One of the most important elements of the real estate process is also, for many people, among the most misunderstood: escrow.
At its core, escrow is simply a legal arrangement in which a third party Read more...
One of the most important elements of the real estate process is also, for many people, among the most misunderstood: escrow.
At its core, escrow is simply a legal arrangement in which a third party (typically referred to as an escrow company) temporarily holds a large sum of money or a piece of property until a particular condition has been met.
In other words, if you're about to buy a brand-new home, an escrow company might hold onto some funds until the transaction has been finalized. At that point, the money would move into the hands of the seller and the title into the hands of the buyer and everything would close exactly as it should.
Why Escrow Matters and When Is It Used?
Depending on the transaction, escrow will be used for one of two different reasons. For starters, it's a way to protect the buyer's good faith deposit (also commonly referred to as earnest money) so that the money is guaranteed to go to the seller according to the conditions that have already been laid out for the sale.
Secondly, escrow companies hold onto a homeowner's funds for the purposes of taxes and insurance for a lender and borrower - thus making sure that they actually get paid and that nothing holds up the completion of the transaction for any of the other parties.
Special note: Escrow accounts don't cover ALL of the expenses related to one's impending homeownership. Things like homeowner's association fees, or money needed to pay current utility bills, would not be covered by escrow accounts.
The key thing to understand here is that earnest money is designed to show a seller that a buyer is serious about making a sale. If the contract falls through due to anything having to do with the buyer, like if they suddenly decide to back out at the 11th hour, the seller is supposed to be able to keep that money. If no third-party escrow company was present, it's feared that buyers would try to keep funds that are no longer rightfully theirs.
Likewise, the reverse is true. If the home purchase goes through successfully, that earnest money is supposed to be applied to the buyer's down payment. If that money were just handed over to the seller ahead of time, there is a fear that they might try to find some excuse to keep it.Obviously, this is problematic because of the sheer sum of money that you might be talking about.
Additional Situations When Escrow is Critical to a Real Estate Transaction
Another related concept it's important to understand has to do with what is called an escrow holdback - or a situation where funds are held in escrow beyond the completion of a transaction.
One of the most common reasons why this might happen has to do with a buyer who may find something problematic with the home during a final walk through and home inspection . The seller may agree to fix the issue,but it will take a week or two - thus triggering the hold back and the funds to be held in escrow.
Another situation that may require a holdback is when a buyer agrees that the seller can stay in a home for a longer period of time beyond the closing date. This, too, is quite common as sometimes sellers need additional time to get their new home ready.
Likewise,if you're a buyer in the process of actually building a new home from the ground up, that money will likely remain in escrow not until the completion of the transaction, but until you've had a chance to sign off on all the work.
Remember, Escrow Companies Are There for Your Protection
Regardless, escrow (and by association, escrow companies) are essential in that they protect the best interests of ALL parties involved in a real estate transaction. They are seen as objective third parties with a tremendous amount of responsibility and they're often one of the major reasons why transactions are completed successfully at all.
Love,
Kartik
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An interesting thing about the real estate industry is that there are far more people involved in the sale of a home than a lot of people realize. Of course, there is a buyer, a seller and their respective Read more...
An interesting thing about the real estate industry is that there are far more people involved in the sale of a home than a lot of people realize. Of course, there is a buyer, a seller and their respective licensed real estate agents - that much is obvious. Sometimes, the roles are clear - nobody questions what an appraiser does, because the job description is explanation enough.
But one of the most often overlooked positions in real estate is also, in a lot of situations, among the most important. The role is that of the transaction coordinator, and in a lot of ways their specific job may very well be one of the most important of all.
What is a Real Estate Transaction Coordinator?
While a transaction coordinator is not a legal requirement in a real estate transaction, as the name suggests, a transaction coordinator is a real estate professional tasked with managing all of the paperwork and deadlines involved in a real estate transaction. If you've ever purchased a home and felt overwhelmed about the sheer volume of paperwork you're expected to read and sign, just think about how the person who had to prepare all that paperwork must feel.
Why are Transaction Coordinators Important to the Home Selling Process?
The reason why this role is so important is because a good transaction coordinator is trained in every step of the sales process. A big part of their job involves monitoring the life of the transaction, from the moment a seller and buyer enter into contract all the way through the steps required to properly close.
What Does a Transaction Coordinator Do?
Just a few of the jobs they have to perform on a regular basis include but are not limited to ones like:
Opening escrow
Coordinating inspections
Overseeing repair negotiations
Communicating important updates to clients
Monitoring all documentation that is submitted
Coordinating the closing process and more.
In a larger sense, this is the person who is making sure that the wheels don't fall off the car, so to speak. It's their job to both make sure that an agent never gets bogged down by administrative tasks so that they can always focus on the client, as well as to make sure that nothing falls through the cracks and everything gets done properly and on-time based on the purchase agreement.
Transaction Coordinators Help Simplify a Complex Process
Overall, they're in charge of making sure that no unnecessary delays happen during this admittedly complicated process, all in service of the most important goal of all: closing a transaction and helping to create the most positive experiences for clients, no exceptions.
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In the real estate world, building an effective real estate team is a growing trend. Rather than working independently, real estate professionals, and even our real estate students are starting to plan Read more...
In the real estate world, building an effective real estate team is a growing trend. Rather than working independently, real estate professionals, and even our real estate students are starting to plan ways to build teams of agents that work with them to make their business run.
These teams have one leader normally known as a “rainmaker”, then a number of support staff underneath who make things happen.
If you are considering the team approach to real estate, getting a team off the ground can be your biggest hurdle. Here are some tips for starting and growing an effective real estate team that will fuel your success.
Step 1 – Self-Evaluation
The first step in building a real estate team is your own personal self-evaluation as the potential team's future leader. What are your strengths and weaknesses? By pinpointing these, you can start building a team that will support your weaknesses and build on your strengths.
Next, consider what you need out of your real estate team. Do you need more buyer agents so you can list more properties? Are you looking for a Transaction Coordinator to help you with the paperwork on your files? Do you need help with your marketing and advertising copy? The answers to these questions will help guide you as you build out your organization.
Finally, prepare your systems. Before connecting with people for your real estate team, make sure you have a foundationally successful real estate business and know how to generate leads. One of the biggest things that potential recruits will want to know is whether or not you have a system in place to bring in leads for them to handle. Once you have a system in place, people will be more willing to buy into your vision.
Step 2 –Choose Your Professionals
Next, choose the professionals you need on your team. Your needs will vary depending on your goals and your skills and weaknesses. It will also vary depending on the structure of your team, whether you are looking to manage a team of sales professionals to support your efforts as an agent or are looking to lead a team of agents.
Some common pieces to a well oiled real estate team include:
Buyers agents
Contractors
Appraisers
Attorney
Accountant
Inspectors
Copywriter
Marketer
Make your list, and start looking for qualified individuals to fill those positions.
Note that lots of these folks don’t necessarily need to be full-time and on your direct payroll. Starting out as a new agent, you’ll want to build out a list of vendors that you know and trust to do the job right for your client.
Step 3 – Start Hiring
Now you are ready to start looking for qualified people and bringing them on to your team. Be careful about the professionals you hire. Make sure they are ready to work in a team environment and have the skills you need.The first person to bring on board as you build your team might be a virtual assistant or transaction coordinator. Your virtual assistant will manage email and office work so you can focus on the client facing aspects of your business. Your TC should ensure that your files are compliant and that all parties are receiving and signing paperwork in a timely way.
The nice thing about building out the administrative functions of your team first is that the virtual assistant can often be turned on and off as needed and the TC can be paid on an a per-file basis.
Make sure you're finding people who are a good fit for your team. One way to determine this is through personality testing. Personality testing will tell you if the person you're interviewing is a good fit for a sales-based business. Look for positive people with a passion for real estate to add to your team.
The personality testing can be critical in preventing turnover of your team. The innate personality of a buyer agent will be vastly different than someone in a dedicated administrative role.
Step 4 – Delegate, but Stay Involved
Once you have a team working well under you, start delegating responsibilities. However, make sure you stay actively involved. This is not the time to walk away from your real estate business. Instead, it's a time to jump in and lead by example. If you've hired well, you should be able to delegate responsibilities with confidence, while still taking an active role in the day-to-day operations of your real estate business.
Step 5 – Keep Recruiting
Even after your initial team is set, continue recruiting quality talent, especially talented agents. If you have proven sales systems in place with active lead generation they will be attracted to your team. Once you have them, make sure you have the right incentives to keep them invested in your team. Retention is just as important as recruiting, and you'll only retain quality people if your team provides them something of value.
Remember it is far more expensive to hire a new person than to retain an existing one.
Step 6 – Focus on Lead Generation
So what could you bring to the table that would make qualified real estate agents want to be part of your team? For many real estate teams, the answer is qualified leads. Finding a source for leads and then offering those leads to the professionals you bring on to your team is a key factor to the success of any real estate team. Your source may be direct-mail campaigns, social media postings, or other online marketing, but find a lead generator and use it well.
Step 7 – Take Care of Clients
Make sure you have a system for your team that keeps clients comfortable while they list with you. You may delegate this to one particular agent or team member, or you may have a proven system in place that each agent follows with their delegated clients. Keeping clients satisfied throughout the sales process will make your team more effective and help with your team member retention.
Step 8 – Keep Refining Your Processes
As you get the freedom to step away from the direct sales of your business, use your new time to refine your sales process for your team. Constantly evaluate what is and isn’t working and make changes and adjustments accordingly. Check with your team members regularly to ensure they are using the systems you have put in place to run their part of the business. Keep lines of communication open to ensure everyone knows what their responsibilities are and what they can expect from you.
Step 9 – Add Training as You Continue Building
After you start your team and get it moving along successfully, you may wish to grow it. Before on-boarding new licensed real estate agents or other real estate professionals, make sure you have solid training in place. Teach your new recruits what you expect and how your business operates, so they can come on board as solid, productive team members. Soon, your process will replicate itself as your team, and your income, continue to grow.
Real estate teams should allow you to make more sales and close more deals than you can do on your own. With these tips, you can build a successful team, retain the talent you recruit, and see your income continue to increase year after year.
Love,
Kartik
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As a potential real estate agent it helps to understand how you will likely get paid for your time and expertise. I wanted to examine how agents commonly earn a living, how everything is split, and what's Read more...
As a potential real estate agent it helps to understand how you will likely get paid for your time and expertise. I wanted to examine how agents commonly earn a living, how everything is split, and what's risks you take on as a real estate agent in hopes of a payday.
The Common Standard: Commissions
The most accepted way for real estate agents to be paid is to charge the seller a commission which is then split among the buyer's and the seller's agent. This amount is typically between four and six percent of the sale price.
Like most sale transactions, there are exceptions to this rule. Raw land sales, for example, sometimes can be as much as ten percent of the total sale price.
On the other end of the spectrum, there are agents and companies that will work for a flat fee that is substantially less than on a percentage basis. Compensation programs like this are generally more common in seller markets where there are far more buyers than listings for sale.
How Everything Is Split
There are a few caveats to note about this seemingly simple arithmetic. The agent does not get to keep all the commission because they must work for a broker in California who will certainly take some portion of the total commission.
When it comes to how brokers split the money with their agents, a lot of it depends on the agent's experience. A brand-new agent may agree to work for a much smaller percentage as a means of getting their foot in the door. A seasoned agent may take all of their commission and pay their broker a fee to rent their desk in the office.
When starting out in our real estate industry, you can expect to keep between 50 and 70 percent of the commission starting out and this should increase with sales volume and experience.
The Risks of the Agent
It's not always easy to see the risks that the agent assumes if you aren't behind the scenes. Not only do agents have to pay the MLS fees as well as the costs of their insurance and dues, but you’re also taking some of the responsibility for the sale.
For example, let's say the agent spends six months trying to sell a home. They've found an interested party, but the buyers haven't quite formalized their offer. If the seller gets cold feet at the last minute, the real estate agent will typically not be paid. (If the seller had received a formal offer and then refused though, then the broker may have still been entitled to their commission.)
These risks explain why some agents seek salaried positions in property management for example rather than be beholden to the commission. These jobs do exist although they are on the rare side. The vast majority of real estate agents are commission-only for the duration of their careers.
Agents do more than just showcase a property in its best light. The right agent can spot red flags before they turn into legal hassles, counsel sellers about the quality of the offers, and give buyers a better idea of when to jump at a deal. Their efforts are rewarded when the sale goes through, according to the terms of the listing agreement.
Hope this helps explain a little about the world of the agent. If you’re interested in taking real estate classes, please give us a call at 888 768 5285.
Love,
Kartik
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One of the most difficult skills for new Realtors to learn is budgeting. Along with good time management, the two skills are probably the core requirements for first-year success in this challenging profession. Read more...
One of the most difficult skills for new Realtors to learn is budgeting. Along with good time management, the two skills are probably the core requirements for first-year success in this challenging profession. What does it take to create a realistic budget for a new agent? In one word, the answer is "planning." Approach the task in much the same way as a family might make an annual or monthly budget, with research and tracking. Here are the three steps to building a budget that can work for any new agent and is adaptable as time passes.
Track and Analyze
Carefully log every penny you spend for two weeks running and then apply some honest analysis to what you come up with. Logging of all the money you spend will reveal where there are "leaks" in your current monetary habits and will also show what expenses are absolute necessities. The effectiveness of this step, the only one that takes place before making a pro-forma budget, is based on the ancient adage, "Know thyself." Until you know what you spend, when you spend it, and why, there's no way to make a realistic budget.
Build a Budget
List every monthly expense and use a worst-case scenario to estimate average monthly income. If there's more income than expenses, you're still not off the hook. Be certain to go through each expense item and determine whether it can be reduced or cut out entirely. Are you spending too much on eating out, clothing, gifts? If so, snip those expenses down to levels that make sense.
After working with all the data in a spreadsheet and getting a feel for what an "average" month looks like, write out a separate document called "Pro-forma Monthly Budget," and save it to your desktop. For the next two months, allow yourself to fine-tune the pro-forma budget with new revelations or data your forgot on the first go-round. At the end of 90 days, you should have a pretty accurate and useful monthly budget that can serve as a guideline for at least the first year of your practice. In several months, your skills and network will have changed enough to require another round of budget-making. Remember, budgets help you identify ways to cut costs and increase profits, and those are good things. The budget is your friend, not an entity to be feared.
Plan for Emergencies
Real estate agents can take a tip from personal budgeting theory: it's essential to have an emergency fund in place that can cover at least three months' of expenses. Every smart family has a fund like this and so should every real estate professional. Especially in a field where income is notoriously volatile, an emergency fund will help to smooth out the natural income vicissitudes.
Final Thoughts
There's no reason to reinvent the wheel, so do some online research about typical real estate agent budgets to get ideas about common expense categories that might not occur to you as a new agent. Be careful, however, not to assume anyone else's categories or specific dollar amounts will apply to you. Always do the hard work of tracking and analyzing before you begin to create your own personal budget.
Remember, the real estate business is a marathon not a sprint. Being able to weather the storm is more important than ever now.
Love,
Kartik
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When most people think about working in real estate, they immediately think of selling houses. While residential sales are the most common occupation for those with a real estate license, it’s far from Read more...
When most people think about working in real estate, they immediately think of selling houses. While residential sales are the most common occupation for those with a real estate license, it’s far from the only option. In fact, there’s a lot you can do within real estate that has nothing to do with the conventional sale of houses. Here are some of the real estate jobs available for those that don’t want to just sell houses.
Commercial Real Estate
If you like sales but don’t love the idea of selling homes to residents, you can still find the career of your dreams within real estate. Instead of selling homes, you’ll sell and lease office space and property to businesses. But the differences between commercial and residential real estate sales don’t end there. In commercial real estate, agents must be knowledgeable about the sectors in which they work and provide valuable analysis to potential buyers. Since newcomers to an area might not know much about the region’s demographics or traffic levels, it’s the commercial real estate agent’s job to fill them in and help find the best location or tenant for a given area. Because of this added analysis, it can be a longer and more difficult process to make a sale in the commercial realm than in the residential space, but the rewards can be greater -- a commercial Realtor can make a great living.
Real Estate Broker/Owner
Although it’s commonly believed that a real estate license is the same across the board, most states actually have levels of real estate licensure. And if you’re not content to act as a conventional real estate agent -- or if you’ve been an agent and want to try something else -- there’s still a way for you to get involved in real estate without being an agent. Becoming a real estate broker requires a healthy dose of ambition, but there could be serious benefits down the road. As a broker, you’ll have your own firm where real estate agents will work for you. It’s a way to keep your hands in a lucrative business while also allowing you to start your own business, applying your knowledge and expertise in an industry for which there’s always demand.
Property Manager
Earning a license also opens up the door to becoming a real estate property manager. Property managers oversee buildings for owners. A common role for a property manager that’s responsible for the units within an apartment complex (or a series of homes owned by a person or company) and is charged with fixing repairs, collecting rent and finding new tenants when existing tenants move out. This type of job is for someone who loves real estate and likes accounting, but doesn’t want to become a Realtor. Property managers are generally paid based on the gross rents collected; property managers can also receive leasing commissions for screening and finalizing deals with tenants.
Real Estate Assistant
The life of a real estate agent isn’t for everyone. Not everyone wants to travel to open houses and to meet with clients. However, for those that simply want to work in real estate while remaining in one location, there’s a way to make it happen -- and you may not even need a real estate license to do it. A real estate assistant provides support for agents and brokers, including answering phones, posting listings and preparing paperwork. These tasks help the agents tremendously as they manage their workflow. It’s also a good introduction for those who are unfamiliar with the inner workings of real estate. A real estate assistant may realize that they want to be an agent after all, and they can continue to work as an assistant while they take real estate license courses.
Financial Analyst
Real estate agents and brokers are often too busy with their everyday duties to take note of emerging trends in the marketplace. That’s where financial analysts come in. Analysts look at real estate data and attempt to predict where real estate is going, particularly in the local area. Financial analysts that work in real estate are also tasked with finding attractive investment opportunities so that the company can properly allocate its resources. Being a real estate financial analyst means being based largely in an office; it also doesn’t require a real estate license. Most large commercial real estate companies will have analysts on their team.
Real Estate Appraiser
If you like numbers, but don’t want to be tied to a desk all day, real estate appraisal might be the career for you. You don’t need to go to real estate license school but you will need to obtain a separate appraisal license. Once you do that, you’re able to determine accurate property values for the houses you examine, based on the home’s characteristics and comparable sales data. Appraisers are used when houses are sold or refinanced.
Inspector
Outside of the agent, the bank and the buyer, an inspector is the most important part of any real estate transaction. Inspectors visit properties before they’re sold and look for potential issues that would not only impact the sale, but would cause problems for the buyers down the road. Inspectors must be highly knowledgeable in all areas regarding houses; they don’t need a real estate license, but if you’re interested in being a real estate inspector, you’ll need to understand the inspector requirements of your state.
Loan Officer
Real estate loan officers don’t actually issue loans. Instead, they’re the intermediary between the bank and the buyer. Loan officers help buyers to get approved for financing, point out any issues that inhibit a buyer’s ability to obtain a mortgage and recommend products based on the unique situation of each home buyer. To become a loan officer, you don’t necessarily need a real estate license. Instead, you’ll have to take a 20-hour pre-licensure class that covers the laws and legalities around real estate lending. After that, you only need to pass the NMLS SAFE Mortgage Loan Originator Test and you’re ready to start working as a real estate loan officer.
There are plenty of cogs in the real estate machine. If any of these fails to function properly, the entire operation fails. Even if you don’t want to be a Realtor or obtain a real estate license, there’s a career option for you in our great business.
Love,
Kartik
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Most people think that in order to become a great Realtor we need to be good at showing and selling property," we tell ourselves. "What more is there?”
In reality, it turns out there's quite a bit Read more...
Most people think that in order to become a great Realtor we need to be good at showing and selling property," we tell ourselves. "What more is there?”
In reality, it turns out there's quite a bit beyond that.
If you’re interested in obtaining your real estate license and become a full-fledged Realtor, it’s probably useful to learn a little bit more about what someone in that role actually does daily.
Once you finish our real estate license school and head out into the real world, you'll find that the daily responsibilities of a real estate agent are actually a lot more involved than you might think. Not in a bad way — but in a way that you should be familiar with before you begin those early days of your career.
The Life of a Real Estate Agent: Breaking Things Down
One of the most important daily responsibilities of any real estate agent actually has little to do with "selling houses" at all. Broadly, you need to be excellent at providing customer service to a wide range of people in a myriad of different situations.
Be The Calm in the Storm
Think about it like this: Buying a home is one of the most important moments in a person's life, particularly if it's the first time they're doing it. So it's an inherently stressful experience and one where people will be looking for an expert to guide them. The best real estate agents understand that they are the calming force in any transaction. You need to be able to provide people with the information they need to make the best decisions possible and you need to do so in a way that simultaneously instills confidence.
It's a lesson you'll begin to learn in our real estate license school but that you'll have to perfect over time on the job.
Understanding Contracts and Paperwork
Another major daily activity of a busy Realtor involves drafting and preparing things like offers and other types of paperwork. This requires a deep understanding of not only the laws and regulations in your particular market, but also the needs and requirements of the people you're actually working with. Remember that as an agent, you are someone else's advocate — they're trusting you to bring a level of experience to the deal that they themselves do not possess. To get to that point, you need to not only be aware of HOW to handle the paperwork that comes with buying and selling real estate, but organized enough to do so in the right way.
That customer service element also intersects with the marketing side of the business — only instead of selling a property, you're really selling your most valuable asset of all: yourself and your abilities.
Similarly, the busy real estate agents spend a majority of their day getting, obtaining and servicing listings in their marketplace. Most of the time, this is done by pouring over the Multiple Listing Service database, otherwise known as the MLS. Most MLS databases are logical but sometimes they are not so intuitive. Only through practice running a variety of different searches can proficiency be obtained.
For example, how do you search for a single-story home, with a spa but no pool in a specific school district below $750 per square foot? This search will take the expert Realtor 1-2 minutes, whereas for a rookie this same search might take 10-15 minutes. Like most things - practice makes perfect.
If someone says to you, "I like this house we're looking at, but it would be better if it had X, Y and Z qualities," you should immediately be thinking of other properties you can show them. You can't do that without putting in the time to research what those listings actually are. Working with the MLS is a crucial part of the daily life of a real estate agent.
Don’t forget to prospect
Most importantly, a real estate agent spends an incredible amount of time collecting leads from other sources, too — either via word of mouth from past satisfied customers or from referrals in the industry. Hitting the phones or door knocking can also be a great way to get a hot tip on a property before it actually gets on the market- especially if it's one that you know would be perfect for one particular client.
That aspect alone can quickly become an omnipresent part of the job — something that you should have at the very least in the back of your mind all day, every day. It's part and parcel for what a real estate agent actually does and, in truth, that rush of getting the jump on your competitors is a large part of why people love the profession in the first place.
Get Comfortable Being Out and About
Of course, a lot of your days will also be spent showing properties which is the aspect of the job that anyone who has ever purchased a home is most familiar with. But again, it's just one small part of a much larger story. Getting your start in real estate comes with the understanding that it's more of a far-reaching profession than most expect.
The great real estate agent is part therapist, part negotiator and available to answer any questions that their clients may have.
Hoping this helps. I’m always looking to bring value to our readers. If I can help you, please reach out on Instagram @kartikspics or call the office at 888 768 5285.
Love,
Kartik
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Frankly, Instagram has brought us a ton of new students. So many of our students enroll because they have seen social media posts from agents about how much money they make. Programs like Million Dollar Read more...
Frankly, Instagram has brought us a ton of new students. So many of our students enroll because they have seen social media posts from agents about how much money they make. Programs like Million Dollar Listing have contributed to this perception.
While some of these stories are true and many agents do make a lot of money in our business, I wanted to write a quick article about things you should know before starting a career in real estate. I wrote a few pieces of advice - I thought the title was catchy - before anyone takes the first step in entering our business.
You Are the Boss
It may seem obvious, but people who have spent the majority of their lives working for a manager or supervisor are often surprised by how much discretion they have over their daily schedule. There aren’t any wake up calls in our business. No one complains if you show up 5 minutes late - or don’t show up at all. Worse yet, if you work for a “virtual brokerage” there might not be a person available to bounce ideas off of or to get advice from when you find yourself in a rut. When a decision needs to be made, you are often the person who has to be decisive and take action.
You Need a Business Plan
Being a self-employed person means that you need to come up with a business plan that provides a roadmap for your real estate business. How much money are you setting aside for marketing and advertising? How many transactions do you plan to close in a month, or in a year? Does your business plan call for you to work from a real estate office or work from home? How much time are you setting aside for your business if this is part-time work?
In addition, you also need to understand your tax obligations. You will have to pay quarterly taxes and budget for this. You'll need to track your business income and deductions to ensure you pay enough every year. Most agents have a CPA or other tax advisor that they lean on regularly for this.
It’s Useful To Have a Cash Reserve
What social media posts and television rarely show are the slow periods. There will be a time when you don’t close anything and your pipeline isn’t progressing as quickly as you would like. This period can especially hold true for the brand new licensee that will have a minimum 90-day window to get a handle around the business. Always have at least a small cash reserve built up before starting, and keep adding to it little by little. By having a nest egg, you'll be able to weather slow periods and continue to build until you are at the point where you have a steady pipeline of closings.
Your Schedule is Flexible... Sort Of
It's true that you can work whenever you want. So if you are a night person who loves working at 2am because it is quiet and calm, you can do all your paperwork and get your online marketing accomplished during those hours. On the other hand, remember that you will have clients that can and will contact you at unpredictable times. A certain property may show up that a client wants to see right away and that showing may not have been “in your schedule” but you may feel the need to drop everything and pivot.
If you become a residential real estate professional you will likely have clients that work 9-to-5 jobs. The only times they have to look at a house or arrange for a showing are evenings and on the weekends. Are you accounting for this in your plan?
Somehow Differentiate Yourself from the Rest of the Pack
You have a real estate license. That is an accomplishment not to be undermined. Remember, however, that you were in a full classroom of other people who also obtained their licenses. They’ll likely be working in the same neighborhoods as you. Additionally, you will also be competing against established, veteran Realtors which will be an even more competitive field.
Establishing your personal brand and differentiating yourself is absolutely mission critical. Figure out what makes you unique, whether it is your marketing skills, market knowledge, or negotiating techniques. Then let people know about your skills so that they each out to you first.
Start Your Real Estate Career Today
Are you ready to make the move into real estate and gain the education you need to succeed? Visit our website to learn about how you can gain your license and start this exciting career.
Side note - My intention with this article is not to discourage anyone from starting in our business. It’s simply to pepper a little bit of realism in the basket of fake Instagram and YouTube videos. I have many students that make into the 6 and 7 figures annually. It is possible, but everyone is looking for the secret sauce that’s going to make them successful.
The truth is that there is no secret - it’s just hard work.
Love,
Kartik
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As of early this year, there were more than 2,000,000 real estate licensees throughout the United States. Of that number, around 1.3 million were members of an Association of Realtors. Additionally, a Read more...
As of early this year, there were more than 2,000,000 real estate licensees throughout the United States. Of that number, around 1.3 million were members of an Association of Realtors. Additionally, a good portion of this group has had their license for one year or less - further evidence that our industry is a competitive one.
But real estate sales isn't just a highly competitive business - it can carry it’s share of stress, too. It can certainly feel like something of a grind, especially in those early days, which is why jumping into this particular pond head-first might not be the best idea.
Likewise, many people who wish to enter our business don't actually have the financial ability to start on a full-time basis. But that's okay, because becoming actively involved in real estate part-time brings with it a wide range of benefits that can't be ignored. Not only can this help you confirm this is something you actually want to do, but it can assist you in creating a transition plan to get you to full-time and to replace your 9-to-5 income in a thoughtful, intentional way.
Starting a Career in Real Estate: Breaking Things Down
The first thing you need to do to start a part-time career in real estate involves coming up with your own unique solutions to some of the common challenges people face.
Scheduling, for example, is often a difficult hurdle to overcome. It's not necessarily easy to be fully available for your clients at a time that works for them when you have another job to worry about. Unfortunately, there's no "one size fits all" solution to this issue as every situation is unique. Just know that it can be done, but you'll need to hone your organization skills and communicate your hours to prospects clearly and concisely to keep everything flowing as smoothly as possible.
Likewise, it's imperative that you get your own expectations in order. Becoming successful in real estate is already time-consuming - not to mention how long things can take when you're also trying to continue your current employment. If you think that you'll somehow be able to A) work a full-time job, B) do real estate part-time, and C) keep your nights and weekends free, the chances are you're going to have to sacrifice one of those three things. You can only have two, so pick the ones that are most important to you before moving forward. This is on top of family or other personal obligations you might be faced with.
In terms of the actual logistics of becoming a real estate agent, you'll first need to take care of getting your real estate license. This involves figuring out and completing your pre-license requirements, which we can help you with. If you schedule is tight we offer online correspondence real estate courses too. Once you sit for and pass your real estate license exam, you can then take another critical step in joining your local board.
This Association of Realtors organization will allow you access to the Multiple Listing Service, also referred to as an MLS for short, that acts as a centralized repository that all Realtors in your area can use to list properties, view market statistics and more.
You’ll need your license in order to join the association of Realtors which is why our pre-license courses are so important.
Finally, you'll need to find a broker to work with. Here, you have two options: large, national brands like Coldwell Banker and Century 21 or smaller, independent and locally operated brokers. The former will come with benefits like major name recognition, but the latter will offer an intimate connection to the local community that could be quite helpful. Again - every market is unique so there is no "right answer" here. Think about which option fits best with your long-term goals and which offers the most favorable terms as far as the percentage of the commission you enjoy, desk fees and most importantly training. As a part-time real estate agent, you’ll want a company that offers training around your schedule as it will probably be less flexible than someone starting on a full-time basis.
Yes, starting a real estate career part-time is going to be time-consuming and no, it isn't going to be easy. But it is absolutely possible if you enter from the right perspective and are consistent with your efforts.
As the old saying goes - "anything worth doing is worth doing right."
As always, I'm looking to bring you as much value as possible. If I can be of service, send me a message or call the office at 888 768 5285.
Love,
Kartik
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Obtaining a real estate license after passing the real estate exam is only the beginning of your career in our great real estate business. The next step (and in many ways the more important piece of the Read more...
Obtaining a real estate license after passing the real estate exam is only the beginning of your career in our great real estate business. The next step (and in many ways the more important piece of the puzzle) is to prospect for clients.
The high level question the must be asked and answered by the new agent is: What does a buyer or seller want in their Realtor? And next - How do I meet those needs?
Simply put - buyers and sellers are looking for a local real estate expert. Buyers want someone who knows what local restaurants are great, where the nightlife is, what schools are perfect for their kids, and what amenities are popular in the neighborhood.
Sellers, on the other hand, want a local Realtor who knows what the current and future market outlook is, what the comparable sales look like for the house when compared to other similar properties on the market, and at what price to market the home.
So how do you become a local real estate expert for your clients? Here are several strategies to implement once you finish your real estate courses and become a Realtor.
Go to Local Government Meetings and Chamber of Commerce Events
Government meetings and chamber of commerce events will play important factors on how you grow your business and connect to community members. You'll want to pay attention to any changes, regulations or votes coming up with the city council or planning commission that will impact the local real estate market. These meetings could discuss zoning regulations or upcoming development projects, for example. Information gathered at this event can allow you to better track the market and inform clients of developments that can affect the home buying or selling process.
I remember one friend of mine who was showing a high-rise condo to a buyer on Wilshire Boulevard in Los Angeles. The buyer found a home online that he wanted to see and reached out to the agent for a showing. Directly across the street was an empty parking lot that was in the early stages of being the site for a new high rise development. If approved, the new structure would have completely obscured the southern view from the living room and bedroom and would have also casted a dull shadow over the pool deck. The fact that the agent was plugged into the local planning commission and had actually attended some of the Homeowner Association meetings meant that he was in the know and ultimately able to advise the buyer on the proposed development. Surely a large building blocking your view that breaks ground shortly after the close of escrow would be a nightmare scenario for the uninformed buyer.
At chamber of commerce events, you can network with other businesses. You can learn about the roles these employers have in the community, and can share this information with buyers. It’ll also be a great chance to meet other entrepreneurs and refer business to one another.
Get Involved in Social Events and the Community
Prospective clients like to see that real estate agents are getting positively involved in local events. Whether it is partnering up with a local blood drive or volunteering time at an animal shelter, these tactics show that you want to invest your time and work in building a strong and welcoming community.
Also, attend social events such as festivals and get to know people. Shake hands with organizers and speak with the local residents. People will remember your friendly demeanor at the event as they will be inclined to speak positively about your real estate business with others.
There’s nothing wrong with telling people that you are in the process of obtaining your real estate license now and start building those relationships early. Of course, you won’t be able to do anything that would require a real estate license, but there aren’t any laws against getting to know people in the area.
Show You Are an Expert in Emails, Social Media and Personal Interactions
After taking real estate classes Los Angeles, you've gained the knowledge to help people with their real estate dreams. Yet you also have to show them that you are a local expert. You can do this through your correspondence, social media accounts and interactions with clients.
Once you get your license, you’ll need to define the areas where you’ll want to build your real estate practice. Study the properties in those areas and the overall market on sites like www.dqnews.com and in the Multiple Listing Service. Over time, you’ll get to know the types of properties in those areas, the number of certain residential properties (single-family homes, duplexes, and multi-family structures). Also, you've gathered the data about recent home transactions, buyer trends, and average sales prices. Take all of this data and pepper it throughout your emails, newsletters and social media sites.
Drop in facts that will draw in a person's interest and convince them to take the next step in calling for your services. You want to impress them with the market insights that you've gathered as they will feel confident about your skills. In addition, you want to do the same at face-to-face meetings and appointments with clients. Showing people that you've done all the real estate homework will allow you to gain repeat business and positive reviews that will help your career.
By immersing yourself in community events, attending government meetings, and sharing your local expertise through social and other media, you can solidify your position as a top real estate expert in the local market. It’ll be easier to convert leads into real estate transactions by showing your in-depth knowledge about local market trends.
As always, please call my office at 888 768 5285 or visit our website for information on real estate classes online or in the classroom. If you are getting ready to prep for the real estate exam and you need a real estate crash course click here.
Always looking to bring you value.
Love,
Kartik
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