The Real Estate Broker

Published Date: 02 Nov 2017

Business Plan

Table of Contents

Executive Summary

Real Estate Brokers is a brokerage company, whose prime business will be providing a platform where sellers can list their properties for sale to buyers. The company will be providing extra services for sellers at a fixed fee of RO 25, which will involve email marketing to previous clients and listing of properties at websites as well. In addition extra services can also be offered for an additional fee, as per services required.

The Company

Real Estate Brokers is a new startup brokerage company in the Muscat, Oman. It is a Limited Liability Company managed and owned by 2 major shareholders. Mr. A owns 51% of the outfit while Mr. B owns the remaining percentage.

The management team currently consists of the owners, Mr. A and Mr. B. They, being the founder, are also suitably equipped with the knowledge and experience to manage the company.

Mr. A will serve the company as CEO (Chief Executive Officer). He has around 10 to 12 years of experience as an independent broker in a large brokerage company. He will be responsible for managing and operation of the company on day to day basis.

Mr. B will serve the company as CFO (Chief Financial Officer). He has approximately 15 years of working experience in a local audit firm. He will be responsible for all finance and administration related issues of the company.

Services Offered

The categories of properties that will be listed for sale are: Homes, Office Buildings, Strip Malls, Apartment Complexes, Restaurants, Schools and Foreclosures.

Real Estate Brokers will be there for peoples, who have dreams alive in their mind that one or some day they would be able to purchase their own house, business property and farm houses at competitive prices. Whereas cultural barriers and shortages in reasonably priced housing are two of the major problems that always prevent people’s dreams from materializing. Therefore, we will be working for making these dreams alive, furthermore our success will not be defined by how many sales deals were closed each year, rather we will emphasized whether people were assisted in the process or not.

We will excel ourselves as far as credibility and reputation of Real Estate Brokers is concerned, as company will publish real estate book and real estate organizational events in local real estate associations. In addition to that Brokerage Company will try its best to make good working relationship with almost all the members of local real estate association bodies.

The Real Estate Brokers will charge a commission of 20% on every deal close. Company will hire services of experienced brokers in the field, who will be paid 25% of commission earned for every deal close.

Financial Considerations

Real Estate Brokers would require funds of RO 200,000. The funds would come from both owners. Mr. A will invest approximately RO 102,000 and Mr. B will invest approximately RO 98,000 in the company.

Objectives

The company objectives are as follows:

Financial Objectives

Achiever property sales of around 65 for first year, which then increased by 10% each year till fifth year of operation.

Achiever revenue of around RO 202,600 for first year, which then increased to RO 306,800 till fifth year of operation.

Keeping brokers compensation at around 25% of revenue.

Keeping our Gross Margin at around 25% for each year of operations.

Finally, by the end of year one the company should have at least 5 other brokers on board to ensure growth.

General Objectives

Remaining a unique property brokerage company within Muscat city.

Build and sustain strong relationships with brokers, buyers and sellers.

Enhance customer experience on daily basis while focusing aggressively on creating a "word of mouth" potential.

To become a reputable and profitable brokerage company, so that we can take advantage of other real estate deal opportunities within market as they happen to available.

Hire and recruit self motivated, hard working and success-oriented sales agents.

Maintain and develop an office of approximately 15 successful sales agents by the end of third year.

Develop a firm corporate brand identity within our dedicated targeted market segments.

To begin working as a motivated team and establish better working relationships by promoting suggestions and communications from all team members.

By fourth year of operations, become one of the leading real estate brokerage companies within Muscat city.

Realize a positive ROI (Return on Investments) by the end of first year.

According to our belief the objectives mentioned above are comfortably achievable because of the professionalism attitude of our employees and sales agents, those we will be hiring. Those individuals achieve a real estate license mostly go away from school with having knowledge of real estate procedures and laws; moreover turnover rate within this field is very as agents do not have training outside the regulations, procedures and laws of the company itself. Therefore in order to enter this profession, agents’ needs to have license first so that they may start marketing training required to become professional real estate agent, whereas the training is usually at high prices that is not affordable, due to which most of the agents are not able to obtain training, thus without having proper training their average earnings initially are very low against industry averages.

The office environment that will be provided by Real Estate Brokers to agents and clients will be arranged productively. In addition there will be separate place for discussion regarding daily marketing schedules or routines to be followed, where agents will be guided properly as to how to apply marketing tactics discussed in order to gain clients. So that agents may follow their own daily schedule or training and guidelines provided. By providing stability and guidance we will be delivering programs that will allow new agents to earn profits more than average real estate agent earnings.

The simple calculation for agent earnings would be, like if agent while working with Real Estate Brokers sets a goal to close at least one sales lead per month on an avg of RO 100,000 sale, then he would earn RO 5,000 per month * 12 months= RO 60,000 per year. It is our utmost goal as a brokerage company to help each of the agents in achieving their goals.

Company Description

Real Estate Brokers is a brokerage company specializing in small to medium sized properties. The company will deal with higher value properties, but this should not be the relied main source of income. The niche of the properties to be sold is non-specific. However, the company shall not have any part in selling properties with legal issues. If any property is pending litigation of any kind then it shall not be listed for sale with Real Estate Brokers.

Real Estate Brokers shall be solely real estate Brokerage Company with one or two public dealing offices at the time of conception; however, future offices are possible as business starts to grow.

Mission Statement

Real Estate Brokers aims to be one of the leading website brokers by providing a unique platform for properties buyers and sellers, so that the transactions can be conducted in fairly and with no trouble.

Our Core Values are:

Offering of properties will have a return on investment for the new owner, including commission, of 20 months or less.

All the properties would be vetted to ensure that they are of the highest class. Thus meaning that our reputation as a respected broker of quality properties is assured.

Employees/ brokers will be treated as strategic ally.

The Core Elements

Quality

The success of Real Estate Brokers depends on it being recognized as a seller of quality properties which will continue to grow as investments for the new owner. Therefore we will develop a culture within our firm where employees/ brokers will be prepared to take new challenges to do a better and provide our clients an even better experience, more value for their money, more certainty about the sale they are about to close.

Customer service

Half of your our business reputation depends on a good customer service. Therefore we will follow all necessary steps which are required for successful property broker business; some of these are listed below:

As for the service to prospective clients, it would be second to none. They will feel that they are getting the best possible service for their fee of RO 25.

We will be genuine and personal in our client’s approach.

We will contact our clients personally after a successful deal.

We will send a business relation gift to returning customers and keep on offering them the best service ever where they can ask questions, free of charge and as often as they want.

We will offer them a sort of refund option (if possible) if our brokerage business is not what they expected it to be.

Competitive Strategy

Real Estate Brokers most important competitive edge will be our relationship with our clients and other brokers as a strategic ally. By building a business based on long-standing relationships with satisfied clients we simultaneously build defenses against competition. The longer the relationship stands, the more we help our clients understand what we offer and why they need it.

In addition for each employee/ broker we would have a secured and methodical, but friendly approach. They would receive 25% of the commission on each sale, so they do not try and distance themselves from the company. To further ensure this, a rigid contract with each employee shall be signed. This shall include a Non-Disclosure Agreement clause, a Non-Compete clause and a fixed period of employment with the first term of 3 months followed by terms of 6 months.

The Real Estate Brokers will be publishing a real estate book, which will have all the guidelines and training materials necessary for new agents working with our brokerage company. This book and all organizational programs will be distributed to all the local real estate association members, association and stores. This book will be solely written for the purpose of new agents in order to guide the agents, hence allowing the quick start program.

The brokerage company plan to provide most competitive commissions of approximately 25% of company’s revenue/ sales value. This competitive commission tactic will be used as marketing and promotional strategy in order to get most skilled and experienced agents within market. Therefore we feel that having best available skills and human resource will create sustainable competitive advantage for the company in future to come.

This Real Estate Brokers will have marketing plan in position for agents to use. The brokerage company will be supporting all agents in planning & goal setting and in their marketing strategies & techniques. Although some of the agents will be working as independent contractors, but overall this brokerage company will accomplish its goals as a team. New ideas and suggestions will always be invited as we planning to employ open door policy. Moreover, reference services section providing outline of company’s services offered to sellers, in house agents, and our buyers.  As we know no other firm is proving these type of services therefore it will be served as competitive edge over our direct competitors.

Details of Services

The service of Real Estate Brokers is brokering properties. This service is offered to owners who are looking to sell their property. The marketing of the properties can take two forms, the listing of the property to all previous clients who were either interested in buying or bought a property with us previously.

The other option is a listing on our company’s website. The fee for Real Estate Broker’s service is RO 25 this is a base listing and email marketing to our previous clients. If the client wants optional extras then they can be included for an extra fee. In addition the Real Estate Brokers will charge a commission of 20% of every sale value. The categories of properties that will be listed for sale are: Homes, Office Buildings, Strip Malls, Apartment Complexes, Restaurants, Schools and Foreclosures.

Agents with Real Estate Brokers will be provided with the following services: 

24/7 hour office access

Competitive Commissions

Own personal Web page.

One to one training on goal settings

Marketing and sales guidelines schedule to follow on daily basis.

24 hour phone answering service

Complete broker support

Full range of professional marketing materials furnished with pictures of properties for advertisement purpose

Free of cost inside and outside panoramic photography of each property.  Further, all photos will be placed on Internet realty sites and Multiple Listing Service.

Sellers will be provided with the below mentioned services:

Free of cost CMA (Comparative Market Analysis).

Free of cost inside and outside panoramic photography of each property.  Further, all photos will be placed on Internet realty sites and Multiple Listing Service. This will allow potential buyers to see our seller’s properties online.

Advertisement in all local real estate publications

Post cards with ‘Just listed properties’ will be dispatched to all surrounding areas.

Flyers will be distributed to other broker’s offices and sites.

We will design professional and attractive pamphlets providing all properties information and details such as: tax info, room dimensions, a letter from seller, and a full history of the property so that potential buyers can read it when viewing the property. This pamphlet will be especially for seller to give it to new owner at the time property sells.

Open house invitations will be distributed upon seller’s approval.

Brokerage Company will be protected by computerized systems so that we are able to know who enter and get out of premises at all times.

Effective follow up system will be placed.

We will re analyze our marketing actions with sellers if we are not able to get any contract within first listed month.

Buyers will be provided with the below mentioned services:

Buyers don’t need to hassle around; we will just match their needs at home. We will be developing comprehensive questionnaire for our potential clients/ buyers so that they can list their needs and wants or any special facility they see in potential targeted property. Once we will have all the info and details using questionnaire then we will put this info and supplied details in our customized software in order to match the needs and wants of buyers with property’s specialties.

We at Real Estate Brokers will bring the desired property to their home; further if buyers want then we would be showing the property face to face also. Moreover we go step further with potential clients/ buyers and if at any case they don’t need to visit the site personally then we will be going on site for them so that we could bring inside and outside panoramic pictures for their viewing at home.

Market Analysis

Our market is all owners who are wishing to sell their property. There are thousands of properties sold each month within Muscat, thus if Real Estate Brokers could tap into even 1% of this market then it could realize a very high revenue return.

The company wants to grow at a 10 percentage-point above inflation rate year on year, then after 5 years a 5-percentage-point above inflation. After 10 years at an above inflation rate. All inflation statistics shall be taken from the Central Bank of Oman, if the Central Banks target inflation rate of 2.0% then this should be very achievable. As of yet the current inflation forecasts are 4.6% for 2011, peaking at +5% by the end of 2011, 3.5% in 2012, and coming to the Central Bank of Oman target of 2.0% in 2013.

Target Market

The market of property brokerage is divided up into numerous categories and demographics.

However, taking the two main - and most obvious - categories of buyers and sellers the company can outline its appeal and strategy toward each main category.

Within the sellers there are property owners or sellers. Then within these there are established, aged or new. Again there are categories within these, there is mid-range, high-end sellers and within each of these there are other categories. It would be hard to further break down the market without diluting the point of Real Estate Brokers marketing strategy. Thus the breakdown of buyers and sellers is enough.

Marketing Strategy

The market strategy for sellers is as follows:

To advertise Real Estate Brokers services directly to potential sellers thus garnering early properties to sell. Once the website has gone live potential clients can be referred to the website to utilize our services there. Also once a website is live then Site Engine Optimization can take place to promote the site in search engines and also PPC advertising can take place in order to get more potential sites.

The strategy for getting buyers would need to be more targeted in order to have a high conversion rate and so a viable revenue stream. This targeted approach will be email marketing to those who have previously used or been interested in our offerings. This would mean that they have the necessary funds to purchase the properties we have for sale. Also the SEO would include the properties for sale listings and so buyers would be referred to our site in that way.

Marketing Materials

The marketing materials and methods will be used to contact the target market:

Websites

Monthly listing bulletin

Newspaper advertisements

Marketing kit (with edition geared for clients and for professional offices)

Signage outside Real Estate Brokers offices

Direct mail postcards

Guide on "How to buy a first property"

The marketing kits will be featuring at least 3 to 4 case studies of approximately one page long story, picture of the property, a picture of the client(s), and testimonial statement from the customer.

The website of the company shall emphasis on featuring at least three video testimonials of around 2 minutes duration described by the customer personally with pictures of their property, the overall process while working with Real Estate Brokers and its staffs/ employees. The customers will be asked whether they would be willing to take part in company’s case study/ testimonial soon after a month closing or during the meetings scheduled to be follow up. For this case study, clients will be offered a RO 300 gift certificate. The freelance writer will be hired to write the case study and photographer/ videographer will be employed as well.

In addition to that the marketing kits prepared for the company’s offices will also include all of the details and info in the customer’s version; moreover details related to gift certificate offer will also be mentioned. Moreover the benefits from having referral association with Real estate Brokers will also be mentioned and adjusted accordingly.

Furthermore the direct mail postcards will be dispatched to at least 2,000 targeted clients within ideal target market. The list of targeted customers will be purchased on the basis of age, income and lifestyle elements by assuming that they may be potential clients looking to buy homes or property. The process of sending postcard will like, at least one post card will be sent to individuals mentioning invitations to join next coming information session. List of new 2,000 customers/ individuals will be selected every three months.

Marketing Calendar

Real Estate Brokers will schedule marketing activities on daily and weekly basis via below disciplines:

One hour will be allocated from 9 to10 AM each morning for the marketing "subject" of the month.

Allocating a weekly time, Tuesday 2 pm to 3 pm, in order to review the last week's figures against projections and compared to previous weeks also

Allocating a weekly time, Thursday 3 pm to 4 pm, in order to plan work on the marketing topic and other marketing actions for the next coming week

The office assistant will be made in charge for management of all incoming calls during these reserved meeting times and ensuring that they remain unambiguous on the schedules of office.

The more staffs will be hired by Real Estate Brokers at the time when quantum of work increase and impossible for agents to handle all of the clients, which is according to our estimations to be eighth clients per agent. This strategy will make sure that he retains his own time for marketing events/ activities while remaining work can be delegated to other staffs.

Use of Funds

Real Estate Brokers would require funds of RO 200,000. The funds would come from both owners. Mr. A will invest approximately RO 102,000 and Mr. B will invest approximately RO 98,000 in the company. The startup expenditures would include:

Legal expenses related for the reason of company registration and licensing will cost approximately RO 2,200.

Company’s website will be developed that will cost approximately RO 1,500. These costs would include costs for the development of website, hosting and domain purchase.

Insurance related start up expenses will be around RO 2,800.

The costs related to office setup would be around RO 22,500. These costs would include purchase of computers, printers, renovation of offices, purchase of desks and chairs etc.

Initially Real Estate Brokers would pay RO 75,000 as advance rent for two offices. One office will be at center of Muscat city, whereas second office will be at south east of company.

Approximately RO 25,000 will be reserved for working capital for initial 3 months of the inception.

The company plans to reserve funds of approximately RO 58,000 for startup payroll.

Marketing and Advertising related costs would be around RO 11,500.

Other Startup expenses will be approximately RO 1,500.

Implementation Summary

In order to reach its goal of becoming a successful website brokerage company, Real Estate Brokers will adopt the following strategy:

Emphasize expertise, professionalism, and reliability.

Build a long-term relationship-oriented business.

Provide solutions, service, and quality customer services to our clients.

Sales Strategy

The sales strategy of Real Estate Brokers breaks down into two lines. The first of these is emailing our previous clients or people who have shown interest in our previous listings. These people, as they are known to have the available funds, can purchase the properties. This can be targeted even more by finding the niche that interests particular clients.

The second strategy is listing the property on our listing system and other 3rd party sources such as other brokerage websites etc. This will open the property to an even wider market and so help get the sale and generate the revenue.

Real Estate Brokers will charge a set fee of RO 25 for the aforementioned listing and email campaign. There will be optional extras that the seller can have; however, they will be for an additional fee and on request.

The commission of the sale is to be set at 20%, this is a reasonable figure and will not add too much to the asking price of the property. However, if an offer is lower than the price which includes our commission the owner will be told the price minus our 20% commission, thus ensuring that Real Estate Brokers always has a 20% commission on each sale.

Brokers for Real Estate Brokers shall be compensated 25% of the commission of each sale they make. This is a common figure of remuneration and as such should not be something that is a problem in garnering brokers. After 3 months of service in which the broker has fulfilled their task of selling at least RO 20,000 in commission, thus RO 5,000 profit for the company, per broker. Then they shall be given an addition performance related bonus. This means that the broker will never become a drain on the company finances because they will always be covering their pay. The performance related bonus shall be given at the end of 3 months and be at the discretion of the Chief Financial Officer.

The process of completing the sale shall be done through our escrow service if possible. However, other payment methods are acceptable if they purchaser is absolutely clear that they must pay 20% of the sale price direct to us, and the remaining 80% goes to the seller. Real Estate Brokers escrow service is through PayPal, Wire Transfer, MoneyBookers and other alternatives that are deemed acceptable by the company directors.

Sales Forecasts

The growth rates mentioned in the market are ones that the company would like to achieve. This may, after the first year, be done through alternative methods within the company outside of the property brokerage business.

The sales projected are very reasonable, 5-9 sales a month by 5-10 people converts to 1 or 2 sales per person. The total cost of the purchase to a buyer shall be around RO 50,000 to RO 500,000. As there would be less people with RO 500,000 in ready cash to buy a site, we have dropped the sales figures for the more expensive purchases.

As the low end of the market is relatively un-catered for Real Estate Brokers approach will ensure that people at this end of the market come to us, after our reputation has grown.

There may be some limiting factors for the sales forecast, if there was a downturn in the economy then the sales would suffer as a result. However, although the market is unstable it has recovered slightly, thus the possibility of a near downturn across the world is low.

Assumptions

Sales will grow by 10% each year.

Direct cost of sales- brokers compensation will be 25% of total revenue for five years of operation

Misc expenses will be 5% of total revenue from year 1 to year 5.

Management Summary

The management team currently consists of the owners, Mr. A and Mr. B. They, being the founder, are also suitably equipped with the knowledge and experience to manage the company.

Mr. A will serve the company as CEO (Chief Executive Officer). He has around 10 to 12 years of experience as an independent broker in a large brokerage company. He will be responsible for managing and operation of the company on day to day basis.

Mr. B will serve the company as CFO (Chief Financial Officer). He has approximately 15 years of working experience in a local audit firm. He will be responsible for all finance and administration related issues of the company.