Connect with us


An Agent of Your Own: 5 Key Steps of Starting a Real Estate Brokerage

shaking hands

Thinking of starting a real estate brokerage so you can take over the real estate industry?

You’ve got some big dreams – and why not? You’ve got plenty of drive and you know there’s potential but how much potential is there?

The real estate industry generates billions of dollars each year so get ready to cut your piece of the pie.

Continue reading this article to learn about how to start a real estate brokerage firm.

The 411 on Starting a Real Estate Brokerage

Whether you’re already a professional at real estate marketing or you’re just starting out, the following tips will help you as you’re starting and growing your business.

Who Should Start This Business?

Not all businesses work for all personalities so you need to make sure it’s the right kind of business for you. Just because a business is lucrative, that isn’t enough to get going.

If you love evaluating real estate and you have a lot of knowledge about real estate in a particular area then this might be a great business for you.

You should also look at the requirements in your area for starting your own brokerage. Local ordinances require you to be a real estate agent for a certain amount of time. Besides for biding your time, you also have to do a certain amount of deals per year and continue your education.

What’s the Day-to-Day in This Business?

If you’re the owner of the business, your day-to-day activities consist of managing agents and marketing the brokerage. You’ll help with paperwork, give advice and put out any fires that start.

As a broker, you’ll likely do many of the same activities that agents do. If you’re working as a listing agent, you’ll represent the client in either buying or selling a home.

You’ll market the properties, hold open houses and vet buyers if you’re operating as the listing agent. If you’re operating as the buyer’s agent then you’ll help clients find properties that fit them.

Who Is the Target Market?

Almost everyone can be a target in the real estate business but you need to figure out who you want to market your specific brokerage to.


Besides for knowing the type of client you want to work with, there are some sellers and buyers that are more attractive because they mean less than work than other clients.

With buyers, you want to find people that are already approved for financing or have the cash to buy. With sellers, you want to find sellers that are motivated and ready to take a decent offer.

How Do You Make Money With a Real Estate Brokerage?

Real estate brokerages make money by earning a commission when the property sells. When you’re a broker, you get a part of the agent’s commission as agreed upon in the agent’s contract.

Some broker’s get as much as 50% of the agent’s commission and some as low as 10%. The percentage all depends on what terms are negotiated and agreed upon by the broker and agent.

What Can of Growth Potential Is There?

If you want to grow your brokerage, you’ll have to service additional areas. Many brokerages start in one community and expand to communities nearby.

Get a Brokerage License

A brokerage license is necessary when you start your brokerage firm. To get your brokerage license, you’ll need to meet state requirements for realtors, take necessary classes and pass the broker’s exam.

Create Your Business Plan

Before you get started, you need to create a business plan that can hold up if you need to get a loan from a bank or convince an angel investor that your business is worth an investment.

Decide on a Franchise or to Go Independent

Once you’ve passed your broker’s exam and secured your brokerage license, determine whether you want to be a franchise or if you want to go independent.

While opting for a franchise gives you a headstart, you won’t have as much say over how you do business. You’ll also have to pay a decent fee if you want in on the franchise and even pay continuing fees as you do business under the franchise.

There are pros and cons of both franchising and going independent so make sure you know what you want and see which model fits your needs.

Determine Your Legal Structure

The legal structuring of your real estate brokerage is very important since it determines ownership, taxation, and liability.

Before you pick a legal structure, make sure you review all of your options, speak with your lawyer, accountant, and other professionals and get advice on which one will be the most beneficial to you.


Register Your Brokerage

Now that you have everything else in place, it is time to register your brokerage. You’ll have to get all the necessary papers in place and also check to see what the fee is in your location.

The process is usually pretty straightforward and easy to understand but it is very important so you should make sure you do it right. If you’re concerned, have an attorney help you register your brokerage.

Learn More About Real Estate to Grow Your Business

Now that you know what it takes when starting a real estate brokerage, why not learn more essentials about real estate? We have many articles you can read as you’re learning about growing your business.

Navigate through our site, find your favorite section, drop a bookmark and come back soon for more great reads.