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How to Profit from Opening a Real Estate Brokerage in Today's Market
With real estate markets fluctuating up and down and with
economic conditions varying over time people often hesitate to open a real
estate office for fear that the timing isn’t right for them. The reality is
that nearly every situation can be good for opening a real estate office, the
key is to know how and what to doing each market. With that said, let’s now
take a look at how to profit from opening a real estate brokerage in today’s
Bringing agents into your office is key in any market
condition. What most people don’t realize is that when market conditions are
good and real estate agents are making a good living they are very difficult to
recruit. They are often too busy to take the time to meet with you and even if
they do give you a half an hour of their time they are often too busy or too
happy with their current arrangement to seriously consider a move.
Conversely when conditions are difficult agents become
frustrated and begin searching for solutions. Ironically it is during these
times that most brokers place less effort on recruiting as they are beat up by
market conditions and frustrated themselves by trying to support their current
agents and or keeping their office open.
This presents a tremendous opportunity for anyone willing to
aggressively recruit in today’s market not only are agents looking for
solutions but they are far more eager to relocate.
Limit Your Expenses
Many of the traditional real estate models involve leasing
massive square footage and providing ridiculous amounts of personal equipment
to all of the agents in the office. This model hasn’t worked in years and
really struggles in tougher economic times. When opening a real estate office
today you must control your overhead and operate a lean business mode. Doing so
will allow you to break even with much smaller revenues.
By taking a lot of the pressure to overcome large leases and
high equipment cost away, brokers with smaller overhead operations are able to
keep a clear mind and continue to find ways to offer agents services and
support. Many of the brokers stuck with large overhead enter into panic mode
and do nothing but remove services and equipment from their agents essentially
forcing them out the door to a competing office.
It may sound silly or even naïve, but every decision you
make is controlled by your attitude whether you are aware of it or not. In
difficult times, people are looking for leaders to follow to better results.
Many existing brokers are beat up and frustrated and panicking as they watch
their revenues turn to losses that grow each month. The mood in their office is
often one of misery and there is typically little to no culture or synergy.
By having a positive attitude and sharing your vision you
will motivate people simply by providing them as environment where they feel
they can thrive. Not only will you see your agents perform better than they
were in the negative environment, but the culture and synergy of your office
will become contagious and agents outside your office will want to join to be a
part of it and to escape the misery they try to avoid at their existing office.
Focus on Revenue
When times are good and money is available people tend to
spend lots of time trying different ideas or working on side projects. When
times are tough however it is important to focus your efforts on activities
that will generate income for your business. Yes long term goals and improvements
are important, but they should all lead to income for your company.
Too often see offices struggle and ultimately close because
the manager spends most of their time on side projects that will not lead
directly to revenue for the office. Be sure to keep focused during difficult
times as each additional revenue stream is extremely valuable.
Depending on how you approach things, it can always be
either a good or bad time to open a real estate office. While some would argue
that the best time to open is during a real estate boom others would argue that
the greatest opportunity for profit has already been missed.
There are many opportunities that exist today that do not
exist in booming markets. In order to profit from opening your own real estate
office today you must be prepared to have the right attitude, focus on revenue
generating task and aggressively recruit. All of this while controlling your
expenses. There is always risk when opening your own business but in today's’
world the reward can far outweigh the risk.