Tips for Starting a Real Estate Business

How to launch the right type of real estate biz at the right time

By Marcia Layton Turner

Considering starting your own real estate agency? If you're fascinated with houses, enjoy meeting people, and know your local area well, you're well-positioned to get started. You have a choice to make up front, however, regarding your business' structure. Will you:

Start an independent office
Buy a franchise
Partner or merge with an established operation

Whether you're already working as a real estate agent or not, make sure you've tackled these steps before you make that decision.

Earn your real estate license

To run a real estate company, you either need to be a broker or hire one to manage the real estate transactions. But if you're starting solo, you'll need to have your own license.
Try:

Study online for your licensing exam or sign up for an online course that guarantees you'll pass on your first try, no matter which state you're in.

Research the pros and cons of real estate company ownership

While the appeal of owning your own agency is the potential to earn more money, there are downsides, too, such as liability, higher costs and increased administrative activities.
Try:

Learn more about the business startup process, get advice on running a successful agency, and participate in discussions like Agents Online or Point2Agent to learn more about running your own show.

Consider if a franchise is the way to go

Although it requires a cash outlay to become a franchisee, becoming part of an established real estate brand could be a smart idea if you have no real estate reputation of your own.
Try:

Carefully compare the various real estate franchises, such as RE/MAX, Century 21, Coldwell Banker, ERA, LampPost and Help-U-Sell before signing on the dotted line and writing a check.

Develop your business plan

Whether you need financing or not to set out your own shingle, preparing a business plan to map out how you'll start and run your company will significantly increase your odds of success.
Try:

Familiarize yourself with a business plan outline and take a look at what the experts have to say. Real estate guru Mike Ferry offers a complimentary business plan as a guide to developing your own.

Study your local market

Learn more about real estate conditions in your area, gain an understanding of what's selling and what's not, and for how much. That kind of knowledge will make you a sought-after resource to clients and colleagues.
Try:

Carefully read your local real estate listings and MLS listings and stay current with blogs on real estate market conditions such as Ziprealty

Join the National Association of Realtors in your area to gain access to home listings and necessary real estate forms to run your business.
Buy errors and omissions insurance to protect your company from lawsuits.
Work hard to systematize your company's operations to make it more efficient and profitable for you.
Place an ad with the National Referral Roster, a directory of national real estate firms, and earn priority status in receiving referrals from out-of-town colleagues.