First things first: In Colorado, a real estate agent is referred to as a broker. If you’re looking to upgrade your license, you will be working toward becoming an employing broker. Employing brokers can manage brokerage offices and employ associate brokers to work for them. They are also equipped to handle the more technical aspects of real estate transactions.

What Are the Employing Broker License Requirements in Colorado?

Compared to many other states, the process and prerequisites for becoming an independent broker in Colorado are actually pretty simple. To be eligible to become an employing broker in Colorado, you must have held an active broker license for the past two years. You’ll also need to take a class and rack up some experience points, but we’ll get into that in our step-by-step guide below. 

How to Get a Colorado Employing Broker Real Estate License

How to Get a Colorado Employing Broker Real Estate License

Complete 24 hours of brokerage administration course

Show proof of 50 experience points

Apply for your Colorado Real Estate Employing Broker License

Let’s break down each step a little further so you have all the information you need to get started.

1. Complete a Brokerage Administration Course

• Cost: $199 (through Kaplan)
• Time commitment: 1-2 weeks
• Helpful resource: 6 Best Real Estate Schools in Colorado for 2023

If you’ve met Colorado’s requirements to qualify for an employing broker license, you can enroll in the 24 hours of brokerage administration classes. This short course will teach you the laws, business practices, and rules required to manage and operate a brokerage.

A variety of local real estate schools offer the brokerage administration education via online, self-paced, or scheduled livestream classes, so you can complete the course from the comfort of home.

If you are looking for a real estate school that can take you through the course material easily and efficiently, we recommend taking a look at Kaplan’s course offering. They have a long-standing reputation for providing top-notch real estate instruction online, all at an affordable price.

2. Accumulate & Show Proof of 50 Experience Points

• Cost: None
• Time commitment: Up to 5 years
• Helpful resource: Colorado Division of Real Estate website

Experience points are a way to quantify the value of a Colorado real estate professional’s experience in our industry. There are lots of ways to earn them (see below), which means you may have already accumulated what you need for this step.

To help you understand how points are earned, we’ve outlined the points system below:

• 10 points for each full year that you’ve practiced as an employing broker
• 5 points for each full year that you were an employing broker charged with ensuring compliance with commission statutes and rules (you’ll need to include a copy of the detailed executed delegation of authority)
• 1 point for each hour of a continuing education completed after January 1, 2018 (up to 20 points)
• 3 points for each completed or closed residential sales transaction
• 6 points for each completed or closed commercial or vacant land sales transaction
• 2 points for each administered residential property management transaction
• 4 points for each administered commercial property management transaction
• 2 points for each completed or closed commercial lease transaction
• 1 point for each completed or closed residential lease transaction
• 2 points for each completed or closed timeshare sales transaction

You need to have accumulated 50 points within the last five years in order to apply for your employing broker license. Even if you have more than 50 points, it doesn’t make sense to include them in your application, since you’ll have to submit evidence for every point you claim. As the CREC says, “there are no awards for most points claimed on a submission.”

3. Apply for Your Colorado Real Estate Employing Broker License

• Cost: None
• Time commitment: 1-2 hours
• Helpful resource: Colorado Division of Real Estate’s Online Services website

You’re almost there! While Colorado doesn’t require that you take an exam to qualify as an employing broker, it takes a few hours to submit the necessary documents to upgrade your license. Luckily, you’ll be able to do it all online, and before you know it, you’ll be starting the next chapter of your career.

You will start by logging into the Colorado Department of Regulatory Agencies (CDRA) website, the same place you originally applied for your Colorado real estate license. On the CDRA website, select “Change License Level/Update Name and/or DBA.”

You’ll need to confirm your personal and professional information and provide your employing broker’s information using the employing broker experience and knowledge worksheet.

Then you’ll provide these supporting documents to qualify for your employing broker’s license:

• Proof of completion of your broker administration course from your real estate school
• Proof of having earned 50 experience points via transaction records
• Proof of successfully passing the Colorado portion of the real estate broker exam

Once you’ve completed the application process, you can check the status of your request on your online account at any time. Once you get the approval email from the Colorado Real Estate Commission, it’ll be time to celebrate!

How Much Does It Cost to Get a Colorado Real Estate Broker License?

Quick Facts

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Colorado Real Estate Governing Board:

Colorado Real Estate Commission

schedule

Education Requirements:

24 hours

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Cost of Colorado Real Estate Broker License Course:

$199 (through Kaplan)

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Total Estimated Cost:

$199

Because the Colorado Real Estate Commission doesn’t require you to take an exam, and there is no cost to change the status of your license, it only costs about $200 to change your license role from a broker to an employing broker in Colorado.

Sample Colorado Real Estate Broker License Costs

(Colorado real estate broker license costs as of October 2023)

How Much Does an Employing Broker Make in Colorado?

According to The Close’s salary information database, the average employing broker in Colorado makes $84,585 per year, which is higher than the national average of $79,781. This is a big pay bump compared to brokers, who make an average of $71,337 per year in Colorado. Remember, a Realtor’s income will depend on several factors such as location, years of experience, skills, and more.

Colorado Real Estate Employing Broker License FAQs

You may have more questions about getting your Colorado real estate employing broker license, so we’ve answered some of the most frequently asked questions below. If there’s something we’ve missed, let us know in the comment section. We’d love to hear from you!

Should I get my Colorado employing broker license?

How long does it take to become an employing broker in Colorado?

More Career Resources

We hope our guide was helpful in understanding the steps needed to take you to the next stage of your real estate career. We wish you nothing but success and continued growth in your exciting new path. At The Close, we continue to provide actionable strategies for every stage of your career.

The post How to Get a Colorado Employing Broker License appeared first on The Close.

CINC may be as close as it gets, at least from the sales standpoint. CINC’s new offer for 2024 includes marketing and advertising, lead capture, lead follow-up, team performance tracking, and now artificial intelligence (AI)-powered response. Read my CINC review to see how I’ve ranked this lead generation platform and to help you decide if it’s worth adding to your real estate toolbox.

CINC Overview

Pros

• Hyper-local lead generation and IDX websites
• Dedicated ad and platform account manager
• Lead nurturing and seller lead capture
• Platform geared toward teams and top performers

Cons

• Takes time to get a return on investment
• Cost structure may not be a fit for newer agents
• Artificial intelligence (AI) is an additional cost

The Close Score

4.8

Pricing:

3.3

General Features:

3.5

Advanced Features:

4.5

Customer Service:

3.4

Customer Rating:

4.4

Expert Score:

4.6

out
of

5

My Verdict on CINC

My overall verdict is that CINC is a proven leader in the all-in-one website, lead generation, and lead nurture software solutions, and other CINC reviews say the same. Due to a dedicated account manager handling your ad placements, the system is much easier to use than comparable solutions. The attractive hyper-local lead generation-focused website also makes you look like the neighborhood expert overnight.   

The biggest challenge with CINC (or any other online lead generation system) for newer agents and/or single agents on tighter budgets is the high upfront cost structure, which is more oriented toward teams and top-performing single agents, who are more focused on long-term return on investment (ROI).

My favorite feature for 2024 is the AI bot, Alex. Alex can respond to leads or inquiries and keep the customers on the hook until you become available. This feature is a must for any top-producing real estate agent. The downside is it is an additional cost, which is more of an annoyance than a deal killer.

Video Walk-through

Key Features of CINC

All-in-One Lead Generation Software

Originally, all-in-one solutions were specifically designed to support top-producing agents and teams specializing mainly in online lead generation. These systems combine IDX websites, a top-of-the-line customer relationship manager (CRM), lead management, and online lead generation systems into one solution. Yet today, CINC’s all-in-one solution can manage and follow up with leads from multiple sources.

These systems can place ads on Facebook and Google, capture leads through landing pages, and nurture leads with an integrated CRM. Top-producing real estate agents have one thing in common: an all-in-one software solution to generate and convert their leads.

The most significant hurdles for real estate agents in adopting these technologies are the high upfront cost and the difficulty in managing the ever-changing ad requirements from online advertising platforms like Facebook, Instagram, and Google. CINC has solved both of these hurdles, as I will share in this CINC review of new updates and offers for 2024.

IDX Website

The most essential feature of any lead capture website is a site visitors want to visit and return to often. This desire to return begins with hyper-local targeted ads on Google that drive traffic to convert on the site. 

National websites like Zillow may rank higher for general home-for-sale searches. However, they are virtually useless for homebuyers who want to know more about living near a specific golf course, city center, or lake community. 

In CINC reviews for 2024, I found that the software is a leader in real estate paid search engine marketing (SEM)-optimized websites by focusing on unique and specific features of a geographic location. Each SEM-optimized webpage is loaded with local information and geographic features that “real buyers” search for while doing their home and area research. CINC reviews and captures this information for you.

Agents can further individualize their sites by incorporating blogs and vlogs, giving users more reasons to return and keep them away from large impersonal websites like Zillow and Redfin. The attractive websites are also preloaded with a mortgage calculator and neighborhood and school data, so buyers spend more time on your site than similar sites. 

Capture ‘Real Buyers’

A great lead generation website is useless if it doesn’t capture the contact information of “real buyers” who are likely to buy in the next few months. To do this, a website must provide an easy-to-use, highly functional home search and valuable and attractive information that buyers cannot get elsewhere.

CINC real estate websites integrate IDX from your local MLS so homebuyers can easily house hunt all the available properties using standard search features and the highly visual and attractive map search function. 

Shortly into their home search, a CINC website asks buyers to register to access more information and website features and to save their favorite homes and search criteria. Once your future client registers, the real magic of CINC begins.  

Seller Lead Generation

If buyer leads are gold for real estate agents, then seller leads are platinum … Am I right? Unless you want to spend time showing buyers homes every weekend, you need to generate home seller leads. 

This CINC review has proven to me that the company has perfected seller lead generation websites and landing pages. Despite the real estate market softening, listing inventory is still frighteningly low. When you combine CINC’s home valuation tool with a postcard campaign to your neighborhood and past clients, you’ll immediately start generating seller leads. 

In addition, according to the National Association of Realtors (NAR), 50% of homebuyers already own at least one home. This statistic means that the many buyers coming to your CINC website will also need to sell a home before making a new home purchase. This fact makes the home value questionnaire and tool necessary for top-producing agents in 2024.

Exclusive Leads

Unlike Realtor.com, Zillow, and Redfin, the leads you generate on your CINC site are exclusive to you. You may not know that websites like Zillow, OpCity, and Realtor.com resell the same lead multiple times to several agents. These sites may resell leads five, six, or even 10 times over! 

While researching for this CINC review, I found that this is not the case with your CINC leads. Since your CINC website captures leads through your paid advertising, the leads in your CINC system are exclusive to you. This activity means you will have a greater chance of converting leads and, in turn, a higher return on your advertising investment. 

Automated Lead Nurture

When you capture a lead, CINC will instantly notify you or your team member through its app. So you can promptly introduce yourself while they are still surfing your site and you are still top of mind.

It’s well known that the best way to convert online leads is to connect with them within the first five minutes. The problem is busy agents are not always available to make a call at the drop of a hat. Additionally, many leads don’t answer on the first call or text, making your follow-up list longer and longer.

This is where the CINC customer relationship manager (CRM) and automated lead nurture take over. CINC’s professionally written and customizable follow-up text plans and email campaigns are designed to keep you and your website top of mind and the homebuyer coming back often. CINC sends call-to-action automated texts when leads are active on your website to encourage users to connect with you immediately or to reconnect even if they have been quiet.

Lead Routing Team & Management

If you have multiple team members or manage a large team, the CINC platform can route leads to team members by their availability, response times, or even their lead conversion percentages. This feature ensures that customers get a prompt response and that your marketing dollars are maximized.

You can quickly see your lead sources, new leads, appointments, and current clients from the CINC dashboard. This dashboard simplicity lets you easily see where your leads are coming from and which team members perform best—making managing a high-performing real estate business not only possible but profitable.

Alex, CINC’s AI Bot, Brings Communication to the Forefront

In simple terms, artificial intelligence (AI) is the programming of computers to think and respond as a human would. This technology has already become game-changing for the sales industry. Like with other technological advancements, the real estate industry will likely be a late adopter. 

The CINC AI bot’s name is Alex. Alex will quickly text leads for you and initiate a nonconfrontational conversation. When a lead responds, you can jump in and take over from where Alex left off, or Alex will continue to nurture the relationship until you become available.

Consistent follow-up is a full-time job, with the average conversion time for online leads being between six and 18 months. This feature makes Alex the perfect solution for any real estate professional who wants to provide a high-touch and personalized experience.

In this CINC review of the AI bot Alex, I learned that if you wish to outperform your competitors, you must adopt artificial intelligence in your real estate business today! In my opinion, AI will not be an option in the future—if you don’t incorporate it into your business, you will be left in the dust.

Higher ROI Than Other Platforms

Today, quality leads are in high demand, with many real estate lead generation companies now charging up to 40% of the hard-earned commissions at closing. CINC puts you in control. With CINC, you select your target audience, messaging, and spending. 

CINC provides a dedicated marketing team member who is an expert with Google and Facebook lead generation, IDX websites, intelligent CRM, lead nurturing automation, and more. 

Some competitors advertise on Google, Facebook, and Instagram to drive site traffic. CINC is a Google Premier Partner that uses hyper-local marketing to attract “real buyers” and motivated homesellers as exclusive leads to your website. By doing so, CINC generates leads at a substantially lower cost than other lead-generation companies and platforms, and there is a much higher return on investment (ROI) upside with CINC because of fixed platform costs and low cost per lead.  

CINC Guaranteed Sales Program

The big announcement in this CINC review for 2024 is the new Guaranteed Sales Program. This program allows you to get started with CINC with a risk-free investment. To ensure your adoption and success with the system, the Guaranteed Sales Program includes a members community, regular webinars, access to best practices from CINC’s industry-leading in-depth Success Playbook, and additional training opportunities.

CINC is so confident that you will not only love their system and generate closings, but for a limited time, CINC will guarantee that you will close deals in a set time frame if you follow the best practices of CINC’s Success Playbook. Obviously, there are restrictions and commitments, so contact CINC today to learn more.

CINC Pricing

CINC’s all-in-one lead generation platform starts at $899 per month for single agents and $1,299 per month for teams. For more details about pricing for the Guaranteed Sales Program and additional advertising promotions available for new clients, please reach out directly to a CINC sales rep.

CINC also offers many other pricing options. These options range from single agents looking to dip their toes into an all-in-one lead generation solution to multi-million-dollar expansion teams looking for a solution that can serve them in multiple markets.

All plans offer the following core and lead generation features:

• CRM
• AutoTracks
• Mobile apps
• Landing pages
• Seller Suite
• Switchboard Sarah
• Custom labels
• Mass messaging
• Database imports
• Google Buyer Leads
• Google Seller Leads
• Facebook Buyer Leads
• Facebook Seller Leads
• List Cast
• Remarketing

However, a few features differ depending on the plan:

Features	Solo	Ramp	Pro	Select
Number of Users	1	Up to 4	Up to 49	50+
Video Messaging	Basic Package	Basic Package	Advanced	Advanced
Lead Routing	Basic	Advanced	Advanced	Advanced
System Integrations	CRM Connect Google	CRM Connect Google Zapier MOJO BombBomb	CRM Connect Google Zapier MOJO BombBomb Other CINC Integrations	CRM Connect Google Zapier MOJO BombBomb Other CINC Integrations
Cash Offer
CINC AI	Starting at $200/month
Dialer	3 lines for $75/month

The Bottom Line: Is CINC Worth Your Money?

It’s the 10-plus years of experience, outstanding customer service, and guarantees like this that attract and keep top producers using CINC. If you are looking for a consistent lead generation platform that will save you time, automatically follow up with leads, and put its money where its mouth is, give CINC Pro a try. In my opinion, you can’t go wrong.

The Close Methodology 

In addition to our expert assessment of CINC, we scored the software against dozens of other lead generation companies. This score consists of our general methodology as well as CINC reviews and the following criteria:

• Pricing 25%
  • Looked at the average price per lead for buyer and seller leads, monthly ad management fees, the minimum required ad spend, onboarding fees, and pricing for mandatory tools like CRMs, IDX websites, and automated lead nurturing. 
• General Features 25%
  • We evaluated each company’s main features, like lead capture tools, lead management, integrations, and ease of use. If a company required features like a built-in CRM, IDX websites, or automated nurturing, these were included in the analysis. 
• Advanced Features 20%
  • We evaluated whether the leads generated were high-funnel or low-funnel, lead exclusivity, how leads are qualified, lead quality, and how difficult the leads are to convert.
• Customer Service 10%
  • The dashboard and user interface are essential factors to consider. If it’s challenging to use or find your way around the platform, you’ll be much less likely to use it. 
• Customer Rating 10%
  • We read CINC reviews and other software reviews and did test drives to evaluate others’ experience compared to our own.
• Expert Score 10%
  • We gave extra credit for any standout features not covered in the above categories. 

Your Take

Have you used CINC software? We’d love to hear what you think—add your thoughts to the comments below!

The post CINC Reviews: A Seasoned Real Estate Pro’s Insightful Perspective appeared first on The Close.

For the past 10-plus years, I’ve coached agents on how to attract and retain high-net-worth clients and the truth is, breaking into the world of luxury real estate is surprisingly simple. It does take some creativity, hard work, and tenacity, but mostly, you need a real passion for all things luxury. In this article, I’ll teach you how to become a luxury real estate agent using my 15 favorite tried-and-tested methods—and you can start today!

Download Our Checklist for Breaking Into the Luxury Market

First Things First: Understanding Today’s Luxury Real Estate Market

What Is Luxury Real Estate?

What Is the Luxury Real Estate Market Like Right Now?

Getting Started: What You Need

So you’re ready to tackle luxury real estate. You should know that it’s a different type of animal. To start, you’ll need to be knowledgeable about the luxury market and have a strong personal brand. And while you might want a few years of experience under your belt, it’s not an absolute requirement. 

Above all else, what really matters is your commitment to becoming a luxury real estate agent. Those who excel in the high-end market provide service, consistency, and excellence. You’ll need to be passionate, creative, dedicated, and authentic every single day. And you can start right now with my proven tips below!

1. Adopt a Fancy Hobby

The best way to meet high-net-worth clients is by doing something you already enjoy. This can be as easy as joining a local antique car group, attending a few fine art shows, sipping your way through wine tastings, or finding a local polo club.

While you might not be in a position to buy your own polo pony, there are many ways to be an enthusiast. No 1955 Jaguar D-Type? No problem. Educate yourself on antique cars and attend meetups and car shows to show off your knowledge. Then, if you are attending a vintage car race, you can bring a list of luxury properties in your area that feature large garages or outbuildings that would be perfect for a vintage car collector.

But—and I cannot stress this enough—start with a hobby you actually enjoy or at least find interesting. No one likes a poser.

2. Make Luxury Part of Your Personal Brand

A key step to breaking into the luxury market is to make sure all your marketing materials—including your business cards, website, advertising, and social media—are cohesive and sophisticated. 

Attract the attention of high-end homebuyers by showing them the best of the luxury lifestyle in your farm area. Marketing the luxury lifestyle is easier than ever before with social media as the perfect place to “fake it until you make it.” It won’t cost you a lot of money to feature and discuss high-end restaurants, gallery openings, or golf tournaments on your social media accounts. 

If you want to take your website marketing and branding to the next level, we recommend Agent Image. Trust the experts at Agent Image to create a stunning, performance-driven IDX website. Agent Image uses state-of-the-art digital marketing services including search engine optimization (SEO), social media management, and pay-per-click ads to help you stand out. Click the button below for 20% off.

3. Get Involved With Charities & Causes

It’s no secret that affluent people often support causes, attend charity events and auctions, volunteer, and fundraise. Target an issue that means something to you and get involved. Organize a toy drive, chair an event, join a board, or start donating a portion or your commission to a specific cause. 

Relationships and opportunities will develop naturally when your dedication to the cause shines through. From there, you can build a network that will lead to new opportunities.

This is another strategy that requires authenticity and sincerity. Don’t fake a love of rescue dogs if you don’t like animals—people will see right through you.

4. Sweat the Small Stuff

In a property worth millions of dollars, every detail is important. You need to be ready to point out the luxury finishes, from the big obvious indoor basketball court to the tiniest cutting-edge audio speaker. You need to know about the Italian quarry where Calacatta marble is found, which high-end French range is en vogue, and how a property’s eco-friendly green roof is not just cool—it cools.  

If, for example, you work in a market with lots of expensive historic homes, you need to have the proper vocabulary: know a cornice from a corbel and the difference between balusters and the balustrade. And be familiar with easements and zoning boards that may get a say in future renovations and restorations. 

On the water? Know your boat lifts and dock permits. In the mountains of Colorado, what are the fire risks, and where are the best ski lodges and stocked trout streams? If someone is going to pay a premium for high-end property features, you need to become the luxury agent who knows what they are and why (or if) they’re worth it. 

Again, social media is key to showing off your expertise. If posting to social media doesn’t come naturally, you can get thousands of real estate social media templates from Coffee & Contracts. Sign up to get new Facebook and Instagram posts designed for real estate agents for every day of the month, plus lots of bonus material to keep your social accounts fresh and engaging.

You can get started for $74 per month, which includes access to all content plus membership to the private Facebook mastermind group. As a special thank you to our readers at The Close, use promo code THECLOSE for $15 off your first month.

Visit Coffee & Contracts

5. Consider Breaking Into Luxury Leasing

Even in the luxury market, the life of a real estate agent is ruled by the ebbs and flows of those commission checks. That’s why breaking into high-end leasing can help you diversify your income stream and your network. Even though these are rentals, the value of the lease can make the financial incentive comparable to a small property in your area. 

Working in luxury leasing also lets you bump elbows with affluent clients and owners. You’ll learn about the luxury market and its clientele. These connections can be valuable in long-term client relationships and generating referrals. For example, helping a high-net-worth individual find a rental for six months in a new city when they get established will foster that relationship for both when they’re ready to settle down and buy and for referrals down the line. 

Along with establishing your network and knowledge of the luxury market, you can use luxury leasing as a stepping stone to advance into selling luxury properties. Ingratiating yourself into the culture and context of the high-end market enables you to brand yourself as a luxury agent. When clients see success in this niche, it builds your brand in a way that only experience can. Shift your mindset into positioning yourself as the luxury market expert in order to pave the way for more opportunities in the future. 

6. Solve a Problem Specific to the Wealthy

If you want to make the leap from real estate agent to luxury real estate agent, you must offer more profound knowledge and broader expertise. Here is a list of common concerns for high-net-worth individuals, which often dovetail perfectly with your real estate services.

• Real estate investing
• Legal tax avoidance mechanisms and tax consequences of property purchases
• Asset appraisal, privacy, protection, and preservation
• Insurance
• Zoning and land use
• Development
• Non-traditional banking jumbo loans
• Common property and prenuptials

Think of one (and only one) problem that a luxury client may have that you can solve. You can then position yourself as the one person in your market who solves this problem for affluent clients. Reflect on your career and experiences and ask yourself the following questions:

• What experiences, skills, and knowledge are valuable to a luxury client?
• Which luxury clients would benefit from my skills and experience?

Then, write a positioning statement to use on all your marketing. For example:

“I help high-income individuals create, acquire, and manage a diverse property portfolio.”

If you need help ensuring your online reputation reflects your specific expertise, consider Birdeye. Grow your visibility, increase your rate of review collections, and enhance your clients’ experience all from one platform. With Birdeye, your testimonials will help you shine online, increasing your chances of becoming the go-to luxury agent with your specific talents.

Grow Your Online Reputation With Birdeye

7. Teach a Relevant Course 

Once you know which specific problem you are uniquely qualified to solve, get out there and start educating your prospective clients. High-net-worth individuals may desire a deeper knowledge of real estate investing, 1031 exchanges, recent zoning changes, second home purchases, or development opportunities—and you can be the one to teach them.

Position yourself as the real estate educator and local authority by creating a 30- to 45-minute presentation or workshop. Ideally, you want to share all the ways that they can solve the problem without telling them exactly how to do it. End with a simple call to action: If they would like more information, they will need to schedule a meeting with you.

Focus on educating without getting anything in return. Even if you don’t set any meetings at first, you will eventually become a trusted authority on your chosen subject, leading to opportunities in the future.

Don’t forget to bring snacks! Offering cookies, coffee, or even wine and cheese can go a long way toward breaking the ice.

8. Master the Art of Networking & Self-marketing

In luxury real estate, your network is your net worth. Being actively engaged in the community (and business events) is crucial to building your professional sphere. Regularly attend Rotary Club meetings and perhaps join a high-end athletic club. Explore your area to see if there’s a chamber of commerce that aligns well with your real estate niche. 

Don’t forget to include private lenders and wealth managers in your network. After all, they’re often already working with high-net-worth individuals. This way, you can gain insights into the luxury market—and perhaps even referrals. Invite them to an upcoming client appreciation event to help them build their base as well. Make sure you’re building mutually beneficial relationships so you’re the go-to real estate agent for their clients. 

Remember that effective networking isn’t just about attending events, though. It’s about following up, engaging with your community, and showing genuine interest in their activities. Find ways to provide value and help them commemorate milestones in their lives like anniversaries, birthdays, and important events—a small gesture goes a long way. Strengthening these relationships can pave the way for long-term opportunities. It won’t happen overnight.

9. Level Up With Designations

If you want to become a respected luxury real estate agent, you need proof that you have the knowledge, skills, and experience to handle such an expensive asset. There are several designations and certifications explicitly designed for agents in the luxury real estate market.

• Luxury Homes Certification
• Coldwell Banker Global Luxury Certification
• Certified Luxury Home Marketing Specialist
• Accredited Luxury Home Specialist

While these won’t provide you with a luxury client as soon as you complete the course, they will provide you with a solid foundation to attract those luxury clients. Again, in luxury real estate, it’s all about networking. Clients in this space tend to value personal referrals and convey trust through connections. 

These programs often come with mastermind groups on Facebook and private referral networks. You’ll also be able to discuss market insights in depth with other agents. This continuous learning and exchange of ideas can help get your brain thinking about client acquisition. Plus, hearing success stories from how other agents broke into the market can keep your resolve going while trying to do the same yourself.

10. Understand & Adapt to High-end Client Communication

In the world of luxury real estate, speaking the language of your clients goes beyond just knowing what to say. It’s about understanding their needs, preferences, and expectations. High-net-worth individuals often have specific ways of communicating and conducting business. If you get emails or texts with just short, one-word responses, don’t take it as rude or curt. Your clients are most likely very busy people and every second counts. So it’s important for you to be able to adapt to your clients (and not the other way around!).  

With luxury real estate comes an increased potential for global clients, meaning your understanding of cultural differences is key. This means being aware of and respecting different norms, customs, and communication styles. For example, understanding the importance of formal titles and when to shake hands: Many cultures around the world shake hands when beginning and ending a conversation. Notice and study these subtleties so they don’t catch you off guard. 

While many real estate pros recommend customizing your communication methods for each client, this is a must if you want to make it in the luxury market. Some might prefer a weekly detailed email update, while others might opt for a quick text or phone call with their assistant. Pay attention to these preferences to show respect for your client’s time—and how they conduct business. 

But the most important aspect of adapting to speaking their language is listening. Understand their desires, motivations, and concerns by listening carefully to what your clients are saying. Pick up those breadcrumbs throughout the conversation to help you tailor your advice and communication and build a stronger relationship with your client.

11. Hitch Your Wagon to a Star via Co-listings

You can gain serious skills and connections by helping other luxury agents with their marketing, events, and open houses. When you can show your well-to-do peers that you are hungry, they will be more likely to take a chance on you as a referral partner when they’re too busy to give their high-end clients the attention they often demand. 

Don’t be too proud to co-list, either. If someone is too busy to take on a luxury listing, offer to jump in and do the grunt work. Half of the commission of a luxury listing is well worth it. Plus, you’ll have the opportunity to learn from a more experienced agent. It’s not just about sharing the workload—you’ll be able to gain insights into the nuances of luxury deals, from client interactions to closing the deal. 

Plus, being associated with a high-end listing will instantly build your credibility and reputation in the luxury real estate community. You’ll now be able to associate your brand with a high-end property—use this to your advantage to boost your luxury profile.

12. Mine Expired Luxury Listings & FSBOs

Luxury homes can take two to three times longer to sell than the average home because fewer people can afford them. Plus, many are custom designed and have unique features, making them more difficult to price correctly the first time. Some luxury listings can sit on the market for years and change listing agents multiple times before they sell. 

Luxury for sale by owner (FSBO) sellers can also find it difficult to attract “real” homebuyers for their premium-priced homes. This means that there is opportunity for savvy agents to prospect for both expired luxury listings and FSBOs. When I coach agents on how to get listings by prospecting expired luxury listings and FSBOs, I encourage them to present themselves as ambitious (yet professional) luxury real estate agents who offer the ultimate solution to a client’s problem. Listen to their issues and above all, be prepared to talk data. After all, there’s a reason that the first agent didn’t work out (or why they’ve decided not to list with an agent!).

13. Claim New Construction as Your Own

Hustling to become the representative for a new residential construction project is one of the fastest ways to establish yourself in the luxury market. If a developer has one project and likes the work you’ve done to sell it, chances are they’ll have another one … and then another one. 

Once again, networking is key here. Take any opportunity you can to get in front of developers and show off your skills. It might even be possible to consult on projects before they ever begin. After all, you’re the real estate expert and have plenty of knowledge about what the market will bear. It’s a mutually beneficial relationship that can grow and develop over time.

14. Dress for Success

Or should we say, dress to impress? In luxury real estate, appearances matter. Observe how your clients act and dress and aim to mirror their style—while keeping different cultural norms and expectations in mind. It’s not just about imitation; it’s about showing respect and understanding to your clients. 

However, don’t go overboard. It’s essential you stay true to yourself and your personal brand. Your clients choose you for your authenticity and expertise, so while it’s important to present yourself well, don’t spend all of your next commission check on a new wardrobe or wear clothes you don’t feel comfortable in. 

When you dress appropriately, it shows respect for your clients but also reflects your professionalism. Remember, we may be dealing with global clientele here. Whether the situation is a high-stakes negotiation or you’re showing a listing, your attire should be chosen thoughtfully and intentionally to ensure you leave a positive, lasting impression.

15. Adopt a Service Mindset

High-net-worth individuals are used to a certain level of service. Promptly responding to emails and texts and answering the phone is just the beginning. Exceptional service is all about making the client feel like they are your first—and most important—priority. 

We’re not talking about splashing out on fancy gifts or splurging on expensive meals. Showing clients you care is often about the smallest details. Remembering birthdays, anniversaries, and children’s names (and their hobbies or favorite sports teams) can go a long way. A simple handwritten note can speak volumes about the kind of agent you are. 

Too busy at the polo fields or charity auctions for handwritten notes? A service like Handwrytten crafts personalized messages and uses proprietary technology to recreate your handwriting to send a note that looks just like the real thing.

Bringing It All Together 

Becoming a luxury real estate agent sounds daunting, but in the end, it’s pretty simple. Connect with your passion. Be genuine in your pursuit of relationships and networks. Create a plan to meet affluent people who share the same excitement for luxury real estate properties that you have. Brand yourself appropriately, work hard, and provide a professional, unparalleled client experience. Take these steps and you’re already on your way to becoming a luxury real estate agent. 

Remember that, in today’s world, luxury is not strictly about price—it’s about the uniqueness of an experience and elite level of service. Do you have a way to break into luxury that we didn’t mention here? Let us know in the comment section!

Download Our Checklist

The post How to Become a Luxury Real Estate Agent appeared first on The Close.

But if you’re ready to get started, you first need to understand the basic process, requirements, and costs. I’ll help you do that and give you the resources you need to take this exciting, giant next step in your career journey.

Steps to Getting a Real Estate Broker License

1. Learn the Requirements for Your State

The first step is, of course, to learn the requirements in your state. In most states, there are basic legal requirements to get your license (in addition to experience and education). 

Minimum Age to Get a Real Estate Broker License

You must be at least 18 years old in order to get your real estate broker license in all 50 states. Some require you to be 20 years old. Of course, since you usually need to be at least 18 to get your real estate salesperson license, this makes sense.

Criminal Conviction History

Likewise, since you cannot get your real estate license with a felony conviction on your record in most states, you cannot get your broker license under these circumstances either. If you did manage to successfully petition your state licensing department to grant you a salesperson license with a felony conviction, you will need to do the same for a broker license.

State-specific Shortcuts

Many agents don’t realize that there are often exemptions for the education and experience requirements listed below. Attorneys in good standing with the state’s bar and those who have college degrees in real estate-related majors generally don’t need to take the required education courses and may not need the required experience either.

State-by-state Resources for Managing Broker Candidates 

If you’re in one of the following states, check out our guide with all the information about licensing, tailored to you.

• California
• Colorado
• Florida
• Georgia
• Illinois
• Massachusetts
• Michigan
• New York
• Ohio
• Texas

2. Complete & Document the Required Experience & Transactions

Most states require a certain number of months or years of real estate experience to qualify as a broker. Others, like New York and Texas, require a minimum number of transactions, which you need to complete and document before getting your license. In general, those states have a points system to help you understand if your combined years in real estate and transaction experience meet their criteria. Here’s a sampling:

Since your managing broker is legally your broker of record, they will likely already have the documentation you need. Generally, you do not need to provide details from your past transactions. You just need to know the number and type of transactions you’ve closed as a salesperson.

3. Take Your Real Estate Broker Prelicensing Courses

Once you’ve learned the qualifications you need to get your broker license and completed and documented the right number of transactions, you need to complete your real estate broker courses.

The length and difficulty of your broker licensing courses vary by state, but you should expect to spend at least a full week in classes to qualify for your broker license. Many agents will find the broker courses more interesting than their salesperson prelicensing, but they do tend to be more difficult.

Real Estate Broker Prelicensing Course Hours by State

Consider taking your real estate broker courses online with Colibri Real Estate. They offer the same courses as everyone else, but often for a better price. Plus, they’re our top pick for best online real estate school.

4. Pass the Real Estate Broker Exam

Just like your salesperson license, the next step in getting your broker license is usually taking and passing your state’s broker prelicensing exam.

While the tests vary from state to state, they are all multiple choice and will probably take you several hours to complete. All real estate broker exams are pass-fail, and in order to pass the exam (in most states), you need to get 70% of the questions correct.

How Hard Is It to Pass the Real Estate Broker Exam?

The real estate broker exam is generally a little bit harder to pass than the real estate salesperson exam. However, since many people who take the salesperson exam have no real estate experience, the pass rate for broker exams is often higher.

5. Apply for Your Real Estate Broker License 

Once you’ve passed your broker exam, all you need to do to officially become a broker is to apply for your license! The process is pretty straightforward in most states. You need to fill out your application and gather your information, including documented experience (if needed), test results, and certificate of course completion and submit everything to your state’s professional licensing or real estate commission.

That’s it! Congratulations, you are now a licensed real estate broker!

Costs for Getting a Real Estate Broker License

Again, this varies by state, but getting your real estate broker license can cost between $400 and $1,200. Here’s a quick breakdown of the costs for courses and fees to get your broker license in California, New York, Florida, and Texas:

Costs to Get a Real Estate Broker License in 2023

Skills Needed to Become a Real Estate Broker

To be successful, real estate brokers will need to build on the skills that they developed during their time as agents:

• Buying
• Selling
• Negotiating
• Marketing

But brokers can also:

• Recruit agents
• Train others
• Mentor
• Lead a team
• Oversee administrative staff
• Oversee contracts
• Engage in transactions without outside broker oversight

If you’re thinking about building your own brokerage, remember that it’s not just about being a great salesperson or the number of transactions you’ve done—it’s about being a good manager. Your brokerage will fail or succeed based on the team that you build and retain.

Take the time now—before you even get your broker license—to get clear on your objectives, think about the skills that are required, find a competitive advantage, determine the type of agents you want to serve, and consider what your processes and procedures will look like.

Tools to Start a Brokerage

If starting a brokerage sounds like your next great adventure, I have plenty of resources to help you along the way. Consider these five important next steps (and check out the worksheets and guides to help you accomplish them):

1. Really do some soul searching and decide what kind of brokerage you’d want to build. Read my article on how to start and get those wheels turning. 
2. Create a budget with my worksheet.
3. Consider your competitive advantage and come up with a name. Start thinking about branding your new business.
4. Determine your procedures and processes. For example, what splits are you going to establish?
5. Start strategizing for recruitment. Learn how to attract both customers and agents!

Pros & Cons of Becoming a Real Estate Broker

In my dozens of years in the real estate industry, I’ve been an agent, broker-owner, franchise partner, recruiter, speaker, coach, and author. I’ve launched two brokerages, invested in two others, and coached other broker-owners. I’ve put in the crazy workweeks and the sleepless nights, and yes, I made plenty of mistakes along the way.

There are many reasons why you might want to become a real estate broker. It’s a natural progression in your career and an important step in professional development. But making sure you take this next step for the right reasons will help you avoid major mistakes and save you a lot of heartache in the process. 

Becoming a Broker Means You Can:

• Earn more, either by enabling yourself to conduct transactions without having to split your commission with another broker or by starting your own brokerage and earning splits from your salespeople
• Build your own brand or offer a unique service or system that other brokerages do not
• Cut back on selling and focus on recruiting, training, and leading new real estate agents

On the Flip Side, Don’t Become a Broker Just To:

• Save money
• Avoid supervision or regulation
• Grow your business just for the sake of growth

Typical Broker’s Earnings

Earnings depend entirely on the work you put in and the market where you reside. More deals and higher sale prices will both result in higher annual earnings. Our guide below uses a proprietary tool to estimate the typical salary for brokers in every state: 

Real Estate Broker FAQs

Have questions on the basics? Read on!

What’s the difference between brokers & agents?

What does a real estate broker do?

Are there different types of brokers?

Bringing It All Together

Getting your real estate broker license can be a fairly long and expensive process, but follow these steps and you can be your own boss in no time. Take it from me, becoming a broker can be one of the most rewarding career steps you ever take. 

Do you have advice for someone considering becoming a real estate broker? Leave a comment below!

The post How to Become a Real Estate Broker (Without the Stress) appeared first on The Close.

As someone who’s been a real estate broker in Colorado for 28 years, I can walk you through the process of getting your license from start to finish. We’ll explore Colorado real estate education requirements, taking the state exam, interviewing brokers, and completing your license application. Let’s dive in!

How to Get a Colorado Real Estate License

How to Get a Colorado Real Estate License

Complete a 168-hour Prelicensing Course

Pass the Colorado Real Estate Exam

Submit to a Background Check

Join a Colorado Real Estate Brokerage

Obtain Errors & Omissions (E&O) Insurance

Apply for Your Colorado Real Estate License

Before we get started, we need to clarify some terms. In Colorado, new real estate agents are referred to as brokers. This can be confusing because, in many other states, brokers manage sales agents and real estate offices after obtaining additional education and experience. However, these supervisors are called employing brokers in Colorado.

To be eligible for a Colorado real estate license, you must:

• Be at least 18 years old
• Have a high school diploma or equivalent
• Pass a background check

1. Complete a 168-hour Prelicensing Course

• Cost: $599-$1,199 (through Kaplan)
• Time commitment: 2-8 months
• Helpful resource: 6 Best Real Estate Schools in Colorado

Colorado requires that you complete 168 hours of prelicensing coursework to qualify for your real estate license. You’ll also need to complete a course final exam, which is separate from the Colorado license exam. Your education will cover both state and national topics, including:

• Real estate law and practice (48 hours)
• Contracts and regulations (48 hours)
• Trust accounts and recordkeeping (8 hours)
• Current legal issues (8 hours)
• Real estate closings (24 hours)
• Practical applications (32 hours)

 If you’re looking for a real estate school in Colorado, we recommend Kaplan. The company offers self-paced and live online courses so you can choose whichever you’re more comfortable with.

2. Pass the Colorado Real Estate License Exam

• Cost: $49
• Time commitment: 4 hours
• Helpful resource: PSI candidate information bulletin

Quick Facts

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Cost

$49

schedule

Time to Complete

4 hours

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Format

154 multiple-choice questions

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What to bring:

One form of valid ID

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Passing grade:

75%

Once you have successfully completed the educational requirements and your course exam, you can now register for the state real estate license exam.

Colorado’s real estate exam has a reputation for being one of the most difficult to pass in the country. If you have completed your 168 hours and still don’t feel entirely prepared for the license exam, then consider an exam prep course. Kaplan offers a test prep package for only $99, which includes lots of simulated exams.

When you’re ready to schedule your exam, visit the PSI testing website. You’ll be able to schedule your exam and pay the $49 fee. You’ll have four hours to complete the license exam, and you’ll need a minimum score of 75% to pass.

PSI has seven test center locations in the state of Colorado, so you shouldn’t have trouble finding a test center near you. 

Colorado PSI Real Estate Test Center Locations

3. Submit to a Background Check

• Cost: $50
• Time commitment: 2-6 weeks
• Helpful resource: Colorado Division of Real Estate website

Next, you’ll need to complete a fingerprinting process to get a background check. Since it can take six weeks to process your results, we recommend getting started early.

You can obtain your fingerprints from IdentoGO or at most local police departments. You’ll need to bring a government-issued identification card. Once completed, your fingerprints must be submitted to the Colorado Bureau of Investigation for a background check. The CBI will then send the results to the Colorado Division of Real Estate (DORA), where they will be matched with your real estate license application.

People with certain prior convictions are less likely to be approved for a Colorado real estate license. If you have concerns about your background check, you may want to contact DORA and explain your situation before going through the trouble and cost of studying to get your real estate license.

4. Join a Colorado Real Estate Brokerage

• Cost: None
• Time commitment: 2-4 weeks
• Helpful resource: What’s the Best Real Estate Company to Work For?

In Colorado, beginning real estate brokers must work under an employing broker. This allows you to learn from other experienced licensees regarding how to work with buyers and sellers and how to successfully complete real estate transactions.

When you start your broker interviews, be sure to ask about the split or how you and the brokerage will divide the commissions. Some brokerages will ask for a 50-50 split on commissions and not charge monthly desk fees anymore. It all depends on your abilities and effort but once you’ve reached a specific sales goal (or the cap) for the year, your commissions may rise to 100%.

5. Get Errors & Omissions (E&O) Insurance

• Cost: $229 per year
• Time commitment: 2 hours
• Helpful resource: Colorado Division of Real Estate’s broker insurance requirements

The Colorado real estate commission requires that all active, licensed real estate brokers maintain an errors and omissions (E&O) insurance policy. Before you purchase it, however, you should check and make sure your new brokerage doesn’t already provide this to its agents.

6. Apply for Your Colorado Real Estate License

• Cost: $485
• Time commitment: 30 minutes
• Helpful resource: Colorado Division of Real Estate’s broker application instruction guide

Congratulations! You’re almost there. Be sure you have the following documents ready when you apply:

• Certificate of completion from your real estate education provider
• Receipt of fingerprinting completion
• Brokerage information
• E&O certificate
• Application fee payment ($485)

Start by setting up an account on the DORA website. From there, you’ll apply for a new broker license and submit your personal information, brokerage information, and supporting documents.

The division may take anywhere from three to seven days to approve your application, but you can check the status anytime by logging into the portal.

How Much Does It Cost to Get a Real Estate License in Colorado?

Quick Facts

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Colorado Real Estate Governing Board:

Colorado Real Estate Commission

schedule

Prelicensing Requirements:

168 Hours

inventory

Price Range for Prelicensing Courses:

$599-$1,199

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Total Estimated Cost:

$1,500-$2,300

It will cost anywhere from $1,500 to $2,300 to get your real estate license in Colorado. This price tag includes fixed costs such as exam, background check, insurance, and application fees. The biggest variable in cost will be your prelicensing course, which can vary in price based on the type of package you choose.

(Colorado real estate license costs as of November 2023)

Do Realtors Make Good Money in Colorado?

According to The Close’s salary information database, average brokers in Colorado make $71,337, which isn’t far from the national average of $73,985. Remember that, as a commission-based career, there is no limit to your earning potential as a broker.

How to Get a Real Estate Broker License in Colorado: FAQs

If you have more questions, be sure to scroll through our most commonly asked questions below. Have we missed something? Be sure to let us know in the comment section—we love to hear from you!

Does Colorado offer real estate reciprocity with other states?

How long does it take to get a real estate license in Colorado?

What are the levels of real estate brokers in Colorado?

How difficult is the Colorado real estate license exam?

More Resources From The Close

We hope we’ve helped you break down the steps to getting your Colorado real estate license so you feel confident about taking your first step. At The Close, we’re committed to providing actionable strategies for every stage of your career.

To get articles straight to your inbox, subscribe to our newsletter. Don’t forget to join our Facebook Mastermind Group to get advice from agents nationwide to take your career to the next level.

The post How to Get Your Colorado Real Estate License (+ Tips From a Top Broker) appeared first on The Close.

In this article, I will uncover the full list of the services that your brokerage may choose to provide, a detailed description of each, and the estimated costs so you can make the best decision for your brokerage. Starting with software and outsourcing is not a bad idea while you continue to grow. Let’s dive in.

Buyer & Seller Leads

In an agent’s world, prospecting is the name of the game. They’re hungry for leads, and as more companies provide them, that appetite seems to grow. Keep in mind that when brokers supply their agents with leads, everyone wins. With more leads to work, your agents should close more deals—and add money to your brokerage’s pocket. 

The game has changed nowadays to make leads more accessible (as long as brokers are willing to pay). However, the benefit of buying these leads directly is that you can also save money on marketing—just cut out the advertising middleman and buy the leads directly from a platform like zBuyer. 

Of course, it’s not as cut-and-dry as all that. Providing your agents with leads means that you’ll need to budget for them. You’ll also need to hold your agents accountable for the leads you provide—that’s a fine line to balance. By offering leads, you may be attracting more junior agents with less experience who may need more coaching and education. This balance is important in keeping your brokerage alive with seasoned professionals as well as the fresh new agents.

Why Smart Brokers Provide Leads

Your return on investment (ROI) on providing leads will be directly related to your training and accountability to the agent. Brokerages that do this well can see a three to four times return on their money. Additionally, there are a lot of talented agents who just need a little momentum in their business, which brokerage-supplied leads may provide.

Lead Generation Cost Breakdown

Of course, the cost of providing your agents with leads will vary depending on where your brokerage is located. But if you want to provide enough leads to attract and maintain motivated newer agents, then you should expect to spend anywhere from $10,000 to $100,000 per month on leads. Once you throw in a lead manager, you can expect to pay another $45,000 per year for their salary. Let’s review some of the top lead gen companies that brokers should be looking at:

Consistent Digital & Print Marketing

One of the most important lessons learned over my 28-year real estate career is that nothing is more important in an agent’s business than them getting their marketing out consistently. Despite all the systems and tools that are available, more than 80% of agents still fail to follow up with their clients after a sale—not even a postcard!

Brokerage-provided marketing services can include mailing monthly postcards to their sphere of influence (SOI) and farm area as well as helping agents with social media content and creating professional listing and buyer presentations. Your brokerage can provide marketing services through software, outsourcing, or, when you’re large enough, hiring a full-time marketing manager.

Agently offers a full AI marketing suite with thousands of real estate social media templates—including buyers, sellers, video marketing, listing marketing, open houses and much more. It automatically integrates your brand so you spend less time on social media. You can also track your productivity and enhance your communication with your broker. Check them out at the link below.

Why Smart Brokerages Provide Digital & Print Marketing

If you want to add a service that provides value and measurable returns in both productivity and profits, then taking over your agent’s marketing is the answer. Agent marketing will attract other agents, increase referrals and repeat business from your agents’ SOI, and—best of all—it helps maintain your brokerage’s brand image and standards.

Digital & Print Marketing Benefits vs Costs Breakdown

Coffee & Contracts is a real estate marketing company that offers thousands of social media templates designed specifically for real estate agents. This includes Instagram Reels, carousels, Broke Agent memes, and more. You’ll get access to fresh content and new options every month as a subscriber. You can get started with $15 off your first month with the promo code THECLOSE.

Listing Preparation & Marketing

This is a no-brainer if you’re trying to recruit listing agents. Many high-producing agents are good at lead generation and sales but can fall short when it comes to marketing and managing their listings.

That means you can take a big burden off their plate by offering to handle all the details of listing preparation, like cleaning and staging. You may also help them with marketing tasks like photography, video production, sign installation, MLS input, and promotion.

These services should be outsourced until your real estate brokerage is large enough to support a full-time listing manager. Be sure to negotiate volume discounts with your vendors to keep your expenses within budget. If you’re just dipping your toe into this brokerage service, I recommend looking into providing your agents access to a service like Apply Design, an easy-to-use virtual staging software that charges $7 to $10 per image.

Why Smart Brokerages Provide Listing Preparation & Marketing Services

Of course, these services will allow you to attract the right agents for your brokerage, but there are other benefits you may not be aware of.

Maintain Your Brand’s Image & Standards

This way, listing marketing will be up to the standards of your real estate brokerage and in line with your branding. No more cell phone pics, dark and blurry images, or real estate signs printed with the wrong colors or font. Just this by itself will attract image-conscious homesellers.

Listings Sell Faster & for a Higher Price

When your marketing is done correctly, you will attract more buyers, too. The more buyers who see your listings, the greater chance they will sell quickly and for top dollar, and this will make your agents look good!

Higher Splits & Fees

Believe it or not, many productive and top-producing agents are happy to pay their broker more for the benefit of having all the listing marketing done for them. This provides them with the confidence they need to go after luxury listings and gives them back more time to do what they love—making more sales!

Listing Preparation & Marketing Benefit vs Costs Breakdown

Transaction Management Services

If you have a highly accountable group of agents, then any task you can take off their plate will increase their productivity. Simply put: If your agents are chasing paperwork, they are not  generating leads. Transaction management is an easy and low-cost way to get some of those red-tape tasks off your agents’ schedules.

You can choose to offer this as an a la carte service, but I prefer to increase my fees and include it on every file.

Why Smart Brokerages Provide Transaction Management Services

Taking over the transaction once it has gone under contract will not only free up your agent’s time, it will also eliminate the challenge of chasing down paperwork from your agents to complete your required brokerage file.

Since you have to pay someone to manage that file, it is easy and inexpensive to add this transaction management service to the list of what your brokerage provides. We’ve done a breakdown of our top transaction management software picks to make the choice as easy as possible.

Transaction Management Benefits vs Cost Breakdown

Agent Signs & Lockboxes (Installation, Removal & Storage)

It may sound simplistic, but providing signs and lockboxes and having them installed, removed, and stored is very enticing to agents. Why? Because what self-respecting agent loves to swing a sledgehammer at a steel sign frame to get it into a frozen lawn? No one, that’s who! Even worse is placing 20 open house signs on busy intersections wearing a black Armani suit in 100-degree weather. Been there—hated it!

Save your agents the pain and embarrassment of having to install listing and open house signs. Let someone else deal with the headache of where to place the lockbox and finagling it onto a metal screen door. Your agents will love you for the simple gesture. To provide this service, you can contract with a local sign company to manage the whole process. The cost is typically $30 to $50 for each install or removal.

Why Smart Brokerages Provide Sign & Lockbox Services

Maintain Your Brand Image & Standards

If I had a dollar for every time I saw one of my brokerage signs printed in the wrong color or with the wrong font, I could buy the Miami Dolphins! Most agents are not in tune with the importance of maintaining a brand, and if they have the ability to save $10 a sign by having them printed more cheaply, they will. If you include listing and open house signs as part of your services, this will ensure that your brand is always presented with quality.

Promote Your Brand

If your listing and open house signs are branded to your brokerage, you are also promoting your brokerage—and the best part is you only pay when your agents take a listing or hold an open house.

Signs & Lockboxes Benefits vs Cost Breakdown

• Sign installation, removal & storage, $60 per listing
• Lockbox installation, $20 per listing
• Open house sign installation & removal, $50-$100 per open house

Meetings & Events

Real estate sales is a social business, and most agents love to socialize. A healthy event calendar will not only increase agent retention, but will make recruiting easier. Real estate can also be a lonely business, and many agents are hungry for connection, especially if they are struggling.

3 Types of Events Successful Brokerages Host

Team Meetings

Believe it or not, team meetings are less about education and information and more about building and maintaining relationships and company culture. Coffee and donuts, or lunch right after your team meeting, can give agents a reason to socialize and bond. It also gives them a reason to show up (besides listening to you or your sales manager talk shop).

Social Happy Hours

A monthly happy hour at a local brewery or trendy restaurant will make your agents feel like you value them and want to get to know them better. Additionally, these social happy hours are a great opportunity to invite agents from other brokerages to check out your company’s culture.

Client Events

Getting in front of your agents’ clients not only builds your brokerage’s brand, but it provides a reason for your agents to reach out to their SOI and past clients. Many busy agents would love to throw customer appreciation events but lack the time or skills to do it. And some agents with small SOIs or client databases fear that they won’t have enough people show up. Why not give them all a helping hand and coordinate the event for them? There’s no need to do them monthly—quarterly or bi-annually will be enough to keep your agents in front of their SOI.

Meetings & Events Benefits vs Costs Breakdown

Education & Training

Any real estate brokerage that wants to serve agents throughout their careers must provide a full suite of education and training. If they’re not getting it from you, they will get it somewhere else. Plus, keep in mind that your educated agents tend to be more productive and on top of the newest contract changes, leading to less mistakes—in short, your errors and omissions insurance will thank you. 

Begin by thinking about what type of agents you want your brokerage to serve. What phase of their career are they in? What skills and knowledge do they need to be successful in order to push through to the next phase?

If you don’t have time for this rhetorical question, I did some of the thinking for you. Below you’ll find a short list of the phases of an agent’s career, as well as classes that will support them in that phase. 

Types of Agents & Training Smart Brokerages Offer

Unlicensed Prospects

People interested in getting into real estate need access to a real estate school. Many successful brokerages either offer an in-house real estate licensing school or have an affiliation with one, where they refer students in exchange for promoting their brokerage as an affiliation option. So if your business model includes recruiting brand-new agents, getting into prelicensing education is a no-brainer.

New & Newer Agents

This is where you need a structured training calendar—one that can walk a new licensee through a marketing plan, lead generation strategies, and all the required tasks related to working with buyers and sellers.

Newer agents also need the support of a mentor who they can call to get their urgent questions answered. This ensures that they are doing the right thing and protects your brokerage.

Productive Agents

Busy productive agents don’t want to sit in classes week to week. They only want to attend classes that they can directly apply to their business. Productive agents are attracted to business planning, lead generation classes, and continuing education (CE) credit courses that offer knowledge they can use.

Top Producers & Teams

Top producers and teams are looking for educational opportunities that are geared toward the latest systems, tools, and strategies that help them bring their business to the next level.

Try bringing in coaches, trainers, or top producers from other markets to teach your driven agents. Agents from outside your market area are more likely to share their secrets without the fear of a competitor taking their market share away.

Education & Training Benefits vs Costs Breakdown

Office Management Services

Beyond just printing fliers, holding classes, and running team meetings, you still have to fulfill all the state-mandated managing broker activities, such as agent supervision and file compliance—not to mention all the management tasks that go with running a brokerage, such as financial management, office reception, and recruiting.

While these services may not be on your company brochure, if you wish to have a successful brokerage, they still need to be managed. 

Office Management & Services Benefits vs Costs Breakdown

Essential Software to Manage Real Estate Brokerage Services

Now that you have decided what services you are going to provide the agents with your real estate brokerage, next look for the software solutions that will help you deliver these services and manage your brokerage.

To keep your expenses low, use software whenever you can. Even though the upfront cost and setup of software can be pricey, it will save you money over the cost of hiring an employee.

For a full list of software solutions to run a real estate brokerage, please check out the article: Real Estate Brokerage Software: Our Top 26 Picks for 2023 (+ Pricing).

It’s a Fine Balance & Further Reading

The types of services you choose to offer will ultimately determine the employees you will need to successfully run your real estate brokerage. A common mistake new brokers make is offering too many services when their brokerage is small. This mistake puts too much stress on a young brokerage’s limited staff.

To avoid this misstep, you must find creative ways to provide a full range of services to your agents—all while not breaking the bank. One way to do this is to use software solutions, outsourcing, and then hire employees to manage the remaining tasks.

What mistakes did you make when you set up your first brokerage? Are there any services I might have missed? Let us know in the comment section below.

The post 9 Services Smart Brokerages Are Offering to Attract More Agents appeared first on The Close.

I learned this from experience. In my 28-year career in real estate, I have launched or coached more than 20 startup real estate brokerages. Accurately estimating expenses was one of the most critical steps we took. That’s why I decided to put together this article to outline the right way to estimate expenses for your new brokerage.

Real Estate Brokerage Expense Categories

In this article, we’ll review all the common real estate brokerage expenses you may incur operating a new business. Each of the categories below represents a group of expenses along with their estimated annual costs—just divide by 12 to grab your monthly cost. I’ve also pinpointed each category’s ideal percentage of your overall revenue.

I’ll break each category down and explain it in detail. After reviewing each of your brokerage expense categories, you can move to estimating your revenue and completing your real estate brokerage budget.

It’s important to note here that, strictly speaking, profit is not an expense. However, we’ve factored in a 20% profit margin, assuming you want to run a reasonably profitable brokerage business by efficiently managing expenses and revenue according to the guidelines we’ve set forth here. More on this topic later.

Real Estate Brokerage Expense Categories: Costs vs Revenues

Let’s do a quick high-level overview of your expenses. We’ve done a breakout of: 

• Categories
• Annual costs
• Percentage of annual revenue

Payroll Expenses

Estimated total annual cost: $40,000-$120,000
Ideal percentage of revenue: 25%-30%

Your real estate brokerage payroll expenses may vary. Many new brokers forget to factor in the other expenses from employees—think payroll, paid time off, insurance—and, of course—taxes. A few more considerations when it comes to payroll include:

• The number of employees you have and their statuses (full time, nonexempt, etc.)
• The employment market
• Any additional benefits you choose to offer your employees

Here’s a breakdown on the main payroll expenses you’ll need to account for:

Employee Payroll

Estimated annual cost: $32,000-$96,000

The number of employees you have at any given time depends on the services you’re offering to attract agents and the size of your brokerage. For deeper insight on which employees to hire at different stages of growth, see my previous article: The 5 Employees You Need to Hire to Grow Your Brokerage.

The city and state in which you’re opening your brokerage will also affect the cost of payroll—an office manager’s salary can vary significantly between a city like Chicago and a rural town like Wichita. To get an accurate estimate of hiring costs in your area, you’ll need to research average salaries in the area (make sure to filter by county).

Employee Benefits

Estimated annual cost: $3,200-$9,600

Remember to factor in employee benefits like health insurance, life insurance, vacation days, family leave, 401(k) contributions, and bonuses. These expenses can surprise you later and throw off your profitability if overlooked. Decide now what your policy will be for paid time off and whether or not you will contribute to a retirement plan on behalf of your employees. Keep in mind that these benefits are also great recruiting tactics, which help attract the best talent for your business. 

Employer Payroll Tax

Estimated annual cost: $2,700-$8,100

The most common expense new broker-owners overlook is the additional taxes the government requires employers to pay. Let me tell you, the IRS doesn’t take kindly to businesses that fail to pony up. In addition to the hourly wage or salary that you agree to pay your employees, you must also pay employer payroll taxes, which are an additional 7.65% that your brokerage pays to Medicare and Social Security.

Workers Compensation Insurance

Estimated annual cost: $560-$1,680

Most states also require employers to provide workers’ compensation insurance. Failing to do so may result in significant fines or even closure. Workers’ compensation insurance protects the employee and you in the event that your employee gets injured on the job and isn’t able to work.

Payroll Servicing Company

Estimated annual cost: $900-$2,700

If all this gives you a headache, you can hand off all your payroll worries to a payroll servicing company. These companies will handle all the state and national requirements for hiring and managing employees, including legal regulations, tax withholding, and workers’ compensation insurance. Just be sure to factor the additional expense for payroll servicing into your budget.

There’s plenty of broker software options to help you with payroll and accounting, as well as other back-office tasks like compliance management, transactions, and commission management. For example, Lone Wolf Back Office, formerly known as brokerWOLF, has been in the business for more than three decades. The software user interface (UI) leaves a bit to be desired, but it gets the job done.

Office & Office-related Expenses

Estimated total annual cost:  $80,00-$260,000 ($0 virtual)
Ideal percentage of revenue:  20%-30% (0% virtual)

Unless your real estate brokerage operates virtually (without an office), your office will likely take up a large chunk of your expenses. Still on the fence about the benefits of a brick-and-mortar versus a virtual office? Consider the type of agents you’re looking to recruit, the services you’ll be providing, and the flexibility of the lease terms. Each situation is different. Since there are so many factors to consider, choosing the right office can be challenging.

For expense purposes, you can break the costs associated with a brick-and-mortar real estate office down into four categories: 

• Base rent 
• Common area maintenance (CAM) 
• Utilities
• General maintenance

Base Rent

Estimated annual cost: $36,000-$66,000

The base rent is the amount your brokerage must pay each month for the use of the space. In a city like Boulder, Colorado, typical office space can range from $25 to $50-plus per square foot. To calculate your base rent on a commercial lease, you’ll need to multiply the total square footage of the portion of the building you are leasing by the cost per square foot.

For example, if you’re looking at office space that is 3,000 square feet and the landlord is asking $22 per square foot for base rent, then your cost would be $66,000 a year in annual base rent. Divide your annual base rent by 12, and you will have your monthly base rent, which in this case would be $5,500.

Common Area Maintenance

Estimated annual cost: $15,000-$30,000

Common area maintenance fees are additional expenses associated with the property that are passed through to the tenant. These tend to include costs directly related to the space you occupy plus the costs associated with the rest of the property, like parking lots or other shared spaces.

Common CAM expenses are cleaning, repairs, building maintenance, utilities, internet, insurance, security, parking lot maintenance, snow removal, landscaping, trash, and taxes.

CAM fees can add $7 to $12 per square foot to your lease, and you can even be charged retroactively if the landlord underestimates the CAM. So, before you sign that lease, make sure you understand your potential liability and what you can afford.

Utilities

Estimated annual cost: $3,000-$13,000

If your lease or CAM doesn’t include utilities, you’ll need to budget for them as well. When you budget for utilities, you may think only of gas, electricity, water, and sewer. However, if you plan to make calls and use the internet, you’ll need to budget for communication costs too. They can add up quickly.

Maintenance

Estimated annual cost: $1,500-$3,000

If everything goes as planned with your brokerage (and why shouldn’t it?), you’ll have lots of wear and tear from busy agents using your office. To keep things ship-shape, you will want to budget for common maintenance tasks. This can include services like trash removal, recycling, and paper shredding.

If you are renting a standalone building or building maintenance isn’t covered in your lease or CAM, then you’ll want to budget for additional building maintenance to ensure your agents and their clients aren’t turned off by a poorly maintained office.

Software Expenses

Estimated annual cost: $13,000-$36,000
Ideal percentage of revenue: 3%-6%

Gone are the days of having four to five employees to run your real estate brokerage. Today many of the services brokerages provide are managed with software, allowing you to run your brokerage with as few as just one employee.

Since there are so many options for brokerage software available today, estimating these expenses can be tricky. For a detailed breakdown of the software choices available to brokerages today, see my article on essential real estate brokerage software tools.

For now, here is a quick look with rough pricing estimates for software you’ll need to consider:

Associations, Professional & Insurance Expenses

Estimated total annual cost: $12,000-$18,000
Ideal percentage of revenue: 2%-4%

Some expenses to run your real estate brokerage are necessary but are far less exciting than renting a flashy office. We’re talking about unavoidable expenses like insurance, banking, and legal costs.

Additionally, expenses like membership dues, licensing fees, and tax preparation can easily be overlooked because they only happen once a year. To create a comprehensive budget, you will need to remember to include each of these annual costs—they can add up, and you don’t want them to catch you by surprise. 

Here is a quick breakdown of the expenses associated with licensing, insurance, bookkeeping (assuming you’re not using a payroll service or managing your own books), and other professional costs.

Outsourcing: Transaction Coordination, Compliance Management & Back Office Services

Estimated total annual cost: $18,000-$24,000
Ideal percentage of revenue: 15%-20%

To keep your employee costs low, consider outsourcing as much as you can from the beginning. Fortunately, you can easily outsource brokerage tasks like transaction management and brokerage file review. While you’re at it, consider outsourcing other agent services like photography, marketing, or sign installation and storage.

Transaction coordinator companies charge between $150 and $300 a file, depending on the volume you’ll be sending them. If money is tight, you might consider paying a detail-minded, experienced agent in your brokerage to do it on the side for less. You can also consider integrating your transaction management and commission management into a back-end software like Brokermint or Paperless Pipeline. Check out our guide on the best transaction management software to see if one of those options might work for you.

Lead Gen Advertising

Estimated total annual cost: $20,000-$100,000
Estimated return: $40,000-$400,000
Percentage of revenue: Excluded from operational budget

While providing buyer and seller leads isn’t required to operate a brokerage, many brokerages today pay to generate brokerage referred leads.

To help manage this, many tech-savvy brokerages use all-in-one customer relationship manager (CRM), website, and lead management software platforms like Real Geeks to generate leads. The cost of these systems ranges from $500 to more than $2,500 per month, excluding advertising costs. The advertising spend necessary to generate a consistent return starts at $1,000 per month and can quickly exceed $10,000 per month. If you’re looking for a more hands-off approach, you can buy leads directly for your agents from services like zBuyer or realtor.com. But keep in mind that you’re spending hard-earned commission dollars to save that time. 

To maximize your return on investment (ROI) from leads you buy for your agents, you might want to consider hiring a leads manager to handle the system, track leads, and keep agents accountable. This one hire can increase your ROI up to 400% of the investment you make in lead buying.

Separate Profit & Loss Statement

So why isn’t this in the operational budget? Instead of including the cost of the system, advertising, and leads manager in your brokerage’s overall budget, I recommend having a separate profit and loss (P&L) statement for the leads program. This P&L will combine the expenses of running the program with the revenue received as referral fees. Your agents will pay a portion of their commission or referral fee at the close of any transaction referred from the leads program. This P&L will quickly show you if the program is operating profitably.

Recruiting, Advertising & PR Costs

Estimated total annual cost: $7,000-$60,000
Ideal percentage of revenue: 5%-10%

Recruiting, advertising, and PR expenses will also take a significant chunk of your revenue each month. Here are some quick estimates of common costs associated with recruiting, advertising, and PR.

Agent Recruiting Ads

Estimated annual cost: $3,000-$6,000

Even if you do no other advertising, you’ll want to budget for agent recruitment ads on websites like Indeed, ZipRecruiter, and LinkedIn if you wish to grow your brokerage rapidly. These websites charge a monthly fee to run recruiting ads. 

Newspaper Display Ads & Press Releases

Estimated annual cost: $0-$24,000

Yes—the newspaper is still an effective way to promote your brokerage and your listings. This is especially true in high-traffic tourist destinations, small towns, and areas where the average population is older. To save money, negotiate your display ads in six- to 12-month agreements instead of weekly ads.

When your agents feel appreciated, they will stay. The best way to welcome a new agent aboard or celebrate an agent’s accomplishments is to do paid press releases. Most newspapers will run these for a few hundred dollars. Take my word for it—it’s totally worth it!

Signs, Swag & Business Cards

Estimated annual cost: $1,000-$8,000

Printing, storing, and managing your brokerage’s listing and open house signs will not only make your agents happier, it will help you maintain your brand image and standards. Contract with a sign company for a volume discount.

Physical swag like custom pens, coffee mugs, shirts, hats, or umbrellas can also go a long way to helping you promote your brand and make your agents feel part of a team.

Another outstanding way to maintain your brand while standing out from the brokerages that make agents pay for everything is to provide business cards for your agents. It is a low-cost and simple gesture that agents will cherish. Check out our breakdown on the best real estate business cards (plus mistakes to avoid). 

Social Media & Google Remarketing

Estimated annual cost: $3,000-$22,000

Build your brand awareness by having a solid remarketing campaign on both Google and Facebook. This displays your brokerage ads to visitors who landed on your website when they later use Google or Facebook. It will not only build your brokerage brand with the community, but with new potential agents as well.

Also, don’t miss the opportunity to set up your Google Business Profile and Yelp for Business accounts. Both of these will help consumers find your brokerage quickly.

Office Supplies & Other Expenses

Estimated total annual cost: $8,500-$15,000
Ideal percentage of revenue: 3%-8%

The expenses related to office supplies have decreased dramatically this year, but they can still be significant. Yet, if you are building a full-service brokerage, you still want to be prepared to support the busy agent who needs their marketing and presentations professionally printed and bound.

You will also have some costs related to your part-time and full-time employees working at the office each day.

Coffee & Filtered Water

Estimated annual cost: $1,500

Truth be told, I love coffee, and I am a coffee snob. Brokerages that don’t provide their employees and agents quality coffee and filtered water may as well be saying, “We actually don’t want you here!”

Do yourself and your team a favor and spend a little extra on the small things that matter. Coffee and water service companies like Lavazza will keep you stocked up and prevent you from having to run to the store for coffee five minutes before the team meeting.

Office Supplies & Paper

Estimated annual cost: $1,200

The cost of pens, paper, and Post-it notes adds up, and if not managed, these can quickly eat up your profits. To keep office spending under control, set a monthly budget so everyone knows where the spending limit lies.

Copy Machine & Ink

Estimated annual cost: $3,600

You may find this shocking, but a top-of-the-line copy machine today can cost as much as a used car! Copy machine companies will do their best to tie you into a long-term lease on a new machine for $500 to $700 a month.

They will tell you that you will save money over time. What they don’t tell you is that the lease cost usually doesn’t cover the total cost of the ink. They will say things like, “Ink is only 3 cents a page.” What they don’t say is that a color page uses four ink colors per page. In reality, each color page costs 12 cents a page, and this is in addition to the cost of leasing the copier.

To keep your budget within reason, I suggest you find a used copier for $3,000 to $5,000 and then pay for a maintenance contract for $200 to $300 a month, including ink for a limited number of copies.

Shredding

Estimated annual cost: $480

With identity theft at an all-time high, shredding confidential printed documentation is a must. You can even turn this into an event at your brokerage for agents to invite their clients and generate business.

Meals & Event Expenses

Estimated total annual cost: $9,000-$24,000
Ideal percentage of revenue: 2%-5%

Unless you want to be personally footing the bill each time you meet a potential recruit or have a team meeting (guilty!), you will need to include meals and events in your expenses. Here is a quick breakdown of estimated expenses for meals and events for a small brokerage:

Profit as an Expense

Most people don’t think of profit as an expense. But if you wish to build an accurate budget for your real estate brokerage, you will need to factor in the profit you want to make.

Let’s use a comparison of selling apples at your local farmer’s market. Say the cost of buying the apples from a local organic grower costs you $5, and then you spend $2 on cleaning them and placing them in a bushel. Your cost of goods is $7, right? However, you also have other expenses like gas and the rent on your space at the farmers market to consider. These two expenses run you an additional $60 a month.

So what’s your profit? Well, your profit will depend on how many bushels of apples you sell. To determine how many apples you need to sell each month, you must first determine how much profit you wish to make.

Let’s say your goal is to make $300 a month in profit selling apples at the market. Knowing that the cost of goods is $7 a bushel and your monthly expenses are $60 a month, we can now calculate that you must sell 120 bushels each month to make $300 in profit.

Creating a budget for your real estate brokerage is no different. Decide on an amount or percentage of profit you wish to achieve each year and add it to your expenses before estimating your revenue.

Further Reading & Next Steps for Aspiring Broker-owners

Now you’re ready to estimate your expenses. Once you complete that, you can move to the fun part: estimating your real estate brokerage revenues and finalizing your budget. Don’t forget to grab your free real estate brokerage budget worksheet. 

If you are building or considering starting your real estate brokerage, check out our growing list of industry insider articles on starting, running, and growing your brokerage. And if you’ve got some budgeting tips that we haven’t covered, let us know in the comment section.

The post How to Estimate Real Estate Brokerage Expenses appeared first on The Close.

Let’s take a look at the three most successful real estate team models so you can make an informed decision and build your own multimillion-dollar team. 

But if you’re already itching to make your first hire to start building your team from scratch, I recommend ZipRecruiter, an all-in-one app for recruiting and hiring both agents and support staff. It’s the number one rated job-seeking app on Apple and Android, which is helpful when you’re looking to cast the widest net and find hidden talent.

Visit ZipRecruiter

The Best Real Estate Team Structures for 2023

Before deciding which real estate team model is best for you, you have to understand the financial risks, difficulties, and potential outcomes of each one. Traditionally, the three most successful real estate team models include the mentor-mentee model, the team leader model, and the lead team model. Here’s a quick comparison of each structure:

As we dive into each of these models in greater detail, think about your motivations for starting a team, the strengths and weaknesses you bring to the table as a leader, and your expectations for the local market in the coming year. These individual circumstances will help you craft a structure that will work well for your particular situation.

1. The Mentor-Mentee Model

If you are looking for a low-cost, low-risk real estate team structure, look no further. In this model, you mentor newer agents into the business in exchange for a percentage of their commissions for a specific period (typically 12 to 24 months). After that, the new agent will leave the team and pursue their solo real estate career. 

As the mentor, you provide structure, set expectations for success, and answer questions. However, you are not providing leads, paying for marketing, or managing team members. This is a common real estate team model for brokerages that offer revenue sharing from their multilevel marketing (MLM) or downlines, like Keller Williams, Exit, and eXp.

Organizational Chart

As you can see in this chart I created for my personalized coaching business, 16 Strategies, the organizational model is simple. As the mentor, you recruit new team members to your brokerage, train them to be successful, and then you transition them into your downline. To maximize your downline further, teach your team members to do the same. This will grow your downline exponentially and provide you (and them) with long-term residual income.

Lead Generation Strategy

The objective of the mentor-mentee model is to teach new agents to fish (sure, a bit of a cliché—but when it works, it works). They pay you a portion of their commission for access to your lead generation knowledge and experience, not for actual leads or marketing. As a mentor, you can teach outbound prospecting, sphere of influence (SOI) calls, strategic planning, and even how to host an effective open house.

Services & Expectations

Mentors and mentees set their own individual goals. Ultimately, you want your mentees to be successful, so you’ll want them to keep all clients and leads they generate while on your team.

You may choose to provide administration or transaction coordination services, but it’s not required. Team members are responsible for their marketing and advertising. Remember, the value of your team is your time and training, not the resources you are providing. 

Team member retention is intentionally low because it purposefully moves new agents into solo production. When your mentees transition into your downline, you receive a portion of the brokerage’s revenue or profit generated from that agent’s transactions, even after they leave your team. However, this long-term income only accrues if you’re part of a brokerage with an MLM commission structure.

Splits & Costs

This real estate team structure teaches its members to become independent agents. Junior associates are responsible for all the expenses associated with being an agent, including marketing, office costs, MLS fees, and brokerage split.

The splits in this model are lower for you than other real estate team models because you are not paying their expenses. Therefore, you can only expect to get between 10% and 30% of their commissions.

The mentee should receive at least 50% of the total commission after the brokerage takes its portion and the split is paid to you. This ensures that your team member makes enough money to stay in business.

Is This Team Structure Right for You?

If you like to teach, are part of an MLM-style brokerage, and want to produce a continuous source of productive agents to fill your downline, this is a perfect model. 

However, if you are not building a downline at your brokerage, think twice about this structure. Inherent turnover means you are constantly training new agents, taking time away from your production. You might find that the small portion of commission you earn for training a new agent doesn’t compensate you for the time you could’ve been making sales.

2. The Team Leader Model

The team leader model is centered around actively promoting the team leader or their brand. This traditional real estate team structure also often focuses its efforts around a neighborhood or community.

As the team leader, you provide structure and resources to team members, and team members promote the team leader’s brand, not themselves. Because you’re building a brand around a specific community, high standards and unmatched customer service are essential.

Organizational Chart

The team leader model is divided into operations and sales. The team leader is typically the lead listing agent, and team members take on showing-agent roles. The sales side of the organization may also include a telemarketer and a second listing agent.

On the operations side, this team structure requires at least one employee and one business manager, but is most effective with an additional marketing manager and transaction coordinator.

Lead Generation Strategy

As the team leader, you set lead generation goals, team member expectations, and standards. You are also responsible for leads for the team. Client referrals are the secret to success, so maintaining relationships and providing unmatched service is crucial. Keep lead generation costs low so you can spend those savings on making your client experience second to none.

This structure works best when targeting specific areas, but it can be expanded upon once it’s established and successful. Dawn McKenna (pictured above) is a great example of how a top producer in Chicago expanded her team to the surrounding suburbs and then all the way to Naples, Florida.

An all-in-one platform like CINC can make targeting leads in specific areas easy. Unlike most IDX websites, CINC’s lead generation technology helps you generate hyperlocal leads from specific neighborhoods, school districts, or even gated communities. Once your new site captures a lead, CINC uses AI lead nurturing trained by top producing agents to get them out of your CRM and into your agent’s cars.

Lead Ownership

You may, at times, feel the need to allow the team members to retain clients after closing. But don’t—this could be a huge mistake! You took the time to create the team, assumed the risk of hiring employees, and covered the operational costs. Therefore, every client should remain a client of the team, not individual agents. 

This ensures that if and when a team member leaves, the lead will continue to be marketed to by the team and not by the former team member. This must be clear in writing when inviting a new member onto your team.

Services & Expectations

Since this real estate team model is based on maintaining a high level of customer service, you’ll want to provide full-time administrative support so the rest of the team can focus on sales activities. You should also provide all marketing materials to ensure brand quality and uniformity. 

How to Set Expectations & Reduce Turnover

Team members should have specific weekly or monthly productivity goals around number of contacts, leads, contracts, and closings.

Generally, team members should produce four to six transactions their first year and eight to 12 transactions thereafter. Half of their business should come from their sphere of influence, while the other half will come from team lead generation activities.

This real estate team structure should have higher retention rates, as long as you’re carefully hiring for a team’s cultural fit. But if a team member fails in customer service or has a poor attitude, it reflects on you and your brand. “Hire slow and fire fast” should be your motto for this team model! 

Splits & Costs

Member splits are typically 50-50 or 60-40 (with 40% going to the team), depending on the source of business. You might give a larger split if the team member provided the lead from their sphere. 

Remember that your split must be enough for you to provide support and marketing for the rest of the team. If your split is too low, you may end up using your entire commission income on expenses.

As far as costs go, team members should be responsible for their phones, cars, and National Association of Realtors (NAR) dues. However, depending on the percentage of commission you take, you may choose to cover some common business expenses, like office bills, errors and omissions insurance, business cards, MLS dues, and lockbox fees. 

Is This Team Structure Right for You?

This is an excellent real estate team structure for someone with an established brand (or someone who has a strong vision for building a brand). You’ll also need high standards, enjoy working with others, and have proven techniques that generate business. Setting expectations is essential, as is selecting the right team members.

However, there are some challenges with this team structure. For example, if you don’t take the time to appreciate your team members, it could lead to resentment and jealousy. To have long-lasting success, you will need to check your ego at the door. Don’t let emotions cloud the bigger picture: total community dominance!

3. The Lead Team Model

Similar to the previous structure, the lead team model is divided into sales and operations but further distributes salespeople into two halves:

1. Inside sales: On the operations team, they deal with inbound leads, follow-up, and prequalification.
2. Outside sales: On the sales team, they handle showings, negotiations, and contracts.

This real estate team structure is expensive and requires high transaction volume to keep the machine moving. It’s the riskiest to operate, but when done correctly, there’s absolutely no limit to your success.

Organizational Chart

This model is operations-driven, not sales-driven. The operations team oversees sales, instead of the other way around. It’s essential to have both a business manager for operations and a lead listing agent for the sales team.

The inside sales team on operations follows up on leads from your advertising efforts and ensures lead qualification and assignment. The outside sales team is responsible for showings, negotiations, and contracts. 

Lead Generation Strategy

The lead team model’s primary source of lead generation is advertising, which is expensive. You could easily start off paying $500 a month and eventually scale up to more than $20,000 monthly. Your advertising budget should include sites like Zillow and Google, or lead acquisition platforms like Zurple, BoomTown, and kvCORE (see my kvCORE review here).

If you prefer prospecting, your team can reach out to expired and FSBO leads using software like REDX and Landvoice. Just keep in mind that the cost and strategy of lead generation for the entire team is your responsibility.

Services & Expectations

Expensive lead generation products and tight profit margins mean you need to have higher expectations of team members and create rigid daily or weekly milestones that must be met. It’s reasonable to expect each team member to close a minimum of one transaction per month, with a stretch goal of three. 

Turnover in this structure can be higher than with the team leader model. To protect your brokerage, be sure to write into your team agreements that clients remain with the team if an agent leaves. 

Splits & Costs

Because this real estate team structure is high volume and heavily reliant on systems (not skills), it’s pretty ideal for brand-new agents. 

As you hire, look for team members who are highly driven and looking for the right opportunity. You may want to consider covering some of their administrative costs, like MLS and NAR dues, so they can focus on your leads instead of taking a part-time job.

Inside Versus Outside Sales Compensation

Be sure to comply with state employment requirements, including minimum wage, tax withholding, and whether certain team members should be classified as employees or independent contractors. NAR’s legal team put together a useful FAQ on this topic.

Outside salespeople should receive 25% to 30% of the commission or a flat fee of $800 to $1,500 per closing. This may seem low, but remember that the outside salesperson doesn’t have any expenses. Nor do they handle the lead acquisition, manage the lead once it’s under contract, or assume the financial and legal risks that you do.

With this setup, they could easily build up to three to six transactions a month and make $40,000 to $60,000 their first year. You should compensate inside salespeople with an hourly rate plus a bonus for appointments set or successful closings. 

Is This Team Structure Right for You?

If you want a large real estate team, but don’t want to embody a brand or meet with every client, this is perfect for you. The lead team model operates on systems that can manage hundreds—if not thousands—of leads every month, which means you can build a scalable business that can generate millions in commissions. 

However, you will need significant startup capital. This is the most expensive of all the models to set up and operate, so there is substantial financial risk if you don’t get it right. The most common mistake is overpaying team members. Because the advertising costs are so high for this structure, the margins are just too thin to overpay your team.

FAQs

Once relatively rare, teams have really become the backbone of our industry. Now that you have a better sense of the three most successful team models, let me address some other common questions I get about real estate teams, and take a look at what real estate teams look like in 2023.

How do you know it’s time to start your own real estate team?

What are some other real estate team roles?

Should new agents join a team?

What does being part of a team mean in 2023?

Bringing It All Together

There are thousands of successful real estate teams across the nation, and each has its own unique structure. The three I outlined here are among the most common models, and if you follow my advice, they will give you the best chance of success in building a successful real estate team.

Know of a real estate team structure that we overlooked? Let us know in the comment section!

The post 3 Foolproof Team Models: Hiring, Splits, Lead Gen + More appeared first on The Close.

Over the past 27 years, I have invested in hundreds of properties. And I’ve helped just as many people with their first real estate investment. While it can seem daunting, don’t worry. I’ll walk you through my proven process for flipping houses—from doing market analysis all the way through financing, creating a budget, renovating, marketing, and selling your property. Let’s get started.

How to Flip a House: 10 Steps to Flipping Houses the Right Way

Real estate investing has been a passion of mine since I was a child. I learned how to start flipping houses the old-fashioned way—through plenty of trial and error. Since then, I have spent much of my real estate career coaching real estate agents and investors and advising them how to find, buy, fix, and resell real estate the right way.

While there are many different approaches to flipping houses, I prefer the simple one. My guide, which explains how to start flipping houses, is just that—a simple approach to finding and flipping real estate. It has served me well in my career, and I hope it works for you too.

The most common question I get regarding flipping houses is “Is the market right for fix and flipping?” or “Is my market right for flipping houses?” That’s why the first step to any successful flip is determining the direction of your local market.

1. Determine the Direction of the Market

It might sound like a cliche, but the market is always right for flipping houses. Yes, really. After all, you shouldn’t be worried about where your market is right now. Instead, your primary concern should be the direction the market is going and the pace at which inventory is selling.

Seller’s Market: Home Prices Are Rising

Buyer’s Market: Home Prices Are in Decline

How Smart Investors are Pivoting to Beat the 2023 Market 

Many people are saying this market offers nothing but doom and gloom for house flippers. They recommend changing strategies to try to beat it. With a perfect storm of soaring interest rates and softening prices, I don’t blame them. But smart investors who have been in the game for decades see it differently. How are they changing their strategy to beat this market? The answer might surprise you. They’re not.

In challenging markets the best investors don’t pivot. They double down on what works: The BRRRR method – the building blocks of a successful flip in any market. So If you want to create value in your local housing market this year, check out Kiavi’s free BRRR method guide below. It includes everything you need to know for a successful flip including tips for securing the best financing and the hottest new home rehab trends for 2023.

2. Find Fix & Flip Opportunities

Flipping houses involves buying dilapidated or outdated properties, remodeling them, and selling them for a profit. Fix-and-flip investors must have the skills to find undervalued real estate opportunities, evaluate them, and manage contractors to ensure their “flips” are completed on time and within budget.

Finding properties to fix and flip isn’t as easy today as it once was. For example, the properties listed on your MLS probably won’t have margins large enough to make a hefty profit—or any profit at all.

The secret to finding fix-and-flip properties today is to identify off-market homes and homeowners who are highly motivated to sell. These may be homeowners who are in financial distress due to circumstances beyond their control, such as foreclosure, divorce, job loss, or bankruptcy.

Once identified, savvy investors approach them with an offer to take the burden of the property off their shoulders. Some of these properties are distressed, neglected, or abandoned, so an “as-is” quick closing is very attractive to the potential seller.

Finding motivated sellers isn’t easy, which is why I offer a complete course on finding motivated sellers and off-market listings at The Close Pro called Survive & Thrive With Sean Moudry.

Visit The Close Pro

3. Evaluate Fix & Flip Opportunities

Once you have found a good fix-and-flip opportunity, you’ll need to evaluate the property to make sure you know what you are getting into before you buy it. It’s at this juncture that many new fix and flippers cut corners and make career-ending mistakes.

To prevent that from happening to you, check out my fix and flip risk assessment process. These should help to ensure you don’t make some of the most common mistakes even experienced house flippers sometimes make.

4. Establish the Right Offer Price

“You make money when you buy the property, not when you sell it.”

In other words, the price you pay for the property will determine the profit you will make when you sell. If you overpay, chances are you won’t make any profit at all. This error is more common than you might think.

Anyone who has been investing for a long time has made the mistake of overpaying for a property. I know I have, which is why I came up with my Fix-and-Flip Risk Assessment —a tool that will force you to slow down and focus so you won’t overlook property details that may cost you big money later.

My worksheet also creates a numeric risk score to help you narrow your offer price range to avoid overpaying for a property.

5. Negotiate the Price & Terms

Once you have determined your offer price on your fix-and-flip opportunity, you will need to negotiate the price and terms with the seller. For some people, negotiations come naturally, and for others, it may take a little practice.

I have found that the best way to negotiate the best price for fix and flips is to meet with the seller face to face and share your concerns about the property openly and honestly. Explain how much work it will take to get their property “resell ready” and emphasize that your profit is not guaranteed.

Next, remind them why your offer is the best one. Accepting your as-is offer that closes quickly will help the seller move on with their lives painlessly.

Lastly, bring the completed contract with you. I can’t tell you how many times I have come to verbal terms with a seller, only to have them get cold feet a few hours later. As soon as they agree to the terms, make the adjustments to your contract and ask them to sign the contract immediately to secure your deal.

6. Find the Right Financing

Fix-and-flip financing is different from other types of real estate financing. When you’re financing a home to live in, the lender puts most of the qualifications on the borrower’s ability to pay the mortgage back over 30 years.

We use “hard money” lending when flipping houses—which means short-term loans generally paid back within six to 12 months. This quick turnaround time means that hard money lenders will take a closer look at the property than at the borrower’s finances.

With the higher risk involved for the lender, they’ll charge higher upfront fees and interest rates. For a complete breakdown of how to choose a hard money lender and my top picks for fix-and-flip lenders, read my hard money lenders guide.

Cash Is King & Queen When Flipping Houses

Before you even consider making an offer on a potential fix-and-flip opportunity, you need to ensure that you (as the buyer) or your client has access to enough cash to close the deal. If you don’t have cash, Kiavi is a good option. They offer competitive rates, fund quickly, and work with brand-new investors, which not all hard money lenders do.

7. Create Your Renovation Budget

It may sound counter-intuitive to create your budget after you’ve made an offer, but the truth is, you often won’t have time or access to the property to complete an accurate budget beforehand.

Keep in mind that you haven’t closed on the property yet, and there is still time to back out of the deal, though you’ll risk losing your earnest money. You can also try to renegotiate if you find that your initial estimates fall short of the actual rehab budget.

Many project management software providers offer outstanding estimating software. However, I have found a simple spreadsheet like this one to suffice for most light remodel flippers.

Just remember “garbage in … garbage out,” meaning if your initial estimates are wrong, the spreadsheet will also be incorrect. If you are brand-new to remodeling and flipping houses, I highly recommend using a professional contractor to help you develop estimates for the work that needs to be completed.

8. Close on the Property

The big day has come, but don’t get too excited. Before you go into the closing and sign your name to your first flip, take a minute to review all the information you’ve gathered so far from each of the steps outlined here.

Did you investigate everything thoroughly? Did you get all your estimates back? Which issues, to the best of your knowledge, may come back and bite you later? This moment is your last opportunity to take a pause or walk away completely. Don’t take this step lightly.

Once you feel confident that you have your questions answered and the issues you are aware of can be managed if and when they arise, walk into the office and confidently sign the paperwork to buy your first flip.

9. Hire Contractors & Remodel the Property

Now the real work begins! It’s time to remodel the house.

One of the biggest mistakes new fix and flippers make is to try to do all the work themselves. Even if you are a professional contractor and planning on this course of action, you will still want (and possibly need) to secure quotes from other contractors. Lenders will require bids from several contractors.

It’s unlikely that you’ll be able to pay yourself for remodeling the property until after it sells, so you’ll need income from another job. But working on your flip in the evenings and on weekends isn’t going to cut it. You’ll need to get the home remodeling finished quickly.

One rule of thumb is to be in and out in less than five weeks—meaning from the day of closing to the day you put the home back on the market. Here’s why timing is so important: The longer you hold a property, the larger your finance costs.

The other reason is that time is money. If I spend a large chunk of my week renovating this property, I am potentially missing out on other fix-and-flip opportunities. Some of those opportunities will offer better margins, and as a result, will be snapped up quickly.

So get multiple written bids from contractors and plan on using them to finish the project faster and keep you focused on finding the next project. Trust me, the money spent on contractors will offer you the best return on investment (ROI) over the long run.

10. Market & Sell Your Fix & Flip for a Profit

Another common misstep fix and flippers make is cutting corners on marketing the home once it is completed. I know that after weeks of hard work, you’re probably excited to get your masterpiece on the market. But you can’t cut corners here. Any realtor worth their salt will tell you: Marketing and selling homes is hard work.

Before placing the for sale sign in the yard, you need to complete the full punch list and professionally clean the house. Selling a home is about getting a buyer excited about living in the home. If they see unfinished details, construction debris, or dusty and dirty windows, they’ll think you have cut corners in areas they cannot see.

Next, you will want to stage the property. It is a well-known fact that staged properties sell faster and for more money than vacant properties. A professional staging company charges between $1,000 and $4,000 to stage an empty home. If you don’t have room in your budget for staging, consider virtual staging.

Finally, if you’re not a licensed real estate agent, hire one. Many fix and flippers have their real estate agent license so that they don’t have to pay a commission each time they sell a home.

Hire an experienced agent who knows how to market your fix and flip and drive buyers to your door—and in some cases, multiple offers too. They’re worth their weight in gold. Having another real estate pro who can handle your sale for you will give you time to focus on your next fix-and-flip opportunity—without worrying about managing the details of a real estate transaction.

Bottom Line

Like Mike Tyson said, “Everyone has a plan until they get punched in the mouth.” Mike was right, and his advice applies to flipping houses. No plan is perfect, but I’m sure he would agree that some planning is far better than no planning at all.

So, before you get too excited and jump into your first fix and flip, take some time to review these steps and my fix and flip risk assessment process and worksheet. Otherwise, you are sure to get punched in the face by an otherwise avoidable mistake.

The post Fix & Flip 101: 10 Steps to Flipping Houses (the Right Way) appeared first on The Close.

Later in my career, I worked as a team leader at Keller Williams Realty and as an investor in two Keller Williams franchises. This experience taught me the recruiting skills and processes needed to keep agents productive. Even though I was very successful, the itch to build my own real estate brokerage brand never went away.

So in 2014, I set out on my own to start an independent real estate brokerage from scratch. The long five-year journey of creating a new brand, managing employees, recruiting agents, and building out offices had opened my eyes to the things I wish I had known before starting a real estate brokerage.

In this article, I will share my wisdom of the seven things I wish I knew before starting a real estate brokerage.

1. Your Brokerage Needs a Clear Objective

Before you blow through your savings or you max out your credit cards to open your new real estate brokerage, get clear on why you are choosing to go on this adventure and clearly define what you wish to accomplish.

An unclear objective will make your important decisions more difficult and can leave you without an exit strategy.

Ask yourself questions like, “Do I want to build a brokerage that serves a specific community or that serves multiple areas?” and “What type of agents do I want to work with and why?”

Your answers will provide context for all the other decisions you must make for your brokerage. For instance, if you are starting a real estate brokerage to serve a specific community, then your brand and logo should be specific and reflect the community it serves. However, if your goal is to grow beyond your local community, city, or state, your branding and logo will need to be unique so you can obtain a national trademark prior to expanding.

I have coached brokerages that had the ability to expand into other markets, but because of decisions like this that were made in the early stages of their development, the growth of the brokerage was severely diminished.

Make your decisions with the end result in mind and find a competitive advantage that allows you to differentiate from your competitors.

2. Your Brokerage Needs a Competitive Advantage

A successful startup builds on the success of the past but also brings a competitive advantage. Your real estate brokerage startup should be no different. A competitive advantage is a clear differentiation that separates you from the competition in the customer’s view. This allows your brokerage to stand out and makes your brokerage more memorable.

There are three main types of competitive advantage:

3 Types of Competitive Advantage for Your Brokerage

1. Price

Some brokerages create a competitive advantage either by offering lower commissions to the sellers (Redfin) or by reducing splits and fees to the agent (HomeSmart). These business models operate on slim margins and high volume.

Before you jump on board with a low-fee business model, consider the months or even years you will lose money before you are breaking even. Personally, I would rather provide another competitive advantage and maintain profit margins.

2. Unique Product or Service

Coldwell Banker created a competitive advantage with their RealVitalize program. RealVitalize allows sellers who are low on cash to be able to update their dated home with things like new granite counters and appliances, and pay for it at closing.

Like the RealVitalize program, your competitive advantage doesn’t need to be something nobody else offers. It just needs to be communicated in a way that customers assume that you are the only brokerage in their area offering the unique product or service

3. Specific Niche

The most common way brokerages differentiate themselves from their competition with a competitive niche advantage is by focusing on a specific geography, demographic, or industry.

In the past, real estate brokerages used geography as their specific niche, but today, there are entire brokerages that just focus on first-time buyers, luxury homes, condos, or even military buyers and sellers.

Your brokerage can also have a specific niche of the type of agent it specializes with. This can be agent types like new agents, seasoned agents, luxury agents, and teams.

Having a competitive advantage allows the customers and agents to differentiate your real estate brokerage from all the others. Focusing your marketing and messaging will reduce your overall cost of acquiring customers and agents alike.

Next, we discuss in detail how to attract the right type of agents for your brokerage.

3. A Recruiting Plan Is Essential to Attracting the Right Agents

Your objective and competitive advantage are the first two things you must get clear on before starting your real estate brokerage. The next step is creating a plan to recruit the right type of agents to fulfill your dream.

Begin by using your objective (what you want to achieve) and your competitive advantage (what differentiates you from the competition) to determine the type of agent who will thrive at your brokerage. For example, if you are building a luxury brokerage, then a lot of brand-new agents are very unlikely to produce the results to help your brokerage achieve your objective.

The secret to recruiting is being very clear on what your objective and competitive advantage is and how this can benefit the agents you wish to attract. Once you’ve done that, you need to focus all your recruiting efforts on that specific agent type.

This is done by narrowing the vast pool of agents in your market down by their production and the location they wish to specialize in. Once this is done, you will use well-written scripts to attract the right agents or repel agents who don’t fit your brokerage. You can learn more about recruiting scripts in our article The Ultimate Guide to Recruiting Real Estate Agents (plus scripts and objection handlers).

Next, your presentation must inspire the agents to want to be a part of your dream. Since your brokerage is new, you must sell them on the vision. You will do this by having a clear and concise message about what you are going to achieve and how you are different from the other brokerages.

Lastly, you will need to have outstanding processes and procedures to serve your new recruits and fulfill all the promises you made. Curious about what this entails? No worries … keep reading.

4. You Need to Develop the Necessary Processes & Procedures to Operate a Real Estate Brokerage

As I shared earlier, the fact that you may have the skills to be a successful solo real estate agent by itself doesn’t mean you will be successful at leading and operating a real estate brokerage. The skills and processes are completely different.

To be successful as a salesperson, you must develop your own skills, follow your own processes, and hold yourself accountable. Conversely, to successfully run a real estate brokerage, you must be able to lead agents and employees to consistently follow the processes and procedures that you set out for them. In other words, the skills that made you a great agent might not translate to make you a great broker/owner. More on this later.

This requires you to take the time to think out what processes and procedures are necessary for you to run your brokerage. To help you out, I compiled a complete list of the processes and procedures to run a successful brokerage.

Processes & Procedures to Run a Real Estate Brokerage

Agent Support
	Weekly Communications Plan
	Agent Training Plan
	Team Meeting Plan
	Agent Marketing Support Plan
Broker Supervision
	Contract Compliance Process
	Contract Review Plan
	Industry Changes and Updates Communications Plan
	Broker Question Process
Office Management
	Agent Split/Fee Management
	Commission Disbursement Process
	Agent Billing Process
	Escrow Accounts Management
	Financial Review and Management
	Employee Hiring and HR Management
	Annual Tax Filing Plan
Agent Recruiting
	Agent Recruiting Plan
	Agent Onboarding Plan
	Agent Off-Boarding Plan
Office Management
	Cleaning and Maintenance
	Security
	IT Support

Before you turn in your pink slip at your brokerage, take some additional time to observe how they are managing these processes and procedures. You may not even be aware of some of these because they operate behind the scenes.

Managing Employees

In addition to creating your processes and procedures, you will also need to develop the ability to lead and manage employees to follow the processes to operate your brokerage.

Many agents think that they would be good at managing employees because they are easily likeable. However, being easy to get along with is not a good indicator of being a successful manager and, in many cases, can backfire.

Learning how to hire, train, and manage employees is a monumental feat on its own. Yet, if you wish to build and grow a successful brokerage, you will need to develop this skill. Unfortunately, I have not found a universal simple path to develop this ability.

The best advice I can share (without writing a book here) is to be very clear on the expectations and execution of the tasks that are required of the position from the beginning. This will make it easier to hold them accountable in the future. Yet, to accomplish this, you must have your processes and procedures written out in advance.

Each of these important decisions build on the next. This is why I am suggesting you take the time now—before your brokerage is open—to get clear on your objective, find a competitive advantage, determine the type of agents you want to serve, and build your processes and procedures. All this before deciding on what software and office location is right for your brokerage.

5. Software Can Make or Break Your Brokerage

The secret to building a brokerage that will retain agents for years to come is consistency. This is because consistency builds trust, and trust leads to agent retention and agent referrals. The key to consistency is investing in real estate brokerage software.

I am well aware that there are successful brokerages that operate completely off of Excel spreadsheets and the sweat of their employees. The risk with this approach is that humans are just that: human. That means they make mistakes. Not to mention the massive problems you’ll have when you lose a key employee who takes the knowledge of your processes with them when they leave.

You don’t want to put yourself or your brokerage at risk by relying on ad hoc and insecure systems and processes. Today, there are many software systems that will protect your brokerage from losing your processes when a key employee leaves and can provide you with clear reporting to insure that the procedures are being followed by your agents and employees. Cutting-edge software not only saves you time, it can also attract tech-savvy agents.

Below is a list of procedures that are imperative in running a successful real estate brokerage and the software that makes these processes secure and easier to manage.

The Software Options to Successfully Operate a Real Estate Brokerage

Procedure	Objective	Optional Software	Cost
Agent Marketing	Create custom listing fliers, monthly mailers, and newsletters
		Microsoft Publisher	$150/yr
		BannerSeason	$45/mo
		ProspectPLUS!	As needed
Brokerage Management	Track agent transactions, income projections, and manage agent splits and fees
		Lonewolf	$350+/mo
		Total Brokerage	$219+/mo
Contract Compliance and Management	Manage the broker file, broker review, and file storage
		Dotloop	Call for pricing
		SkySlope	$350+/mo
Recruiting Software	Pull market share reports, agent production reports, and contact information
		BrokerMetrics	$199+/mo
		Brokerkit	Call for pricing
Financial Management	Basic financial management and tax preparation
		QuickBooks	$60/mo
Emails	Brokerage branded email accounts for agents
		Workspace by Google	$6/user
Websites	Brokerage website and individual websites for agents
		Placester	$64+/mo
		Real Geeks	Call for pricing
Agent CRM	Contact relationship management software
		BoomTown	$750+/mo
		Zurple	$399+/mo
		LionDesk	$70/user
Showing Service	Manage showings and feedback
		ShowingTime	$45+/mo
Payroll Service	Manage payroll, employee liability insurance, and tax withholding
		Oasis Advantage	$75-$150/mo
		QuickBooks Payroll	$22/mo

Some of the software providers offer more than one feature than the category I have placed them in. For example, Propertybase provides websites, customer relationship management (CRM), and lead generation software in an all-in-one solution. For a deeper look at all-in-one CRMs, see our recent article: The Best Real Estate CRM for 2022.

Also, in some of these categories (like brokerage websites), there are endless options. My goal here is to provide you with a general understanding of what software is available. Therefore, I suggest doing your own research to determine which software providers are right for your situation.

The decisions you have made thus far are all extremely important, but none of them are as expensive or put you at risk more than selecting the right office and location for your real estate brokerage. Let’s take a deeper look.

6. How to Select the Right Office for Your Brokerage

I can’t say this enough: Get your office right from the beginning. Your office is often your largest expense and your greatest risk. Before getting tied into a long-term lease, you must first take into consideration your overall objective with your brokerage, your competitive advantage, and the type of agents you ultimately wish to recruit. Make sure that the office and the location is in line with all of your goals. This way, you have a greater chance of getting it right the first time.

Will Agents Return to Offices?

This is the $10 million dollar question. Will agents return to the office after the pandemic is over? The concern is if agents get used to working from home, then do you even need to plan and budget for an office when opening your real estate brokerage?

My guess is even though most agents will stay mobile, many will still want the option to work from an office again. For some of us, it is difficult to motivate ourselves from home and for others, their home may not be conducive for doing business. But this may not be the only reason you want an office.

Your Office Is a Statement to Your Customers & Agents

Your office can be more than just a place for team meetings—it can be a statement to customers and agents of your commitment to the community and your brand. For instance, if you are building a boutique brokerage that is specific to a neighborhood, you want a visible office to create brand awareness in the community you serve.

On the other hand, some seasoned agents are attracted to semi-private offices or at least the idea of having them available. If your goal is to recruit professional, seasoned agents, then an office building would be the suitable solution. A secret you may not know is instead of breaking the budget on A+ main floor office space, consider the third floor or fourth floor. The higher floors are usually 15% to 25% less than the main floor.

If you’re building a brokerage that teaches newer agents, consider an office space with few private offices and a larger training room that can be closed off to not bother the other agents while you are teaching. When not in use, the training room can be used as agent drop-in space.

Are Co-working Spaces a Viable Solution?

I have had brokerages with beautiful executive office space and I have run my brokerage from a co-working space. The low cost and short-term lease commitments can make co-working space a great place to launch your brokerage. The long-term challenge with co-working space is coordinating things like team meetings, lead generation, and educational events with the other members of the co-working space.

The other challenge is that as you grow, the cost can rise exponentially. Room for two to three agents may only cost as little as $400 a month, but when you grow to 15 agents, the cost can exceed the cost of having your own private office space. As with short-term rentals like Airbnb, you will pay more for the flexibility that a co-working space offers.

If you are considering co-working space, beware of additional costs like parking, coffee and snacks, conference room rental, and so forth.

7. How to Select the Best Location for Your Brokerage

One of the most important things you must consider when selecting the office for your new brokerage is location. Location is more than just deciding what area of town you want to be in. The location can determine if your agents are going to sell mostly condos in the city or mini-mansions in the suburbs.

Parking and accessibility is important if you have customers or agents who drop in to the office for short periods of time. Many downtown locations are desirable, but the lack of parking and accessibility might make them unattractive to some agents.

If you are in a tourist town where visitors may be interested in retiring or buying a second home, you may want to consider a small house or retail location on the main strip that will attract curious tourists to come in. The office location and style must be attractive and inviting so customers feel comfortable enough to stop in.

Bottom Line

My agenda is not for you to start your own brokerage. It is, however, to provide you the information and a true picture of the obstacles that come with starting your own brokerage so you can make the best educated decision based on your individual goals and situation. If you’re up for the challenge, read on to learn How to Start a Real Estate Brokerage (Without Going Broke).

If you are thinking that you don’t have the time or vision to create your own brokerage, you may want to consider a franchise. Franchisors have already figured out the vision and the plan for their franchisees. Therefore, if you have the drive to build a brokerage and don’t have a plan, then a franchise may be the perfect solution for you.

Simply put, opening your own brokerage is not as easy as you may think. But if you use this information to prepare yourself to make the most important decisions prior to opening your brokerage, you will have a higher chance of achieving the success you desire.

Over to You

Do you have a suggestion for opening a brokerage that we overlooked? Let us know in the comments or join us on our Facebook Mastermind Group here.

The post 7 Things I Wish I Knew Before Starting My Real Estate Brokerage appeared first on The Close.