How a Real Estate Company Works

Real estate refers to land and the buildings on it, as well as any natural resources

within a property’s boundaries. The value of real estate tends to rise over time,

which makes it an attractive investment. Investors can make a profit by purchasing

and selling real estate or renting it out for a fee. Real estate agents and brokers help

buyers, sellers and renters navigate the process. Other professionals that work in

the real estate industry include developers, appraisers and mortgage brokers.

The real estate process formally begins when a homeowner decides to sell their

home. They then seek out a real estate agent, often through recommendation or

online research. The agent will provide the homeowner with market analysis and

research to help them determine an appropriate price for the property. Once the

homeowner agrees to a price, they will sign an exclusive right to sell contract. This

binds the seller to the agent and guarantees compensation for the agent should they

successfully sell their property within a set period of time. Also read

Once the sale has closed, the real estate agent will submit a commission check to

their broker. The commission is calculated as a percentage of the sales price of the

property. Agents also earn commissions by listing properties on a multiple listing

service (MLS). The MLS is an online database of real estate listings that are shared

by multiple brokerages. The MLS allows potential buyers to search for properties by

location, price and other criteria.


In addition to listing properties on the MLS, real estate companies can also advertise

their services through traditional means, such as newspaper ads and yard signs.

They can also host open houses to attract prospective clients.

As with any business, the key to success in real estate is being able to effectively

manage your clients’ expectations and needs. A strong reputation in the industry

can lead to repeat business and referrals from satisfied customers. To build a solid

reputation, focus on consistently meeting client expectations and providing them

with excellent service.


Once you’ve established a name for your real estate company, register it with the

local government in the state where your business is located. You’ll need to supply

the company name, address, owner information and other relevant details. It’s

usually best to register as an LLC, which provides liability protection for you and

your assets. However, there are other business entity options such as an S

corporation or C corporation that can also offer liability protection and tax