According to the National Association of Realtors’ 2017 Profile of Real Estate Firms, seventy-nine percent of firms comprise a single office, typically with three full-time licensees. This causes many broker/owners to lament their lack of inventory, their relevance in the market, and their ability to stay current with technology. Owners of larger operations often share these concerns, plus:
- The industry’s population is aging. According to NAR’s 2017 Member Profile, the median age of a realtor is fifty-three, with thirty percent over the age of sixty and only four percent under age thirty.
- Many broker/owners do not have an exit strategy that will prepare them for retirement.
You can sell your firm to a larger company
Large, publicly-traded real estate companies sometimes acquire market share by buying the number one, two, or three operation in an area. The larger the brokerage, the more likely it is that stock and cash-up-front will be paid. In other instances, the acquiring company may buy a book of business but offer no up-front money, instead paying over time. Some may offer management a contract, employment, or a vested interest in the newly-merged operation.
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The most important reasons you should be selling
The key reasons for wanting to sell an existing brokerage, or wanting to merge with another operation, include concerns about hitting financial goals and reduced margins; leadership struggles; teams taking control of the brokerage; and issues with partnership or health. The majority of the broker/owners facing these issues simply want to retire, or shift focus by staying on after their business is acquired.
The top ten reasons to sell your company are:
- You’re not making enough money, or you’re not getting a satisfactory return on your invested time.
- You want to return to selling. Many people open a real estate brokerage because they thought it was the next logical step in their career, but their true love was listing and selling real estate. A good salesperson isn’t necessarily a good businessperson.
- You want to start a new career.
- You are tired of the managerial hassles.
- Partnership disputes.
- You want access to better resources.
- Personal or legal problems.
- Loss of agents. And you’re sick of the revolving door.
- Burnout. You’re a real estate veteran who has lived through more than one recession and you don’t want to build again.
- You want to retire.
Reach out to colleagues when trying to sell
In a white paper published recently by EXIT Realty Corp. International, CEO Tami Bonnell explored these reasons to sell your brokerage. A thirty-year veteran of the real estate industry, Bonnell was instrumental in building three major brands. She has also successfully negotiated scores of mergers and acquisitions. “If you’re interested in exploring the possibility of selling your brokerage, make it known to your ‘dirty dozen’—a close sphere of professionals who work in the real estate industry but who are not realtors themselves. They could be appraisers, home inspectors, or mortgage professionals,” says Bonnell. “They may know of brokerages in your community that are both primed for growth and a good fit with your business and personal philosophies.”
To download the full white paper, including best practices for a successful transition, visit www.exitrealty.com/whitepapers.
