Residential Real Estate Brokers Go on Buying Spree

June 15, 2011 - PRLog -- Gus Grizzard has used four acquisitions in four years to increase the size of his company to 120 agents.

Bill Soffel also completed four deals in recent years to more than double his company to 50 agents.

Both brokers took advantage of a difficult real estate market to build their market share and to bolster their bottom lines through acquisitions.

In the June issue of industry newsletter, "Real Estate Broker's Insider," Grizzard and Soffel share their keys to success. In particular, they caution buyers to structure payments to protect themselves.

The generosity of acquisition prices runs in inverse proportion to the health of the housing market. During the real estate boom, companies traded hands at big premiums, with few strings attached.

Now, though, down payments are small and payouts are staggered over two to five years. Soffel suggests tying the sale price to revenue generated by the agents who join the new company.

"Let's say the company is worth $100,000," Soffel says. "We're not going to just write a check for $100,000. We don't have any protection if the agents don't produce or if they decide they don't want to join us."

More advice from Grizzard and Soffel appears in the June issue of "Real Estate Broker's Insider."

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