Conduct Market Research
Research and planning are key to success in this industry, and this is something that a lot of aspiring agents don’t realize early on. While you are essentially on your own in terms of your own success, you must remember you will be under the purview of a brokerage. As a real estate agent, you can think of yourself as an independent contractor, and because of that, the responsibility is on you to get everything in order. The following steps will help you do just that. Nevertheless, it is always recommended that you consult with a business attorney before taking any steps.
As a real estate agency owner, you have a unique set of competitors. Not only are you competing with fellow agents, you’re competing with the entirety of the Internet. Anyone can conduct their own online search for a home or property using websites such as Zillow.com, Realtor.com, and Redfin.com, to name only a few.
What sets you apart from all of these? Your inside knowledge. People can spend hours searching for their forever home or the home they will want to flip and/or remodel, but they will eventually become frustrated that they don’t have insider access apart from the occasional Open House. That’s where you’ll come in.
Research the market to determine the following:
- What have been the trends in real estate over the last few years?
- What trends can you predict will emerge over the next few years?
- What are the hassles of searching for a home, and how can you capitalize upon clients’ frustrations to make the process easier for them?
- What services are people willing to pay a little more money for?
Convenience is truly the name of the game, but with your help, clients will be appreciative of the personal touch and the inside information you can use to help them find the property they’re looking for.
Craft Your Business Plan
A business plan is necessary no matter what field you are in, and no matter if this is your first business or your twenty-first business. Everything that you venture into requires some pre-planning so that you can preempt any hiccups or obstacles along the way.
The main components of a business plan include:
- Executive Summary. Here is where you detail what your real estate agency is all about and what your primary goals are. It’s essentially a declaration of who you are, what you will provide to your clients, and how you will go about doing that. In order to get any type of help from the bank — such as a small business loan — you are going to need a business plan, so use this section as a quick way to present the overview of your company. Discuss here what services you are going to offer as well as any short-term and long-term goals you have.
- Market Analysis. In this section, you will put forth the research you’ve done on your target market as well as the competition for your area. What does the market look like at the time of writing your plan? Remember, the real estate market can fluctuate, and you can have events known as a “seller’s market” — or one in which people selling their houses are met with more favorable conditions, such as high home prices — or a “buyer’s market” — one in which people looking to buy houses are met with more favorable conditions, such as high inventory and lower prices.
- Marketing Plan. You might be the most prepared person in the world, your designs might be flawless and eye-catching, but you are nothing without a steady client base! Your business plan will have to address how you plan on reaching your clientele and what you are going to do to get your name out there. With the growing popularity of attaining a real estate license, there is more competition now than ever before Marketing yourself the right way will ensure that people come to you.
- Financial Projections. There will be start-up costs and revolving expenses associated with getting your agency off the ground. You will have to look into the costs that come with renting or purchasing an office space, computers and other office equipment, marketing materials, licensing and permits, and more. Be sure to take a good look at this list to determine how much you can scale out and over how much time.
Register Your Business Entity
You will also have to register your business for tax purposes. There are a variety of classifications when it comes to registering, known as business entities. These business entities include:
- Sole proprietorship
- Limited Liability Company, or LLC
- First, you should choose a name for your agency that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another location. If you use your own name in your agency, you might not have to worry about any of that — unless, of course, you have a very popular name.
Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your agency be sued, your personal assets would be protected.
Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.
Again, it is always recommended that you work with a business attorney to ensure that all requirements are met.
Learn the Trade
There is a host of lingo and language you will have to learn to be the best real estate agent you can. It will also contribute to your credibility if you keep yourself abreast of new terms and jargon.
You will take your clients through the entire process of searching for a home, making an offer, closing on the house, and the rest of the legal process when ownership is transferred from the previous owner to your client.
Get yourself acclimated to what is required of you, the buyer, the seller, and the lawyers at every step of the way. It is also important for you to have a profound understanding of the structure of homes (or whatever dwellings you are going to show). That way, if your clients ask you questions, you’ll know the answer.
Though it is undesirable, prepare for negotiations to get sticky or ugly. It is imperative that you learn how to negotiate properly so that your clients can get what they deserve within the legal limitations.
Establish Your Location
Next, determine where it is that you want to localize your agency. How far will you be willing to drive to meet a client and tour a house or a building? Are you going to establish your agency in a town you’re familiar with, or will you have to do some research? Your particular niche will be dependent on a few factors:
- Types of dwellings or buildings you would like to show
- Price points
- Types of neighborhoods
- Income level of clients
This will also determine where you focus your marketing as well as where you decide to purchase or lease the building for your agency.
Create an Online Presence
Clients are looking for a hassle-free experience. With this in mind, you will need to create an easy-to-access online presence. A clean website with clearly defined tabs and sections will make the experience all the more enriching for your potential clients. Don’t have them search for your contact information or the About Us page. If website building is not your forte, you can either hire a web designer or you can utilize one of the many online website building platforms. Keep in mind that there will be fees associated with either option.
Branding your company will also be of exceptional importance. No matter if your client is looking at your website, your social media page, your business card, or a brochure, you want to ensure that your company is recognizable. You can achieve this by doing the following:
- Creating or designing a logo that you use on everything
- Choose a color scheme and stick with it. Do not deviate or change the colors from one platform to the next
- Using the same or a similar font on all of your media
Think of all the real estate websites you are familiar with, and if you can envision their logo, then that means they have created a solid online presence. The purpose of branding is recognition, so if you make too many changes between your social media page, your business card, and your newsletter, for example, your company will not be immediately recognizable.