If you’re interested in starting a real estate business to help buyers and sellers navigate the stressful and complicated process of working through one of the biggest transactions of their lives, you’ll need to make sure your business is well prepared.
Here are four of the 11 steps you’ll need to know about starting your own real estate business. If you like what you read here, be sure to read the complete 11 step guide on how to start a real estate business.
1. Find your niche
Real estate is a competitive field.
In our definitive guide on how to start a business, we suggest that aspiring entrepreneurs choose a niche for the best chance at success. Here are some real estate niches to consider:
• Resort and vacation homes
• Income properties (homes purchased to generate income through rental or leasing)
• Commercially zoned properties
• Property management
• Rental Property
2. Get a license
Whether you are working in New York, California, Texas, Illinois, or another state, you’re going to need to have the appropriate license for your real estate business.
A real estate license
• There are four basic steps you need to compete to get your license and start working as a Realtor:
• Take the real estate pre-licensing course for your state. Every real estate pre-licensing course will cover the laws and regulations for your state, in addition to the federal real estate laws in effect for all 50 states.
• Pass the real estate licensing exam. In most states, you must answer 70% to 75% of the questions correctly to pass.
• Submit your real estate license application. Some states may require all real estate license applicants to submit their fingerprints for a criminal background check.
• Find a broker to work for. Having your license associated with a licensed brokerage is necessary for you to start working as a real estate agent. This is a critical decision that requires research and careful thought.
A broker license
The basic steps for obtaining a broker license are the same in most states:
• You’ll need a real estate license.
• Experience. Realtors are typically required to have at least 2 to 4 years of experience working in the real estate industry before they are eligible to apply for a broker license. Additionally, some states require agents to complete a minimum number of real estate transactions before becoming eligible for a broker’s license.
• Education. Broker applicants in every state are mandated to complete pre-licensing education, which can vary from 45 hours to 90 hours before they are permitted to apply for a broker’s license.
• Broker’s exam. You must pass the broker licensing exam, which is more comprehensive compared to the real estate agent’s exam.
• Application and Fees. Complete the broker license application and pay any applicable fees. The fees range from $150 to $200, depending on which state you live in.
3. Create a strong brand identity
Crafting a memorable brand identity is a crucial element in any real estate professional’s success.
A brand represents how people know you and your business.
In today’s competitive real estate market, a strong brand is more important than it has ever been.
Ask yourself these important questions:
• What identity/personality do I want my real estate brand to project?
• Who will want my products or services?
• What can clients get from my services that they can’t get anywhere else?
• What can clients get from working with me that they can’t get anywhere else?
• What are my brand values?
• What is the most important part of my customers’ experience?
Your answers to these questions will build the core of your brand. All of your future branding decisions should expand on these ideas. Your company name, your logo, and your website design should all grow from the concepts you laid out here.
Be sure to build a unique brand. Too many real estate companies have identical logos and identical branding. Your real estate logo should be unique (unless you’re working for an existing brokerage).
4. Build a web presence
According to a study on homebuyers, 90% start their search online, and 40% contact a real estate agent after researching on the web.
Make that first impression a good one with a well-designed site.
Ensure that your real estate website design truly embodies your brand. Visitors should be able to understand who you are, the services you offer, and your qualifications and reputation.
Your website’s design and marketing copy should project your personal or broker’s brand voice and identity. Here are some suggestions:
• If you work as a real estate agent, include a photo and bio. Homebuyers want to know the person behind the site.
• Be authentic and avoid marketing “happy talk.” Speak the same language as your customers.
• Include high-quality examples of sales you’ve closed, and make sure to include social proof wherever possible.
• Give site visitors an easy way to get in contact with you.
To learn more about great website design, check out Grow Your Small Business With These 7 Website Design Best Practices and 7 Modern Web Design Trends for 2019.
5. Join a team
There are two basic types of real estate brokerages: franchise brokerages and boutique brokerages.
National Franchise Brokerages
Franchise brokerages work under the umbrella of large national companies. These companies grant brokers the rights to use their name, branding, and business plan. The franchise receives these benefits, and in exchange, the larger company receives a percentage of every deal closed by that office.
The larger companies provide vast resources for marketing and branding, easy name recognition, and a larger percentage of online traffic.
The major drawback is size. New agents, in particular, may find the impersonal nature of a large franchise to be off-putting, and the consequent lack of mentoring and professional development can make it an added challenge to break into an extremely competitive market.
Boutique brokerages are usually owned by a small company. They are managed by a single broker, and the agents working in that brokerage usually work closely together.
The small size of a boutique brokerage increases the value placed on each individual agent. Because the boutiques are small, every contribution to the brokerage’s bottom line makes a marked difference.
Newer agents can benefit from the extra attention and direction given by more experienced agents.
Boutique brokerages are also more flexible with branding regulations. Agents have creative license to build themselves a brand without as many constrictions, which can help new agents create a standout brand for themselves from the start.
The primary disadvantage of working with a boutique brokerage is that the available budget for marketing materials and other resources is likely to be significantly lower than that of a big chain.
Brand recognition may be harder to achieve and will be limited as a rule to the areas the boutique serves.
And of course, if you have a special license and want to open your own real estate brokerage, you’ll have lots of additional issues, including hiring employees, office space, and more. If you need help with employment or contractor agreements or agreements with your vendors, take a look at Quickly Legal, which offers an easy and inexpensive way to create, sign and manage business contracts, with many you can start using right away.
The above five steps will give you an advantage and will help get you started on the road to owning a successful real estate business of your very own.
Amanda Bowman is a Branding and Support Specialist at crowdspring, one of the world’s leading marketplaces for crowdsourced logo design, web design, graphic design, product design, and company naming services. Amanda guides crowdspring customers through the easy process of obtaining affordable, high-quality custom designs and names for their business. She regularly writes about branding, entrepreneurship, small business, and design on crowdspring’s award-winning small business blog.