California Real Estate Practice

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					   California Real Estate
   Practice
   Chapter 2

Prepare for Success
Learning Objectives
After reading this Chapter, you will be able to:
 identify the various costs and expenses in
  starting a real estate sales career.
 determine the start-up equipment needed to
  begin a real estate sales career.
 describe the personal attributes and factors that
  help real estate licensees become successful.
 list steps to improve your communication skills.
Prepare Your Finances
Many new salespeople leave the real estate business or
change their license status to “inactive” within the first year
because they are not prepared. In this section will cover the
following sections:
      What Do you Expect to Earn?
      Get your Finances in Order?
      Get Your License and Join the Board
      Get the Necessary Equipment.
      Risk Management
 What Do you Expect to Earn?
 Based on the median sales price of homes in California—
   $540,000—most new agents expect to earn several
   hundred thousand dollars in their first year. Although it is
   not impossible, it is highly unlikely.
 It takes a while to build your business and establish
   yourself, new salespeople do not earn as much as
   salespeople with six or more years of experience.
 Income usually increases as an agent gains experience.
   According to the 2005 NAR Member Profile, the 2004
                       income income is with over 25
   nationwide medianMedian for Realtors the middle years
                      income
   of experience is $92,600. in a series of incomes
                      ranked from lowest to highest.
Get Your Finances In Order
   You must have at least six months to a year of
    living expenses set aside.
        It can take six months or longer before your real
         estate career will be able to provide financial
         support for you and your family.
   Write a monthly household budget that
    accounts for your household expenses.
        Be as conservative as possible. It is vital to your
         success that you have savings or other resources
         to maintain your household expenses while your
         real estate business is growing.
         Get Your Finances In Order
                                (continued)
   You will need money to purchase the necessary
    equipment and supplies to start your new real estate
    career.
       In starting your new business it is important to be aware of
        the various expenses involved in starting and maintaining a
        real estate business.
            Calculate all the business costs and expenses you can expect
             to incur.
                 Equipment
                 Supplies
                 Marketing
                 Advertising
                 Etc.
   Identify costs and expenses you may incur and decide
    which are essential.
   Then estimate what it will cost each month for the first
    several months.
      Start up Costs and Ongoing
              Expenses**
Start-Up Costs                     Ongoing Expenses
                                    business, after
 Basic equipment (cell cost of doing Cell phone bill
           **The first
  phone, computer, PDA, fax, exam, will be to pay
           passing the state        Car maintenance
  GPS)
                                   license.
           for your salesperson  Internet and e-mail account
 Lockbox key
                                   Printing costs
ongoing expenses are
  Business cards                   Advertising
expenses that recur every
  Letterhead & envelopes
 month.                            Automobile insurance
 Preprinted forms
                                   Photos
                                Start-up costs are one-time costs.
 Business supplies
                                   Postage
    (maps, pens, paper, etc.)
                                   Association dues & MLS fees
   Open house supplies
                                   Coordinator fees
   Marketing materials
                                   E&O & liability insurance
   Presentation materials
                                   Continuing education
   Signs and sign riders
                                   License renewal
      Get Your License and Join the
                  Board
   The next cost will probably be to pay the fees to
    join the local Association of REALTORS®.
   Membership to your local association gains you
    access to the free WINForms® software and
    WINForms® is to the local board
    you can go a free software program office and
    that allows members toMembership in your local association
    purchase the standard printed forms and other
                            download,
                           includes membership in the California
    complete, and print transaction forms
    supplies you may need. of REALTORS® (C.A.R.)
    from their computers. Association
                           and the National Association of
   Membership also includes access to the Multiple
                           REALTORS® (NAR).
    Listing Service (MLS).
    Listings and the Lockbox
   In order to show properties listed in the MLS you will need a
    lockbox key.
   Only real estate licensees who are members of the local
    real estate boards have the key or combination to open the
    lockbox and get the property key. is a box that holds the key
                            The lockbox
                           to a listed property that is key” to open
    Electronic lockboxes use a special “electronichung on or
    them.                   near the front door of a listed property
       The electronic lockbox key looks like a small remote and can be
        updated by placing it in the special HotSync cradle.
       There is a charge for the key and depending on the board; it is paid
        monthly, quarterly, or annually.
       Each broker and salesperson is issued an individual “key” code,
        electronic lockboxes record who has opened them, the date and
        time opened, and the office and phone number.
       Listing agents have an audit trail so if anything is missing or
        damaged they will know who has entered the home.
Get the Necessary
Equipment       Technology is crucial
                if you are to remain
 Cell Phone           competitive in today’s
                       real estate profession.
 Personal Digital
  Assistant (PDA)
 Computer System
 Digital Cameras
 Global Positioning
  System (GPS)
Communication
                   Communication is the “lifeblood” of real
   E-mail – An e-mail feature will help you keep connected to
                   estate sales, and the cell phone is your
    your office andprimary point of contact. accommodate a
                    clients. Some phones can
    keyboard, if you plan to send lengthy e-mails.
   Internet Access – Access to the Internet is great for quick
    searches, accessing your company's website, or finding driving
    directions.
   Camera – A camera is a practical option on your cell phone.
    While picture quality may be lacking, the convenience is
    appealing. Quickly snap a photo and e-mail it to a client.
   GPS – a device that uses satellite technology to track your
    location and map out driving directions to a desired destination.
   PDA – a handheld computer or personal organizer device. You
    may choose to purchase a PDA phone that combines the best
    of both worlds.
Computer System
   Contact Management Software
      Contact management software is a database
       Generic Programs
     program that allows you to manage and track all
     
     Real Estate Productivity Software
     of your client information and activities, including
    names, phone numbers, addresses, websites, e-
     Hybrid Software Solutions
 Be mail addresses, last meeting dates, and more.
     Internet Savvy
      Email Address
      Websites

   Presentation Hardware
   Mobile Printer
           Risk Management:
                       Insurance

   Automobile Insurance
        As a real estate salesperson, part of your time will
         be spent driving clients around to show them
         properties.

   Errors and Omissions Insurance
        A policy that covers various claims for errors,
         mistakes, neglect, or carelessness in the normal
         business activities of a real estate brokerage.
Put Your Best Foot Forward

 Professional
  Appearance
   Dress for Success
   Your Vehicle
 Professional
  Attitude
           Perfect Your
        Communication Skills
♦ Listening Skills
♦ Ability to Work with a Variety of People
      Respect Other Cultures
      Respect Other Lifestyles
      Dealing with Difficult Clients

				
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