How to Open a Real Estate Brokerage
You might be interested in learning how to open a real estate brokerage if you have an affinity for real estate, a sound knowledge of business, and are comfortable with brokering deals that involve large sums of money. A real estate brokerage brings sellers and buyers of real estate together and, for a percentage of the deal, negotiates their transactions. Although the real estate market can fluctuate wildly, starting a real estate brokerage can be a profitable next step for any real estate agent with sufficient financial resources and contacts.
Part One of Four:
Analyzing the Business Edit
Determine what type of real estate brokerage you want to open. There are brokers who specialize in residential real estate, commercial real estate, national real estate, international real estate or a combination.
- It’s best to specialize in a particular real estate niche as opposed to trying to market your brokerage as a “one size fits all” business.
Assess market demand for your services. Does the market in your community justify the existence of your business? How much of a demand is there in your area for the real estate services that you’ll be providing? Is that demand expected to grow over the next several years? What are the overall prospects for the real estate market in your vicinity? Who are your competitors and how effective are they at market penetration? 
Determine whether your business could be profitable. How much money do you expect to make over the next five years with your real estate brokerage business? How can you justify those earnings? How much do you plan on growing each year over the next five years? Answering these questions may be difficult, but they are crucial in determining whether or not you can realistically expect to stay in business for long.
Write a business plan . Your business plan is a summary of your business and its strategies that you can show to potential investors or lenders. It is intended to be used to show them that you have a solid plan for your business compiled from research and experience. Your business plan should:
- Include an executive summary. An executive summary will give prospective lenders and investors a quick overview of your business model and explain how you expect to make money.
- Don’t forget to include a mission statement.For example: “Our goal is to make it easy for our clients to find their dream home.”
- Provide an overall description of your company. Your business plan starts with a description of your real estate brokerage. It should explain the services that you’re offering, the needs of the market that you’re satisfying, and a description of your target market.
- Describe your organization and management. This is where you’ll describe the legal structure of your business, such as whether you’re organized as an LLC, a partnership, a C or S Corporation, or a sole proprietor. You’ll also use this section to highlight management experience in the industry.
- Explain your marketing strategy. How are you going to promote your real estate services? What is it that differentiates your real estate brokerage from others in the area? 
- Don’t forget to specify your unique selling proposition (USP). That’s the service you’re offering that sets you apart from your competitors. 
- Include financial projections.
- Be sure to forecast growth in both income and expenses.