How to Open a Real Estate Brokerage

To open a real estate brokerage is no easy task. It involves a substantial investment of both time and money. Of course, if you want to open a real estate brokerage, you must be a licensed real estate broker. After you get your broker's license, start by following these steps.

Difficulty:

Challenging

Instructions

1. Write down your business plan. If you need financing to open a real estate brokerage, your banker will want to see these plans on paper. Find help in your local library or in bookstores. You can also find help online. (See "How to Write a Business Plan," under Related eHows.)

2. Choose an office site. Decide if you want to purchase a building, construct a building on a lot you find or rent existing office space. If you decide to rent, be sure to review all terms of the rental agreement.

3. Plan your office by determining present needs and anticipating future needs. As your business grows, you must accommodate additional agents and office staff. Some experts advise allotting 75 to 100 square feet of office space per agent.

4. Select office furnishings including furniture, computers and phone system. Choose an Internet service provider with the ability to upload and download multiple listing services. Purchase user-friendly software programs and invest in the best virus protection possible.

5. Ask your local insurance agent about general business insurance and compare prices from one company to another. Be sure to mention that you are planning to open a real estate brokerage and ask what specific policies they recommend. The real estate business has a lot of liability. Ask about Errors and Omission coverage.

6. Open trust accounts with consent to examine at your local bank. You must set up your general ledger accounts also. Your banker will advise you on these since he will have your written business plan outlining your financial needs.

7. Set up your accounting system by purchasing bookkeeping software or by hiring an accountant.

8. Compile a "Company Policy and Procedures" manual to hand out to all agents and staff upon hire. You must spell out record-keeping procedures, how agents and office staff are paid and general office rules. You must have an Independent Contractor Agreement signed and on file for each self-employed agent.

Tips & Warnings

• Have a mind-set to be able to adapt to the constant changes in the business environment, especially if you want to open a real estate brokerage. The housing market can be quite volatile.

• Make sure you have the temperament needed for operating a real estate brokerage. Demands of being the "boss" and having to meet on-going payroll can be extremely stressful.