Real estate brokers enter into the real estate business with the intent to be successful. Many, however, are not sure how to reach the level of professional achievement that they desire. As real estate attorneys, we work with real estate brokers on a regular basis drafting and reviewing their contracts and resolving any legal disputes that arise. While we do not claim to be real estate market experts, we have noticed that our most successful brokerage clients all operate under a unified set of principles and standard procedures.
We have taken the time to compile a list of tips for both new and established real estate brokers that should assist brokers in achieving their professional vision. These are not intended to be just tips for good business and making profit. These real estate broker tips are also intended to help make your life as a real estate broker easier for yourself and your clients (and your attorney too).
1. Build Relationships, Not Profits
The old adage says that if you give a man a fish, he will eat for a day, but if you teach a man to fish, he will eat for a lifetime. This is true of most real estate brokerage relationships. Real estate brokers should seek relationships first and foremost with both their immediate clients as well as other brokers. While making an initial sale is important, developing relationships that will score you sale after sale tends to make a more successful long-term business model.
2. Hire Capable and Respectful Staff
Often, a client’s first impression will be your receptionist or secretary. A bad experience with customer service personnel can turn off potential clients to your business, regardless of how successful you may be. If you plan to entrust your personal reputation to others, ensure that they fully understand the meaning and goals of customer service.
3. Once You Have Found Good Staff, Keep Them
A happy workforce is a productive workforce, and the last thing that you need is for your secretary to quit the night before a major sale closes. If you do not like your staff, you should fire them. If you do like your staff, you should aim to make their lives easier and provide them with incentives to want to stay. Under no circumstances is it acceptable business practice to treat your staff poorly, however.
4. Bookkeeping and Financial Organization
The real estate brokerage business involves a lot of moving parts, and it is easy to lose track of financial priorities. One easy solution is to hire an accountant to keep your books. If you run a smaller business or cannot afford to hire a staffer for solely financial bookkeeping, however, then you need to make certain that you keep your books straight. This involves more than just knowing where money is going. It is also about not co-mingling client funds with brokerage assets and ensuring that the financial end of your business runs smoothly.
5. Financial Planning for Success
Like any business, a real estate brokerage firm runs on the revenue it brings in minus mandatory expenses. It is important for you to understand both what your business’s financial needs currently are and what those needs will be in the future. This is where having a long-term financial plan is important. If you have a financial plan in place, you will be able to tell when your business is booming versus when it may need some adjustment.
6. Set Goals for Sales and Profits
Unfortunately, real estate brokers are often concerned only with sales on an individual basis rather than on a macro level. Understanding the big picture of your business is important to knowing whether it is a healthy business model that will generate you profit. Rather than focusing on making sales individually, real estate brokers should focus on setting goals to either move a set number of properties or earn a set profit. These goals should tie in closely to your business’s financial plan.
7. Your Business Entity Is a Formality, But You Must Treat it Like a Real Entity
The reality of most corporations and LLCs, particularly small businesses like many real estate brokerage firms, is that they are fake entities used to facilitate the business endeavors of the individuals running the business. When you are your business, it is easy to forget that your company exists and has needs of its own. While following corporate formalities may seem like needless paperwork, it is the bedrock that your business entity stands on. Letting those formalities fall by the wayside threatens both your business entity’s status and also potentially opens you up to personal liability as a real estate broker.
8. Be Careful How You Advertise
Most advertisements are just that, and most consumers of advertisements understand that you are trying to make a sale. However, real and tangible promises made through advertising are technically legally enforceable. The could also create civil liability if they turn out to be materially false statements. When you advertise, be very careful to use non-committal language and avoid making representations you cannot be certain are true. Most importantly, DO NOT use language or terms in your advertisements that may be considered discriminatory in nature.
9. Realize that You Have Particular Duties as a Legal Agent
As a real estate broker, you are stepping into a particular legal role known as an agent. Agents are essentially just individuals or entities who perform some type of service for another individual or entity. As a real estate agent, you owe certain duties to your client, such as the duty to remain loyal to your client’s interests and to tell them the truth when they ask questions.
10. Develop a Strong Relationship with an Attorney You Trust
Just as real estate clients come to brokers for advice about real estate issues, your attorney is your advisor and confidant on legal issues. This makes it important that you not only trust your attorney, but you also need to have a strong working relationship with him or her. Your attorney will be able to advise you on any legal situation that arises and will help keep you and your business interests safe.
Law Offices of Yuriy Moshes is a full service law firm that focuses in real estate, foreclosure help
and employment law. Our firm offers white glove customer service to its clients. We are available at all hours and offer free consultations on legal issues.