In order to start a real estate brokerage in Ontario, you are going to have to follow the required steps listed below. Steps include incorporating your company, finding the right partners, getting financing, brokerage licensing, errors and omissions insurance (E&O), learning the responsibilities of becoming a broker, establishing buyer client expectations, and a salesperson’s listing obligations. Keep reading to learn more.
How to launch a successful real estate firm in Ontario?
Before we go into each step, we are going to define the term real estate brokerage.
What is a real estate brokerage?
A real estate brokerage is a business (sole proprietorship, incorporated, or partnership) authorized to trade real estate on behalf of others. In compliance with the REBBA, every brokerage must hire a broker of record to keep track of every trade and ensure that each trade complies with the government’s real estate legislations, and sign trade record sheets.
Steps to take to start a real estate brokerage
1. Decide the type of brokerage you want to open
- There are many types of brokerages franchises, independent, full-service, limited-service, and specialized in listing or selling. Depending on your background and interests, you can choose one of the following types above. We suggest having working with a lawyer for all your paperwork on this step.
2. Complete Education, Application and Submit Registration
- In order to operate a real estate brokerage you must complete all required educational courses, submit your application, and honestly disclose information in accordance to the Real Estate and Business Brokers Act, 2002 (REBBA 2002), and obtain your license from RECO. However, you don’t need to have a brokers license to own a brokerage, only the person operating the brokerage does.
3. Get Errors and Omissions Insurance
- Every broker is required to be part of the RECO’s insurance program and provide errors and omissions insurance to their buyer and seller clients
4. Create Systems and Processes
- To efficiently run and scale your real estate business, it’s a fantastic idea to have systems and processes in place for administrative and office policies, buying and closing, transaction processes, trade record sheet process, funds disbursement process, registrations, and more.
5. Define Your Brand
- As you know, real estate is an extremely competitive business so creating your own real estate branding will help you stand out in a crowded marketplace, but also attract the right agents. We have a whole blog on this topic and you can read it here.
6. Develop a training program for real estate agents and office staff
- If you are going to be hiring a team of agents you need to set them up for success, educate them on your company culture and policies, and offer professional development and support. Here are some reasons why agents choose brokerages.
7. Lead Generation and Marketing
- In order to get leads for your company and your agents, you are going to have to have some lead generation strategy in place or develop online and offline marketing strategies to drive leads, increase brand awareness for your new firm.
8. Choose software to manage your front and back office
- Consider investing in front office software and back-office software to streamline processes, to answer brokerage phone calls, to service to self-manage the calls, and to automate your admin tasks. Selecting the right software will increase productivity, reduce front-office load, and boost connectivity between your brokerage, agents and employees. Resulting in happier agents and staff and stellar customer care.
Can a real estate agent open a brokerage?
Yes, however agents without a brokerage license, must work under a licensed broker to trade property. Agents who pass the real estate brokerage exam are called real estate associate brokers.
How much does it cost to open a brokerage firm? (depends on the size you want to open)
The cost to open a real estate brokerage beyond the licensing fees depends on the size of the location you want, what city you live in and if you are renting or buying the property. Here are some things to consider paying for laptops and computers for your agents and staff, office furniture, wi-fi, phone services, and other utilities. An approximate estimate is $10,000 per month, however, this really depends on the location of your brokerage and how large your team is.
Can you start a virtual real estate brokerage?
Yes, the advantage of starting a virtual real estate brokerage is less overhead costs, and no expenses for rent or paying for an office building. You will still need to incorporate the business, get E&O, get a phone system, transaction management software, a CRM (customer relationship management tool), or an all-in-one management platform, and some kind of lead generation software. Listen to our podcast where we discuss the ins and outs of online brokerages.
We hope our blog helped you better understand the process of opening your real estate brokerage and we wish you success!