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The Real Estate Retirement Plan: How To Build A Business You Can Sell

You can retire happily and profitably from real estate—but you must start preparing now. The key is to build a valuable business that you can eventually sell. You also need a solid plan for how you will go about transitioning your book of business.

This blog post pulls key findings from an Inman Select Special Report: How Real Estate Agents Can Live Happily Ever After In Retirement. The report took a close look at how agents are valuing their businesses and creating succession plans.

Whether your retirement is still decades away or right on the horizon, start learning now how you can make a graceful, profitable exit from the industry.


Real Estate Retirement Options

There’s no one-size-fits-all retirement plan, so you’ll need to consider your options:

  • Sell your entire business. If you’re an individual agent, that would mean selling your database of clients, processes, workflows, templates, etc. If you’re a broker, you would sell your entire company. Inman reported that 11.83% of respondents plan to sell their business whole.
  • Keep your database active and sell referrals. This is the plan for 34.82% of agents, according to Inman.
  • Just quit, and don’t sell anything. Some agents plan to live off of savings, real estate investments, solo 401(k)s, Social Security, a spouse’s retirement plan, etc. But even if you have a nice and cushy IRA, it’d be a shame to waste what could be another huge chunk of money.

How To Build A Valuable Business...That You Can Sell!

Create systems and processes, and document them in your CRM.

Every aspect of your business—from your hiring process to your listing plan to your past client followup—should be clearly defined and documented.

A robust CRM like Realvolve—one that allows you to create custom workflows—is the best platform for documenting your systems and processes. Your Realvolve workflows will document (and automate) the who, what, when, and where of every task that needs to be completed to ensure your business runs smoothly. Even if your transaction coordinator or listing agent quits overnight, all of their tasks are saved in Realvolve as workflows, ready for anyone to take over.

And the same thing can happen when it's time for you to step down. You can hand over the controls to your successor and they can continue to run your business on those same proven processes.

Maintain records of your cash flow and profit history.

Prospective new owners of your business don’t care about how many transactions you close in a year. What they care about is the long-term profitability of your business.

For that reason, you need to make sure your tech stack includes an accounting tool like Zoho Books, Sage Accounting, or Quickbooks Online (all of which integrate with Realvolve, allowing you to easily sync transaction data).

Chuck Boles, president of The Chuck & Buddy College of Business Knowledge, advises real estate agents to perform an annual valuation—“a rolling five-year historical average of their business growth patterns and values in key areas of their practice.”

A professional business broker or accountant specializing in valuations can help you with these annual valuations. For more info, NerdWallet has a great article how to value your business.

Boles also suggests assigning a value to each of your clients. Inman provides this example: “For instance, an A+ client is someone who has bought a home with you twice and referred you twice, so is worth, say, $1000, while an A client is one who has done one transaction and one referral, worth $750.”

Build a database full of valuable client intelligence.

Throughout your career, you should maintain an evolving record of all of your contacts, listings, and transactions. If your database is full of years-long communication records, notes on clients’ personal lives, and milestone dates (60th birthday, 25th wedding anniversary, etc.), you have something of value that can be sold—something way better than a list of names purchased online.

Of course, clients don’t want to be sold. To do this retirement thing right, you need to slowly transition your clients into the care of your replacement. You might choose to partner with a junior agent for several years prior to your retirement, giving you time to mentor them on your processes and introduce them to your clients. (By the way, even this process could be automated and documented with a Realvolve workflow! You could call it the Road To Retirement Workflow. And when your successor is ready to retire, they could use it, too!)

Whomever you choose as your replacement, make sure they fit with your current business culture. If they are compatible with you and the way you do business, they will likely be a good fit for your clients and employees, too.

Technology's Important Role In Your Real Estate Retirement Plan

To sell your business, you need to be able to package it up and say, “This is everything you need. Here are my processes, nicely laid out in my CRM, with templates and automation and instructions on what to do. Here is a record of my profits for the last 20 years, and a valuation of my book of business. Here is my database of clients, and everything you ever wanted to know about these people and my interactions with them.”

It’s not just a matter of building a successful business (although that’s the most important part). You also need to invest in technology that will allow you to make your business salable.

Find the perfect tech stack for your business. It might be a blend of Google Sheets, an IDX website, and a robust CRM like Realvolve. Or it might be an all-in-one platform. Whatever you choose, make sure you start working on this sooner rather than later.

One day, when you’re retired and sitting on a beach on a Thursday afternoon, you’ll thank your younger self.


Start your technology search by learning more about Realvolve!

Click the button below to schedule a demo with one of our team members.



This article was originally published on October 3, 2019. It has been updated for comprehensiveness and accuracy.

Sammy Harper

Sammy Harper is the content marketing coordinator for Realvolve. In addition to a decade of digital marketing experience, she has spent the last six years immersed in the world of real estate and CRM. Fascinated by the real estate industry and inspired by agents’ stories, she is dedicated to providing valuable content to help real estate agents thrive.


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