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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Real Estate Brokerage SWOT Analysis

 

Strengths

 

While their revenues are subject to substantial fluctuation based on the housing market, real estate brokerages are generally able to remain profitable in most economic climates. This is especially true in wealthier markets where economic fluctuations cause less of a shift in the overall values of real estate. The barriers to entry for these types of businesses is moderate as a person must be a licensed real estate agent for two years prior to obtaining the brokerage license. The startup costs for a new real estate brokerage are approximately $50,000 to $100,000. If an individual has a strong local or regional brand name then these costs may be less as not as much capital needs to be allocated towards the initial marketing budget.

 

Weaknesses

 

Given the moderately low barriers to entry for these businesses, there are a number of competitors in any given real estate market. Most importantly, independent real estate brokerages often face stiff competition from their franchised counterparts. The operating costs, especially related to marketing, can be extremely high depending on the market. However, as many brokers and agents now list their properties on the internet - a proper advertising campaign can reduce overall marketing costs.

 

Opportunities

 

One of the ways that a brokerage can rapidly expand operations is by acting in a property management capacity. This is an important revenue stream for a real estate brokerage as it provides ongoing and highly predictable streams of revenue that can balance out commission based income. Additionally, many real estate brokerages aggressively recruit agents in order to hold their license at the firm. This is the fastest way to expand revenues. It is important to be able to recruit real estate agents that have extensive contacts within their local market.

 

Threats

 

Online listings have created a much more free-market atmosphere for real estate sales. Many property owners have turned to selling their homes on their own without the assistance of a real estate agent. This trend is expected to continue for a significant period of time. Additionally, in today's economy, many people have acquired their real estate sales licensure so that they can act as an agent on a part time basis.


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