Starting a Real Estate Business
Starting a real estate business sounds like a lucrative venture in any economy. Promises of large commissions and working at one's own pace are strong lures for many would-be real estate agents. But is it really that easy to put out your real estate business placard? Here, we show you a few brief and basic ways in which to start a real estate business.
Unless you plan to work obtaining leads for a licensed real estate agent, it will be necessary to study and write the exam to become a certified agent. The criteria may be different depending on where you plan to operate, so it is best to decide which type of real estate you prefer. For example, some states permit agents with general licenses to sell both residential and commercial properties. Other states, on the other hand, require separate licenses.
Further, the real estate industry does not solely consist of the sales aspect. It also includes, appraisals, property management, property inspections, and legal services. Whether you must choose a desired field for a qualification exam or you are permitted to write a general exam, it is important to determine which area you prefer depending on:
- Your personal preference. As an example, there are individuals who enjoy "staging" homes. It has become very popular today to hire professionals to make houses look appealing to potential buyers. If you are already doing this or you are good at suggesting ways for the seller to increase the price, then residential properties should be your focus.
- Whether you have existing contacts. If your background helps you to find deals, then this should be the direction you choose. To illustrate, you may have worked for many years in the commercial mortgage department of the bank, so you are already familiar with the terminology and some of the key players. It should not be intimidating for you to jump into the commercial real estate sales arena.
Once you have obtained your license, you will need to decide whether to become part of a larger agency or start up solely on your own. Indeed, advantages and disadvantages exist for both methods. As part of a larger agency, you will have access to resources of which you might not otherwise be aware. You may also benefit from watching more seasoned agents. But this level of support comes at a high cost. Most agencies charge for office space, advertising, and many other expenses associated with using their established name. Lastly, they take their cut of the commission.
On the other side of the fence, you may be able to start your own real estate business on a shoestring, especially if you already have contacts in the field. Keeping costs down by operating from your home, handing out your own sales flyers, and even paying others a small fee for leads, may be more advantageous to you than aligning yourself with an existing agency.
In conclusion, starting a real estate business is no different than other business ventures in regards to common start-up practices. Plenty of research, a thorough business plan, a well-developed marketing system, and a serious budget are required before you start. And remember, that earning a commission is not going to happen the first day you obtain a license. It may take several months before earning any money so knowing in advance how you will live during your start-up is crucial.