What are the requirements for setting up a real estate agency?

Investing in a new business is one of the most important decisions you can make. In vain, according to the Global Entrepreneurship Monitor 2020-2021, Spain tops the ranking of fear of failure as the main obstacle to entrepreneurship, as it is felt by 64% of the population compared to an average of 47%. And the health crisis has not helped since, according to the same report, total entrepreneurial activity (TEA) fell to levels after the 2008 crisis, specifically 5.2%.

This applies to any type of business, including real estate agencies. Having an economic plan or expert advice becomes apparent to achieve good goals. In addition, it is essential to know the legal requirements required to set up a real estate agency, as well as to ensure that the company meets market expectations in order to survive high competition.

Legal and tax requirements

The fundamental requirements for setting up a real estate agency include several points. The first is, if this is done through the real estate franchise model, to create a commercial type company. For this there is a trade register, where among other things you will have to choose a name, register a bank account with a minimum required capital of 3000 euros and after passing a notary public to register a public deed in the trade register. .

There is another series of steps that will lead us to the treasury, register the company in the Economic Activity Tax (IAE) and get the final CIF. Without forgetting social security, where the company must also be registered and where the administrator must be listed as a self-employed corporate self-employed mode.

It is also important to choose the place where the activity will take place, apply for an opening license other than professional civil liability insurance, employer liability insurance, and find out if warranty insurance is mandatory. Autonomous society.

Finally, it should be noted that real estate brokerage is one of the activities affected by the Anti-Money Laundering Law, so they should have a representative in the possible official bodies to prepare an information guide and prepare them in this regard. Staff.

Economic and financial viability plan

One of the vital aspects for a prospective investor is to prepare an economic viability plan that describes in as much detail as possible the required initial investment. This includes a franchise license plus office conditioning, which can be around € 40,000 plus working capital needed to cover the costs of the first months of operation, which is estimated at € 60,000 to € 80,000. .

As for the cost of the services offered, we must keep in mind that it is aimed not only at the end user, but also at the sales team itself, who will need training plans, marketing support, legal services and, of course, the necessary tools to manage your work. For all this, it is advisable to implement a specific action plan, to start and start a business with specific activities, to periodically review the implementation of these activities, what results will be obtained. Or if some adjustments are needed.

Important Commercial Aspects of Creating a Real Estate Agency

It is recommended to conduct a market analysis – to evaluate the possible opportunities of the market, its characteristics, average price, as well as the services and communications in the region – and to compete in order to identify more effective strategies. And offer a really interesting value proposition to future customers.

In addition, one of the characteristics of the real estate sector is that there are various business models, from a self-employed real estate agent, that can be associated with a high degree of independence and management in the franchise, as well as interesting. A real estate company remuneration system, through a sole proprietorship agency where the manager in turn performs other functions (hiring, selling, managing services) with a small team of commercial agents.

An example of this is REMAX, a real estate company that is committed to a common business model where agents are autonomous. In doing so, they incur their own personal expenses in exchange for one of the highest paid remuneration in the market, thus becoming a relevant actor in business performance and development. In addition, at REMAX they have a training school and an important marketing department that supports them in everything they need.