How to set up an estate agency
Are you looking to pursue your dream of setting up your own estate agency business? If this sounds like you, our helpful guide is a great starting point.
In this article, we cover everything you need to know, from picking your operational area and choosing between residential or commercial real estate, to finding suitable business premises and picking the most appropriate estate agency insurance.
Contents
Coming up with a business plan
Choosing between commercial and residential real estate
Top tips for setting up a successful estate agency
What qualifications do you need to be an estate agent?
What skills do estate agents need?
What insurance does an estate agency need?
How to start an estate agency
Below, you can find our five steps to get you on your way to starting an estate agency business.
1. Come up with a business plan
A business plan is a necessity when starting up any new business, whether it’s an estate agency or something completely different. The plan should help you to get a clear idea of the steps you will take to get your business where you need it to be. This can include goals and targets, branding ideas, growth projections, specifics about your target market or audience, financial information, potential problems or obstacles, identification of your competitors and more.
Building a plan gives you an opportunity to consider all aspects of your business and how you will make it a success.
2. Choose between commercial and residential
You may have already made this decision, or identified which route you will take in your business plan, but before launching your new estate agency, it’s important to think about the types of properties you wish to sell.
A residential estate agency sells properties that are made to live in, such as houses and flats. Your agency would need to provide available properties for sale, offer viewings for potential buyers to look at the properties and communicate between buyers and sellers, particularly at the negotiating stage.
You may also choose to offer residential letting as a service. Homeowners who wish to let their homes out may require your services to help them find reputable and trustworthy tenants to rent the property to. This could involve regular communication between tenants and landlords to ensure everyone is happy.
A residential estate agent would need to ensure a property is sold in a timely manner, and you would be required to market the property to find potential buyers and book viewings in.
Dealing with commercial property is a different ball game altogether. Commercial property can cover a wider variety of buildings, from warehouses and office spaces to shops and even farm buildings. This means it’s good to have an expert understanding of what these spaces are used for and the kinds of businesses looking to buy or rent them.
There are generally more legal requirements and paperwork for commercial properties, so previous experience in this field will be essential. Things you may need to know include freehold vs. leasehold acquisition, planning law and landlord-tenant law.
3. Pick an operational area
While some businesses can successfully work on a regional or national level, estate agencies may need to pick smaller areas to operate in. You may have already decided on your operational area in your business plan, but it’s important to know the maximum distance you’d be willing to travel to sell a property.
While real estate mainly involves office work, there are times you will need to drive to various properties for viewings, and you need to consider how far you are willing to travel, taking time and petrol costs into account.
When starting up your estate agency business, specify your operational area on your social media channels and your website. You may wish to do this in miles, for example, up to 25 miles from Leeds city centre, or by specific locations, such as ‘Oxford’, ‘Bristol’, etc.
Should a person come to you with a property to sell or rent outside of your operational area, you should weigh up whether it’s worth travelling the extra distance or not.
4. Find business premises
Most estate agents need a physical premises to work from, but choosing one isn’t always easy. You need to consider whether you want a prime location, which could also come with premium rent or fees, or whether you’re happy in a quieter area that may cost a little less.
You can use your business plan that you created in Step 1 to determine how much rent you can afford, while keeping your running costs in mind too. This budget will likely determine the location and size of your business premises. You can always upsize or move in the future if the business is running well.
5. Advertise your agency
By now, you’ve decided on what kinds of properties you want to sell and you have secured your business premises. But you need some clients and some properties to sell.
Marketing and advertising your estate agency is so important. Below, you can find just some of the ways you can do this.
- Make leaflets to post to local homes
Leaflets are still an effective marketing aid that will give you the visibility you need. You can drop leaflets in your operational area, making sure that they cover all the right information, such as your business name and address, how you can help customers, why you are different from your competitors and your contact information.
- Put your properties for sale on larger, well-known websites
Many estate agents choose to list their properties on websites that get a lot of traffic, such as Rightmove and Zoopla. When a person finds a property they like on these sites, they can contact you directly to set up a viewing, making it a great way to advertise your own estate agency.
- Set up your social media channels
Social media is one of the best places to advertise your agency, while also showcasing the available properties for sale. Use your channels regularly, posting frequent updates, to increase your follower count.
- Advertise in local publications
You could look at putting adverts in local publications, such as village magazines, newsletters, local newspapers and more. Just remember to keep track of the number of leads that come from such channels to make sure they’re worth your while.
If these tasks seem daunting while you’re getting set up, it might be a good idea to hire someone with previous experience who can take such tasks off your hands.
Top tips for setting up a successful estate agency
- Conduct your market research - do take the time to identify and research your target market. This could save a lot of time and money in the future.
- Create excellent branding - it’s important to present your overall brand in the right light. Make sure you have a good name and logo, and that all your marketing materials, including your website, are standardised.
- Hire the right people - the people can make or break a business, so be sure to hire employees that you’re happy to represent the business you’ve created.
- Consider diversifying - you can stick to selling properties, but also consider branching out to offer conveyancing services, removals, etc.
- Have an excellent website - customers rarely browse properties in an estate agent’s office any more and will tend to look online first. Ensure your website is capable of listing all the properties for sale, and keep it up to date with the right information.
What qualifications do you need to be an estate agent?
There aren’t specific qualifications that you need to start up an estate agency, however, there are some that would benefit you, including a degree in business, surveying or civil or structural engineering, or Propertymark qualifications.
It may also be beneficial to have experience within the industry, so you know it’s the right career path for you. It will also help you to forge connections with the right people and give you an understanding of how this type of business runs.
What skills do estate agents need?
While qualifications aren’t always a necessity, there are some basic skills that you will require in order to run a successful estate agency. These include:
- Excellent communication
- Good judgement about what a person needs or wants
- Organisation
- The ability to negotiate
- Customer service skills
- The ability to source reputable tenants
- A strong awareness of the housing market
- The ability to use social media to sell properties
What insurance does an estate agency need?
It’s essential that you have the right estate agency insurance in place. Not only can this build trust between your brand and your customers, but it protects both you and them financially if a claim of a mistake or accident is made against you.
When you have physical premises that members of the public enter, it’s worthwhile considering public liability insurance. This will cover compensation claims for injuries or property damage that occurs on your work premises to a member of the public. It can also cover you outside of your premises, for example if you’re meeting with a client at their premises and accidentally damage their property.
Professional indemnity insurance will cover your business if a client suffers a financial loss because of a mistake you have made or because of the poor advice you have given. This is especially important in the business of selling properties.
Finally, to protect your employees, you may be legally required to have employers’ liability insurance. This can cover any injuries suffered by your employees during their employment with you, including slips, trips and falls, or any illnesses that arise as a result of the work they do for you. It is a legal requirement to have at least £5 million worth of cover if you have any employees.