“If you want to succeed in real estate, be persistent, be passionate, and never give up.”
– Barbara Corcoran, American businesswoman, investor, and television personality
By Realttorney®
Are you are licensed real estate broker in the Philippines who is a project seller and wants to go into general brokerage to maximize all the opportunities that the real estate service sector has to offer?
Are you a private practitioner who belongs to a branded brokerage house but is dying to establish your own real estate brokerage business?
Finally, are you a graduating student of the Bachelor of Science in Real Estate Management in 2024 and are confident to pass the real estate brokerage examination in April 2024?
Embarking on the journey to establish a real estate brokerage in the Philippines is a significant endeavor that requires meticulous planning, industry knowledge, and a commitment to ethical conduct. It is a huge endeavor, but rewarding nonetheless.
These aspiring entrepreneurs in the real estate sector must navigate through various regulatory requirements, market dynamics, and operational challenges to carve a niche in this competitive landscape. This article outlines the essential steps to initiate and grow a successful real estate brokerage in the Philippines, focusing on practical insights and strategic considerations.
Step 1. Acquire the Necessary Qualifications and Licenses
All Real Estate Service Practitioners (RESPs) know this as gospel truth. No one can practice the real estate service profession without being licensed or accredited by the Professional Regulatory Board of Real Estate Service (PRBRES) according to the provisions of Rep. Act No. 9646 or the Real Estate Service Act. This means that if you are not yet licensed, then this article may not be for you to read.
But if you are persistent and you really want to become a licensed real estate broker or an accredited real estate salesperson, then you have to acquire the necessary qualifications. To become an accredited real estate salesperson then you need to undergo a 12-hour real estate training seminar for new-entry salespersons.
But, please remember that you need to have a minimum of 72 units of college subjects as a minimum qualification to get accredited by PRBRES. Now, if you want to be a real estate broker — because someone told you that the earning capacity is limitless — then you need to obtain a Bachelor’s degree in Real Estate Management under Section 14 (b) of Rep. Act No. 9646.
After graduating with a degree in Real Estate Management then you need to pass the licensure examination to be conducted by the PRBRES under the supervision of the Professional Regulation Commission (PRC). Familiarize yourself with Republic Act No. 9646 to ensure compliance with regulatory standards.
Step 2. Develop a Comprehensive Business Plan
What? Do I need to make a business plan? Yes, of course, if you want to succeed in your latest endeavor. Let me share with you a wonderful quote from Benjamin Franklin. He said, “By failing to plan, you are preparing to fail.” It is also similar to what Winston Churchill said: “He who fails to plan is planning to fail”.
It does not need to be a complicated business plan. Keep it simple as far as practical. But you have to cover these three critical items that would become the foundation of your entire business plan.
The first critical item is Market Analysis. Conduct thorough market research to identify target markets, assess competition, and analyze demand-supply dynamics. In my experience, I concentrate only on real estate transactions in the Metro Tagaytay area. I just want to specialize in a particular real estate market where I can operate comfortably. Or in a class of real estate that I can handle with ease, like farmland or raw land.
The message here is don’t be a jack-of-all-trades and master of none. One cannot effectively service the entire real estate market in the Philippines, covering all 13 or 14 regions. You have to choose your niche, your area of expertise, where you can effectively operate.
The second critical item is Financial Projections. Prepare detailed financial projections, including startup costs, operating expenses, and revenue forecasts. But, I don’t know how to do this? Do not despair. The greatest source of information regarding this matter is at your fingertips… and it is free. If you like to read, try Google Search. If you like to listen to instructions, try YouTube. Or, call a friend who has done this or has experience in making financial projections.
The third critical item is Strategic Objectives. Define clear objectives for the incoming year or the current year. Create the mission and vision for your real estate brokerage. Then, outline the unique value proposition for the clients and stakeholders of the brokerage.
Find a quiet place and time where you can do your planning without interruption from your kids, spouse, or co-workers. My suggestion is to wake up 30 minutes earlier than your usual time of waking up. Use that “extra” time you have to start planning.
Step 3. Establish a Legal Entity and Compliance Framework
As licensed real estate brokers, it is a given that we are already registered with the Bureau of Internal Revenue (BIR). As such, if you want to venture on your own, outside the structure of your current brokerage, then we are considered independent contractors. But remember that independent contractors are considered sole proprietors in their business endeavors.
The critical and most important act for Step 3 is to determine your Business Structure. Decide on the most suitable legal structure for your brokerage, such as a sole proprietorship, partnership, or corporation. Know the tax deductions allowable for each kind of structure, as well as the monthly, quarterly, and annual regulatory compliance with the BIR.
If the entity you chose is a partnership or a corporation, then you also have to know the different Legal Compliance requirements for your chosen business entity. Ensure adherence to regulatory requirements, including registration with the Securities and Exchange Commission (SEC) and compliance with local government rules and regulations.
Can you set up a One-Person Corporation to conduct your real estate brokerage? In my opinion, the answer is YES. But it is a separate article where my views on it are fully discussed.
Step 4. Build a Robust Network and Partnerships
I have always said in all my lectures that the real estate service sector is a relationship-based endeavor. The more you grow your network, the longer and better your career will be. But, create a high-caliber network composed of licensed real estate service practitioners (RESPs), never with colorum or pseudo practitioners.
Cultivate relationships with real estate developers, property owners, real estate investors, and other industry experts and stakeholders. Cultivating a relationship is quid pro quo. What value do you bring to the table? What value do you offer to the other party?
Consider being a part of a Professional Association of your choice. Of course, Section 34, Rep. Act No. 9646 mandates that all real estate service practitioners duly registered with PRBRES shall automatically become members of the accredited and integrated professional organization (AIPO) of real estate service practitioners.
But apart from joining the AIPO, you may still want to consider joining reputable real estate associations and organizations, such as the Real Estate Brokers Association of the Philippines (REBAP), to enhance credibility and access to resources. Eventually, these current real estate service organizations will transform themselves into specialty real estate organizations to create specialized RESPs.
If you ask: What areas of specialization are being proposed by PRBRES? At this early stage, here are the three proposed areas: (1) General brokerage, Titling, and Documentation; (2) Residential Project Selling; and (3) Foreclosed Properties. PRBRES said that these are the initial areas that may or may not be expanded.
Step 5. Invest in Marketing and Branding
What makes you different from all the other real estate brokers and salespersons working in your area of operation? What sets you apart from the others? Why would a seller or a buyer contact you for assistance in their real estate transaction?
At this stage of your planning process, you need to embrace the wisdom of having a Brand Identity. Another critical component of your business plan should include developing a compelling brand identity. This includes creating a logo, website, and marketing materials that resonate with your target audience.
How much Digital Presence do you need? Leverage online platforms, social media, and digital marketing strategies to enhance visibility and attract potential clients. Wow!! Are there a lot of things to consider? Yes, that is why planning on how to best use these strategies and implement them well is paramount.
These are part of your marketing plan, which is a part of your overall business plan. Why is this a critical part of the plan? It is so because to put these into action, you will spend a little or more than a little financial resource. Hence, you need a plan to know how much to allocate per month to execute these important marketing tools at your disposal.
Why do all these? As a licensed real estate broker or accredited real estate salesperson, you are considered a professional. And what sets you apart from the colorum or pseudo-practitioners who continue to dominate the market? Aside from your license or accreditation, it is a well-crafted business plan composed of the items we have so far discussed.
Step 6. Implement Effective Operational Systems
Now that you have your marketing strategies all planned out, you need to consider what technology you will use to streamline and automate your day-to-day operations. You have to determine how to systematize and manage your listings, site visits or orientations, client follow-ups, and transaction facilitation. There are a number and advanced real estate software and technology solutions that you (as a professional) can adopt. But, of course, this has a cost. So it is important to list this as a necessary cost of your operations.
Team Development: Have you considered creating your own team? Recruit and train your own team of accredited real estate salespersons, ensuring alignment with your brokerage’s values and customer service standards.
Make a handbook that will explicitly outline the mission and vision of your brokerage, the values of your organization, and the standard of service that will be experienced by your clients and/or customers.
In the alternative, have you considered forming a super-team with other RESPs? I know of a super-team, who are members of our organization, which decided to form a corporation to synergize their efforts and resources — financial and manpower — that make their earning opportunities and capacities more efficient.
If two brains are better than one, then probably five brains are far superior to one, correct? So, consider this carefully. It does not hurt if you find like-minded professionals who are aligned with your goals and values. This creates leverage that benefits the entire group in the end.
Step 7. Prioritize Ethical Conduct and Professionalism
The final step is to remind yourself that money is not the end-all and be-all of our profession. In a previous article, I argued that INTEGRITY is the most important personal quality a licensed real estate broker needs to be successful in the real estate service sector.
Hence, it is the same thing when you want to start your own real estate brokerage. Keep your eye on our Code of Ethics. All RESPs should uphold the highest standards of ethical conduct, adhering to the Code of Ethics for Real Estate Service Practitioners to build trust and credibility. This is non-negotiable. Our long-term success is dependent on the reputation we build as a real estate service professional.
Client-Centric Approach: We should keep in mind the needs of our clients before our own. Of course, there are exceptions to the rule, like difficult or obnoxious clients. But we should always prioritize client satisfaction, transparency, and integrity in all interactions, so we can foster long-term relationships and secure referrals for future opportunities.
Conclusion
Embarking on the entrepreneurial journey to establish a real estate brokerage in the Philippines requires a strategic approach, an unwavering commitment to ethical conduct, and a deep understanding of the industry landscape. By following these essential steps and continuously adapting to market trends and regulatory changes, aspiring real estate brokers can lay a solid foundation for success, driving growth, and making a meaningful impact in the dynamic Philippine real estate market.
By adhering to the principles of integrity, professionalism, and client-centric service, real estate brokerages can navigate challenges, capitalize on opportunities, and build a reputation as trusted advisors and industry leaders.
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.
