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Opening a real estate company Advantages and disadvantages

Paper Type: Free Essay Subject: Economics
Wordcount: 2532 words Published: 1st Jan 2015

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While thinking about the future of rates for the establishments you will definitely find a lot of factors to be considered, including the local and world economy as well as both the local and the World Markets. In addition, the current political situation should be also regarded. Nevertheless, trying to predict the future rates is almost the same as trying to predict the place a helium balloon can fall if you let it go.

If you understand what is meant and moreover, you are interested in it, it is very likely that you have already thought about opening a real estate company.

Of course, it features both advantages and disadvantages as it usually means that you don’t work for somebody but for yourself, but nevertheless you ought to be a part of the brokerage, meaning that you don’t feature a boss and you don’t have the set hours.

Nevertheless, most of world’s real estate agencies work according to the basis of the 100% commission. Besides, all the expenses are also paid by them. But if you would like to open such a real estate company, the first thing you should do is to ensure that you have the necessary temperament for running it as being the “boss” can be rather exhausting and stressful.

Anyway, it is a well-known fact that the long term success features a lot of aspects, but the most important thing is obviously a reasonable business plan how to start your real estate affair. Let’s examine it!

The real estate company will be named the Gomos real estate Inc. and it will be a new firm located in London, capitalized by two stockholders and two principal investors, Timothy Belij and Dimitrij Black (the licensed brokers and the firm’s sponsors). So, these two licensed brokers are expected to sponsor all the independent contractors of the real estate agents in the area. 

Only the brokers of this company have the only possible authority that allows sponsoring the oncoming licensed real estate agents according to the corporate broker license.

In addition, when joining the Gomos real estate Inc all the agents are to receive a complete training program.

The Gomos real estate Inc. will start working in May 2012.  The office will be in the West End, London, close to the tube and other public transport.


The aim of the Gomos real estate Inc is to provide people with an easy, quick and comfortable search of houses, flats and other establishments both for buying and renting. It is expected that the firm will become successful within its first year as according to the research it completely satisfies the demands of the market for such establishments in the area. Besides, the long-term debt will be paid within three years of its operation while the short-term borrowings are to be paid within the first half of the year.


The business plan has the following objectives to be achieved.

To become a successful company with the free choice of benefiting the investment opportunities of the other real estate as such may appear.

To employ the professional staff, including motivated sales agents as well as a good office manager

To keep the office of 20 sales agents featuring the previous aspects. Besides, it is believed that from 75 to 100 square feet of office space is needed for every agent.

To find the office furnishings including tables, chairs and other furniture as well as computers and phone system. Besides, it is important to choose a good internet service provider and the Wi-Fi. The user-friendly software as well as the virus protection programs is also needed.

To develop a fruitful cooperation with the clients, staff members.

To become one of the best brokerage companies in the area by the second year of operation and maybe even before.

To realize a profit within the first year.

To become a member of the local National Association of Realtors.

These aspects are expected to be obtainable because of the staff professionalism and the demands of the market. Besides, there will be various weekly training for the staff, including the improve skills training as well as the marketing plan how the clients can be gained.

Every agent is expected to obtain at least one seller and one buyer (the bargain about £ 90, 000), every month, so he or she will earn £4,500 per month and £54,000 per year.

The company, it its turn will profit £2, 000 per month and £24,000 for the year from one agent. Featuring 20 agents, the profit will be £480, 000 a year. In addition, the active broker sales are expected to be at least £ 3,500 commission from each side to total £8, 000 (100%) that will belong to the company and in its turn, the company will pay the broker.

The company will be developing and as a result it will employ the additional staff and provide them with the needed trainings. And besides, the Gomos real estate Inc is expected to include the additional marketing techniques to meet the high standards of service.

Start up Expenses

The start-up expenses of the Gomos real estate Inc costs consist of the following:

fees for the opening a real estate company (£10, 000)

Office equipment, furniture and hi-techniques (£ 10, 000)

rent of the office (£ 1, 000)

insurance (£ 2, 000)

fixed wage of the staff (£ 10, 000)

cleaning and the maintain of the office (£1, 000)

advertising campaign ( £15, 000)

extra expenses (£10, 000)

So, it may be seen that the amount that you need while opening a real estate company is about £60, 000.

In addition, every two or three years there must be the licenses renewed; and as usual, there isn’t any examination to be taken. But prospective agents and brokers should contact the London’s real estate licensing commission so that they could verify the detailed licensing requirements.

It should be remembered that the real estate business is slower in winter, so the start up date must be in spring so that the company may gain some profit and reputation.

Besides, it is important that your rent could cover your security of the month.

Job Outlook

It is believed that the real estate brokers and sales agents’ employment will increase in the year 2014. That will happen because we see that the housing needs of a growing population are also increasing, and in addition, now more and more people are starting thinking that the real estate is really a good investment.

It is also expected that not high interest rates would continue to stimulate real estate sales, and that will obviously result in the lack of agents and brokers.

Moreover, every year there will be a huge amount of job openings because they will require replacing workers that would go to the other occupations and of course we should not forget that many people will leave the labor force.

However, it is likely that the job growth will have the limit because of the increasing usage of technology that will definitely make the agents and brokers productivity better.

The sellers and the agents of the Gomos real estate Inc to be provided with the following services: 

Best commissions.

24/7 hour office access.

24- hour call service.

Marketing and sales guidelines that should be followed every day.

Broker support.

Web page.

Various trainings


Comfortable sitting and office

Great location of the office

Dining options

Free CMA (Comparative Market Analysis).

Photos with the panoramic view placed on MLS (Multiple Listing System)

The buyers of the Gomos real estate Inc will be provided with the following services:

The buyers are matched to homes. In addition, for the buyers there is a special extensive questionnaire to satisfy their demands and desires.  After that this questionnaire is taken and the following information is put into the Passport program so that all the buyers could be matched to the homes according to their criteria. By the way, the passport is the up-to-date software that is available to licensed real estate agents and brokers.

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The buyers are gone on-site. So, then, the homes that they have chosen are visited and there the in and out panoramic photos are taken so that they could examine the views. After that all the photos can be e-mailed or may be shown face to face. The buyer doesn’t need to enter the site unless they choose to. The home is brought to them.

Analyses of the market

It should be focused on such aspects as providing the homebuyers and homesellers with the needed skills and professionalism and reaching a great sale as well as the purchase in the needs of the real estate. In addition, the in-house agents are also regarded. For that reason every support program that may be needed will be at their disposal.

By the way, the economy in the region is developing rather fast these days and as a result, more and more homebuyers are seeking where and how to purchase the buildings. By the way, this year there has been a 71 % increase concerning the sales of properties priced more than £1 million and last year it was about 30%.

In addition, it is also known that the number of the foreign buyers in the property market of London has increased a lot. That is obviously a positive sign. Besides, the prices are continuing to rise, encouraging the buyers to act.

The cash buyers are also increasing and that means that they would prefer to invest the money in the property within the area.

However, the international buyers are still at the market top. Despite the fact there has been the political turmoil in the Middle East and the natural disaster in Japan, there is no evidence to suggest that there will be an influx of foreign buyers.

.These changes shouldn’t be omitted by the Gomos real estate Inc.

Moreover, it is expected that the Gomos real estate Inc will become a well-known name and a successful company in the real estate market of London. 

The Gomos real estate Inc will be located in the area that is suggested to have the main revenue potential. Besides, according to the latest analyses, this market area has the growth and stability.

The office where the real estate will be located is comfortable, charming and fully equipped, featuring the reputable design. It is believed that the location is perfect as it will enable the sales associates to work in the region, allowing them to gain more profit within a short period of time.

Besides, according to Forbes (http://www.forbes.com/2007/07/11/real-estate-hearst-ent-manage-cx_bn_0711fundrealestate_land.html), there was the entrepreneur debating of starting a real estate firm that featured eight main systems that should be definitely reviewed when opening. Here are those aspects: Legal Structure, External Threats, Marketing Tactics, Must-Have Technology, Important Performance Metrics, Start-Up and Ongoing Expenses, Permits

and Sourcing Supply.

The Segmentation of the market

Homeseller is considered to be the main market segment. It is expected that the Homeseller would sell various homes and buildings and besides, will provide the company with the main profit.

Secondly, it will be the homebuyer who will buy different housings and will gain the profit as well.

Individuals who want to lease would be guided as well in order to lease properties.

Private people desiring to buy or sell some object.

The in-house agents’ corporation is regarded as the fifth aspect of the market segmentation. . That is why various guidance and training, strategies and marketing techniques will be held. In addition, every agent will be able to be assisted in creating a schedule featuring the style of the work, hence that will result it the increase of the productivity. Moreover, every agent would have the on-site guidance in all areas that he or she may require.

The Gomos real estate Inc.’s advertising campaign

The budget of the advertising campaign is £15, 000 and it will consist of the following aspects:

Billboards nearby telling the real estate is open and features the real professional services and a wide selection of items (£5,000)

Website (£ 3, 500) with a standard “brochure-style” presentation including the details on the location and the assortment of the establishments as well as the available services.

Advertising activities( posters and flyers in the area (£2,500))

Some extra expenses. (£5, 000)


Obviously, real estate is a difficult and unpredictable industry that is why it is really wise of you to get errors and omissions insurance so that you could protect your assets. It is well-known that nobody can say what will happen in future but if you want to open a real estate company, it is obviously that he or she should look through all possible risks. That is why, we need to examine them.

The first and the main risk is the possible accident concerning the building or people but the insurance will surely give you the possibility not to worry about this. Then, it is also rather important that you would have the money for extra expenses that are not forecasted. This you may regulate by taking a loan from your creditors.

In addition, at the beginning the Gomos real estate Inc. could deal with the competition from famous and experienced agencies. To solve this problem there is a massive advertising campaign provided.

In conclusion, to open a real estate company is not a rather easy task but nowadays it is considered to be profitable and modern. Of course, there may be some risks, but the success is absolutely worth trying. Nevertheless, you should examine all pros and cons before doing it.

This start up plan examines all objectives to be achieved and the needed investment as well as the most important information concerning the opening of the Gomos real estate Inc.

You shouldn’t forget that every two or three years the licenses ought to be renewed and all brokers and sales agents have to be licensed.

It should also be remembered that the real estate business may be slower in winter, so start your deal in spring to gain some profit and reputation.

Besides, it is important that your rent could cover your security of the month.

It is also believed that the Gomos real estate Inc start-up marketing will cover the whole marketing campaign within the first half of the year.

Anyway, it is expected that the Gomos real estate Inc will become successful within its first year as according to the research it completely satisfies the demands of the market for such establishments in the area. Besides, the long-term debt will be paid within three years of its operation while the short-term borrowings are to be paid within the first half of the year.


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