This document provides an overview of real estate as a career and the requirements for obtaining a real estate license. Some key points: - Virginia requires 60 hours of education to obtain a real estate license. Applicants must pass a final exam administered by PSI. - Becoming a licensed real estate agent allows you to work under a broker. Brokers oversee agents and are responsible for legal and regulatory compliance. - The real estate industry involves many roles including brokers, agents, appraisers, attorneys, lenders, inspectors, and more. Supply and demand impacts the housing market. - Licensed agents can become REALTORS® through trade associations like the National Association of REALTORS

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. 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. 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. 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. Real Estate is ‘Big Business’
What Interests you?
Residential
Commercial
Investment
Property Management
Industrial
Agricultural
Special Purpose

6. Brokers Settlement Company
Appraisers Buyers
Attorneys Developers
Sellers
Education Lenders
Assistants
Home Inspectors
REO
Property Managers

7. The Battle of Supply and Demand

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. 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. 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. 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. 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. 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. 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. 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. Agent by Speciality
Residential Commercial
Prop. Manage. Other 10%
4%
4%
82%

17. Agents Likely to Stay in Business
0 20 40 60 80
Very Certain
73
Somewhat Certain
20
Not Certain 7

18. Average Hours Worked Per Week
12%
Less 20 Hrs 20-39 Hrs 40-59 Hrs
60+ Hrs
13%
41%
34%

19. Becoming a Business Person
• You’re the:
• CEO
• CFO
• Marketing Director
• IT Staff
• Research Analysis

21. Hours
Money of Sacrifices Relationships
Work
Health
Time Spiritual
&
Commitments Needs
Recreation

22. Goals
Action Plans
Objectives Daily Actions
Personal
Bud"t
Promotion
Plan

23. Annual Income?
40 hours x 52 weeks = 2080 hours
Desired Income ÷ 2080 Hours = Hourly Value
Example: $100,000 ÷ 2080 = $48 per Hour

24. Tools
of the
Trade

25. 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)

26. 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

27. www.RealFutureCRM.com