Tips for Starting a Real Estate Business
Steps and Tips for a Successful Venture
First off the main thing to remember is when starting a real estate business, you should think not only of the possible profits you will gain. More importantly, you should know the right steps to take and the tips to follow in order to earn those profits.
The second thing to remember and the most important even before putting up the business, make sure you have sufficient funds for covering the startup costs. Initial expenses for a business includes rental fee for your office, outlay for office materials and equipment, office sign, website building, marketing and of course, business insurance. Your startup money should also cover the operating expenses for the first 1 to 2 years to give you enough time to build up your staff with quality sales staff and property managers and an experienced receptionist as your receptionist is the front window of your business. Your receptionists will be your client’s first point of contact when they walk into your office or make a telephone call to your office. A bad receptionist will ruin you before your can have a decent start; on the other hand a good experienced receptionist can be worth their weight in gold to your business after you have put it up.
Obtain a Real Estate Agents License
The requirements for obtaining license real estate agent vary on each state. Thus, you should know first what your own state requires from those applying to get their license. In many states, the requirements include taking a course approved by the state, minimum age of 18 and salesperson experience of 16 years of age.
Choose Your Office Location
Ideally, any business establishment or office must be located in a place where it will be easily seen and will be easily accessible to people (both your clients and your agents). Other factors to consider are zoning and square footage of the actual office. Remember the old saying. LOCATION, LOC ATION, LOCATION.
Build a Professional Looking Website
Having a professional-looking website will increase the value of your business. A website can also be an effective marketing tool. On your site, you can post and display all listings, both your own and those from other services. A website is very helpful to your real estate business because more and more people are nowadays turning to online resources when searching for homes that they can buy. You need to be familiar, as well, with other related technologies used in real estate business.
Remember Your Insurances
Professional Indemnity insurance plus other insurance policies (check with your insurance broker) are necessary for your venture. As an agency Principal, you have agents whose actions you should be liable for. In case a disappointed client sues you, the insurance will make sure your business will be legally covered.
Prepare an Agreement
An agreement for independent contractor should be developed and written. This document will outline what you expect from your agent, his/her behavior, individual agent's commission split, etc. You are an independent contractor so you should not expect your agents to spend required time in the office. However, they must adhere to the code of ethics required of them. You are also allowed to set policies which they must follow in case they need to use space and resources in the office.
Provide Tools and Equipment in Your Office
Your business office should be well-equipped in terms of facilities and tools. There should be a waiting area, a conference room with appropriate furniture, reception desk, copier, fax, phone and computer. You can provide your agents with computers that they can use. You may include in your policies that agents pay for desk fees to compensate operation costs.
Recruiting Your Agents
Your agents are your ally in the business. You need to choose established agents whose experiences will benefit your business. In other words choose fully licensed agents who have a sound track record of listing properties and also a good sales record as well. You may also choose to have a fully licensed agent whose sole job in your agency is to go out and list properties to sell and allow the sales team to sell those properties. If you choose this option as well then you are required to negotiate terms and conditions with your listing agent as to commission’s etc. New and beginner agents will bring in excitement and energy in the brokerage business. However, they need to be trained so they will not make any legal errors. In recruiting agents, understand that they must also be provided with sales training.