What do I need to start my own agency

Question

Jay Hinrichs · Answer

@Aaron Wyssmann  of course I have no idea your motivation to open a RE brokerage. however if its to make money I can dissuade you of that notion  LOL... small brokerages break even maybe .. I have owned a few over the years. And my motivation was for deals... I made all my returns on the deals the agents would bring me.. the Brokerage was simply a vehicle to have deals handed to me ... Overhead kills you.

Now that being said I am talking about west coast were its uber competitive for fee's and agents.. your not going to get 30 to 50% commission splits here .. no where near that.. the big shops will get 20 to 30k per year per agent. Small shops usually 7 to 12k per year. and you have to provide E and O and all the support. then the best agents  hit their desk fee in the first month then they are 100% after that. The money in Brokerage is to build it up to multi hundreds of agents then sell the business to one of the nationals.

Russell Brazil · Answer

General liability insurance, rent, office supplies, utilities, technology costs, website, marketing, ...these are just a few of the things that come to mind quickly.  Im sure there are many many other costs.

Victor Patel · Answer

I was an agent for many years before I became a broker and opened up my own brokerage.  Initially, I was a one man shop that specialized in multi family properties.

So why did I become a broker?  Because now I don't have to split any of my commissions with the broker holding my license.  Sure I have to pay for my own website, business liability insurance and do a little more admin work but I keep 100% of my commissions.

The added costs of a one man brokerage are minimal relative the split I had with my broker.  I actually work less and made the same or more money.

Recently, I have franchised with a national commercial real estate firm and taken on 2 experienced agents.  I give my agents a large split.  My share of their commission actually "keeps the lights" on at the office and pays for my personal marketing expenses.

My move from agent to broker has been a success.  I hope yours will also!

Aaron Wyssmann · Answer

@Jay Hinrichs  thanks for the help. That's what I was thinking as well but just wanted to go in "eyes wide open".

Jay Hinrichs · Answer

@Aaron Wyssmann  NO NO your on the right track if its just for yourself and your not hiring agents then for sure just do it yourself..

Key is MLS access.. not only to hopefully find some deals but to LIST them I like controlling my own homes and listing them myself.. cuts all the BS out.. when I get an offer I get to negotiate it on the spot.. instead of having to do the agent dance.. don't get me wrong I love all my agents that work with me throughout the country.. but here in Orygun I ( actually we being Ms. Lori my wife lists all of our homes)  right now were are building a 27 homes subdivision price points 350 to 400k.. so we have very good command and control over our product.. in our market to sell new construction I would have to pay 2 points on the list side and 2.5 on the sell side.. so I save 7 to 8k per house.. Or if I was like some of the bigger builders they have full time W 2 employees that make salary and spiff.. either way it works for me.

Also I like it because in the even I have a bummer and I do have bummers I can be more aggressive with price since I am not using a realtor.

Aaron Wyssmann · Answer

@Jay Hinrichs  I don't know why I missed all the replies here. I'll have to check my settings.

My sole purpose is opening an agency is for doing investments. I don't want to have other agents really unless they would be investors also. So do think it makes more sense just to an agent under another broker and call it good?

Charlie MacPherson · Answer

Don't let formalities hold you back.

I've just opened my own brokerage but need another year+ to sit for the broker's exam.  Instead of waiting, I have a closing attorney serving as my broker of record, while I own the company.

He has over 20 years in real estate and my coach has over 25 years, so we're not flying blind here.

Just because you can't get over the mountain doesn't mean that you can't tunnel under it!

Michel Lee · Answer

I agree with Russell, the very important ones are liability, website, and marketing.

John Weir · Answer

You're lucky, here in SC we have to wait 3 years! Best of luck I plan on getting my brokers and doing the same thing, but I have two years to go!

What do I need to start my own agency

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