Building a real estate brokerage
Real estate – many people think of billionaire investor Warren Buffett or New York’s Leonard Stern when the word comes to mind. But you don’t have to be a billionaire investor to be successful in real estate.
Agents and brokers might be less well-known, but those at the top of their field are certainly as impressive. Just ask Myra Nourmand, whose LA brokerage has sold homes for Sheryl Crow and been featured on HGTV’s Dream Homes. But they didn’t get there by accident. They studied how to grow a real estate brokerage – then built the business of their dreams.
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Real estate brokerage vs. real estate agent
Before we get into how to build a real estate brokerage, let’s clear up a common misconception: the difference between a real estate agent and a real estate broker. Agents have earned their real estate license, but they must work under a licensed broker. Brokers have an additional license that allows them to either work independently or to own a real estate firm and hire agents as employees.
Earning your broker’s license opens up many new opportunities – including a higher median salary and more independence in when and how you work. It’s an excellent business move for those in the real estate industry – but it isn’t the last step. Once you’ve earned your license, it’s time to learn how to run a successful real estate brokerage.
1. Remember the 2-millimeter rule
Always dream big – but your day-to-day goals can (and should) be small. The 2-millimeter rule means that your next step is always just 2 millimeters away. The smallest changes add up to the biggest results. Set SMART goals, chunk down your tasks and be realistic in your day-to-day expectations. It’s important to have both a short-term and long-term vision for your business, so keep your feet on the ground.
2. Do your research
There are many types of brokerages. The first rule for how to grow a real estate brokerage is to find an unmet need. You can specialize in residential, commercial or industrial properties, or in land transactions. You can work with investors and investment groups, or you can open a property management firm and focus on managing rentals. Each of these areas requires you to gain specific knowledge and build certain relationships. Choose your specialty before you go any further.
3. Get organized
You’ll need a business map, a marketing plan, a website, lead generation strategies, CRM software – the list goes on. Time management is never more important than when you are building a business. It empowers you to do more with less. We all have the same amount of hours in the day – truly successful people just know how to use those hours more effectively.
4. Build your knowledge
Going from agent to broker brings greater salary and opportunity – and also greater responsibility. Brokers are often in charge of compliance and recordkeeping, finalizing contracts and reviewing financial statements and transactions. Plus, as the owner of the firm, you’ll need at least a basic level of business and marketing knowledge, such as lead generation, mindful scaling and more. Real estate markets and laws are always changing, so any successful brokerage owner must have a hunger for knowledge.
5. Use the power of leverage
When building any business, the power of leverage is key. Leverage – using the assets you already have, whether physical objects, talents and skills or connections – is how you grow. When building a real estate brokerage, leverage might mean using your network to find new hires and new clients, expanding skills like negotiation to learn about new verticals or leveraging life experience to relate to people.
6. Hire the right people
You’ll want to focus on quality over quantity. Work on your recruitment strategies to get the best talent in the business. They’ll bring in major connections, local knowledge and smart strategies, helping you to hit the ground running. But you’ll need more than salespeople – you’ll need organized front-office employees, tech-savvy fixers and team players to mediate deals. Make sure your staff is balanced, or you’ll run into culture problems.
7. Work on your communication skills
You’ll be taking on a bigger role, interacting with clients on both sides of a deal, plus hiring and training new agents. Working on your communication skills can improve your relationships with both clients and employees. Great leaders have great vision, but also know how to communicate that vision. That’s how they inspire raving fans – in both customers and employees.
8. Build your reputation
It can take years to build a good reputation. But it starts with your internal company culture. Only when you have respect and integrity within your company can you act with respect and integrity toward your clients. And customer service should be the first thing on your mind. Focusing on the needs of your clients – and then going above and beyond – is vital to building your business. Word of mouth remains one of the best ways to grow your business, especially in real estate. Make sure you’re taking full advantage.
9. Be open to advice
Ask anyone at the top of their industry and they’ll tell you they didn’t do it alone. Those wondering how to build a real estate brokerage need look no further than their own backyards. Join your local association of realtors for access to networking opportunities and advice. Find a mentor within your field. Attend seminars like Business Mastery. They can give you the knowledge – and the motivation – you need to succeed.
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