The attractiveness of the real estate business is obvious to anyone who has at least once encountered the sale or purchase of apartments. Since transactions in this area are concluded for large amounts, the commission of participants in transactions also has a considerable amount, although it is only a few percent. Therefore, many people tend to open a real estate agency, counting on easy and simple earnings without much investment.
Opening a real estate agency is far from always successful, although the initial investment in the business is indeed relatively low, and the abundance of requests from both buyers and owners inspires hope for a large number of transactions.
However, as experience shows, most real estate agencies actually cease their operation in the first year of operation. This is due, first of all, to the incorrect assessment of the real estate market by the owners of agencies, as well as the lack of experience in this area.
In real estate sales, professionalism is essential to success.
Despite the seeming simplicity of transactions, there are many nuances and specific difficulties that real estate agents face. Sellers and buyers of real estate rely on experts to help them solve these problems, and are willing to pay a commission only if the agency really facilitates the transaction.
In this regard, it is quite risky to create a real estate agency for a person who is far from this business area.
Of course, you can hire specialists, but in this case there is a risk that realtors will conduct transactions without the owner of the agency. In this case, all expenses will fall on the creator of the business, and income will go directly to his employees. Therefore, before opening a real estate agency, it is highly desirable to have sufficient experience in this field of activity, good acquaintances in all institutions that a realtor may encounter during the transaction. You can pre-work for some time as an ordinary realtor and earn invaluable experience in personal sales.
However, having experience in real estate sales does not guarantee the success and profitability of the new agency.
Most of the new businesses are created just by experienced realtors who already have the practice of conducting transactions. However, those who do not know how to adequately manage money and make correct economic calculations. Such entrepreneurs quickly go bankrupt, not having time to bring their enterprise to profit. Therefore, when creating a real estate agency, it is very important not only to act according to a clear and reliable business plan, but also to conduct marketing research and find the best niche for yourself in the real estate industry.
It is advisable for a new agency not to try to cover the entire real estate market at once, it is better to focus on a narrow segment of this market, collecting as much as possible all the information about the availability of real estate, its owners, the intricacies of legislation and the level of demand.
For example, instead of wasting energy on competing in the sale of residential real estate, you can successfully earn money in the commercial premises market, or deal exclusively with rental transactions.
Novice realtors should not even try to start working in the sale of primary real estate and mortgage construction. This is possible only if there is already a fairly good accumulated experience of working with banks and construction companies. To open your own real estate agency, it is enough to have a small office equipped with office equipment and communications.
Since the real estate market is extremely unstable, it is better to have your own premises, since rent in times of crisis can quickly make the company unprofitable.
At the first stage, most transactions can be carried out by the owner himself, since there will be few transactions before reaching a certain level. However, from the very first days, it is highly desirable that at least one employee who can answer the phone calls of customers always remain in the office.
For a real estate agency, the lack of reliable communication with clients can be critical.
It should be noted that the work of realtors is always with a large amount of work outside the office. Own transport, which makes it possible to quickly travel to sites and meet with clients, greatly facilitates the work. Therefore, transport costs, as well as communication costs, occupy a significant place in the budget of a real estate agency.
The initial cost of opening an agency can range from one to several hundred thousand dollars.
The running costs will depend mainly on the number of agency employees. As a rule, the owners of a real estate agency seek to tie the salaries of employees to the number and value of transactions, paying a certain percentage of commissions. This avoids unnecessary expenses. However, since so much work is wasted in preparing transactions, the owner of a real estate agency needs to be prepared to count every ruble of income and expenses.
Although the profitability of a real estate agency is often 20-25%, in order to achieve the success of a new enterprise, it is necessary to act systematically, firmly and actively.
If you want to open your own business in this area of entrepreneurship, you can order a good and detailed business plan directly on our website. This will help you avoid many of the losses that new entrepreneurs face when starting their own business.