Should Real Estate Agents Start a Business?

Question

Hello everyone, I'm coming close to being licensed as an agent and I've been thinking a lot about establishing my brand in my local market. I've been considering establishing a business and creating a website around that brand to funnel my leads. However, when I look at other agents in my area these are the trends I'm seeing:

Don't seem to have an established brand - most of them don't seem to have their own website. Many of them seem to just use their profile page on their brokers website as their "website". To me this just seems lazy and makes it hard to establish a solid brand around yourself. Again I'm new to the business so I'm just wondering how higher performing agents go about this.

Don't seem to have a solid business - I don't know the legalities of establishing a business as an agent, but to me this just seems like a no brainer. Other agents in my area don't seem to be doing this (but it is a small town). How should agents do this? The few I seeing doing it just make their business their name. For example: if Jon Doe in my area had a brand and a business website it would look something like:

Business name: Jon Doe LLC

Website: JonDoe.com

I'm wondering if this is sufficient. Some people just use their name as their brand, but would it also be expectable to operate under a brand name like example "Elite Realty". What do you think works best for establishing your brand and marketing your business?

Excuse me if anything I say seems very misinformed, because I'm just getting into this myself. However I do come from a marketing background and I know that establishing brands and authority in markets is very valuable. I'm just wondering how the best way to do this as an agent would be. I appreciate any advice someone could offer me on this matter.

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Charlie Cameron · Answer

@Ryan Moye I'll take a different approach to this answer that I think is what you are getting at.  Should you build your own brand around yourself as an agent? The answer is HELL YES. And if you can't do that under a brokerage because the broker wants you to be building THIER brand... that's a thing of the past.  Everything you do is under your broker, so you want to work with one that is totally happy with you growing your own brand (and even your own team) under that brokerage.

New agents are looking for the simple quick wins and commission checks when ALL of them should be thinking like you: how can I build a lasting brand in the long run that brings leads to me?  There's actually a ton of ways to do this because in most markets most agents aren't.

You can establish your brand in very simple ways which, with consistency and effort over the long run, can create major results. Many agents still don't know how to properly take advantage of YouTube, Social Media, a CRM, build their Sphere of Influence, a Website, etc. On that note, your brokerage should provide training in all these areas and provide CRM/website with MLS integration.  It's 2020.  There's no excuse to not have all of that!

Anyway, this is a much longer strategy deep dive than I can write about here, but yes - you can build a brand with a great brokerage which will set you up for long term success.  And in most states, you can form an LLC in your name for your agent business, but check with your licensing agency because every state is different.

Spence Kal · Answer

@Ryan Moye

Oh ok, sorry for my confusion there. So you want to build business X, to bring in leads to you as an agent or wholesaler. Kind of like Ken Corsini, who has Barn Door Homes, brokerage and mortgage company and also benefits from getting deals through those. I think most agents don’t do that because 80% are lazy and already not good at their job, and never think about having to retire from a solopreneur job where if you stop working, you stop making money.  10% are good enough at their jobs that they don’t have to, they just work off referrals. And then 10% do start businesses. Obviously not accurate stats but generally speaking.

I think it’s a great idea even if the business isn’t real estate related, although it makes more sense that it would be. Create multiple streams of income, including passive, so you don’t end up 65 years old and having to work to pay bills. Plus businesses is exciting.

I think the “team” or “group” comes in (at least in ohio) when you want to put your own branding and photo on a sign, instead of the managing broker having their picture on your listing sign, with your name at the bottom. At least that’s what I’ve heard from realtors and teams here, I’m still working through license material so maybe others can confirm or deny that.

As for websites they’re valuable for recognition and branding, great if you put a bunch of time into making useful content and SEO, and required if you have a new small business. I mean cmon guys it’s 2020 here, it legitimizes you, and most people search for things on their phones and now Alexa. Do they even make phone books anymore? New realtors should at LEAST have a google business profile set up. A lot just don’t because bad ones don’t care and good ones get leads from their SOI (sphere of influence). If 80% of your business is from referrals why focus on the 3% that come from online google searches.

I also don’t think you NEED a pile of cash to build a brand. A national or global brand definitely, but a brand is just the way people think or feels about your product/service. Obviously money helps a lot but you can communicate that for free through social media. It’s your standards, beliefs, how you act, dress, talk, the colors and fonts in ads, everything. It will just be a small local brand, but a brand none the less if it’s consistent.

Bruce Lynn · Answer

I would wait until you join a brokerage so you set up brand the way that works for you and them and complies with your KY real estate laws.  There are sometimes certain ways you have to use team, group, realty, etc.   That way you don't pay for things that don't work.

Building a brand is expensive.....that's why many people don't do it....but depending on where you are, your success, and how much money you have, it might work.

You might want to develop some questions around brands when you join a real estate company/broker.  Will they allow that, will they allow you to design your own logo, your own signs, your own business cards, your own website.

Many agents use the company websites as #1 it is easy, #2 it complies with the laws, #3 they have good lead capture, #4 they have easy built in IDX capabilities to display listings and in a legal way.

I don't like building it around a name....and I think it is wise to be careful what you name your brand.  For example if you name it The Ryan Moye Group, what happens when you want to sell the company?   Will someone want to buy your name if you are no longer associated with it?  Maybe, but less likely than wanting ABC Realty Group.  Even if you name it something like Kentucky Real Estate Group, what happens if you want to go nationwide.

Seems like you are on the right track, so keep it moving....you'll probably run circles around most agents in your town.

Justin Johnson · Answer

@Ryan Moye

Hey Ryan, so in the state of KY there are some laws that you need to be weary of. You have to be represented by a broker, that broker will normally not be appreciative of a completely individual brand without any connection back to the brokerage. Also if you create another business to funnel leads make sure that you are not breaking Tie-in laws. Moving from Wholesaling (little regulation in KY) to becoming a real estate agent is a different world. You have the skills to be a great agent from your wholesaling experience, but a certain way they make us do things. As always, This is not law advice and I would recommend an attorney.

David M. · Answer

@Ryan Moye

I think it definitely comes down to money.  Most agents don't make that much, especially starting out.  Definitely, also find out when you join your broker what are the laws/regs and his/her policies.

Also, you may not be able to truly establish a separate business.  I'm not sure how it works in KY.  But, your real estate license is tied your personal name.  So, you can't establish a separate company/business to broker real estate without your Broker's license (I think you guys call it a "Principal Broker").  Even if you tried, you wouldn't be able to get any of your commission into that business entity since your commissions will be cut to your personal name.  Meanwhile, your deductions are the same anyway since as a real estate agent you are already an IC by definition...

Many agents will establish some sort of brand such as web/email domain.  They get spruced up website of their own.  Teaming is just agents getting together and basically forming a mini-brokerage "within" a brokerage since generally agents can help each other.  Usually, its formed out of when one agent get successful and needs help with their business.  Instead of forming their own brokerage, they make a team and create their own systems.

I'm a little confused since you profile says you are a wholesaler.  Are you asking about for your wholesale business or for your future real estate agent activities?  If for the latter, you are going to have to follow your State's advertising laws which should include displaying your (principal) broker's info and brand.  That's why its "sold" that its important to link up with a brokerage with a good "brand" name like a Re/Max, Coldwell Banker, etc...

Hope that helps.  Good luck.

Matthew Irish-Jones · Answer

@Ryan Moye lots of agents have their brand or name listed above the brokers name.  They get the guidance, training and insurance of a broker while trying to brand themselves within the brokerage.

That’s where a lot of the teams come in as well like

“Smith team” with Keller Williams, etc..

As far as building a brand, it’s far less about laziness and far more about money.  Takes a lot of money to build a brand.  If an agent is making 6 figures working under a brokerage and has leads coming in, it’s far less about laziness and more about practicality.  They are happy with their deal flow and don’t want to build an entire brokerage.  They are happy being productive agents and making good Money.

Then there are the agents that suck, make no money and have no brand.  You probably don’t need to pay much attention to them.

Ryan Moye · Answer

@Spence Kal

Both. Building a business that can build strong brand awareness outside of the persons own identity.

Spence Kal · Answer

@Ryan Moye

Are you talking about building a brand, or building a business? Because they can be very different

Rob Bergeron · Answer

Everything is relational. Generally speaking a website isn't going to make or break your business. You need to add value and evidence of success. Start by getting yourself out there and active.

Should Real Estate Agents Start a Business?

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