Buying a real estate brokerage, appraisal or title business in South Florida
South Florida has 39 established real estate brokerages, appraisal firms and title agencies by our count: companies in business at least 15 years that still file with the state every year and aren't part of a larger group. Of those, 77% have been in business 20 years or more. Most will never be listed for sale, and many of their owners have never been asked.
What it takes to own one
Real estate brokerages, appraisal firms and title agencies in South Florida come in every size. Here's what owning one could look like at three levels, from a solid company to one of the leaders, with a small business loan covering most of the price.
- Earns about
- $34,000 a year
- Price about
- $93,000
- Your cash
- $13,000
- Could pay you
- up to $17,000 a year
- Earns about
- $56,000 a year
- Price about
- $155,000
- Your cash
- $22,000
- Could pay you
- up to $28,000 a year
- Earns about
- $92,000 a year
- Price about
- $253,000
- Your cash
- $35,000
- Could pay you
- up to $46,000 a year
Earnings are owner earnings: profit plus what the owner pays themselves, before loan payments and taxes. They and the prices are our estimates from public records, not the owners' figures, and we value companies like these at about 2.8 times a year's owner earnings. Your cash covers the down payment and closing costs, and what the business could pay you is what's left after the loan payments and the cushion lenders require. The more cash you bring, the further up you can go.
Age, size and location
Revenue is our estimate from public records, grouped into wide ranges.
| In business | Companies |
|---|---|
| Under 20 years | 9 |
| 20 to 29 years | 18 |
| 30 to 39 years | 8 |
| 40 years or more | 4 |
| Estimated yearly revenue | Companies |
|---|---|
| Under $1M | 16 |
| County | Companies |
|---|---|
| Miami-Dade | 13 |
| Monroe | 10 |
| Palm Beach | 10 |
| Broward | 6 |
| Town | Companies |
|---|---|
| Miami | 9 |
What the best of them have in common
- Brokerage: productive agents who have stayed for years, rather than a long list of inactive licenses, and a name and lead sources that belong to the firm.
- Appraisal: several licensed appraisers, a mix of lender and private clients, and a clean review history.
- Title: referrals from many lenders, builders, real estate offices and attorneys; experienced closers; and clean escrow records and underwriter audits.
- Revenue that held up reasonably well in a slow year.
- Rental management accounts under signed agreements, which add steadier monthly fees.
- Good systems for documents, escrow and record keeping.
- An owner who isn't the biggest producer.
- Licenses, registrations and errors and omissions coverage (professional liability insurance) that are current, with no history of discipline.
What to check before you buy
- The housing cycle. Look at revenue in the slowest recent year, not just the best. Title and appraisal work tied to refinancing can fall fast when rates rise.
- People. Agents and appraisers can usually leave whenever they like. Find out who produces most of the revenue and what would keep them.
- Escrow and trust accounts. Read the monthly reconciliations, underwriter audit reports and any complaints to the commission or the department.
- Claims and fraud. Errors and omissions insurance history, title claims, and controls against wire fraud at closing.
- Referral arrangements. Federal law (RESPA, the Real Estate Settlement Procedures Act) restricts paying for referrals of settlement services. Have an attorney review any marketing or joint venture agreements.
- Franchise. If the brokerage operates under a franchise, check whether the agreement can move to you and on what terms.
- Florida insurance. Ask how often trouble getting property insurance has delayed or killed closings.
Questions to ask the owner
- Who are your top agents, appraisers or closers, and how long have they been with you?
- How did the business do the last time home sales slowed down?
- Where do most of your deals or orders come from?
- Has an escrow account ever been short or failed an audit?
- Have you had any errors and omissions claims, title claims or wire fraud attempts?
- If you're part of a franchise, can the agreement move to a new owner?
- After the sale, who would serve as broker of record or agent in charge?
To learn what these companies do, which licenses they need and how ownership works, read our full guide to buying a real estate brokerage, appraisal or title business in Florida.
Owning a company in South Florida
The local economy
South Florida covers Miami-Dade, Broward, Palm Beach and Monroe counties: Miami, Hialeah, Doral, Fort Lauderdale, Hollywood, Pompano Beach, West Palm Beach, Boca Raton, Jupiter, and the Florida Keys down to Key West. It's the state's largest metro area and its most international. PortMiami, Port Everglades and Miami International Airport tie the region to Latin America and the Caribbean, which supports a deep base of wholesalers, freight forwarders and logistics firms, many of them near the airport. Tourism and cruises, finance and wealth management, health care, real estate and construction carry much of the rest. Palm Beach County adds wealthy seasonal residents and, out west near Lake Okeechobee, sugarcane and vegetable farms. In the Keys, nearly everything turns on visitors, fishing and boating.
Companies that serve homes, condo buildings and other businesses do well here: the building trades, property services, insurance agencies, medical and dental practices, and professional firms.
What's different about owning a company here
Costs run high: commercial rent, wages and, above all, property and windstorm insurance. Price the insurance before you make an offer, not after. Miami-Dade and Broward make up the Florida Building Code's High-Velocity Hurricane Zone, with stricter rules for roofs, windows and structures. That raises building costs, and it also gives steady work to the contractors who know those rules well.
Much of the workforce and many customers speak Spanish as well as English, and a company that works well in both languages has an edge. The winter season matters more in Palm Beach County and the Keys than in Miami. In the Keys, the cost of housing makes hiring and keeping staff one of the hardest parts of running a company. Ask any seller there how they find workers and where those workers live.