If you have decided it’s time to start up your own real estate brokerage, a franchise offers the best way to carve out your niche. If you decide to partner with a franchise, you will be partnering with a world-recognized brand that empowers you to blaze your own trail and build a lasting legacy. Here is an overview of starting a real estate business.
Develop a Business Plan
All business owners need a business plan, including a small business operated by a real estate broker. A business plan will provide a guide to ensure your franchise operates smoothly and you achieve your goals. Your business plan should include:
- Mission statement: Your mission statement will help define your goals and philosophy for your brokerage. Consider why your brokerage will exist and what will set you apart from the competition in your marketplace.
- Target market: Carefully consider the markets you want to serve and the quality of agents you want to represent your brokerage.
- Strategy: Market research will help you plan a strategy to outperform your competition. A SWOT analysis will identify your strengths, weaknesses, opportunities, and threats. Your strategy can then include how to use your strengths, improve on weaknesses, take advantage of opportunities, and eliminate or at least reduce threats.
Any business venture requires some upfront investment. Take a look at your own finances and ensure you have the necessary funding to invest in a franchise. With RE/MAX INTEGRA an all-in investment starts at $39,500, including the franchise fee and start-up costs.
Ask yourself the following questions:
- First, are your personal finances in order and on solid footing?
- Without facing undue pressure on your personal finances, do you have funding to support the on-going operation of your brokerage?
- If you don’t have the funds, what are your options, i.e. a bank loan or partnership, or opportunities such as mergers and acquisitions?
Consider the franchise costs and franchise requirements for new owners. Do your research to find out things such as one-time fees for start-up costs, renewal costs, additional monthly operational fees, etc. You’ll need to know all aspects of the financials including the royalty payments you must make and how they are collected.
With a better understanding of the financial requirements, you can start looking into what that investment will get you in a franchise.
What Do You Want from Your Franchise?
Consider what you will expect from a real estate franchise, as it will vary greatly depending on the franchise partner you choose. Start by identifying what is important to you in a Franchise partner. Are you looking for world-class training? Agent/Friendly technology? Brand recognition? Freedom to create a unique culture?
Once you know what’s important to you in a franchise partner, start researching available real estate franchises, reach out to their franchise sales consultants and speak confidentially to Agents and Broker/Owners at those companies.
You will be offered a list of services, along with the costs. You can review everything with your lawyer to make sure you understand all the associated costs and are making the best purchase for your needs and financial situation.
As well, franchisers must provide a disclosure statement before you sign a contract agreement that would typically include:
- Background information
- The company’s financial condition, start-up, and on-going costs
- Any restrictions on the franchise
- Training opportunities
- Advertising provided by the franchiser
- Conditions for terminating the agreement.
- Other franchises offered by the company in your region
Exploration and Application
Every franchisor has its own exploration and application process. Each franchisor will guide you through the exploration process that shares with you the benefits of being a part of their network.
Once the exploration process is complete and both you and the franchisor have determined that there is a mutual fit, an application will be required. This application typically includes:
- Personal income documents
- Bank statements
- Federal income tax documents
You will have to prove you have the finances available to not only start up your brokerage but to continue to support operations. On your part, you will also want to review the franchise agreement and disclosure statement with an attorney.
This is all reviewed with your lawyer before money is exchanged, and paperwork is signed. When everything is in order, you can arrange for the funding to make your purchase.
If you are a real estate professional interested in more information on RE/MAX INTEGRA franchise opportunities, click here.
This material is not an offering. The information in this material is not an offer to sell or a solicitation of an offer to buy a franchise; it is for informational purposes only. A franchise is offered in many jurisdictions only by delivery of a franchise disclosure document to you in compliance with applicable franchise disclosure laws. Further, if you are currently affiliated with another franchisor, this material is not intended to offer a RE/MAX franchise or to solicit a change in affiliation. RE/MAX INTEGRA, 7101 Syntex Dr., Mississauga, ON, L5N6H5 Minnesota File No. F-1659