Tips on Starting a Brokerage from Scratch
Summary: A brokerage might be the financial investment that will take your real estate endeavors to new heights.
For those that are looking to take their real estate investment to the next level, starting a brokerage might be the right move for you. Now, by doing this, you’ll have multiple agents split their commission with you as well benefiting from a brokerage ownership.
Remember, as a broker, you’ll be taking on supervisory duties that don’t have to as an agent, plus you’ll have to take care of overhead costs. However, this opportunity can provide an immense fortune if done correctly.
Here are some tips from the finest minds in the business that will help you get started.
First off, you’ll need to have the funds to cover your startup costs such as renting or buying your own space, supplying your office with the appropriate equipment, insurance, website design, and many other aspects. You’ll also want to cover your operating expenses for a minimum of three to four months. Otherwise, you’ll end up running yourself out of town before you get a chance to thrive.
It’s crucial to look up what broker-licensing requirements are in your state as well as obtain your real estate broker’s license. In most states, you’ll have to take a course, be 21 years of age, and have practices real estate for a minimum of two years.
An important step every business needs to take is to create a website to expose yourself to potential clients. Be sure to set up a professional-looking website that incorporates a services that includes listings in the area. Most home shoppers begin their search online, which means more business for your brokerage.
Be sure to purchase the correct insurance that covers you in a variety of areas. Remember, as a broker you’ll be taking on liability for the actions of your real estate agents. To protect you and your assets, errors and omissions insurance will cover you in the case that an unhappy client decides to sue your brokerage.
Every office requires essentials such as a waiting area, conference room furniture, reception desk, computers, fax, copier, phone system, and other items. If you’re hiring independent contractors, they can utilize their own individual computers if they prefer. On the other hand, if you have in-house agents, you’ll want to provide desks for your agents.
Recruit the Right Agents
Established agents that have worked in the field for years will be a great asset. While new agents might bring a plethora of excitement and enthusiasm, you run the risk of allowing them to make errors in the field that could lead to legal issues. They’ll also require mentorship by you or a specialized trainer. Keep this mind when you’re taking care of the hiring process.