Realty Business Establishment
A licensed property agent may decide to create a real estate company to enjoy a greater percentage of commissions and client referrals. According to state regulations, it’s important to have a broker on staff. The owner may hold the designation or hire a professional who does. Every state has different rules and regulations, so it’s important to contact the state in which you live about those governing a new business. Here are some basic guidelines about how to form a property sales business:
Incorporate the business
Most people forming their own business in any industry want to establish a corporate or limited liability structure (LLC). It’s important to check the laws relating to corporations and limited liability companies in the state of residence. One method that realty businesses use to protect personal assets is to form a corporation or LLC prior to starting a new business, according to “Real Estate Law.” (Aalberts, 2014)
Designated and Associate Broker
Most states require certain levels of property sales experience. A broker supervises sales agents, and is licensed by the state after having sat through the necessary exams. The broker is considered a “senior property sales professional.” Those working with the designated broker are considered associates, and assist in the process of preparing documents and aiding the loan process.
The designated broker is considered a principal of the business. He or she may employee others, including salaried employees, for the property business. The designated broker’s role is quite important because, as a licensed broker, he or she will be held responsible for any actions or omissions of other agents working for the business. If laws are broken, the designated broker may lose the license to practice, pay fines, or both.