© 2015 OnCourse Learning California Real Estate Practice, 3 rd Edition

© 2015 OnCourse Learning

California Real Estate Practice, 3rd Edition

© 2015 OnCourse Learning

HOW TO READ THIS BOOK

• Chapters 1 - 16 include a list of the new “Key Terms” with brief definitions. Review before starting each chapter.

• In the body of each chapter these terms are set in boldface italic type with in-depth discussion.

• At the end of each chapter are questions to help you test yourself on your comprehension of the material.

• The answers are in Appendix A.• A glossary of terms is also at the back of book.

Starting Your Real Estate Career 1.1 History and Background

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Chapter 1

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• Real estate has many Complex legal theories and Unusual fact situations

• Clear Communication becomes critical !

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This means clear communication with and between:• Clients• Customers• Regulatory authority• The public• Other licensees• Your principal broker

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Your Primary Purpose as a Professional:

• Customer Service• Consumer protection

Then

Compensation

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Service must include: • Protecting your broker• Protecting your broker’s principal

(client)• Protecting yourself

Thereby protect theReputation of every Professional Real Estate Licensee

Service = providing helpful activity for another

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• Service to one licensee may not fit the definition of “service” to another.

• Service is the variable that makes “identical service” unlikely.

• Service may vary with the time and expertise of the provider.

The only constant is “change!”

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o Land valueso Buyer seller needso Perceived valueso Marketso Economieso Local building codes

Perception Market strength/weakness supply and demand Which are affected by:• Buyer and seller knowledge• Motivation• Product differentiation• Knowledge of the broker and licensee• Terms and conditions

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It’s a complex marketplace.

Multiple Listing Services aid by providing:• Universal access to members• Public access to buyers and sellers• Current information on pricing• Supply and demand• Competitive pricing data

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Some definitions:• Licensee: a person, whether broker or salesperson,

licensed under the provisions of BPC 10011.• Real estate broker: a person who, for compensation or

expectation of compensation, . . . does or negotiates to do one or more of the following acts for another or others:

– Sells or offers to sell; buys or offers to buy; solicits prospective sellers or purchasers of; or negotiates the purchase, sale, or exchange of real property or a business opportunity.

– Leases or rents or offers to lease or rent. Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal gov’t.

– Solicits borrowers or lenders for or negotiates loans . . .– Sells or offers to sell a real property sales contract, or a promissory

note . . .– See BPC 10132 or text page 6 and 7.

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1.2 Facts and Myths

• English common law defined “property” as:– A bundle of rights:

• Possess• Use• Encumber• Transfer• Exclude others

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Myth number one:

California real estate licensees sell real estate.

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Brokers and licensees have only two things to sell.

Can you name them?

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The Two Things You Have To Sell Are:

Time

Knowledge

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Myth number two:

All licensees offer the same service so they should all be paid the same fee.

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Activity for which a license is required may be the same for every licensee but the service actually may differ.

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By definition, there is only one “agent” with every real estate firm. That “agent” is the “designated broker.”

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Myth number three: Success or Failure is something that just happens.

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Success or failure is a choice and you will learn from each one.

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Whether you believe you can or believe you can’t you are right.

Your BELIEF determines your reality.

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1.3 Attitude is Everything

Your attitude, positive or negative, will dictate how others perceive you and how you perceive yourself.

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Do whatever is necessary to:• Put yourself in a positive environment.• Surround yourself with successful people.• Bring your positive attitude wherever you go.• Ask yourself:

– Can I handle my own inner fear of rejection?– Am I persistent?

• . . . a self-confident?• . . . enthusiastic?• . . . a problem solver?• . . . adept at handling objections?

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1.4 Goals

• If you’ve always wanted to be “somebody,” you can relax, you are “somebody.”

• Now get more specific in defining the person you would like to become.

• You, like most people, will have great difficulty becoming what you cannot define.

• Without a clear destination, any direction will do.

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Goals establish the baseline to measure your progress.

• You will need to examine your:–Personal motivation.–Finances.–Support group.

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Goals must be:

• Achievable – believe to achieve

• In writing• Exact, not abstract

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Setting goals

• Short term - one to six months.

• Medium term - six months to a year.

• Long term - one to five years or longer.

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Specific time line for achievement.• With accountability – tell someone

you know• Ask that person to question you often• Short term – meet 3 FSBOs on

Wednesday• Drive every street on the north side

of town• Collect business cards from 25

businesses• Med. Term – get GRI designation

– Take two courses toward broker’s license.

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Long term goals

• Open your own firm in five years.• Purchase one rental every five years.• Obtain your broker’s license in three

years.

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Plans – the “how”

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Planning leads to efficient use of “time.”Plan your work and work your plan.• Write it down• Prioritize

• Focus• Most important – first• Evaluate • Eliminate• Continue

What is your time worth?

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With roughly 2,000 working hours available in one year . . . $40,000 annual income = $20.00/hour $80,000 annual income = $40.00/hour $120,000 annual income = $60.00/hour

What is your time plus your knowledge worth?

My time plus my knowledge* is worth $ ____________ / year, or $ __________/hour

*more knowledge = more value

Value of client interaction time

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With only one fifth of the average licensee’s time

(400 hours) spent with a client – face to face, now what is your time worth?

To increase face to face client time

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Maximize the hours available for client interaction by:• Increasing:

• Calls• Appointments• Prospects you meet• Referrals received• Repeat business from established clients

Plan your work and work your plan!

To maximize productivity – prioritize!

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“A” time: time spent with decision makers“B” time: time spent prospecting for new clients“C” time: time spent seeing new listings and sales

support“D” time: time spent on any non-work-related issues

1.6 Real Estate “Business Plan”

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With your broker/manager or mentor create your business plan to include marketing, financial and daily operational plans:

• Your own Sphere of Influence (SOI) list• You know two to three hundred people• Each of those know two to three hundred people• Make a list of everyone you know

• A daily work plan for the first month• First week in general• First day in detail• Second day plan done after first day• Third day done at end of second day• Etc.

1.7 On Becoming a Professional

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Office procedures manualComputer literacyTax knowledge – enough to make professional referralsEquipment needed

Daily planBusiness cardsSafe carCell phone100 foot tape or electronic measureWorking flashlightListing agreementPurchase agreement

About youDress appropriatelyBe easy to be around. Take time to eat right, exercise and stay healthy

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