Starting your own brokerage? Follow these eight steps for a smooth transition.
You’re a registered real estate agent with ambitious plans to open your own brokerage and a nest egg that you’ve saved to cover the startup cost. Now what?
We’ve distilled the many tasks and responsibilities required of a new brokerage owner into eight simple steps you can follow to get your business on track.
1. Brokerage application and registration paperwork – In addition to filling out forms with your local real estate council and real estate board, you will also be responsible for paperwork such as a police background check, transfer forms, bank account setup and signature cards, etc.
2. Incorporation and business registration process – This process will require the help of experienced lawyers and accountants. These professionals will assist in some of your biggest business decisions, such as naming your brokerage, in coordination with your brokerage application and registration.
3. Create systems and processes – In order to run a successful brokerage, you need efficient processes in place, such as transaction processes, a funds disbursement process, trade record sheet processes and a recruitment process.
4. Develop an independent contractor agreement – In addition to creating systems and processes, you’ll need an independent contractor agreement that details a code of ethics and includes provisions for commission splits with the individual agents who will work with you.
5. Search for office space and essentials – First, determine where you want to open your doors. If you’re opening an independent brokerage, you’ll have more freedom. If you’re opening a brokerage associated with an established franchise brand, your options will likely be restricted. After you determine the general area where you want to open your office, determine what type of property you want, the amount of space you’ll need and the parking access you’ll need.
6. Hire administrative staff – Before any business can happen at your new brokerage, hire an administrative assistant who can help answer your phone calls and handle other administrative responsibilities while you focus on growing your new brokerage.
7. Set up a website – Approximately 80 percent of home shoppers begin their home search online. Before you open your doors, you’ll need a professional website that displays your listings and information about your new brokerage.
8. Recruit agents – Lastly, you’ll need to focus on recruiting agents as your brokerage grows. Remember, if you’re recruiting new agents, they will need attention and extensive training.