Pre Licensing First Session

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This is the slide presentation for the first session of the RECA Virginia Prelicensing class, held at the Fredericksburg Association of Realtors. www.RECASuccess.com

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Pre Licensing First Session

  1. 1. Real Estate Pre-licensing Real Estate as a Career Matthew Rathbun, Licensed Broker ABR, ABRM, ASR, CSP, e-PRO, Eco-Broker, GRI, GREEN, SRES Director of Professional Development
  2. 2. 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
  3. 3. 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
  4. 4. 7 Mistakes Rookies Make 2. Not Using 1. No Business 3. Not Maximizing Resources or Marketing Your Productivity. Available to Plan You 5. Not Purchasing 4. Not Earning Equipment as a Designations. Business Entity. 6. Not 7. No Income Crafting Your Buffer, Passive Message to Income, or Nest Focus on Egg. Prospects. Source: Terry Watson - http://www.realtor.org/archives/slscoach200403011
  5. 5. Real Estate is ‘Big Business’ What Interests you? Residential Commercial Investment Property Management Industrial Agricultural Special Purpose
  6. 6. Brokers Settlement Company Appraisers Buyers Attorneys Developers Sellers Education Lenders Assistants Home Inspectors REO Property Managers
  7. 7. The Battle of Supply and Demand
  8. 8. Licensee versus REALTOR® Power of Trade Associations Voluntary Involvement, based on Broker The REALTOR® Code of Ethics Annual Dues Joining REALTOR® Designations and Certifications
  9. 9. 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
  10. 10. Brokerage Considerations Franchises 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
  11. 11. 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
  12. 12. 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
  13. 13. 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)
  14. 14. Minimum Startup Fees (Estimates) $350 - Licensing Class $65 - PSI Final Exam $850 - Association Fee (Prorated Estimate) $200 - Lockbox Key Fee (Annual) Real Estate is one of the $200 - MLS Quarterly Fee most inexpensive business $250 - Business Cards and Signs startups $300 - Errors and Omission Insurance $250 - Contract Software $2,465 Total Estimated Startup Fee
  15. 15. 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
  16. 16. Agent by Speciality Residential Commercial Prop. Manage. Other 10% 4% 4% 82%
  17. 17. Agents Likely to Stay in Business 0 20 40 60 80 Very Certain 73 Somewhat Certain 20 Not Certain 7
  18. 18. Average Hours Worked Per Week 12% Less 20 Hrs 20-39 Hrs 40-59 Hrs 60+ Hrs 13% 41% 34%
  19. 19. Becoming a Business Person • You’re the: • CEO • CFO • Marketing Director • IT Staff • Research Analysis
  20. 20. Hours Money of Sacrifices Relationships Work Health Time Spiritual & Commitments Needs Recreation
  21. 21. Goals Action Plans Objectives Daily Actions Personal Bud"t Promotion Plan
  22. 22. Annual Income? 40 hours x 52 weeks = 2080 hours Desired Income ÷ 2080 Hours = Hourly Value Example: $100,000 ÷ 2080 = $48 per Hour
  23. 23. Tools of the Trade
  24. 24. 1. Use last year’s production as a “benchmark” $50,000 a. Last year’s income _________ (a) b. # of closings last year _______ (b) 19 c. __________ (a) divided by _______(b) $50,000 19 Equals _________________ $2,631.58 (Average Income Per Closing)
  25. 25. 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
  26. 26. www.RealFutureCRM.com

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