References
NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.
Appraising a Real Estate Office
4 Simple Steps to Valuing Your Small Business (Business.com, Feb. 21, 2023)
Step 1: Forget about capital assets when valuing your business.
Step 2: Work out profitability by being aware of gross income and all outgoing payments.
Step 3: Calculate the Value
Step 4: Factor in Your Market Valuation
How to Calculate Your Business’s Value: Here’s What Investors are Looking For (Fast Company, Apr. 15, 2022)
“The primary drivers of a business’s value are EBITDA (earnings before interest, taxes, depreciation, and amortization) and multiples of EBITDA. It’s like net profit, but not exactly. Broken down simply, a truckload of apples you bought for $100,000 and sold for $120,000 would have an approximate EBITDA of $20,000. Investors looking to buy businesses assign them a value in multiples—x times EBITDA. The most common multiple they want is three to five, or profits around 20%. A company in business for 10 years and holding a 20% margin presents investors with a safe investment to value at five times EBITDA, the higher end of average success.”
Choosing a Business Appraiser (BizBuySell)
“Business appraisers have widely different backgrounds and different capabilities resulting from their unique experience and specialized educational background. Most business appraisers have a professional designation after their name that indicates the designations they have earned. The ones you are most likely to see that require serious study and actual appraisal experience are issued from reputable and recognized trade associations.”
Selling Your Book of Business
4 Steps to Buy or Sell a Retiring Agent’s Real Estate Business (HomeLight, Aug. 3, 2022)
“I would say, generally, just as a rule of thumb, the more engaged and helpful and supportive the retiring agent is in helping you and bringing more value to that client list and adding people to it, keep paying them for that. I mean, my dream scenario is that they’re helping me do more. I would much rather pay 25% forever and have 10 new clients a year that I wasn’t gonna get than get 100% of a database that is limited. I think the more supportive and engaged they are, the more the money could be in the longer term.”
Simple Steps to Sell Your Business, No Matter the Size (Inc., Jan. 13, 2022)
“The pitch deck should include your honest and candid overview of the company, history, team, data, financials (revenue, cost of goods sold, gross profit, etc.), opportunities for growth upon acquisition, what assets are for sale, and so on. Consider where they can reduce operating expenses based on redundancies and where there are new revenue streams into which they can tap. This is your opportunity to story-tell and explain the data you're showing. The final slide should list what you need from them if they're ready to make an offer, as well as the contact info for where to send that. Also, think about your positioning for each company and slightly shifting it for each to highlight their priorities”
What is a Book of Business? Definition & Examples of a Book of Business (The Balance, Sep. 17, 2020)
“Your book of business should include all customers or clients you have worked with in the past. As you acquire a new client, add them and their information to your book of business. Your book of business is ideally ever-changing and evolving, with new information added about your clients as your relationship progresses.”
Selling Your Website
How to Sell a Website in 2023 and Get the Price You Deserve (Kinsta, Jun. 15, 2023)
“You need to invest the time to take your website to its peak. You also have to lay the foundation for new ownership before reaching out to buyers. If you fail to do this, you will struggle even to find a willing buyer in the first place. The more time, money, and effort you put in up-front, the easier the sale will be. A well-managed online business with automated content creation processes and fulfillment is much easier to sell than an improvised mess.”
How to Sell a Website for Maximum Profit in 2023 (Hostinger Tutorials, Jun. 8, 2023)
“When it comes to increasing site value, relying on a single traffic source is not ideal. For example, focusing solely on PPC campaigns. While it’s faster to gain traffic using paid advertising, solely depending on it signals to buyers that they might need to spend a lot on marketing. This is because the more customers you attract from paid advertising, the more money you’ll spend.”
How to Sell a Website – 7 Steps to Sell Quickly (Cloudways, May 8, 2023)
- “Understand your audience
- Know what your website’s worth
- Create a lead funnel
- Research marketplaces for buying and selling websites
- Optimize your profits before making a listing
- Learn to approach interested parties the right way
- Get the right statistics to present to buyers”
Succession Planning
Succession Planning for Multifamily Property Owners (J.P. Morgan, Jan. 9, 2023)
“Is your real estate business properly organized to handle the transition of a new leader? Your processes, vendor relationships and other key information should be well-documented, rather than reliant on one person’s institutional knowledge that may be lost in a transition or death. Training your successor is critical. Make sure you outline regular activities and detail key performance indicators, such as rent prices, occupant turnover, renter credit quality and credit facilities, as well as reporting. Introduce and integrate successors to the team. As you seek buy-in from current employees, it’s important to keep communication lines open and maintain a culture of success and reward.”
Succession Planning Basics: How It Works, Why It's Important (Investopedia, Nov. 28, 2022)
When done correctly, succession planning should be in mind long before a leader leaves a company. Successful succession planning begins with candidate recruitment – hiring the right candidate and providing them with the environment and resources could lead to a smooth transition if and when a future position needs to be filled.
5 Questions You Should be Asking About Succession Planning for Your Family Office (National Law Review, Jun. 30, 2022)
- Why should I create a succession plan?
- When should I start?
- What is included in a succession planning process?
- Where should I begin?
- How do I find the right successor?
How to Win the Succession Game (Chicago Agent Magazine, May 2, 2022)
“There are a number of resources through Realtor associations and brokerages on how to develop a succession plan, but there is no one-size-fits-all solution, and specialists in the field are few and far between. Nick Krautter, author of “The Golden Handoff: How to Buy and Sell a Real Estate Agent’s Business” and CEO of Portland, Oregon-based City & State Real Estate, bought his first book of business from an outgoing agent in 2010 and over the next few years, added several more to his roster. “When I started doing this, I assumed everyone was doing it,” he said, noting that he was surprised to learn how little guidance there was available for succession planning.”
Succession Planning for Real Estate Brokerages (National Association of REALTORS®)
“Succession planning is an important issue for all real estate brokerage firms to consider. Having an emergency plan will help protect the firm’s clients and assets if the managing broker becomes unexpectedly incapacitated. A planned succession will allow the firm to seamlessly transition existing business to a new business broker, but the process for transferring the listings will vary by state.”
Web Resources
Close or Sell Your Business (U.S. Small Business Administration)
SBA provides information on planning your exit, steps to closing a business, selling your business, transferring ownership, and more.
The Institute of Business Appraisers
In valuing your business, consider working with an evaluation professional. The Institute of Business Appraisers offers a certified business appraiser (CBA) designation for those meeting the group’s education and performance criteria.
eBooks & Other Resources
eBooks.realtor.org
The following eBooks and digital audiobooks are available to NAR members:
Business Valuation and Taxes (eBook)
Business Valuation for Dummies® (eBook)
Buying and Selling a Business: A Step-by-Step Guide (eBook)
Career Planning and Succession Management (eBook)
Effective Succession Planning (eBook)
Exiting Your Business, Protecting Your Wealth (eBook)
Inside CEO Succession: The Essential Guide to Leadership Transition (eBook)
Journal of Property Investment & Finance, Volume 34, Issue 6 (eBook)
Selling Your Business for Dummies® (eBook)
Selling With Certainty (eBook)
Succession Exit Transition (eBook)
The Market Approach to Valuing Businesses (eBook)
Valuing a Business (eBook)
Have an idea for a real estate topic? Send us your suggestions.
The inclusion of links on this page does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this page complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.