Hello!

I'm looking to start a new brokerage in California. I've got my brokers license and wanted to see what the next steps are.

Is this something my local board of realtors can help with? Is an office required in CA? What paperwork do I need to do to start bringing agents on? Any recommendations or advice? Pointing me in the right direction would be great! :)

Thanks,
Jason

Free advice is just that...

I doubt your board will be of much help in terms of advising about setting up your business. I suggest talking with an attorney familiar with starting small businesses in CA.

I would think that BEFORE California issued you a Broker's License, it would ensure, for the protection of the General Public, that you knew the answers to all of those questions; or are you one of those Licensees who NEVER practiced as a Sales Person before becoming a California Broker ? Good Luck !

Thanks for the help! Those posts are truly valuable so thank you for taking the time to respond. As a new broker, I feel like this board is great and the users are so kind and welcoming. Who wouldn't want to join this community?! You are truly the best! :rockon:

If someone is able and willing to provide answers to those questions that would be great.

How about places to research what is needed to get a brokerage started? Are there books/websites/people that can provide information on some of these tasks? Is there a more comprehensive list that someone has?
- Form legal business (LLC/SCorp/whatever)
- Research insurance (E&O, General Liability, Workers Comp)
- Decide whether to get an office or be virtual
- Determine commission schedules
- Determine whether to go the EBA route or not
- Website creation / SEO
- Determine how to recruit agents

Thanks

Jason,

It appears you are fishing for info on how to start a CA Brokerage so you can write a book. If that is the case, why don't you just so say.

[quote=curiouscat]Jason,

It appears you are fishing for info on how to start a CA Brokerage so you can write a book. If that is the case, why don't you just so say. [/quote]

LOL! No.. I am really just looking for info on how to start a brokerage in CA.

Have you ever worked for a California Brokerage; or a Real Estate Firm anywhere ?

[quote=Vermont]
Have you ever worked for a California Brokerage; or a Real Estate Firm anywhere ?[/quote]

Yes, I have, in California.

Jason. Congratulations. I just got my license in February and officially started business in March. It has been a blast. I recommend you go the the DRE web site and click on the "Real Estate Business Guidance" link. I found it very useful. My other suggestion is to check the past discussion threads here. I found a lot of info that way too. It's also very validating to know that you aren't the first to have a question. Finally, talk to the most successful broker in your area. I think you will be amazed at how much information you can get from seasoned profesisonals over coffee

Hi colemacj,

Thank you very much for that guidance! I will look into the content on that link as well as keep researching threads here. Congrats on starting your business!

Jason, I recently went through the whole process and got my brokerage set up in California. Here's my experience with your questions:

- Form legal business (LLC/SCorp/whatever)...
You could either file a DBA with your county, which can be done by going to a local newspaper, or you can incorporate (what I did). The S Corp that I formed protects my own assets, and since this is a long term deal, I figured the upfront cost was worth the protection.

Once you file your DBA or get incorporated, you must update the DRE with this information and they will issue you a new license with your DBA or corporation name on it. This may take a little while, but it has to be done prior to acting as a real estate brokerage.

- Research insurance (E&O, General Liability, Workers Comp)
E&O insurance may be difficult to find since you are a new brokerage, but if you would like, I could provide you with the contact information for the guy that I went through. He can also dress the general liability and workers comp. Really quickly though, the workers comp is not mandated by the DRE; however, the Dept of Labor treats your independent contracting agents as employees, so the workers comp was a must for me. An insurance agent would be the best to talk to about this stuff.

- Decide whether to get an office or be virtual
That's all up to you. Both have their benefits.

- Determine commission schedules
Take a look around and see what the big brokerages are doing and then compare that to the business models of Re/Max and some of the online brokerages. They are all different and can all be successful.

- Website creation / SEO
You definitely want to have a website. I created my website, so if you would like something simple, we can possibly work something out. Let me know.

- Determine how to recruit agents
This forum has plenty of useful ideas on where to find your agents. They are everywhere and you can get lists of newly licensed agents, you can advertise online, or you can advertise in the paper. Just got to see what works for you.


Hope this helps. You can contact me through a message here, or email me at info@keenagents.com.

Wow, thank you very much for all that! :) I may take you up on the email offer once I figure out what my next set of questions are lol..

It has been a couple months and I have learned a lot. A sincere thanks to those who were helpful and sent me some great info via email.

Here is what you need to do to start a brokerage in CA (assuming you have your broker's license):

You can either form the brokerage in your name (and file a DBA if you want to use a different name for the business) or you can form a S-Corp (and file a DBA if you want to use a name other than the S-Corp's name). You cannot find

I went the S-Corp route.

There are many sites that will help you form an S-Corp. Once you place an order with one of these sites, they will file Articles of Incorporation with the State. After that has been filed, you should request a Federal EIN (can be done online). Remember, taxes for S-Corps are typically due on March 15th (NOT April 15th). You then need to get a DBA (if the name you are doing business under is different from the name of the S-Corp). (There are a couple other steps to finish getting the DBA approved but they can be done concurrently with the next steps as far as I can tell.)

You then should get a Business License from the city your business will be located in. If you filed a DBA, you may need that paperwork when you go to the city to get the business license.

You need to list an address that is your place of business. Renting a mailbox will not cut it from what I can tell. It can be your home (but keep in mind that this address will be public information).

At this point, are you ready to do business? Almost... You have a few more steps in order to be approved by the DRE (which is legal requirement).

Since I formed an S-Corp, I had to apply to the DRE for a Corporation license (Form RE201). All transactions will be conducted with this Corporation license. As a broker, I am listed as the Designated Officer for the Corporation. Read through Form RE201 very carefully. There are a number of things you need to send in at the same time. It will take a while for the DRE to process your application. Once that is done, you will receive your Corporation License. Now, you are set!

This is similar to what keenagent posted above. At some point, I'd like to rewrite it to be more clear..