While rising interest rates have put a slight damper on the housing market, now is still a very good time to sell a home. In many markets, homes are still going under contract at the asking price (or above) within 24 hours of listing. With the potential for the Federal Reserve to raise rates even higher, many buyers are also still seeking to get in on the action before it is too late.
So, is now a good time to buy a real estate franchise?
5 Considerations for Buying a Real Estate Franchise in 2022
As with buying any type of franchise, there are some important considerations for prospective franchisees who are considering real estate franchises in 2022. For example:
1. Are You Prepared for a Long-Term Commitment?
Buying a franchise is a long-term investment. If you are interested in getting into real estate because you think it presents a good financial opportunity, you need to make sure you are ready to stay in for the long haul. Once you sign a franchise agreement, there are only limited options for getting out, and exiting the system prematurely could mean losing more than your initial investment.
2. Are You Prepared to Be Responsible for Your Own Success?
As a franchisee, you are responsible for your own success. While this is somewhat true when you work for someone else’s brokerage as an agent, it is entirely true when you own your own franchise. While you will have access to the franchisor’s branding and support, it will fall on you to make sure you generate the business you need to be successful.
3. Are You Confident in the Local Real Estate Market Long-Term?
Is the local real estate market poised to grow (or at least remain stable) over the next few years? Currently, we are living in unprecedented times. When evaluating your chances of success as a franchisee, it is important to consider not only the current market conditions but possible future market conditions as well.
4. Is Your Local Market Already Oversaturated with Brokerages?
When considering franchise opportunities, it is also important to consider your competition. If you already have clients you can bring with you, that’s a good start. But, presumably, you will want your business to grow. Before buying a franchise, it is important to assess whether there is room in the market for another brokerage or whether the market may already be oversaturated as it is.
5. Are You Comfortable with the Terms of the Franchise Agreement?
Finally, once you decide to pursue a particular real estate franchise opportunity, you need to make sure you are comfortable with the terms of the franchise agreement. Franchise agreements in the real estate industry are heavily one-sided, and prospective franchisees will often need to negotiate to secure important rights. You can hire a lawyer to review and negotiate the franchise agreement on your behalf, and that way you can feel confident that you are making an informed buying decision.
Discuss Your Real Estate Franchise Opportunity with Attorney Jeffrey M. Goldstein
Are you thinking about buying a real estate franchise? If so, we encourage you to contact us for a free consultation. Please call 202-293-3947 or contact us online to schedule an appointment today.
