Estate agents sell residential and commercial properties on behalf of owners in return for a fee. Most estate agents also deal with rental properties and usually offer services that go beyond simply finding tenants, such as ongoing management, maintenance of properties and background checking of potential tenants.
Why start an estate agency?
The majority of people use the services of an estate agency to sell or rent their home, so the market is huge – and there is also the commercial property market too, which some agents specialise in. Estate agency can be a very profitable business, although it is somewhat of a misconception that estate agents charge high fees for doing little work – they usually do more than you think and the work can be stressful and involve lots of setbacks. Despite this, it is very rewarding and if you’re a ‘people person’ then starting an estate agency could be for you.
What skills will I need?
Estate agency involves dealing with lots of different people, assessing their needs and expectations and then bringing them together to achieve an outcome that everyone is happy with. You will therefore need to be good at dealing with people and possess excellent communication and interpersonal skills, as well as being highly motivated and prepared to deal with setbacks – there is great potential for things to go wrong in the world of property and you will need to persevere and look after your clients at all times. Aside from that, estate agency is largely about marketing and sales, so you’ll need to have knowledge of both. You are acting as a marketing agency for your clients and you will need to effectively market their properties using online and offline media.
Setting up a traditional estate agency is usually quite expensive. Your biggest cost will be renting an office – and because you will probably want to pick a prominent location, this also means expensive rent. Our commercial properties are based across London in some of the most sought after places, including Soho and Chiswick. If you choose to set up an internet-only estate agency then your costs will be much lower, however this is still quite rare as most people still deal with traditional agents. Either way, all estate agents spend lots of money on advertising and marketing the properties on their books. This usually includes a mixture of offline advertising, for example weekly newspaper adverts, and internet marketing through the agents own website and through external property networks such as FindaProperty. You will also need to allocate money for fitting out your office, leasing vehicles and hiring staff – this isn’t a business you can start on your own. Estate agents also spend a lot of money on printing marketing materials, photography and sending out mail. To find out more about business start up costs, take a look at our must-read guide.
What are the keys to success with this business?
Successfully selling and renting out properties for your clients is a good place to start! Your clients will expect strong marketing so that their properties are sold or rented out as quickly as possible, and buyers will expect you to be knowledgeable about the local area and the properties you are showing them. Excellent communication and excellent service is key to this business – there are lots of estate agents out there and it is very easy for the vendor to switch to a different agent. Estate agents rely on being well known within the local area, so to be successful you’ll need to extensively market both your business and the properties that are on your books. This means you will need to develop a strong brand identity and place yourself in all the places which local property hunters look.
Your next steps
It is essential to do your research and know the competitors you will be up against. What do local estate agents charge? How many properties do they have on their books at any one time? As a start-up it’s difficult to compete against established agents, so you’ll need to find some way of getting property owners to try out your services.
In many areas the estate agency market is very crowded, so it might be best to pick a more specific niche – for example by specialising in city apartments, river properties or houses priced above £500,000.