Opened a two-person land brokerage last year. Small numbers that work.

Posting this because most of what I read about opening a shop assumes an office and a roster. Mine has neither.

Background: I sell rural land, mostly 10 to 160 acre parcels, and I'd been at a residential brokerage for six years where nobody understood what I did. Got my broker license, opened a firm with me and one other agent who'd been doing the same thing.

Year one: 9 closings between us. Average commission per side on land is higher than I expected people to believe, $12,600, because the parcels run $180k to $400k and the fee percentage on land is usually higher than residential in my market. Gross commission $113k. I kept my own six sides at 100%, she's on 75/25 for hers, so company dollar off her production was about $9,400.

Costs: no office, we work from home and meet buyers at the property. MLS and dues $3,100, E&O $2,800, accountant $1,900, mapping and GIS subscriptions $1,400, insurance and misc $1,600. About $10,800 for the year. So the firm's own economics are barely positive, and the real gain is that I stopped paying $18k a year in splits on my own deals.

The part that nearly broke it was file review. Land closings have survey issues, access questions, and easement language that residential coordinators don't touch, and I'm the one reviewing all of it now.

What I'd keep: one agent, no lease, and a niche narrow enough that I can actually supervise the work.

Answer

1tonyv88SO4CPRO6

The file review line is the one that will decide whether this scales past two, and I'd plan for it now while you only have nine files.

On the management side I learned this the expensive way. Supervision time doesn't grow with your revenue, it grows with your transaction count, and land files eat more minutes each than the residential ones. Nine files a year is a weekend. Thirty files a year across four agents is a part time job you didn't hire for, and it lands on you personally because the broker of record is the one the commission talks to.

What I'd do is write down your own review checklist now, the survey and access and easement items you check every time, and make the second agent complete it before the file reaches you. Then you're checking a checklist rather than rebuilding the analysis. When you add a third person you hand them the same document on day one.

Also worth confirming with your state commission what your record retention window is and what form the files have to be in, because it varies by state and some require the broker to hold everything for years after closing. Cheaper to set up the folder structure at nine files than at ninety.

2 replies

2renee_dubois Get yours

What happens if she leaves? $9,400 of company dollar isn't much to lose, but she's also half your transaction volume and presumably the reason the firm exists rather than you being a sole practitioner. Is there anything holding her, or is it just that you two get along?