How To Open A Real Estate Company

Question number one: Open your own brain or use ownership service? Again, there are different opinions on this matter. On the one hand, a ready-made brand, system and work technologies are like the foundation for a successful entrepreneur. Learn more to know about advantages of private limited company. 

On the other hand, many are confused by the information that ownership companies do not live long in the market. Vyacheslav Alexandrovich Yekorov, director of Avangard-Realt, explains the reasons for this: “There is official evidence that such companies exist for a maximum of 2-3 years and then split. I have heard many owner buyers complain about their quality: underdeveloped, raw technology does not really work. But – an expensive pleasure, and there is no point in risking a decent amount of money.

Apparently, the “feds” were stuck in their own market, and they decided to stop in the provinces. So far, it has been profitable for them. It is even harder to talk about opportunities for the future. We grant ourselves a certain type of right, but on the basis of equal partnership. This is a very lucrative job. ”

So, if you decide to buy a franchise, you have to accumulate a certain amount. Important: exchange of experiences, mutual assistance and collective discussion of problems, acceptance of common conclusions. – It’s an opportunity to move on from the small business level where we all work successfully in the medium business segment. The beginning of 2007 already marked the stagnation of the market, which led us to many applicants for ownership, some of whom, realistically assessing the situation, chose their choice.

Undoubtedly, your main competitive advantage is opening and launching an internet portal, which will give an impetus to the growth of all real estate companies and bring new technologies to the work of realtors. And now the “expert” company carries out 70% of long-distance transactions with the participation of the Internet. Real estate ownership is still an entirely new direction. If you dare to be the first – as they say, the flag is in your hands!

If you decide to start your own business, you need to understand the obvious: It is profitable to open a real estate company under the following conditions:

  1. Large start-up capital;
  2. Availability;
  3. Having third party sources of income.

It is a good idea to start by evaluating your potential position in the market. To do this, you can conduct a specialized marketing research. It can be very convenient to contact a consulting firm, which will conduct all the necessary research and provide valuable guidance – even to the extent of preventing you from starting your own company. The marketing research order will cost a different amount depending on the problem of the target.

For example, a marketing research firm suggests targeting the following as competitors’ parameters:

  • Sales volume (based on type and value), the real estate market and each major competitor individually;
  • Advertising costs of major competitors (advertising budgets);
  • Competitors’ budget structure (percentage based on value of expenses for different types of advertising);
  • Places in the ratings of major competitors in this market (including the Internet) indicate the method of this rating;
  • Prices of the main competitors for each category – price lists;
  • Competitors discount system;
  • Percentage of each competitor for services provided in each category (for example, 50% – suburban real estate, 30% – non-residential rent, the rest – cheap new buildings) (in terms of type and value);
  • Plans of companies in this market (including investment plans);
  • Staff changes;
  • Office space (size, location) of competing companies;
  • The consumer ratio of individuals and law firms per segment (per competitor);
  • Samples of advertising and information products and their distribution methods.

Many people who open a real estate company make the same mistake – understanding the company as a business. The idea immediately began to dominate, however, a business was created whose purpose was always to make money.

They want to do good to their employees, they want to popularize their brains, while they forget one thing – the task of creating any business: the money invested must work and bring income to the owner. So, advice to you: Think about your money and original goal. The real estate agencies we interviewed Note: Of course, you can save at least, that is, everything: rental premises, advertising, etc. We will take an example of the large-scale opening of the Academy of Sciences. With all the necessary components. Go

Step-by-step instruction

1. Company Registration

The founder of the company can register on his own. However, it would be convenient for a busy person to use the services of a law firm, which would carry out the entire process of registering a new company. In a week you will receive the full set of documents:

  • Company Registration Certificate,
  • Registration with tax authorities,
  • The charter of the company, in which all the functions of the agency are spelled out, etc.

2. Development of samples of invoice and other documents

Elena Andreeva, director of the expert real estate agency network, says: “If we’re talking about competitive advantages, first and foremost, the quality of the service and the customer support, both inside and outside.” Reducing the price (deliberately lowering it above the market average) is not worth it because it raises the consumer perception that the service is easier to implement, and does not greatly increase the number of transactions, lowers the profit margin and generally the overall profitability of the company.

The whole campus escort and an excellent, almost full-time job of a real estate agent who can explain to the customer the essence of the service and what is in it . It is also necessary to explain the extent of the company’s liability compared to a private broker, based on which the cost and reliability of the company’s services are high. Price should be in the middle of the market with high quality service. If the company has specialized service skills, the price may be a bit high. ”

3. Staff recruitment

Of course, the best option would be the recruitment of experienced realtors by acquaintances. In our example, recruiting staff went without advertising. If this is not possible, you should advertise the recruitment of employees in specialized media for work and real estate or similar sites or contact a recruitment agency for assistance.

The number of employees depends on the preferences and abilities of the founder. As the directors of real estate companies warn, quantity is not important, quality is. Valuable for many employees who do not have a real estate experience with a customer base. In addition, you will need to hire a part-time chief accountant, staff officer, PR manager, site manager (administrator), office manager, a driver in his own car and, if possible, a lawyer. Sometimes psychologists work with staff.

It is necessary to determine the level of salary of each employee. Usually, there is no salary for a realtor, especially an inexperienced employee. As already mentioned, his salary is calculated as a percentage of the transaction value. However, based on the requirements of the labour law it provides a fixed salary for the employee, some companies determine the salary.

The more firmly the company stands on its feet, the lower the percentage it pays to employees. Larger companies can set a commission of 30-50%, while smaller companies pay 50-70% of transaction returns to the agent. There are conflicting opinions about who to hire: experienced real estate or newcomers. The benefits of experienced staff are obvious: an established customer base, i.e. a relatively stable income.

However, it is hoped that they will repeat all previous mistakes and miscalculations. Furthermore, the lion’s share of these errors are related to the legal side of the agency’s operations. According to some agencies, it is better not to get involved with experienced realtors. In fact, the most fertile ground for the growth of a new real estate company is the legal background of its founder. Also, education is high quality, not an educational institution that can be obtained in any small and highly sown institution… You know, we have countless lawyers, but standing profession – units.

If you think you do not have enough knowledge, do not skip training classes for you and your real estate. If you do not have a proper education, do not get discouraged, the chances of success will not decrease from this. But in the column of costs you need to add the salary for a lawyer and a good lawyer, as you know, “costs” (approximately 30-100,000 rubles per month).

It would be useful for the new director of NA to see an article by Harry Keller, the owner of the largest real estate company in the United States. The book is about how to become a millionaire selling real estate. Sure, Americal business is very different from ours, but the author has something to note.

4. Office rent

Of course, you can rent an office with an area of ​​12 square meters. I am. Inaccessible or industrial area, but it is unlikely to benefit your business. After all, many customers, when they first come to the agency, evaluate it for external signs… they are greeted with their clothes – when looking at a small narrow office with antique furniture and peeling wallpaper, the customer can simply walk back.

Speaking about the problems of client psychology, the director of the Academy of Sciences “Melt” … notes the contradiction: “On the one hand, the client will judge the agency’s services regarding the probability of office and staff. .. “. Anyway, every self-respecting business person will paint his or her own workplace with dignity and will not hit the dirty face.

5. Serving for advertising is a huge expense item

A decent exterior sign is too heavy. It is possible to advertise in print and electronic media, however most agencies prefer free newspaper advertisements. Website development and maintenance.

6. Other expenses

Purchase of Office Equipment:

  • Office and other furniture.
  • Computers.
  • Server
  • Software products.
  • Purchasing accounting software.
  • Purchasing cash register.
  • Purchase of other office equipment (printer, fax, copy, scanner, camera, camcorder).
  • Installing a landline phone.
  • PPX.
  • Website.
  • Other upfront costs.

Taxation – Income tax from payroll, business.

7. Business insurance

Basically, only large real estate companies insure the activities of their work in the insurance company. According to many agencies, achieving 2-3 transactions per month per real estate is the most difficult block. The problem here is that many types of transactions can take more than a month. For example, transactions for land ownership, inheritance, privatization and transactions for the purchase and sale of housing can, by law, be drawn up for up to six months.

The repayment period depends on the level of expenses and the plans and demands of the owners. A small company can pay in a few months. Larger ones can take years.

What problems await the new real estate company owner?

Entering this business area is not easy as big companies warn newcomers. In a highly competitive market, difficulties await the customer and the authorities. Director of the Academy of Sciences “Yard” Juravleva Dina Moysevna commented: “For more than 17 years in the Kazan market it was much harder to register a real estate company than it is now. We started working before it was privatized. Now everyone can find their own company.

It seems to everyone that you have to open an office, have to advertise, money is pouring in from all sides. This is, of course, an illusion. Now there are various private entrepreneurs and single realtors, and every day there are more and more of them. This is bad for consumers because the number of so-called black brokers is increasing and no one is getting rid of fraud. Such realtors go unpunished easily.

Previously, however, in the absence of Recbalada, there were more holes for dishonest realtors. An apartment was sold several times at once, and then several owners handled the situation. Now this is unacceptable. However, there are loopholes in recording participation in shared construction.

Egorov Vyacheslav Alexandrovich, director of the Avoncord-Realt Academy of Sciences, noted that one of the main problems with the real estate agency was the relationship with the authorities: Cause.

There is such a subtle point: it is difficult to maintain the official staff of a new NA real estate until it receives an adequate customer base. Therefore, many start-up companies operate in “black” and “gray” ways, and the tax office can easily shut down such a company. For more effective growth, the real estate market needs to be as clean as possible. ”

In fact, many agencies are now at the expense of overstaffing revenue. Realtors come to the agency and leave without getting any benefit from their work in a month or two, and the company slowly builds a customer base. Needless to say the form of this process is dishonest and in principle ineffective.

The efficient selection of the team has been cited as one of the toughest tasks for the newly produced director. As already mentioned, the amount of profit a company makes directly depends on the experience and skills of the real estate agent. The agency needs real estate, otherwise the agency will not be profitable for many months.