How to Start a Real Estate Brokerage Business in 2024
Last Updated: 12/17/2023
How I Started My Real Estate Brokerage Business
Hey there! My name is John and I’m the founder of Acme Realty — a real estate brokerage I started from scratch about 3 years ago. Launching a brokerage was a ton of work, but also super rewarding. If starting your own brokerage is on your mind, here are some tips I can share from my experience getting up and running.
Getting Licensed
First things first — you gotta get all the proper licenses before you can actually setup shop as a real estate broker. The exact requirements vary by state, but generally you’ll need some combination of:
- Taking the required real estate pre-licensing courses
- Passing your state’s broker exam
- Meeting experience requirements (usually 1–3 years)
- Submitting a broker license application
It can take a few months to go through the process, so make sure you give yourself plenty of lead time. I’d also suggest getting an associate broker’s license first if your state offers it — it helped me learn the ropes.
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Picking a Business Structure
Once I had my broker license in hand, it was time to pick how I wanted to structure my business. As a new solo broker, I just setup as a sole proprietorship at first — it was easy and had low startup costs. But as my brokerage started growing, I transitioned to an LLC structure for some liability protection and tax benefits. Definitely talk to an attorney and accountant to decide what works for your goals.
Funding Your Brokerage
Starting any business takes capital, and a brokerage is no exception. Beyond just the licensing costs, I had to think about:
- Office space and equipment
- Listing, CRM, accounting software
- My brokerage website
- Marketing materials like brochures, yard signs, ads
- Payroll for my new staff
And of course covering my own living expenses during the startup phase! I funded things mostly through savings and some business loans. Make sure you secure at least 6 months of operating funds before launching.
Office Space Hunting
I toured probably 10 different office spaces when starting out. As a new brokerage, I didn’t want to blow my budget on a huge Class A space. I ended up finding a Class C office I could afford on a flexible short-term lease. It wasn’t flashy, but it was professional and got us up and running.
Building My Tech Stack
Any brokerage today relies heavily on technology, so I invested in:
- Cloud-based CRM, transaction management, and accounting software
- Computers, printers, wifi, phone systems
- A website built specifically for my brokerage
- MLS listing software integration
Having the right tech made my agents’ lives easier and let us work seamlessly.
Creating a Business Plan
I spent a ton of time on my initial brokerage business plan. It was key for thinking through things like:
- My target market and specialties
- Recruiting and retaining top agents
- Financial projections
- Short and long-term goals
Having this detailed roadmap was crucial those early days. I still go back and update it regularly.
Recruiting My First Agents
Once I had the office setup and the paperwork handled, it was time to start recruiting agents. I leaned heavily on my personal networks and past coworkers from other brokerages. I focused on communicating the splits and benefits I could offer them. My first few hires were critical — they brought instant credibility as top producers.
Building My Brand
I worked with a designer to craft a logo, color palette, and overall brand identity that felt professional yet approachable. We created branded email templates, brochures, yard signs, and social media assets. Having a consistent brand really helps brokerages make an impression and stand out.
Creating Marketing Materials
Beyond just branding, I needed marketing materials to promote my services, my agents, and any active property listings:
- Print and digital brochures
- Email templates
- Direct mail postcards
- Social media graphics
- Property listing flyers
- Yard signs
I handle smaller assets in-house now, but initially hired designers to ensure top-notch quality.
Launching a Website
My brokerage website was a huge project, but well worth the investment. It’s often the first impression people get of my company. I focused on:
- Listing my services, specialties, and properties
- Profiles for all my agents
- Lead generation with listings forms
- Responsive design that worked on all devices
This is one area I’d recommend hiring pro web developers if you don’t have the skills.
Networking in the Community
As a relatively unknown brokerage at first, networking became vital. I tried to attend any local real estate or business events I could. Getting to know fellow brokers, lenders, attorneys, contractors, and other community members led to tons of referrals and partnerships.
Focusing on Great Service
At the end of the day, successfully running a brokerage comes down to service — for both clients and your agents. I strive to provide five-star service by:
- Communicating promptly
- Resolving problems quickly
- Having empathy for situations
- Being transparent about my fees/process
- Building trust and rapport
If you can consistently over-deliver on service, your reputation will grow exponentially.
That covers most of the key steps I took during starting up my brokerage. It was a rollercoaster ride at times, but so worthwhile. Let me know if you have any other questions! I’m happy to help however I can. Wishing you the best of luck if you decide to pursue the dream of opening your own brokerage — it’s challenging but incredibly rewarding work.
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Frequently Asked Questions
If you’re considering starting a real estate brokerage business, you likely have some questions about the process and details involved. Here are answers to some of the most frequently asked questions:
Q: How much does it cost to start a real estate brokerage?
A: Startup costs vary widely, but expect to budget at least $50,000 — $100,000 for licensing, office space, equipment, software, hiring staff, marketing materials, etc. Many brokers bootstrap their brokerages with personal savings or loans.
Q: What skills do I need to run a brokerage?
A: Strong business acumen is key, as well as sales, marketing, leadership, interpersonal, and financial management skills. Real estate or brokerage experience is a plus. Being a licensed agent yourself can help inform brokerage operations.
Q: How do I attract top real estate agents?
A: Agents are drawn to brokerages that charge competitive commissions, provide abundant lead sources, invest in marketing support, and offer training opportunities. A strong broker reputation and brand identity help as well. Make sure to emphasize what makes your brokerage unique.
Q: What legal entity should I form my brokerage as?
A: Most brokerages setup as sole proprietorships, LLCs, S-corps or C-corps. Each structure has different implications for taxes and liability. Consult business attorneys and accountants to choose what’s best for your goals.
Q: What type of office space do I need?
A: Class B or C office spaces can minimize overhead for new brokerages. Look for flexible lease terms. High foot traffic and visibility are ideal. As you grow, upgrade to Class A offices.
Q: What key technologies does a brokerage need ?
A: At minimum — CRM, real estate listing/MLS, transaction management, and accounting software. Also smartphones, cloud storage, fast wifi, computers, printers, and phone systems.
Q: What are the first steps to get licensed as a broker?
A: Each state has specific licensing steps, but generally you’ll need to take pre-licensing courses, pass an exam, meet experience requirements (1–3 years), and submit a broker license application.
Q: What are the most important things I’ll need to do on an ongoing basis?
A: Agent and client service, marketing, networking, training agents, recruitment, budgeting, and ensuring legal/ethical compliance should be top priorities for any brokerage owner.
