With home sales skyrocketing in most places across the country and many homes selling for record prices, it's a great year to get into the real estate industry. But where do you start?
Investing in a real estate franchise might be the best way to break into the field. Rather than operating as an independent real estate brokerage, the franchise business model comes with less risk and allows you to reap the benefits of your parent company's brand recognition.
This article will walk you through the best franchise opportunities and what you should consider as you select the best real estate company for you.
Things to Consider When Selecting a Real Estate Franchise
There are many real estate franchises for you to choose from, and no two are exactly alike. There's plenty to consider as you research and review franchisors. Here are some key factors to consider as you make this important decision.
Every franchise will require an upfront franchise fee to operate under their brand. These costs can be pretty hefty – usually anywhere from $10,000 to $50,000, but sometimes even more. The budget you set for your new franchise will determine which real estate brokerage is ideal for you.
In addition to your upfront costs, franchisors will also require ongoing royalty fees, where your real estate agent pays a percentage of their sales to the parent company as a monthly fee. This typically ranges from 3% to 6% each month and is usually paid directly by the agent and not the franchise owner.
On top of franchise and royalty fees, franchisors also charge their franchisees fees for various services. Particularly, many real estate companies charge monthly or annual fees for marketing support, training and other educational opportunities, and technology services.
Your parent real estate company wants you to succeed, so many of them offer training and mentorship programs to help you take their brand to the highest level you can. If training is important for you, find the franchisor that offers the most comprehensive educational packages.
Some franchisors provide real estate leads in specific areas for their franchisees. These leads could give you the upper hand as you launch your real estate business.
Company culture makes a big impact on the success of your agents and your overall company. For this reason, pay close attention to the culture of your parent company's brand as it will trickle down to your local franchise. Being part of a big-box brand is very different from working with a boutique firm or a virtual real estate company.
As you consider franchises, pay attention to the brands' reputation among home buyers and other real estate professionals. A company's reputation will profoundly influence your decision to go with that real estate brand.
Best Real Estate Franchises right now
Now that you know some of the factors to consider when selecting a real estate franchise, here are some of the top franchise brands.
Keller Williams Realty
Keller Williams boasts an agent-led philosophy that puts control in the hands of the agents through top-notch training and coaching programs. Her business model equips agents with a technology edge over other Realtors and the ability to offer their customers whatever they need.
The initial franchise fee is $35,000 and a minimum cash requirement of $150,000. On top of this, the annual royalty fee is 6%, with a $1,000 annual ad royalty fee. The franchise contract is good for five years and is renewable.
Weichert Real Estate
Weichert offers its agents a supportive broker network and expansive training. The parent company also helps you craft an onboarding plan specific to your business, providing you with the structure you need to succeed.
The initial franchise fee to join the Weichert team is $25,000, and there's a $150,000 net worth requirement to be accepted into the company's franchise program. Other fees include a 6% royalty fee and a 2% ad royalty fee. Once you sign a contract with them, your terms of agreement are binding for 10 years.
NextHome empowers its franchise partners by providing the technology, systems, marketing, training, and brand to put them ahead of competitors in their markets.
The company's initial franchise fee ranges from $3,750 to $8,000. After this, franchisees will pay a monthly royalty fee of about $200. There's also a monthly ad royalty fee under $100. Franchise contracts are renewable and can be written for one to five years.
RE/MAX offers franchisees everything they need to make the most of their brand, including a world-class business development program, training and conferences, and a strong social network.
If you choose to go with RE/MAX, your initial franchise fee will range from $17,500 to $37,500. The parent company also requires that you have $35,000 cash to launch your franchise. There are also other fees, including the royalty fee, which vary. Contract terms of agreement when opening a RE/MAX franchise last for five years.
Realty One Group
Realty One prides itself on having built a modern, lifestyle real estate brand, boasting the ideal combination of workplace "coolture," platform, training, and support to build successful franchisees. And the company is recruiting franchisees around the globe.
Franchisees pay a $20,000 initial franchise fee to join the Realty One brand. Terms of agreement are signed for 10 years and can be renewed when that time frame is up. There are other fees involved with the franchise as well, including a 2% ad royalty fee.
ERA Real Estate
Built on the principle of collaboration and creating a community of real estate professionals, ERA Real Estate is a smart franchise choice. The parent company is there to help you make every step of the way.
As a franchisee, the initial franchise fee is up to $25,000 and several other financial requirements, including working capital of $75,000 and a personal net worth of $150,000. There are ongoing fees, as well, including a 6% royalty fee and an ad royalty fee ranging from 0.5 to 1.5%. Franchise contracts are for 10 years.
Century 21 Real Estate
A globally recognized name, Century 21 is another top choice for those who want to franchise a real estate company. In addition to significant brand recognition, the company offers investors comprehensive training, in-market support, and marketing tools to build a strong franchise.
You'll pay an upfront franchise fee of up to $25,000. The company also requires franchisees to have $75,000 in working capital and a personal net worth of $150,000. There are additional fees, including a 6% royalty fee and a 2% ad royalty fee to keep in mind, as well.
Help-U-Sell Real Estate
With a focus on the experience of both the broker and the customer, Help-U-Sell Real Estate offers a unique business model that allows franchisees to charge less while making more money – a win-win for all parties involved.
The initial franchise fee is $17,750 upfront, with an ongoing royalty fee of 6%. Franchise contract terms of agreement last for five years and are renewable.
Build Your Real Estate Business Using Skynova's Small Business Platform
As you build your real estate franchise, let Skynova's small business platform lead you on the path to success. Our all-in-one invoicing and accounting software is ideal for entrepreneurs who want to track all their business activities accurately and easily.
By creating a centralized hub for all your most important records, we're here to handle all your bookkeeping needs. Using our customizable templates and software products, you'll prevail over the other Realtors in your region.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. For the most accurate and up-to-date information about real estate franchises, contact the companies themselves.