Opening a real estate business may seem like a simple matter to many, requiring only an initial capital investment and good communication skills with potential clients. But a lot of firms go bankrupt and disappear from the market of real estate services annually. It is imperative to consider all the nuances and pitfalls of the real estate business to achieve success. We learn some things with time and experience in professions they don’t teach us in schools. Finding a good mentor is the first step for entering any new industry.
The real estate market has always attracted those who have wanted to make quick bucks. Some investors make money on the price difference between acquisition and resales. Others make money off renting properties. Then there are those who help people buy or sell and pocket in sizable commissions. Real estate agents are exciting people. Sometimes even without a formal education, guided solely by instinct and experience, many of them achieve success in mediation and assistance to participants in the housing market. However, not everyone becomes successful – although there are more than enough recommendations on starting your own business in the real estate market.
You don’t need any certifications to open a real estate business. As a result, too many non-professional agencies discredit the work of well-known real estate firms and agents. Therefore, if you have the initial capital to start your own business, you will have to fight with organizations in the real estate market. Kuba Jewieniew, the Founder and CEO of Realty ONE Group, shares some of the freshest insights on starting your own real estate business in 2021. Here’s what we can learn from him.
Real estate business: where to start?
First of all, it is necessary to decide in what form to register it.
It is possible to register a real estate company as a closed joint-stock company or an individual private enterprise. However, it is best to choose the classic option – a limited liability company. It will allow you to reissue documents if the business goes well. You must complete the registration independently to be confident in your solvency as a realtor if circumstances force you to work independently for some time.
For registration, you need originals and copies of the following documents:
- Protocol on the creation of a limited liability company
- The charter of the company, executed in a particular form with the necessary signatures
- Passports of citizens who will be the founders and directors of the future company
- Registration applications
- Receipts for payment of state fees
With the correct submission of documents in five working days, you can receive a certificate of state registration. You will need the following to register for that:
- Division of the tax inspectorate
- Local statistics office
- Regional or city division of the pension fund
- Local insurance fund
After that, you can start making the seal and drawing up the company’s current account. Even before registering the company, you need to decide with which notaries you plan to conduct transactions. An inexperienced or overly busy lawyer can cause the breakdown of any sale or lease agreement. You cannot focus on only one, albeit a verified notary. It is best to work in parallel with several specialists.
For the first time, you need to outline a particular area of your company’s city or region. You can plan work and quickly get positive customer reviews. A satisfied customer is the best way to distribute advertising information. You cannot immediately expect to seize both the purchase and sale market and the rental market. It would help if you chose the sector that has fewer competitors. The same applies to the districts of the city or region with which the company will work.
Know the market
Without a specific “package” of knowledge, you will not see both theoretical and practical success. It would help if you studied the real estate market’s principles before entering the business and always keep your finger on its pulse. Consumer habits and spending trends, mortgage rates and deductions, price fluctuations, and global market trends will ultimately become a single picture for you.
Honesty as a USP
A reputation for a real estate agent is a fixed asset. Therefore, if the choice is between more profit and honest work, you should always choose honesty. Otherwise, you will not get clients. There are many agents nowadays, and changing one doesn’t incur a switching cost for the client. In fact, it just leaves a negative review of your practice in the market.
Choose a niche
If you are still unable to grasp the real estate market as a whole, identify a niche you want to work in. Residential real estate or commercial, elite or middle class, etc. It would help if you did not try to satisfy all customers at the start. Pick a niche, research it, build a reputation for yourself within that niche, and then think about expanding your business into newer markets.
Real estate is teamwork
The basic rule of a successful real estate business is to always work with people. No, this is not just clients. It is interactions with colleagues, mortgage banks, mortgage brokers, and just all kinds of useful business connections. The main thing is the work of an agent is information content and the ability to respond to market movements. And even better if it is possible to predict such trends. Therefore, we are not limited to exclusively dry theory and analytics. We communicate with those who surround us in our business.
Finishing your training will be an excellent way to get into the real estate business for a newbie. Some aspects require time and experience in the professions they don’t teach us in schools. You need to compete in a tight market and do everything you can to fight your competition. With the right strategy and sound knowledge, you can be a real estate king in a few years.