Creating a successful real estate career requires having a knack for timing and sales. So whether you're still training to obtain professional realtor licensing or have begun establishing a new agency, planning is crucial to creating a lasting career in this competitive field.
Besides having a budget to work with and a determined work ethic, other factors must be accommodated when launching your new real estate business. Get a clear picture of what it takes to begin a realty career, this article reviews important steps you should take to give your company the best start.
Meeting Necessary Licensing Requirements
No matter what state you practice in, you can't be a real estate agent without the right license. If you already have yours, don't assume it allows you to conduct business in neighboring states. Realtors often have multiple real estate licenses for this reason, and you may want to consider doing so if you haven't already.
Additionally, some municipalities and counties might have their own requirements you need to comply with on top of state and federal regulations. Some realtors also have to submit to a criminal background check, take some training classes and pass the required realty licensing exams.
Get a Grip on Your Personal and Business Expenses
Running your own real estate service is more than a job; it's a business. This means you need a clear understanding of the different budgets you'll need to manage, such as advertising expenses, payroll, operational costs, and more. Knowing your expenses can help you accurately gauge the revenue you're making, and for new agents, start-up costs typically include:
- Training and licensing costs
- Business cards and online website
- A vehicle
- Travel costs
- Rent or mortgage payment for your workspace
- Utility services like internet and electricity
- Professional wardrobe
You can also budget for the first few months of expenses with a general idea of what it costs to launch your realty business initially.
Develop a Marketing Plan
Advertising can get expensive if you run ads without a specific strategy in mind. So first, conduct market research to identify your ideal client(s). Next, you can track consumer real estate trends to determine which services are most lucrative for your agency.
Setting up ads for your realty business is easy, but without a specific strategy, you risk losing those valuable marketing dollars to ineffective campaigns. So instead, spend this money more effectively by targeting specific market audiences you're trying to engage.
Prioritize Getting Insured
Because you are regularly on the road and visiting client properties, the risks of a real estate agent are significantly higher compared to other industries. Realtors regularly face lawsuits alleging negligence, personal injury claims, and accusations of being discriminatory. All of these situations have the potential to end your career before it's even begun, and it only takes one claim to cause this level of damage.
Fortunately, business insurance policies designed with the realtor in mind can be an effective risk management method. Below are three policy options that many real estate agents rely on to protect their business interests, including their employees and clients. Implementing a robust CRM for real estate agents not only streamlines operations but also ensures a sensible and secure real estate experience for all involved.
General Liability Insurance
This policy is a must for any real estate professional. It protects against third-party liability claims brought against your business involving bodily harm and property damage. It also pays for your defense and any subsequent settlements relating to slander and libel suits filed against you. For example, accusations that you falsely advertised information about a home or your services typically fall under the latter benefit.
Professional Liability Insurance
Your real estate advice is a sought-after feature of your service, so when you give a client guidance that causes financial harm, you've made a professional mistake. But unfortunately, general liability doesn't cover professional errors and omissions on your part.
Professional liability coverage can save you thousands in legal defense costs if you get sued because of unreasonably delaying a closing. Or, maybe you were negligent in researching the property, and a hidden lien now jeopardizes ownership. Finally, perhaps you failed to disclose important information about the property, as a death has occurred in the home.
Ensuring you're adequately insured against these incidents and other mistakes you might make is crucial in protecting the survival of your real estate career.
Business Owner Policy
The reality is that there are countless risks you'll face, and your general liability policy won't be enough. As a result, many insurers offer a bundled insurance package called a Business Owner's Policy (BOP). This has multiple coverages built-in at a lower rate.
This option typically includes general liability, business interruption coverage, and commercial auto insurance. These three create a near-perfect trifecta of protection against unexpected claims and damages you or your clients may suffer during the course of your realty work. But, every real estate office has policy needs unique to its specialty and business model, and insurers often customize a BOP policy to meet this demand.
Whichever policy type you choose to protect your real estate agency, know that you can get tailored prices to your business needs and enjoy the peace of mind that comes with being insured.
The Future Is Bright for Real Estate Agents
Despite the many challenges your realty office might face, there are ways to mitigate and overcome these hurdles to help your business grow. From ensuring properties you show are free of hazards to the public to insuring against professional liability, taking the time to research the risks you could face as a real estate agent will save you time and money in the long run.