Steps To Open A Real Estate Agency

Steps To Open A Real Estate Agency

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Do the Greenville NC passion for investing in stone and the dynamism of the real estate market comfort you with the idea of ​​opening a real estate agency?

Good News: This guide is for you. Here we review the different stages necessary for the creation of your real estate agency: from market research to fundraising, through commercial positioning, marketing plan, or the choice of legal status. Follow the Guide!

Carry Out A Market Study To Open A Real Estate Agency

The first step to opening a real estate agency is to carry out a market study in order to validate that there is indeed a commercial potential in the planned area of ​​establishment.

To do this, you will first need to be interested in the major trends in the sector. Pay particular attention to changes in turnover both in volume (number of transactions carried out) and in value (increase, stagnation or decrease in the price per m2). It is also important to look at the evolution of purchasing behavior and competitive dynamics on the market.

In A Second Step, You Can Tackle A Local Market Analysis:

Are you interested in the request: what are the socio-demographic characteristics of the inhabitants? Is the population tending to increase or decrease? How many households own? Etc.Steps To Open A Real Estate Agency In USA

Evaluate the housing stock: number of existing dwellings, vacation rate, age of the stock, current construction projects

Study the competition closely: commercial positioning, number of employees, type of goods sold and / or managed, number of transactions carried out, turnover, etc.

Finally ask yourself if the local market is dynamic enough to support the entry of a new player on the market.

Focus On The Real Estate Agency Market In Greenville NC

A market hit hard by the crisis, but which is recovering

The real estate market, of course, suffered a severe setback with financial crisis, which, it should be remembered, started in the United States with variable-rate mortgage loans that proved impossible to repay for numerous households which had subscribed them.

The financial crisis which followed, and impacted the world economy, caused on the real estate market a collapse of the prices and a strong contraction which settled in the duration. Many real estate agencies have shut down in USA.

Steps To Open A Real Estate Agency

But we have been witnessing a noticeable improvement since 2015. Real estate transactions experienced considerable growth in 2016 and 2017: + 15.1% in 2016 compared to 2015, and in May 2017: there were 907,000 sales over the last 12 months, a record that seems to be a phase of catching up with the number of sales not made in previous years.

The upturn should not stop there, at least this is what 80% of professionals think that are optimistic for the coming months due to the attractiveness of the market, the aid systems put in place by the State to encourage property purchases and low property rates.

The economic context and low rates obviously plays in favor of the good health of the sector, but we must also emphasize the love of the USA for real estate. Beyond the success of this business program, it is important to underline that the USA are attached to stone and that it is an investment that they acclaim. Thus, the Greenville NC property investment share is the highest in the world (26%) , and 6 out of 10  people are owners.

Fierce competition on the web

Although the sector is in great shape, it must nevertheless be approached with caution as traditional agencies face increased competition. They have to face competition from networks of agents on the Internet, but also from the desire of individuals to sell and acquire their property themselves without going through intermediaries.

The concept of selling between individuals is not new and the some of famous paper newspaper has been transformed into a website which facilitates research for buyers and the posting of its advertisement for the seller. In the same vein, more general online advertising sites have also entered the real estate sector and therefore encroach on the agency’s borders.

It should also be noted that whatever the structure, agent or direct announcement between individuals, this type of solution considerably limits investments and charges. Thus, agents are able to charge very attractive commission rates with which traditional networks are struggling to compete. As for the costs of individuals, they are close to zero, the advertisement is often very cheap.

Real estate agencies: market segmentation

In this context, real estate agents tend to join networks under the banner or to diversify into segments such as property administration and rental management which now represent 71% of the overall turnover of the real estate sector and which makes it possible to reduce significantly dependent on developments in the transaction market.Real-Estate

Note: There is still a niche real estate segment reserved for ultra-luxury, often the prerogative of large international groups.

Mandatory regulations and training for real estate agents

To open your real estate agency, you must hold the professional card framing the profession.

According to Law relating to the model of professional cards, declaration of activity and of the related attestation, to request the compulsory professional card to exercise the profession of real estate agent you will first need to apply for registration in the Commercial and Companies Register.

Then, you will need to take out insurance covering professional civil liability.

If you wish to handle funds, that is to say to collect funds from principals, tenants or co-owners, you will also have to subscribe to a financial guarantee which will give rise to the establishment of a certificate of financial guarantee established by the bank , the financial institution, the mutual guarantee company, or the insurance company that gave the guarantee.

Once these formalities have been completed, you can file a request for a professional card.

Steps To Open A Real Estate Agency

Please note, to obtain the professional card, you must justify the following diplomas or training:

Specialized in real estate

Higher studies in a higher business school

Master in real estate management

A diploma from the Institute of Applied Economic and Legal Studies, in construction and housing, option sale and management of buildings

All other studies (minimum 3 years) within a legal, economic or commercial framework

If your diploma does not correspond to one of the options mentioned above, know that you will still be able to obtain the professional card by proving a professional experience of 3 years in the real estate sector. If you do not have a diploma but already work in the real estate sector, a validation of acquired experience can replace a diploma.

The professional card may valid for 8 years and can carry a total of 6 mentions: transaction on buildings and goodwill, property management, co-ownership trustee, list merchant, tourist services and provision of services.

Finally, when you have obtained this famous card, issued by the chamber of commerce and industry, you will have to register the prefecture of the future real estate agency with the prior declaration of activity.

How to position yourself on the real estate agency market?

Once the market study has been carried out, the next step to open a real estate agency is to define your commercial positioning.

Steps To Open A Real Estate Agency

First, think about the types of goods and services you want to offer:

Do you want to specialize in the new? The old one? Luxury? Second homes? Commercial real estate?

Would you like to do only transactions or also rental management or the sale of lists?

What geographic area will you serve?

It’s up to you to take into account your affinities with this or that product, the type of clientele you want to target, and the most promising segments in your region.

Real estate agency: independently or franchised

These questions relating to products and customers are the basis for defining your business model. Once you have answered it, there will inevitably come the moment when you will have to ask yourself the question of the type of real estate agency you wish to open. Unless, of course, you take over an existing real estate agency.

Several options are available to you: branded agency, independent, agent. Your choice should be guided above all by your tastes and skills.Real Estate Company

Indeed, if you are a specialist in social networks and you do not see any inconvenience in managing a website, it might be wise to open a real estate agency in the form of a network of online agents. This will allow you to significantly reduce structural costs.

Conversely, if you already have sales experience in a store and you like to interact with customers, it may be wise to set up independently in a physical store, and why not by offering a support service premium.

Finally, if communication is not your strong point and you prefer to be supported for this aspect, it might be advisable to join a franchise network in order to benefit from its notoriety and its communication campaigns at the national level. Joining a large brand certainly means a loss of independence, but also support in the creation of the real estate agency because you can count on the operational know-how of the brand that you will join.

Steps To Open A Real Estate Agency

Finding premises for your real estate agency

Depending on the commercial positioning you have chosen, you may or may not have to choose a room for your real estate agency.

In fact, if you wish to create a real estate agency by joining an online agent network, you will in no case be obliged to own premises because you can completely choose to work from your home.

If you wish to open a physical real estate agency, the choice of premises will have to be carefully considered. The location of a real estate agency, like any boutique, has a notable influence on the visibility from which you will benefit. It is generally recommended to choose a local in the city center, ideally on a busy street, and with easy access to the area in which the goods for which you will be mandated are located.

Your commercial positioning will also considerably influence the location of your real estate agency. A luxury real estate agency will logically be located in an upscale district, while a real estate agency specializing in commercial and professional real estate will more frequently be located in an office district.

What legal structure to create a real estate agency?

As with any business creation, the creation of a real estate agency requires choosing a legal status for your business.

If this aspect puts you off and is not in your eyes the most interesting element of your entrepreneurial project, you should still choose your status very carefully. Indeed, the statute will have a direct impact on the taxation of your company, but also your social regime as a manager, or on the governance of your company.

To help you choose the legal status best suited to the creation of your real estate agency, consult our dedicated guide.

Human and material needs to launch a real estate agency

The next step to create a real estate agency is to estimate as precisely as possible the human and material needs necessary to open your agency.

Steps To Open A Real Estate Agency

The material needs necessary for the creation of a real estate agency

In the case of a physical real estate agency, you will have to estimate the price of the premises of course (whether it is a rental or a purchase), but also the material inherent in this type of business: furniture, decoration, alarm, etc.

And whatever type of real estate agency you wish to open, you will in any case have to estimate the cost of the material resources necessary for the smooth running of your activity: vehicles, computer workstations, specialized software, printer, supply of offices, etc.

Staff requirements for launching a real estate agency

It is also necessary to assess staff requirements. The needs here will strongly depend on the type of agency you open and the services offered by it.Property Manager

Besides real estate agents, also think about the needs on the administrative and marketing side. For example, it may be wise to recruit an assistant to manage the administration and maintain a local presence when the salespeople are visiting property.

Additional services to take into account when opening your real estate agency

As we saw earlier, you will have to insure your professional activity. You will have to take into account in your financial forecast this item of expenditure but also all the additional services essential to the smooth running of your real estate agency.

You can for example choose to call on a management firm to which you will delegate administrative tasks (in particular payroll), to offer you the services of an accounting firm to keep the accounts of your agency, or even to call on a communications agency to help you with marketing.

Whatever services you subscribe to, it is important to include them in your financial forecast. To better assess the amounts of these items of expenditure, do not hesitate to request quotes from several professionals. Take the opportunity to play the competition and choose the services with the best value for money.

The marketing plan of a real estate agency

A marketing plan identifies all of the actions to be implemented to acquire and retain customers. It is essential, even before the launch of your real estate agency to consider the solutions that you must implement to develop your business.

First of all, 92% of real estate searches start today on the Internet. We therefore recommend that you conduct an ambitious marketing policy on the web.

You must therefore of course have a site presenting your agency, its team, its positioning as well as your services (purchase / sale, administration of goods, …), and recent real estate advertisements.How To Choose The Right Property Management Agency

Regarding the ads, it is essential that the photos are of good quality so that they make you want to visit the property and contact you. If necessary, you can ask a professional to take pictures of the goods you have for sale / rental. Also be aware that the format of the ads is strictly regulated, so you will need to make sure you are in compliance with the regulations.

Also think of traditional ways to increase your notoriety, such as organizing a distribution of flyers in the mailboxes of the inhabitants of the neighborhood.

Steps To Open A Real Estate Agency

The business plan of a real estate agency

When you have successfully completed all of the previous steps, you can then start writing your real estate agency’s business plan.

The business plan is a document presenting your professional project in a structured, reasoned, and costed manner.

The business plan will help you on the one hand to refine your project and assess its financial viability, but also to present your future activity to potential commercial or financial partners.

It is in fact this document that you will give to your bank or your potential investors when seeking financing. We will therefore insist particularly on the fact that the business plan must present sufficient figures, realistic and well documented, but above all be clear, precise and must make you want to support you. Both the content and the form must be taken care of.

If you have never carried out a business plan, and the idea of ​​launching yourself into this type of exercise scares you a little, you can however use an online business plan software which will accompany you throughout writing and will offer you models already written.

Once you have gathered the personal contribution necessary for the creation of your agency, you can approach the banks and credit institutions in order to gather the rest of the initial financing need. We advise you to contact several banks in order to choose the one which will offer you the most advantageous rate.

You can also use other funding methods such as by using crowd funding via a platform that will present your project to Internet users who can give you or invest money in your project.


Greenville Real Estate Solutions

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