Virtual Real Estate Office-Can someone explain how this works? (agents, duplexes, closing)

[Barbara Scholz]

I just heard about a Broker working his business using a Virtual Office, he has agents under him and the all just work out of their homes. If the need a conference room, they rent it. Records are stored at a storage site. Is this legal?

[Mike from back east]

I can't imagine any reason it would be illegal. It makes good economic and business sense to do this. No more drive to the office...current files are always a few steps away...

Office rent, even in strip malls, is expensive, usually $2k-$4k a month, which comes right out of your profits. Conservatively, office space at $18 per sq ft per year for a 2000 sq ft office is $36k per year. What could you do with that $36k+ per year? That's more than most mortage payments. Why not pay yourself instead?

Strip mall landlords often require you be open many hours per week and usually six days. This is not amenable to many business types. It may be okay for retail operations, but is not as true for services. IMO the old model of storefront realty offices with tons-o'pix in the window of their listings are becoming passe....a Norman Rockwell scene....

The average dining room table with 6 or 8 chairs should suffice for most closings; most larger homes with extra bedrooms/offices can do the job. There is no difference if a 10x10 space is a cubicle or a bedroom.

With cell phones, PDA's, mobile offices, GPS, notebook PCs, and wireless nets all over, a big central PBX seems overkill today.

Ideally, the home/office would be in a new house was designed with lots of can lights in each room, all rooms wired for phone/cable/web, powder rooms, parking. Only issues I see are HOA covenants (if any); any zoning issues that may apply; correct use of the IRS 'home office' recordkeeping requirements; and ADA access (handled with a hotel room, your attorney's office, properly building your home or going to THEIR home or hotel). With my 3-car garage I have a lot of room for filing cabinets, have several out there now....and I'm not working in any capacity.

Seems an excellent solution for many folks these days.

[Barbara Scholz]

thanks, that was very helpful

[olecapt]

Originally Posted by Barbara Scholz

thanks, that was very helpful

Don't take it to the bank though. Such an arrangement would be illegal in Nevada and a number of other states. The question is whether you can practice realty without a physical address that is easily accessible to the public. Nevada requires that you have a place that is complete with a sign visible from a public street or sidewalk. That just about rules out a private home where such a sign would violate zoning laws.

The strong argument against such arrangements is what does the consumer do when things go wrong? He can't even find the broker who did him bad.

I would think it would work fine in one of these executve suites as long as you rented enough permanent space to store the files.

[austin-steve]

Originally Posted by Barbara Scholz

I just heard about a Broker working his business using a Virtual Office, he has agents under him and the all just work out of their homes. If the need a conference room, they rent it. Records are stored at a storage site. Is this legal?

I've worked from either home office or commercial space off and on for almost 20 years. There are pros and cons to each. I ran a large property management company (250 residential units - houses and duplexes) for years in the 1990s from a Mailboxes Etc. the tailgate of my truck, and a cell phone. I kept the files at my home office.

But at this point in my career, doing mostly sales, I enjoy having a nice office to bring people into.

But here's the thing, our clients get the same service either way. My wife and I were in a home office until about a year ago, coming to the main office only occasionally. Most clients have never even been to my office, especially sellers. Buyers we bring in more often but we could just as easily meet at Starbucks.

So I'm not sure it matters at all, except in the cases where legal requirements must be met. An agent either delivers results or not, and whether they work from a home office or big office doesn't determine that.

Steve

[palmcoasting]

An agent either delivers results or not, and whether they work from a home office or big office doesn't determine that.

Exactly. Florida requires an office with a door in order to conduct business. If the city or local ordinances allow that to be in your home, great. My city doesn't so I have an office co-op that I belong to. I meet buyers there to conduct business. Other than that, everything is on my computer and in files at my home. Works great for me, keeps overhead very low.

[olecapt]

Yeah the Californians often have problems obeying laws.

We too run a fancy doc storage system and keep no files. That is except the transient ones we use while the deal is active. So we have no file cabinets either.

That however does not make a virtual RE Office doable in NV. You still have to have a sign visible from a public right of way. And that is against the zoning codes in most residential districts.

The issue if you tried to get a waiver is always traffic. Even if there is none it is raised by neighbors and generally carrys the issue.

Real Californians of course would never let a silly thing like laws get in their way.

[CAugust]

We work out of virtual offices. My brokers home address is the "office" - although as agents we work out of our homes. Closing is done at the county clerks office. Between computers, cell phones and lap tops - I like the fact that I do not need to go into an office. We all have our own computers obviously so we all have access to everything that those who work in an office do without the overhead, which leaves more money for advertising etc...

[Thatguywho]

Originally Posted by Barbara Scholz

I just heard about a Broker working his business using a Virtual Office, he has agents under him and the all just work out of their homes. If the need a conference room, they rent it. Records are stored at a storage site. Is this legal?

in florida you have to have a brick/mortar office address for your brokerage (instead of a mailbox etc. thing)

A virtual is basically a very small or non existent office in a big office building. A place to hang your sign and simply follow the law for the legal address of the building.

They usually offer all sorts of services (phone, fax, copy, answering service, rental of conference rooms, etc)...kind like a discount full service office lease.

The only other cheap option would be for the broker to use his/her home as the main office, which is not such a great thing to do, but legal.

In either case, this allows people to just work out of their homes and cars and fulfills the requirement of a brick and mortar office. Perfectly legal.

couple hundred a month, or a home office, or 1200 a month plus utilities for a regular office...no brainer.

[DMenscha]

Originally Posted by olecapt

Yeah the Californians often have problems obeying laws. Real Californians of course would never let a silly thing like laws get in their way.

LOL Virtual offices are legal in CA, but as a broker, it would terrify me to try and defend my "supervision" responsibilities in court. How would I know what the heck my agents were doing?

I've run up against a couple of these agents in the past and one of them put the following on his flyer "Not a short sale". In fact, the property was a short sale and eventually we sold it when it got foreclosed on.

I called the "broker" up and asked about it and she had no clue about any of the details of the property.