Anyone who enjoys selling properties can also enjoy owning an agency. With several agents dividing your commissions with you, owning your own business makes it easier to overcome market fluctuations, and attract profits. Of course, as a broker you must also take over the supervision duties you do not have as agent, and the overhead of running an office. But if you enjoy leadership and have abilities to handle the flow of money, the payoff can be great, psychologically and financially.
Save enough money to cover upfront costs, which include renting or buying a place, office equipment, logo design, a poster for the office, posters for properties, website design and insurance. You also need to set aside sufficient funds to cover operating expenses for at least three to four months.
Choose a location for your office. Consider zone restrictions, visibility and parking for your agents and clients, as well as square feet (square meters).
Set up a website that looks professional, and employs a service that allows you to display all the listings in the Multiple Listing Service as well as your own. Approximately 80 percent of home buyers start looking for the property online, according to a Forbes.com article titled “How to run a real estate agency: Technology,” which quotes REAL Trends and a Harris poll Interactive.
Contract insurance against errors and omissions. As an agent, you legally have indirect liability for the actions of your agents. The insurance against errors and omissions covers you in the event that is an unsatisfied customer.
Develops an agreement with independent contractors that outlines your expectations regarding the agent’s behavior, and includes stipulation of commissions with the agents on an individual basis. Since they are independent contractors, it is not necessary for agents to remain in the office, but you can expect them to adhere to a code of ethics, and you can also describe your office space usage policies and when agents can answer no Requested.
Equip your office. The essentials include furniture in the waiting area and the meeting room, a desk and a chair for the reception, a fax, a photocopier, telephone system and at least one computer. As independent contractors, agents may bring their own computers. If you provide desktops for agents, you can choose to charge them a fee for their use to offset operating costs.
Recruit agents. Established agents will have a continuity that will benefit you. The new ones can bring a lot of energy and enthusiasm to your agency, but you must train them carefully to make sure they do not make legal mistakes. They may also require sales training.
Develops a clientele. Each agent will probably bring their own customers; but also advertise your agency in newspapers, real estate publications, and radio and television. Realtor.org also recommends organizing an open house in the office, sending emails and letting you know your profile through advertising. Advertising may include, for example, sponsoring a charity or a minor league baseball team. Also, consider hiring an optimization company to boost the visibility of your website in search engines.
- To maintain your profit margin, consider charging agents a fee for the use of the photocopier and fax in the office. Agents may also contribute the cost of insurance for errors and omissions.
- Do not skimp on professional help. Have a lawyer review all agreements with agents, contracts and appendices.