include software for lead gen (custom landing pages, social media posts, and other lead capturing and scoring tools), email marketing, SEO and CRMs

These tools will make your operations more streamlined and efficient, so always account for digital marketing costs, too.

The Bottom Line

While it can seem like a lot of work, laying a strong foundation for your real estate brokerage can go a long way and set you up for success. Make sure you put in the research and legwork and you’re golden.