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