Expetitle Blog

Joint Venture Advantages and Disadvantages

Strategic Joint Venture

A strategic joint venture (JV) is comprised of two or more partners combining their expertise and resources to achieve a particular goal through the creation of a new entity. The standalone business may have substantial potential for growth and innovative products and services. Nevertheless, a JV could mean wider reach, enhanced technical skills, added resources, and/or access to reliable distribution channels and markets.

Within the real estate industry, companies, brokers, and agents can own a joint venture. Entering into a JV is a major decision for an enterprise. It is important to know the business model aligns with your joint venture strategy, goals, and objectives before going into a joint venture. Below, we list some pros and cons of owning and operating a joint venture. Additionally, we briefly discuss how joint ventures work in real estate.

How Joint Venture Works in Real Estate

A common real estate joint venture strategy is creating enterprises from ancillary services, such as title and closing. Through a title company, joint venture partners are able to share costs and revenue from any home closings processed by the company. A joint venture title agency employs solutions to ensure its clients with a consistently secure, transparent, efficient, and stress-free experience through its title agents. Title agents will work with and guide the parties -  the real estate agent, buyer, seller, and lender - to guarantee a successful closing. Providing this peace of mind assures clients and agents that their transaction is being handled in a professional manner by knowledgeable and skilled JV partners.