pre licensing first session
DESCRIPTION
This is the slide presentation for the first session of the RECA Virginia Prelicensing class, held at the Fredericksburg Association of Realtors. www.RECASuccess.comTRANSCRIPT
Real Estate Pre-licensingReal Estate as a Career
Matthew Rathbun, Licensed Broker
ABR, ABRM, ASR, CSP, e-PRO, Eco-Broker, GRI, GREEN, SRES
Director of Professional Development
How we roll!
Virginia Requires 60 hours of Education
RECA’s Final Exam
PSI’s Final Exam
Need for a Broker
License Activation
School Policies
Start Reading Now!
http://www.realtor.org/toolkits/forrookies
21 Things I Wish My Broker Had Told Me
Frank Cook
The Millionaire Real Estate Agent
Gary Keller
7 Mistakes Rookies Make
Source: Terry Watson - http://www.realtor.org/archives/slscoach200403011
1. No Business or Marketing
Plan
2. Not Using Resources
Available to You
3. Not Maximizing Your Productivity.
4. Not Earning Designations.
5. Not Purchasing Equipment as a Business Entity.
6. Not Crafting Your Message to Focus on Prospects.
7. No Income Buffer, Passive Income, or Nest
Egg.
Real Estate is ‘Big Business’
What Interests you?
Residential
Commercial
Investment
Property Management
Industrial
Agricultural
Special Purpose
Brokers
Appraisers
Settlement Company
Attorneys
Buyers
Sellers
Property Managers
Lenders
Developers
Home Inspectors
Education
Assistants
REO
The Battle of Supply and Demand
Licensee versus REALTOR®
Power of Trade Associations
Voluntary Involvement, based on Broker
The REALTOR® Code of Ethics
Annual Dues
Joining
REALTOR® Designations and Certifications
Lockbox Systems
NOT to be shared
Type Dictated by Agreement
Combo Box Liability
E and O Insurance
Listing Agreement
Security Risk
Confirmation of who Gets Code
Multiple System Situations
Brokerage ConsiderationsFranchises and Independents
Independent Contract versus Salary
Errors and Omission Insurance
Broker Culture
Training and Development Options
Mentoring Programs
Experience of Company
Market Area
Services Offered
How Commissions Work
Listing Agreement Dictates Commission
Listing Brokerage “Co-Brokers” and offers Buyer Agent a share of the fee.
MLS dictates compensation
Change in Compensation must be negotiated prior to introducing client to property
You may not negotiate the Commission as part of the Contract
Paid after recordation of the Deed
May ONLY be paid to the broker and then disbursed to agent
“Sharing” Commission with client must be disclosed on Settlement Statement
Broker Commission Example
$250,000 Home Sales Price
2.5% Commission to the Buyer Agent (Just an Example)
2.5% of $250,000 = $6, 250
$6,250 split 50% with Broker (Splits are Negotiable) = $3,125
Personal Commission Breakdowns$3125 (Brought over from last slide)
-$187 6% Franchise Fee (Varies)
$2938-$588 20% for Taxes
$2350-$235 10% Business Savings
$2115-$846 40% Back into Business Budget
$1269 = Personal Income(from sale of $250,000 home)
Minimum Startup Fees (Estimates)
$350 - Licensing Class
$65 - PSI Final Exam
$850 - Association Fee (Prorated Estimate)
$200 - Lockbox Key Fee (Annual)
$200 - MLS Quarterly Fee
$250 - Business Cards and Signs
$300 - Errors and Omission Insurance$250 - Contract Software
$2,465 Total Estimated Startup Fee
Real Estate is one of the most inexpensive business
startups
The median net income of REALTORS®, after accounting for taxes and expenses, was $23,200 in 2008.
Based on our $250,00 sales price example, an agent would need to sell 18.5 homes per year to
meet the national median in income
Agent by Speciality
82%
4%4%
10%Residential CommercialProp. Manage. Other
Agents Likely to Stay in Business0 20 40 60 80
73
20
7
Very Certain
Somewhat Certain
Not Certain
Average Hours Worked Per Week
41%
34%
13%
12%Less 20 Hrs 20-39 Hrs 40-59 Hrs60+ Hrs
Becoming a Business Person
• You’re the:
• CEO
• CFO
• Marketing Director
• IT Staff
• Research Analysis
MoneyHours
of Work
Sacrifices Relationships
Health&
Recreation
TimeCommitments
SpiritualNeeds
Goals
Objectives
Bud"t PersonalPromotion
Plan
Action Plans
Daily Actions
Annual Income?
40 hours x 52 weeks = 2080 hours Desired Income ÷ 2080 Hours = Hourly ValueExample: $100,000 ÷ 2080 = $48 per Hour
Toolsof theTrade
1. Use last year’s production as a “benchmark”
a. Last year’s income _________ (a)
b. # of closings last year _______ (b)
c. __________ (a) divided by _______(b)
Equals _________________ (Average Income Per Closing)
$50,000
19
$50,000 19
$2,631.58
Where to Spend Your Time
Develop Your Business Plan
Develop Your Sphere of Influence
Develop Your Knowledge
(Agents with Designations make 64% more income)
Know Your Market Area
Know Your Resources
www.RealFutureCRM.com