The main job of a realtor is to bring real estate owners and buyers together, help negotiate the deal, and provide assistance until the transaction is complete. As a result, the realtor will receive a percentage of the deal, so you can understand the seductiveness of luxury properties.
But, before you can manage anything like high-end real estate, you have to first make the business official and work with several high-end customers. Let’s start with the first step, and go through the steps of actually opening a real estate business.
Can I be a Realtor?
Buying and selling real estate is not for everyone, so even before you consider opening a business in this niche, it’s important to take a step back and analyze the skills it needs.
First, you have to be good at communicating with all types of people. Property owners come from all walks of life, and they are not to be trifled with! You need to understand their needs, and know how to talk to them in order to create a relationship based on trust and mutual understanding. So, if you are the kind of person who is constantly looking to build connections and create a wide network of acquaintances, yes, you are in the right niche.
Second, you need an analytical mind, to assess the neighborhood, the value of the property, and to understand if the price is correct. Of course, an analytical mind will also let you know when you can up the price or when you need to lower it in order to close a profitable deal.
Finally, you need negotiation skills and to feel comfortable dealing with large sums of money. Especially in luxury real estate, the numbers can border on the obscene and you have to know how to juggle everything.
Put Together a Business Plan
While this is not a mandatory requirement, every new business should be based on a well-detailed plan. In real estate is even more crucial to lay down the steps to come, so you will understand all the resources available at a certain moment in time.
To put together an effective business plan, specialists point to the following elements:
- How much you need to get started – You can’t start a business out of anything, so you have to calculate the bare minimum that will keep you in play for the start. Keep in mind that in real estate money doesn’t come immediately.
- Decide on the niche you want to approach – There are several types of real estate agencies like commercial, residential, national, and more. While some agencies take care of everything, as a beginner, it’s best to start with just one niche and expand at a later date.
- Assess the demand for services – If you want to be in business for long-term, you have to assess the current situation and plan for the future. Take a look around and make sure the services you want to offer are needed in the area. Also, do some previsions using current and past data, and analyze the trend: is it likely to have an increased demand in the near future?
- Know the competition – Real estate is a highly competitive domain, so you need to know who you’re dealing with. Watch your competitor’s behavior and learn from their successes and mistakes. Also, try to devise a strategy that will bring a new type of service on the market, one that will create demand and channel clients towards your business.
- Determine if you can get profit – No one goes in business just for the thrill of it so plan ahead when it comes to profits. Based on the data you have, how much money can you expect to get out of real estate in the first year? Is there a chance to increase these profits for the following five years?
As you can see, there are many aspects that will influence your business model, so it’s best to think about everything before opening the actual business. Not to mention that a well-designed business plan can bring you that much-needed financing!
Launch your Agency
Once everything is set in place and planned, it’s time to do the actual launching. For this, you first need to get all the necessary licenses. Check with local authorities to learn about the documents you need. For instance, some states and countries allow people to get both the real estate agent and broker licenses at the same time. Others require you to be a licensed agent for a determined period of time (usually a year) before opening a brokerage.
Once the office is set-up and fully equipped, you will need to set up a broker trust account with your bank (this is required by the law, so the money will be deposited in a trust account until a deal is closed). You should also get errors and omissions insurance, to protect your business against any mistakes that might happen along the way (there is a level of risk associated with real estate deals regardless of how thorough you are).
Now that your business is ready to launch (or you already launched), it’s time to implement an effective marketing campaign, to get the clients rolling. However, before printing any materials make sure you have a good-looking website. In today’s day and age, a company that can’t be found online doesn’t really exist.
Furthermore, the online environment is fantastic for grooming new customers and creating a special brand for your company.
As you can see, if you take all the necessary steps and take your time to plan ahead and consider both risks and possible sources of profit on the long term, your business should be on the right track. Real estate is not that difficult to start as a business, but it gets particularly challenging when it comes to finding customers and building a network, so you have to be really active in these areas.