Last updated on October 18th, 2024 at 10:51 pm

You are a real estate agent, you attended class and received your license.  You know how to sell real estate representing buyers and sellers.  This will teach you the other part of real estate, business management.  Real estate agents are independent business people.  They are not usually employed by brokers (there are some exceptions).  Being independent means you can create your own business name, email address, and even your own website along with Facebook, X, and other social media.

True, all states have rules on how you can advertise, when you need to use the broker’s name, and how.  All of this aside, when your broker hands you a check for a commission, the funds are yours to do what you want.  This is your gross income from sales.  If you have not already done so, you should have created a business as a sole proprietor, LLC, or Subchapter S Corp.  Taking one of these steps and the LLC is usually recommended, you can open a business checking account after obtaining a federal tax ID number.  Real estate business management is key to success.

First steps to effective business management

• Create a name, and do a name search on the Secretary of State website for your state.  When you find a name that is available do the following

• Form an LLC or other entity with the Secretary of State.  You can usually do this yourself on the state website.  You will need to create an operating agreement (see below)

• Obtain a federal tax ID number by contacting the IRS on their website.  IRS.Gov is not one of the pretend sites.  The cost is zero

• Open a checking account at your bank taking all of the above with you.

Now you are in business, a real business.  All funds go into your business account, nothing goes to your personal account until it first goes through your business account.  The next step is to create an accounting system.  While this may sound difficult, it is not.  A free online accounting program exists that is very simple to learn and use.  As a new agent, you are already paying out for insurance, education, membership fees, lock boxes, business cards, and more.  Our intent here is to help you do what is required a the lowest cost.

Create your team

Create your real estate business management team.  What do I mean by this?  You need to find an excellent loan broker you can work with.  A person who gets your clients financed and closed in a reasonable time.  Next is your attorney.  No need to spend big bucks with an attorney, just meet one and discuss how you might need their help from time to time.  Select an attorney who specializes in real estate law.  After the attorney, select an excellent insurance broker with industry knowledge who understands the day-to-day operations of the real estate business.  

The insurance broker should be able to understand the world of real estate and get your clients to close with a homeowners insurance policy.  This is your real estate business management team which costs you nothing.  In fact, they will owe you for bringing business to them.  They pay you back by putting your clients in front of the line.  You are the team leader and they know it.

My Team

Build a list of vendors

Part of your business plan in addition to gaining potential clients through lead generation is to set up a list of vendors who can do everything to keep a house in good condition.  This will include plumbers, electricians, cleaners, landscapers, and much more.  Be sure that you have excellent references before you interview them and start making referrals.  

Important factors in making your decision to add a vendor is how quickly will they respond to the client.  Of course, you want great work, but communication is critical when you are racing to close and need a last-minute fix.

You have just set up your business but not completely.  What about tracking mileage?  Download MileIQ on your smartphone.  It will track every mile you drive.  At the end of the drive, flag it as business or personal.  You can enter information as well.  The app tracks everything and produces an annual report for your accountant.  Mileage is the IRS’s most audited thing.  The app fixes any potential problems and accurately tabulates what you can deduct based on the current IRS deduction for mileage. As part of your real estate management efforts

My Vendors

Financial aspects

As a business owner, you are entitled to deduct the cost of marketing efforts.  The financial management of your business is as important as working with clients and selling.  Start your successful real estate business by paying attention to details such as tracking the cost of every dollar you spend for your business.  

Starting with the cost of your real estate license.  The best agents have already done some of the items suggested above.  Real estate agencies do what is best for them by marketing their business name.  You have a right to do the same for your own name.  

Meet and work with a certified public accountant.  A CPA is familiar with business taxes.  That person can set up a system for you to make quarterly income tax deposits.  A CPA can go to your electronic accounting system and gather what is required to complete the annual tax returns.  Generally for the cost of doing the annual tax returns, the CPA acts as an advisor on some aspects of your business.  Consider this person to be part of your management team.

Set up your retirement plan

Have you set up a SEP IRA yet? As an independent business person, you need to think about retirement. The IRS has permitted you to set up a retirement plan (SEP IRA) which is somewhat similar to an employer 401k but it allows much more to be deposited. Your business can make a contribution and you as an individual can make a contribution. This link to the IRS website explains how it works. It takes discipline to save money. Work with your CPA to set up your account and keep funding it. 

Create your own website

Have you created a website yet?  If not why not?  Real estate laws and professional associations permit this.  You need to build an awareness of your own talents.  Let your broker and the branded real estate agent work on their brand, you work on yours.  The two efforts are mutually beneficial.  Just follow the best practices in your MLS rules and you will do very well.

 I will get back to the website but first, let’s talk about the email address.  Of course, you can grab an email address with Google or Yahoo, tack on some catchy saying before the @, and you are done.  Consider this.  When you build your website, your site platform will permit you to obtain an email address with anything you want before the @ then the name of your website/business will follow then .com or .xxxx 

Create your own email address

Email addresses that come from the company are more professional and indicate that there is more to the business.  Some brokers offer email addresses with their brokerage after the @sign and some may require this.  When possible, it is better for you to have your own.  Why?  You may love your broker but life happens.  You decide to move out of the area or perhaps even change brokers.  Why not bring your business with you?  This does not mean you can breach your agreement with the broker or the MLS about taking listings etc.  What it does mean is that your business and reputation are portable.  The same email address for many years.

The real estate world is very large.  Real estate sales vary from one area to another and you should have a flexible platform to advertise your listings and your previous work.  What about those comments and testimonials?  This is where your website comes in.  Years ago, we printed flyers with testimonials and other information even full brochures.  Now that information has been transferred to the website.  Your broker may offer you an opportunity to list what you want on pages inside of their website, great, do this.  At the same time keep yours up.  Use links to connect your broker’s site to yours.  

That website is a hub

It takes years to develop client relationships and it’s important that you have a way to connect with them.  Back to the website again.  Your strong relationships with clients will stay strong with a central communication method, your website.  Consider writing blog articles such as this one.  They need not be as long, pick simple topics such as how to grow roses.  Keep publishing so your website increases in value on the platforms, e.g. Google, Yahoo, etc.  

You can use the website as a transaction management tool.  There are “plug-ins” which are small programs that are usually free to manage things such as offering average interest rates, the temperature in the area, and even helping you create a newsletter.  Your own website is a great way to advertise your open houses and more about how you are the best agent to meet your client’s needs.  Don’t let your unfamiliarity with how to set up a site keep you from getting started.  This website will be offering services to help you get started and grow your site and your business.

Your site can also help manage quality time as it will become the go-to spot for many things you want to communicate.  There are good time management tools that you can add.  You can use your website to manage a real estate team as well.

Ways a Real Estate Agent Can Use Their Website

A real estate agent’s website can be a powerful tool for generating leads, building credibility, and showcasing their expertise. Here are some key uses:

1. Showcase Listings

• Property Listings: Highlight available properties with detailed descriptions, photos, and virtual tours.
• Saved Searches: Allow visitors to save their preferred property criteria for future reference.

2. Provide Information Resources

• Buyer’s and Seller’s Guides: Offer helpful advice and tips for both sides of the transaction.
• Market Reports: Share local market trends, data, and insights.
• Neighborhood Information: Provide details about schools, amenities, and local attractions.

3. Build Credibility and Trust

• Testimonials: Showcase positive feedback from satisfied clients.
• About Me Page: Share your experience, qualifications, and commitment to client service.
• Blog: Publish articles on relevant topics to position yourself as an expert.

4. Generate Leads and Inquiries

• Contact Form: Make it easy for visitors to get in touch.
• Newsletter Signup: Collect email addresses for future communication.
• Social Media Integration: Link to your social media profiles to expand your reach.

5. Promote Additional Services

• Property Management: Highlight your ability to manage rental properties.
• Home Staging: Showcase your expertise in preparing homes for sale.
• Relocation Services: Offer assistance to clients moving to a new area.

6. Optimize for Search Engines (SEO)

• Keyword Research: Identify relevant keywords to attract organic traffic.
• On-Page Optimization: Use keywords in headings, content, and meta descriptions.
• Backlinks: Build relationships with other websites to increase your authority.

By effectively utilizing their website, real estate agents can establish themselves as trusted experts, attract new clients, and drive business growth.

Expand the services you provide

Consider expanding your services to include becoming a licensed property manager.  If you sell a property to an investor or someone who is buying it as a vacation home or short-term rental, you can manage it for them after the sale.  Mississippi for example does not require a separate property management license.  Real estate agents are licensed already and that is sufficient.  Add as many rentals as you feel comfortable with and still become one of the great property managers in your area.

Rental property owners eventually sell their properties.  Offering property management services puts you first in line to become the listing agent when they want to sell.  Your owner clients will ask you about property values and the rental market.  Knowledge of the local market again puts you ahead of your competitors.  At the same time, with hard work, you will make money with rental properties and again when the owners sell and perhaps buy other properties.

Some real estate agents become home inspectors to supplement their real estate business.  Some course work and testing along with working alongside a professional for a while is all that is required.  And other real estate agents become real estate appraisers.  Sometimes it takes a while to create an established business as a real estate agent and some of the other things I just mentioned may just be temporary until you have sufficient monthly income to spend even more time focusing as a real estate agent.

Additional Services

Become a one-stop shop

Basically, you should become a one-stop shop in the sense that not only can you list a home and represent buyers, but you can become that resource that keeps in contact years later.  You want your client to ask you for a good plumber, electrician, etc.  Two key things happen when you become that one-stop shop.  Your clients will remember the kindness of finding a good person to do the job.  And, the people you pass work along to become more successful.

To summarize

• Create a real business.  

• Treat your real estate as a real business, separate personal income and expenses from business

• Set up a system to pay your federal and state income taxes quarterly

• Create a website

• Expand the website into newsletters and other resources

• Look at other real estate opportunities such as property management, home inspector, and appraiser.

• Become a one-stop shop.  Be that resource for all of your clients.

Please read other blog articles on this site and comment.  Return as some of the topics here will be expanded upon in future blog articles.