Guide to starting a real estate agency in Hong Kong
You can kick start your journey as a real estate agent by helping family, friends, and other clients in addition to representing yourself in your investment deals. There is a lot of legal stuff you must learn to become a real estate agent and be licensed.
However, there are various advantages to having a real estate license. You will have the access to real estate investment deals, networking opportunities, earning commissions, taking control of your deals, and educational opportunities that help one understand a different aspect of the business.
These are the different steps to follow:
1. First, become a real estate agent. There are different steps followed to be an agent:
- Research your state’s requirements
- Take a pre-licensing course.
- Take the licensing exam.
- Consider becoming a realtor.
- Apply to the Estate Agents Authority of Hong Kong together with the required documents and the necessary fee.
2. Ensure your company is incorporated as per the requirements outlined in the Companies Law and must have at least one company director who is himself a licensed estate agent. The steps are simple. Someone can enlist the assistance of company formation agents who help open a new company and afterward make all the necessary document submissions to obtain the license. He/she must ensure the following steps are completed:
- Obtaining an original land approved company name;
- Drawing up the company documents
- Registration with the Companies registry
Estate Agents’ License (Company)
Anyone wishing to be granted an estate agent’s license (Company), ensure the following in addition to being a company:
- Have at least one director with a valid license
- Have a licensed agent to undertake the Company’s business
Being a real estate agent can be expensive
The payment structure and expenses with your broker, real estate agents, can end up paying a lot of money in annual fees, and this might eat into your profits as an investor. There are fees like lockbox fees, realtor designation fees, broker monthly desk fees/office fees, and commission to a broker.
How the Real Estate Industry works
The industry does not consist only of salespeople and brokers, as many people think. Many people acquire a livelihood through real estate. They earn a living in property management, appraisals, construction, counseling, and financing besides sales. Apart from that, accountants, architects, lawyers, and surveyors depend on the real estate industry to make a living as well.
Real Estate Market
This is the buying and selling of land and buildings. It is all properties available for sale in a given area. Declining home sales have improved the real estate market. It isn’t easy to convert to cash.
The real estate market’s size and scale make it an attractive and lucrative sector for many investors.
The real estate market works according to the laws of supply and demand. It is just like any other market whereby if supply exceeds demand, prices go down and vice versa. However, several factors like locality, durability, and seasonality set it apart.
The many attributes of real estate make prices and market activity specific to one is. It is not portable. It cannot be transported to where prices are high, and it cannot be stored. The determinants of the value of that home are limited to the area within those few miles. All of this serves to make real estate a local good in which prices vary widely even within the same region.
Real estate persists and appreciates it.
The real estate activity varies by season. In the winter, when the climate is harsh in many places, activity reduces. But in supper, it picks up. This makes it difficult to compare real estate figures month-to-month but is adjusted to provide an estimate of what it would look like all else held constant.
Economic principles drive the real estate market, but not the whole real market. Examples of drivers are family and business changes that may cause people to relocate.
What are the key factors driving the real estate market?
This is the composition of a population, such as gender, age, race, income migration patterns, and population growth. A major shift in the demographics of a nation can significantly impact real estate trends for several decades.
- Interest Rates
Interest rates impact the price and demand of real estate-lower rates, bringing in more buyers, reflecting the lower costs of getting a mortgage, and expanding the demand for real estate, which can then drive up prices.
For those intending to buy homes using a mortgage, it is advisable to research interest rates first.
- The Economy
The overall health of the economy is another factor that affects the value of the real estate. The cyclicality of the economy can have varying effects on different types of real estate.
- Government Policies and Subsidies
Legislation can have a sizable impact on property demand and prices. The government can boost demand for real estate through tax credits, deductions, and subsidies.
Anyone interested in investing in real estate should have a license. Hong Kong takes the issues of licensing real estate agents and agencies seriously. Therefore, venturing into the real estate business without a license is an offense that attracts a penalty of up to 2 years of imprisonment or a fine of $500,000. We, at Paul Hype Page, will help you obtain all the relevant permits for your real estate agency business