Broker Management : Establish and Maintain a Successful Brokerage

Table of Contents

Unit One Background of owners of real estate brokerages

Introduction

Objectives

1. Ownership and organization oof brokerage companies

I. Sole proprietorship

II. LLC

III. SCorporation

IV. CCorporations

Summary

Unit One Assessment

Unit Two

Introduction

Learning Objectives

1. Franchises

2. Size of the company

3. Niches

4. Residential

I. First time buyers

II. Resort or second home buyrers
III. Luxury buyers
IV. Condos
V. Military
VI. REO foreclosures

5. Commercial

6. Farms and Ranches

7. International buyers

8. Appraisal

9. Property managaement

10. Auction

11. Realtors

Unit Three Structuring the Organization

Introduction

1. Market analysis
 2. Recruitment

3. Training

4. What does your firm offer?

5. Why real estate companies recruit?

6. The interview process

7. Full time or part time

8. Trial period

9. Firing golas and expectations

10. Administrative Assistant

11. Closing Coordinator

12. Trainer

13. Outsourcing

Summary

Unit Three Assessment

Unit Four

Introduction

Learning Objectives
 1. Agents
I. Job description
II. Qualities and skills

1. What are realistic goals

2. Support staff

I. Contract staff

3. Employees

4. Full time or part time

5. Policies and Procedures manual

Summary

Unit Four Assessment

Final Assessment
Introduction

The real estate industry is one of the ndustrie that is a major contributor to the growth of the

economy, a real estae agent can gain substantial wealth from one real estae deal.The real estae

industry involves the buying and selling or renting of building , land or housing facility, with

the real estate broker acting as the middleman between the seller and the buyer. These real estae

agents are involved in searching for sellers who sell properties and buyers who want to buy

them. Licesed real estate professionals who are seeking to start their own brokerage have to paln

and strategize, they have to consider if they would want to start a brokerakerage from the ground

or purchase an existing one . They would also consider how the firm would be owns whether, as

a sole proprietor, Limited Liability Company (LLC) or as S Corporation or CCorporation.

Module objectives

At the end of this unit the learner should be able to:

 Explain what is a real estate brokerage

 Understand the background of owners of real estate brokerages

 Outline how the brokerage company is owned and organized

  Explain the different types of ownership , Limited Liabilty Company (LLC) , sole

proprietorship and SCorporation or CCorporation

Real Estate Brokerage

The term brokerage in real estate generally means an activity involving the sale of real property

through the intermediary the broker who negotiates the transaction for a commission at the end

of the negotiation.A licensed broker creates this business for the purpose of bringing together

brokering parties who want to make transactions in real estate. The broker who creates the firm

is the broker- owner of the real estate brokerage and sets all policies of the firm.

Background of owners of real estate brokerages

Real estate brokerage owners are usually salespersons from the industry, most licensed agents

progress from management into owning their own brokerages or buy an existing company.

Those who start their own brokerage do it for many reasons such as independence, wealth

potential , or the ability to build their own philosophy and brand. To generate business as well as

to achieve the transactional objectives of clients , a broker must be proficient in four skill areas:

 Obtaining a client listing when a client hires a broker by executing a listing agreement
  Marketing a listing once hired the broker or agent implements a marketing plan to

procure the other principal party for the transaction

 Facilitating the closing of a transaction, where the broker plays an important role in pre-

closing activities to ensure the successful closing of transactions.

 Managing market information, to serve and locate customers a broker must become

expert in local real estate market conditions which include organizing and managing an

information system.

All fifty states impose legal licensing requirements on any person or business entity desiring to

broker real estate.Areal estae managing broker is a licensed real estae broker that supervises a

team of real estae agents. The managing broker is responsible for hiring ,training , verifies

continued licensing of all brokerage agents,provides some services and marketing resources of

agents and ensuresthe performance of their team.The specific requirements of a real estae

brokerage vary from stae to state ,these requirements should be reviewed from the particular

state licencing board. A real estate brokerage company is operated by a licensed broker who

employs licensed salespersons and licensed broker associates who help to conduct the

business.The core activity of a real estate brokerage is the business of procuring a buyer, seller

tenant or property on behalf of a client for the purpose of completing a transaction. If successful

the broker receives a commission according to the provisions of a listing agreement. This is

usually a negotiated percentage of the purchase price.

Ownership and organization of brokerage companies

The broker may have multiple locations and take ownership in a variety of ways, such as sole

proprietorsip, Limited Lability Company (LLC) or S and C Corporations. Due to liability tax

ramifications and what happens to the firm after the owner dies how the business is owned is

important.

Limited Liabilty Comapy ( LLC)

A limited liability company ( LLC) ia an alternative business entity that has the characteristics

of both a corporation and limited partnerships. The LLC offers its owners the advantage of

limited personal liability and a choice of how the business will be taxed. Partners can choose for

the LLC to be taxed as a separate entity or as a partnership like entity in which profits are passed

through to partners and taxed on their personal income tax returns.LLC can live on psst the death

of the owner or owners. LLC can have multiple owners and the ownership can be any

percentage interest as determined by the owners , as income is paid based on on the percentage

of ownership or as directed in the company’s documents

Sole Proprietorship

A sole proprietorship is owned and operated by one person and is frequently used to set up a

real estae brokerage office. The owner is personally and fully liable for the all business

debts.The broker reports all debts and reports any income or loss directly on his or her

personal income tax return. If the company is sued the personal assets of the owner is at risk

There are no legal protection or “corporate shield” to protect the owner from lawsuits . All
 income expenses are reported directly on personal tax returns and there is no preferential

treatment or avoidance of the probate courts in the event of the owner’. Upon the death of the

individual this form of ownership is terminated.

S Corporations

Formerly called subchapter S corporation is a corporation that operates like a corporation but

is treated like a partnership for tax purposes. The primary benefit of this type of corporation

is the ability to avoid the double tax feature of a corporation because any gains and losses

pass directly to the individual shareholders.

C Corporations

This is the well known and popular type of corporation and are shareholder owned, managed

by directors and taxed at the corporate level.C Corporations have the advantage of continuity

of life in the event a shareholder dies. The disadvantage is that of the double taxation of

profits, another disadvantage is that if there are losses , the corpoaration can carry them over

to the next tax year since the shareholders cannot use CCorporation losses on their personal

returns.

Summary

eal estate is a unique form of selling in which the broker is selling something that represents

their client , the property owner and acts as a representative or intermediary between the owner

and a possible buyer using a mixture of skills to persuade customers to sell and buy.
communication and interpersonal skills are essential as real estate is a “people” business.

Perseverance is also needed when the market is not favourable. Some business entities may

legally broker real estate and others may not. There are principal types of business organization

and the legal restrictions on their ability to broker real estate.All business entities may own and

sell their own real estate in varying degrees without violating license laws.

End of Unit One Assessment

1. Which of the following statement is correct about real estate brokerage business?

A. A real estate broker may open a real estate brokerage in his or her name

B. The broker may have only one office

C. The ownership of a brokerage must be as a corporation

2. Double taxation a does not applies to this business entity

A. Liability company

B. Corporation

C. SCorporation

D. Partnership
3. The following type of ownership ceases to exist in the event of the owner’s death

A. LLCs

B. Sole propreietorship

C. CCorporations

D. SCorporations

4. Which statement is true about brokers at real estate firms?

A. There can only be one broker at a real estate brokerage

B. There can be many brokers managing the firm

C. The ownero f a real estate firm must be a broker

D. There can be many brokers but one managing broker

5. The most common form of ownership is?

A. LLC

B. Scorporation

C. CCorporation

D. Sole proprietorship
 6. The disadvantage of owning a Limited Liability Company is?

A. No corporate veil for lawsuits

B. No taxation to the individual owners

C. More record keeping and paperwork

7. The core activity of real esate brokerage includes ?

A. Prospecting for and qualifying potential customers

B. Buying and selling properties for one’s company

C. Procuring customers forclients and effecting transactions

D. Negotiating sale or lease terms for a client

8. Which of the following best summarizes the critical skills in real estate brokerage

Communication, market knowledge

Selling skills, law and qualification

Listing, marketing, facilitating transactions and managing information

9. Which of the following is the a responsibility of the managing broker

A. To manage all of the company’s branch offices

B. To have affiliated brokers notify the commission if they change the name under

which they transact business

C. To develop and enforce a written policy

D. To be responsible only for broker employees who work for the corporation
10. The tax benefit of an LLC is:

A. Income passes through to the individuals

B. The LLC reduces the individual’s federal tax rate by 10%

C. They are tax free

D. Taxes are paid at the corporate level

Unit 2

Introduction

When building a real estate brokerage ,the broker/owner must comtemplate operating the

company whether as a independent brokerage or as a franchise .The prudent broker must

evaluate these options based on franchises, the competitive advantage and disadvatages, benefits

and drawbacks and start up and operating costs.

A broker/owner might choose a franchise based on their specific business model designed to

support the brokers’s expertises, some franchises target specific niche or markets such as

residential or commercial real estate. The real estate owner must also consider what size the

company will have and what aspects of rela estate services the company will offer.

At the end of this unit the learner should be able to:

 Analyze the size of the of a Real estate brokerage .

 Determine what kind of company the brokerage will be, residential, commercial,

property management

 Describe the different niche(s) the brokerage will serve

Franchise

A franchised brokerage is an independently owned company that enters into a licensing

arrangement with a franchisor to participate in various benefits offered in exchange for

compensation. The franchisor grants the franchisee in this case the broker/owner the right to

market real estate services according to certain specifications using the franchisor’s name

trademark, and business systems. The franchise usually a compamy with a recognized name and

an historically known record. Franchisors generllay offer local franchises:

 The use of a recognized name

 National and regional advertising

 Brand recgonition and marketing materials

 Training programs standardized operating procedures

 Marketing and consulting resouces

 A national referral system

 In exchange , A franchisee pays the franchisor start up fee and a portion gross

income

The disadvantages of a franchise may include , the length of the contract ,the initial

cost a or the ongoing expense.

Size of the company

Potential real estae brokerage owners often have misconception that more agents will result in

more profit for the company but as the Pareto Principle or 80:20 rule states that 20 percent of
theparticipants accounts for 80 percent of the results .Eighty percents of effort are generated by

twenty percent of hard work efforts in other words one fifth of time consuming activities delivers

four fifths of the gross sales o0r gross commission.Too many agents allow their time to be

consumed by activities that generate a mere twenty percent of their revenue. The moment they

shift their time investment into higher return activities will yield dramatic income results.

Starting a rela estate business from scratch can have disadvantages such as the difficulty of

building a customer base, marketing, , hiring employees and establishing cahflow these are

based on no reputation or track record to go on.Buying an existing business can most times be

less risky. The business is taking over an operation that is already generating cash flow and

profits. There is and established customer base, repuattation and employees who are familiar

with all aspects of the business. Buying an existing businesss can however be more costlty as

than starting from scratch even though it might be easier to gain finacing to buy an existing

business than to start a anew one as bankers and investors are more comfortable dealinig with a

business that has already have a proven track record. Part of the negotiations should include the

former owner endorsing the new owner and ownership via sociaolmedia to past and current

clients. The selling broker must saty on for a period of time to ensure a smooth transition. A non

compete clause should also be in the sales agreement viewd by an attorney. To indicate that the

former ownwer was ccompensated and an agrrement not to compete.This clause must be specific

in terms of time and distance.

Niche

A niche is a segment of the overall market.Niche marketers serve a select group of consumers

whose interests and needs are distinctly different from the needs of the market in general. Real
este brokerages can create a market niche by serving consumers ina aparticular geographic area,

consumers seeking a acertain property type, a a certain type of buyer or seller, and income

category.When starting a real estate business it is important to consider what specific niche is

right for the business in order to surpass competition. It is important to put a spotlight on the

target market and how best the business will serve this niche.To avoid overspending ,the new

real estate business must meet the needs of a specific group. Some real esate business niches to

consider are:

Residential

First time buyers

 Resort or second home buyers

 Luxury buyers

 Condominiun

 Military

 REO, foreclosures

 Commercial and Industrial

 Farms and ranches

 International buyers

 Appraisal and consulting

 Property management

 Auction

Residential property
These are properties that are owned and used for habitation , such properties may be further

classified in terms of how manyfamilies they are designed to house, whether thaey are attached

to other units or detached.

First time buyers

First time buyers are new to the entire process, they are anxious about every aspect of the

transaction and even though they have lower budgets and are often in a hurry to buy. Selling to

first time buyers is their lack of education and overall understaning og real estae knowledge.

Agents must take extra steps to educate and assist them.

Developing marketing and transaction information materials will help them to understand the

process. This niche is major source of future repeat business and referrals. The entry price is

however high for foirst time buyers.

Resort or second home buyers

Buyer interest in the resort or second home market ranges from luxury properties, to small rustic

getaways . This market includes Investment and retirement as well as an International client

base. Understanding of the receartion and lifestyle market , the tax treatment of vacation and

second homes and real estate investment is needed for the involvement of buying and selling or

managing second homes in a resort , recreational or vacation destination

Move up buyers /Luxury buyers

The luxury home niche involves high hhome prices with correspondingly high commissions for

agents. Howewver luxury homes require special marketing which means more investmenst by

the listing brokerage.Large commissions per transaction and fewre clients allowing for more

personal attention and involvement. THer can be stiff competition for the luxury agents and

luxury businesses. Higher expectations regarding the smoothness of the process and marketing

production quality. This specialty have significantly longer days on market (DOM0 delaying the

agent’s payday.

Condominiums

There has been a considerable growth in the number of condominiums in the United States,

particularly in resort and vacation communities Focusing on condos is very similar to farming

instead of picking a neighborhood to farm you are picking a single building . Unlike asuburban

subdivision with heterogeneous homes condos are often similar same floor plans and features.

Selling a condo is all about the real estae agent getting acquainting themseleves with the

amenities.. Condos are usually in larger cities so the real estate firm could niche a asingle

building or few buildings for all their business.Condos often target businesspersons and young

professionals this is a high turnover demographic. The downside to condos is that depending on

the building it might be ideal to live in the condo persons are selling.

Military
These are very stable income buyers with favorable VA financing available. This a close knit

and highlt transient population that can produce a significant volume of repeat and referral

business. And is highly enjoyed by many agents in communities that have military bases.

However thre is quit a lot of competition from agent referral programs such as the Veterans

United.

REO/Forclosures

These listings are guaranteed and steady with a motivated seller.This involves a counter-cyclical

business that thrives during market downturns. THses properties often sell quickly and therefore

a short turnaround. REOS usually have low price points and often involves lower commissions.

These hiuse are usually in pooer conditions as well as in poor locations. Foreclosures sdales are

the step before the lender forecloses and can involve sellers who are in a desperate financial

position.Broker participation is required as an indvidual agent cannot be a REO agent. This

niche have the potential to be disrupted if banks choose to use auction services or sell their

properties directly to third parties such as institutional investors

Commercial and Industrial Real Estate

Commercial property refers to retail and office properties, but may also include industrial real

estae. The term commercial relates to the fact that the property can potentially generate income

form a buiness usage. Commercial brokers specialize in income producing properties such as

apartments and office buildings, retail stores and warehouses. In this specialty the sales person is
primarily selling monetary benefits , which are the income appreciation, motgage reduction and

tax shelter that a property can be expected to produce.This niche have very high price points and

commissions per transaction. It is less likely to face significant competition in the near term from

new business model disruptors. There are however very long multi-sales cycles which means a

distant pay day.Similar to commercial brokers , industrial brokers specialize in finding

suitableland an d buildings for industrial concerns. This include sleasing and developing

industrial property and listing and selling it. An industrial broker have knowledge of local

building, zoning and tax laws as they pertain t possible sites and about schools, housing ,cultural

and recreationalfacilities that woulkd be used by future employees and plant .VCommission are

usually irregular but substantial.

Land, Farms, Ranches

With the rapid disappearance of the family farm, the farm boker’s role is changing, College

training in agriculture is an advantage there must also be on the job training Knowledge of seeds,

plants, fertilizers, production methods, new machinery government subsidies and tax laws is

vital. Opportunitie s to earn commissions and fees from lesing and property management as from

listing and selling property.. This specialty have high price points and deals can be complicated

International buyers

International buyers purchase both residential and commercial properties. It can be a difficult

niche for non – natve speakes and involves cyclical incomesource when the domestic economy
is slowing. There are higher prie points. Thaere are more complicated tax and transaction rules to

navigate concerning the buyer/seller foreign status

Appraisal and Consulting

The real estate appraiser gathers and evaluates all available facts affecting a aproperty’s value.

Appraisal is a real estate career that does not requireproperty sellingbut however demands a

special set of skills. The job requires practical experience, technical education a nd good

judgement. A specific license is required, som,e states allow appraisals for non federally related

transactions to be done by non licensed appraisers, brokers or salespersons. For federally related

transactions a certification is required.

Property management

For an invrestmnet property , the property manager ‘s job is to supervise every aspect of a

propertty’s operation so as to produce the highest possible financial return over the longest

period of time. The manager’s tasks include renting, tenant relations, building repair and

maintenance, accounting advertising and supervision of personnel and tradesmen.The expanding

development of condominiums has resultrd in a growing demand fror property managers to

maintain them. In addition to large businesses that own property for theiown use hire property

managers.
Auction

This is a popular way of selling real estae. Some staes require a auctioneer’s license. Most

brokerages add auction as an adjunct to a residential or farm brokerage

Realtor or licensee

Realtor is a registered trademark ownedby the National Association of Realtors. All Realtors are

real esate agents, but onlthose real estae agents who are members of and subscribe to th

association’s strict cod of ethics are Realtors.The term realtor cannot be used bu non members

and in some states the unauthorized use of the term is a violation of real estate law.The benefits

to realtor membership includes the benefits of the MLS ,Code of Ethics , education enforcement

wwhich includes arbritrattion of monetary diputes between members , government affairs

activities.

Summary

A real estate broker/ owner might choose to building their way up to running their own

brokerage business. They might have the financing to move directly into an ownership or join a

real estate franchise . Decisions must be made regarding the size of the company and the niche

to be served. In addition to providing real estate brokering services the business should also

manage residential and commercial properties for customers in the targeted market this is

important for the business as it will provide the business with a recurring revenue.
sUnit Assessment

1. Which of the following characterizes a real estate franchisee?

A. A national firm which contracts with local franchisors to promote the national

identity

B. A brokerage company which charges local brokers fees for membershop

C. A local brokerage owned and operated by a national franchisor

D. A locally owned brokerage affiliated with a natonal franchisor for

purposes of enhanced image and resources

2. A disadvantage of a real estate franchise is?

A. The marketing materials supplied by the franchisor

B. The length of the contract with the franchisor

C. The identity associated with the franchise

D. National marketing and a recognizable name

3. Properties owned and used for habitation are know as?

Commercial Properties

Industrial Properties

Residential Properties

Farm lands

4. This niche involves a counter-cyclical business that thrives during market downturns.
 A. Property management

B. Appraisal

C. REO/foreclosure

D. Farmlands

5. The benefit to Realtor membership includes ?

A. Low fees and membership

B. Code of ethics , education and arbritration

C. Enforcement and surveys

D. Representation and licence

6. Which is true about Appraisal as a real estate career ?

A. This career does not require property selling

B. The job does not require practical experience

C. A specific liceense is not required in some staes

D. Non federal transactions a license is required

7. An advantage of real estate franchise is?

A. The ongoing franchise fees

B. The length of the contract with the franchisor

C. National marketing and a recognizable name

D. The initial purchase price

8. Which of the following is an alternative to starting a brokerage/

A. Buying several real etate companies

B. A brokerage approaching to sell the business to you

C. Locating a company in which the owner is ready to sell

D. Working at alarge brokerage to gain expeince

9. A clause included in the purchase of a existing brokerage would be?

A. A non-compete clause

B. A nondisclosure clause

C. A force majeure clause

D. A parent company clause

10. _________ niche is major source of future repeat business and referrals.

A. Military

B. International buyers

C. Luxury buyers
D. First time buyers
Unit three

Introduction

Today’s clients and customers expect a broker to know the market intimately. It is often the

broker or agent with the best market knowledge who dominates business in the market,

knowing a market includes keeping up to date on, pricing and appreciation trends, financing

rates and terms, demographic patterns and trends, construction trends and general economic

trends.

Learning Objectives:

At the end of this unit the learner should be able to:

 Analyze the existing real estate market

 Understand how to staff the office with agents and support staff
Analyzing the existing market

Knowledge of what niche to serve is needed by real estate businesses , there must be a target

market and a strategy as to how to position themselves within that niche. This can only be done

by conducting both a primary and secondary market research..One of the most powerful tools of

any business marketing strategy is defining and addressing their target market or the audience

that will buy the real estae firm’s product or services.Included in this analysis is the the

competiition within this market that are already serving these niches. How does the competition

market themselves ? What are their strengths and weaknesses ,what do they offer ? are some of

the questions that should be asked when doing a market analysis.

To gain market knowledge and statistics there are a number of readily accessible resources

available. All professional agents belong to Realtor associations that compile and make available

statistical information such as the number of agents working in their marketplace. This

information helps the broker/ owner to understand the competitive arena as well as enables

them to track whether their competition has expanded or contracted.

If already practicing in the market and a member of the Multiple Listing Service (MLS)

statistics for all the listing s and sales in the agents area can be obtained. The MLS gives key

market statistics such as:

 The average number of days on the market

 How many units sold

 Listing price to sale price ratio

 Listings taken to listings sold ratios

 The breakdown for the different types of real estate

  The breakdown and activity of each price range sold

 Company share of the market in dollar volume and units sold

 Geographically active markets inside the agents service area

By evaluating their performance against the statistics of other agents or companies in their

market segment. and comparing numbers from MLS statistics for number of units sold, number

of listings taken, number of listings sold and total sales volume in their marklet place this allows

the broker to make a comparison of themselves to the market at large. This is more effective if

the business s is focused on a certain segment of the total market.Reals estate businesses can also

access knowledge and statistical trends through reports studies and market statistics provided by

the National Association ofRealtors. The NAR provides information such as sales and days on

the market ,what people are purchasing, what financing they’re using, what trends are emerging

and what predictions experts are making for the future. The NAR also conducts annual surveys

and studies of buyers and sellers, why consumers select particular agents, what services they

seek from agents, what geographic areas, home amenities and features cause them to buy. This

type of knowledge enables real estate agents to provide the highset level of counsel and value to

their clients.

Other sources of marketplace information can be company compiled statistics on regional trends

and also on the firms market share and penetration. In states where sellers provide title insurance

to buyers, the title companies often conduct market trend reports that allow agents to better

understand the marketplace in which they work.

Competitive market analysis helps real estate fims to learn from the other businesses competing

for potential customers which is key to defining a comparititive edge that creates sustainable
revenue. The competitive analysis should identify the competition by product line or service and

market segment and assess the following charateristics of the competitive landscape:

 Strengths and weaknesses

 Market share

 The importance of their target market to their competitors

 Barrires to enter the market

 Indirect or secondary competitiors

 Market shares

Recruitment

An employee is defined as someone who is under the control and direction of an employer. An

independent contractor is a person who is hired to do work fror anoter person but who is not an

employess of that person. Independent contractores are responsible for the results of their labor

unlike emplyess who must follow ther employer’s directions Brokers are employed by

principals( buyers and sellers) to represent them, real estate brokers almost always act as

independent contractors.

The real estate law requires that every broker must have a written employment agreement with

each of his or her salespeople, whether they are licensed as a salesperson or as a broker under a

broker-associate arrangement. The employment agreement must cover the important aspects of

the employment relationship, including supervision of licensed activities, licensee’s duties and

the compensation arrangement. The dated should be dated and signed by both paries involved
and both the sales person and and the broker must keep copies for three years after termination of

employment salesperos can only be paid by his or her employing broker, they cannot receive

compensation or referral fees from a lender developer or seller.

The advantage of recruiting new agents are:

 Those with businsess experience will come in with technology, finance marketing and

database management

 Recruits coming straight out of college will bring the attitude that this business requires

professional approach which includes discipline, organization

 They are usually willing to follow advice and direction

 They can be trained to suit the business

The disadvantage of recruiting new agents are:

 New licencees comes in with little knowledge of practical skills such as prospecting,

negotiating and getting to closing. The learning curve might be higher for them as they

are untrained..

 There is a disconnect between young agents and older buyers

 Unrealistic expectations

 Financial resources might not be enough to sustain them until they begin earning money
The advantages of recruiting experienced agents

 They already have an existing client base

 These agents h ave knowledge of the business

 Have realistic expectations

The dsiadavntages of recruiting experienced agents are:

They might be unwilling to learn new methods

 Might have issues with the previous company

 Some aspects of previous training might not be needed.

What does your firm offer

The agent choosing the brokerage should be viewed as a consumer choosing an agent. Real

estate businsses should offer benefits or advantages that the agent can count on such as training,

continuing education, and lead generation opportunities. There should be opportunities to host

open houses , social media positioning, sign calls and market share .The brokerage should be an

attractive market leader , strategic alliances or marketing partnerships the company may have

with third party lead generators.For new agents mentoring could be offered where new recruits

could hone their skills with the help of experienced associates. Assist new recruits to close their

first sale quickly as this could assist in boosting their confidence , they could also be assisted

with finding a neighborhood where they will be comfortable and are postioned to meet people

casually.
Experienced associates are not interested in more training , they are looking for a company to

help them build strategy based on their skills and knowledge to increase their sales.To get to the

next level of productivity, experienced agents are looking for brokers who have the resources to

root out and manage leads quickly and effectively.Ownership opportunity or the option to own

is attractive to many veteran agents as it enables them to grow along with the company helping

them to build future financial services

Why real estate companies recruit?

The main reason for real estate firms to recruit is to build a team.To achieve business growth

and stay ahead in a highly competitive industry , real estate brokerages must continualy recruit

skilled agents. To expand into a new market , To replace agents leaving the firm,To attract

younger agents, and to expand into new specialyu aresas or lines of business.

An agent employee of a broker may receive wages, salary, additional commissions, expense

reimbursements and benefit palns. An independent contractor’s compensation is a normally a

combination of commisisions and free office support, most sales agents work as

independentcontrators who earn a commission.

The Interview Process

The main purpoe of an interview is to gather enough information about the candidate to

determine if they will be the best fit for the position. Adauring the interview the candidate

must be an active participant to determine if the position is right for him or her. Multiple

interviews are used to gather information that increases the chance of hiring the right person.

In order to achieve a valid assessment a three step interview process is done, this includes

phone screen, first round of formal interview and then a final round of interviews with the

top candidates. The final round could be a business dinner where the candidate’s spouse or

partner is included as it woul be very difficult to succeed in the real estae business without

family support.

Firing

There ar a avariety of reasons for persons to be fired reasons such as stealing , physical or

sexual assault, the use of drugs or alchol. Job descriptions whether for support staff or

agents should outline the expectations of the company.Goals must be established and

followed up , these goels should be realistic , difficult and clear. Ther should be an exit

interview if firing an real estae personnel to aascertain how the firm did not meet their

expectations
Administrative Assistant

A real estate administrative assistant’s role is to help real estate sales agents perform

efficiently. This job includes clerical duties such as scheduling appointments and organizing

files , customer service duties to meet the clients needs. A good assistant keeps the office

running smoothly, allowing the real estae sales agents to focus on dollar producing activities..

Real estate administrative asssitants perform a multitude of duties to support saales team.

Day to day duties include answering the telephone, taking messages scheduling

appointments, preparing real estatae forms, documents and correspondence,ordering supplies

distributing reports making travel arrangements,and maintaining electronic and paer filing

systems .They may also handle updating information on the Multiple Listing Service,

collecting r ent and disbursing funds associated with a home sale.

Closing Coordinator

Real estate closing coordinators ensure that local, state and federal requirments are met and

that all paperwork is in order to close a transaction. They coordinate legal forms involving

title, escrow and mortgage loan, as well as collect information on the purchase and sales for

all the agents working under the realty office broker. In large offices with more than one

broker, each broker may have at least one closing coordinator or the closer may work

exclusively in one area, such as mortgage or escrow. High-powererd agents sometimes

employ their own closing coordinators who work exclusively with them. Closing

coordinators are responsible for opening, maintaining and filing all documents related to the
 sale or purchase of a home or business. They may also work with residential and commercial

leases and apartment rentals. Some closers work as file clerks, making duplicates of forms

and keeping track of documents. Other closers work with one or more real estate agents or

brokers to set listing and showing appointments and collect required data and licensed. These

closer are usally licensed agents who have completed agent coursework and training.

Trainer

A trainer for a large real estate company might be a a full time position but this service could be

contracted to use when needed. Tainers are needed as there might not be enough time train ,

supervise and manage agents.

Outsourcing

Outsourcing is an effective strategy for improving the profitability of any business. Advertising

and marketing functions are usually outsourced for campaigns or for a limited time. It is for

Real estate like every other business need to keep track of income and expenses flows. Without

knowledge of where inflows come from abnd where outflows went, it will be difficult to

manage the business, evaluate performance or scale operations. By outsourcing finanncila tasks

these numbers for the business can be easily accessed.

Summary

Real estate is like any other competitive endeavor, if all the knowledge about this area is

acquired the real estate firm will gain competitive advantage that will distance them from the

competition. Be analyzing the competition that reguluarly come against in listing presentations

or have significant market share in the firm’s geographic area will positively impact the success

of the real estate firm.

Achieving solid and functional organizational structure of the real estate is done through

previous planning of the strategy oriented towards the achievement of the set objectives
Unit Quiz

1. Which of the following is the advantage to hiring an experienced agent over a new

agent?

A. They are always receptive to new training

B. They bring with them clientele and experience

C. They are eager to learn from you

D. They know everything there is to know about real estae

2. A company hires a person that ensures that local, state and federal requirments are

met and that all paperwork is in order to close a transaction , this job title is?

A. Trainer

B. Receptionist

C. Closing Coordinator

D. Administrative Assistant

3. A market analysis will tell you?

A. If you you can gain market share

B. What the competitors market share will be

C. How the market is allocated among the types of properties sold and price ranges
D. How may agents are to leave the business next year

4. A personal assistant would need a license to?

A. Enter data in the MLS

B. Photocopying listings

C. Review a contract with a client and show them where to sign

D. Put up signs

5. Two ways of analyzing a real estate firm’s market position are:

A. Market share and number of agents

B. Company dollar and number of sides

C. Number of sides and Dollar volume

D. Dollar volume and number of agents

6. The advantage of hiring a new agent over an experienced one is?

A. They are more enthusiastic

B. Knowledge of filling outforms

C. They have an existing client base

D. They are less competitive

 7. A person that trains supervise and manage is called a:

A. Receptionist

B. Trainer

C. Closing Coordinator

D. Administrative Assistant

8. Some tasks that are outsourced are?

A. Sales and closing

B. Listing and prospecting

C. Accounting and Marketing

D. Recruiting and training

9. The best source to determine the dollar volume of a particular market ina particular
year is ?

A. The Chamber of Commerce

B. The Department of Labor and Industry

C. The local MLS

D. The National Association of Realtors

10. An Independent Contractor is?

 A. Is an employee of the broker

B. hired to do work fror another person but is not an employee of that person.

C. Hires experienced agents

D. A temporary employee

Unit 4

Introduction

Professionals in the brokerage businessmust have a broad range of real estae knowledge and

skills. Agents must develop a thorough awareness of their local market and properties.Agents

must also develop a proficiency of the ceconomics of real esate such as prices , finanacing ,
closing costs .People skills are also important , communicating with clients and responding to

their needs.Training is therefore a requirement for every real estate professional which should

include from the experienced agent to the support staff. Policies and Procedures manual must be

referred to when training these real estate professionals.

Learning Objectives:

At the end of this unit the learner should be able to:

 Describe training needed for new and experienced staff

 Understand goal setting and review of goals with agents

 Identify training needed for support staff

 Outline items needed in a Policy and Procedures manual

Training

A new salesperson may get training depending on the company,firms who are more selective of

their salespeople tend to judge their potential and think of them as valuable additions to their

staff, to be trained and treated with respect. Most real estate companies provide extensive sales

and on the job training as the broker is responsible for everything a sales person does and seeks
to avoid costly mistakes. I n employing a salesperons , a broker generally makes a commitment

to:

 Make the brokerage’s listings available,

 Make the brokerage’s market and property data available

 Provide whatever training was promised at the time of hiring

 Provide whatever office support was promised at the time of hiring

 Uphold the commission structure and expense reimbursement policy

 Conform to ethical standards imposed by the broker’s trade organization

 Uphold all covenants and provisions of the employment agreement.

Most states require continuing education (CE) as training o agent is an ongoing thing.

This becomes more challenging every year as agents must be keptup to date on all issues

which affect real estate. Rules and laws which affect real estate are environmental law

federal laws, local laws, license law and state law.Recruiting is an on going process and

can be focused on new or experienced agents.

Agents

Skills of real estate agents should include:

A real estate agent job description should include:

  Generating client’s leads to buy sell and rent property

 Comparable market anlysis Assisting buyers and sellers with research in order to provide

the best information about the property and the transactions

 Create listings for real estae sale properties including information on square footage,

location and features

 Show property to potential clients

 Facilitate negotiations between buyers and sellers

 Make all Disclosures required by federal law, stae law, sellers property disclosure notice

and local notices

 Do follow ups promptly and couteosly to all enquiries from customers, clients and

cooperating brokers

 Enter data for listings into the MLS system

 Review purchase contracts to ensure that terms are met

 Promote properties with open houses, advertisements and listings

 prepare loyalty contracts , purchase agreements ,rental agreements, deeds and other

documents for each real esate transactons where permitted by stae law or regulations

 Maintain your realestae license and knowledge

The skills needed for a real estate agent are:

 Financial qualification which include sknowledge of the ability to calculate mortgage

payments and mortgae financing, understaning how to price property for buyers and

sellers.

 Market analysis
  Marketing practices

 Ethical practices

 Liability management

 Data management

 Selling

 Time management

 Organizational skills in regard to time, materials and data to keep track of a anumber of

varied tasks

 Communication in a variety of ways such as email, face to face, text or by phone

 Writing skills

 Basic computer operation this inclues word document, preparing g contracts, eamils,

using software to prepare contracts, online MLS, scanning, saving files as PDFs ,

sending and receiving documents

What are realistic goal setting

Goals must be realistic and achievable.This means that they must be believed in order to achieve

them . Setting short medium and long term with personal rewards for achieving each one can
help break down the process into achievable bites.Goals must be held to a specific time line with

precise dates for completion built into the plan. Agents need to be able to help enough people so

that they can devote full time to their service profession. Those interested in buying and selling

homes want results in a reasonable amount of time ideally less than three months.Licensees are

not paid for their service until theservice has been performed. That usually means a property has

actually changed hands and the deed has been recoreded or a alease has successfully been

negotaitaed. Long term goals can help perepare for retirement for example setting a long term

goal of investing in their first income property until reaching a certain level of production.

Accounatbility is important as agents should hold themselves accountable for achieving their

goals.

When setting goals should be reasonable, for example is it realistic and practical to set a goalto

sell a million dollars worth of real estae in the first quarter?agents must refer to experienced

agents or management for advice on setting realistic goals. If realistic and attainable goals are not

set the agent will become frustrated. They should be realistic but should not be afraid to set high

standards.

Needs should be analyzed, in other words, determine how much money you need to meet

all normal obligations

Wants should be listed they might include ____________ The goal should be attanable this

does not mean that the should be simple , the goal must however be realistic. Determine an

action plan in order to to accomplish the objective , take the goal preferably one

established for the upcoming year and work backwards. How much money will you have to
make each month to accomplish your goal? How many listings each month, at what

average price? How many sales each month at what average price?

How many contacts will you have to make each month , each week, each day, to accomplish

your long term goal

Convert action plan to daily planning, once you determine how many contacts you will

need to make determine how you will make them (through elephone campaign, by mail , in

person) enter in your daily planning what you want to do each week

Include checkpoints, each month review the previous month’s activities and analyze them.

Assess your progress and revise your schedule activities, develop a habit ogf checking your

progress regularly. Determine ahead of time whwether you are going to miss your mark

and plan what to do to correct it.

Support Staff

Contract Staff

Contract employment involves hiring persons for a aspecific job under particular terms for a

fixed period of time. Through a company’s standard policies and procedures A contract

employee (or self employer) is not considered a permanent employee and is not eligible for the
benefits and accomodations available to permanent mployees. The decision to contract out work

is based on the analysis of skills required , time, equipment and money.

The employment contract for a contract employee summarizes :

 The services to be provided as job descriptions for support staff are varied since there are

various job titles and job duties.

 Payment terms how intellectual property will be treated, employment terms and

termination clauses

 Any reporting requirements,

 Confidentiality clauses, this involves preserving the confidentiality of the company’s

classified information and client’s information. It should be understood that the company

collects and maintain confidential data about clients, their properties , their financials

etc.An agreement should be signed agrreing that all client data, files,company pocedures

,policies and trade secrets are confidential information

Some jobs that a areal esate firm can contract out are accounting, training, cleaning Sign

installation, ad campaigns, photograpghy, social media montoring and marketing.

Employees

Job description

Job descriptions should be developed to assist how a brkrage firm articulates the mos

important outcomes needed from a potential employee , they help to highlight the bounadies of

the person’s resposnibilities. Job descriptions are an integral part of the performance
development planning process , they are neede as a guide for an employee’ expectations of their

roles at periodic reviews and palnning meetings.

Prioritize te information provided in the job description. Details that are of the greatest interest

should be presented first. , this list should coalesce around a particular skill set which will lead to

the type of employee needed for example a list for an Administrative Assistant which

illustrates the most important to the least important:

 Meeting and greeting clients, interacting with clients and staff daily , handling routine

queries

 Operating personal computer to acess emails, electronic calender and other basic office

support software

 Coordinating meetings and travel arrangements

 Compiling and organizing reports , managing projects and schedules.

.For this real estate firm being a information and communication manager and

Administrative and clerical tasks a priority .

Full time or Part time

Based on the needs and the budget of the firm , the real esate brokerage might start with

part time employees and then move on to full time employees. Retired agents who are

still intersested in working could be considered for part time employment as they bring

the added benefit of knowledge of the industry . Some jobs can be done remotely and
 might interest persond with a background in real estate and might working elswher

fulltime.

Policies and Procedures Manual

Policies and Procedures manuals is a guidebook that salespersons can refer to in their

daily business , it helps to prevent disputes by permitting the anticipation of and

resolutions before they arise. and helps ensure the success and reputation of the

company.The manual provides stability for the company and permits the staff to function

effectively in the absence of management. Provides a clear understanding of the

relationship between broker amd sale s associates, management and employees and

administrative functions and sales functions. Policies that should be included in the

manual are:

 Ethical standards (THE Realtor Code of Ethics)

 Communications including email, texting

 An Equal Opportunity statement

 Performance reviews

 Confidentiality

 Sexual harassment policy

 The adherence of all employees and agents to all stae ,local and feral laws as they apply

to the business

 Aderence of all employees and agents to stae real estate licensing law

 Fair housing policy

  The use of drugs or alchol when representing the company or when on company property

 Disclosure requirements including agency disclosure, material fact disclosure, and

interests in related affiliated businesses.

 Expenses and office equipment

 Workplace privacy

 Confidentialty

 RESPA compliance

 Errors an Commissions Insurance

Summary

Training is not a one time program. Real estate professionals must work constantly on improving

their skills as well as increasing their knowledge. The most successful agents are constantly

striving for improvement and this striving continues throuout their careers. Established goals

should include short term , intermediate and long term goals, plannining is needed to meet these

goals as this will reduce wasted time and the realization of individual goals. Real estate Policy

and Procedures manuals is a comprehensive instrument used to elaborate business policies and

operations , it communicates business policy with employees and include their duties and

responsibilities.
End of Unit Four Assessment

1. Which of the statements is true about training agents?

A. Experienced agents do not need training

B. Only some agents need training

C. Training is contious as the industry changes constantly

D. Neww agents need minimal training

2. Which of the following jobs would a brokerage contract out another person or firm

A. Payroll and accounting

B. Training of agents

C. Office cleaning

D. All of the above

3. Which of the following would a real estate company include in a Policy and

Procedures Manual ?

A. A requirement for all personnel to be licensed

B. Business procedures including escrow handling and presentation of offers

C. Requirement for employees to undergo sensitivity training

D. Outline on how to plan the company get together

 4. In order for an agent to plan and make goals for the coming year thay should know:

A. The median sales price and median commission in their market

B. In the MLS the total number of lisyings sold

C. The profitability of the company

D. The number of listings which did not sell

5. What does contract employment involves?

A. Signing a contract thatinvolves benefits

B. involves hiring persons for a aspecific job under particular terms for a fixed period of

time.

C. Hiring persons for permanent employment

D. Contracting persons for the firm

6. A job description for a real estate agent includes?

A. Time management

B. Organizational skills in regard to time, materials and data to keep track of a anumber of varied

tasks

C. Communication in a variety of ways such as email, face to face, text or by phone

D. Facilitate negotiations between buyers and sellers

 7. In the agents setting goals they must be?

A. Reasonable

B. Realistic

C. Progressive

D. Reachable

8. Which of the following is askill requirwment for agents

A. Organizational skills

B. Time management

C. Marketing analysis

D. All of the above

9. The first thing you make in a hiring a person is:

A. A background check

B. Negotiating salar

C. Determine if the potential employee is a good choice

D. Doing a job description

10. Which is correct in regards tothe Policy and Procedures Manual

A. One printed copy is needed at the office

B. It should be reviwed by an attorney

C. Agents are only to review and sign

D. All agents and employees should awknowledge in writing and agree to to

abide by the manual

 Final Exam

1. An activity which involves the sale of property through an intermediary who

negotiates the transaction for payment is a:

A. Listing

B. Deposit

C. Brokerage

D. Prospect

2. A person who is under the control and direction of an employer is

a. A broker

b. Managing broker

c. Director

d. Employee

3. The main source of income for real estate salespersons are:

A. Commissions

B. Referral fees

C. Transaction fees

D. Licence fees

4. Real estate salespersons are paid when:

A. The broker receives the deposit from the buyer

B. The buyer and seller opens

 C. The transaction closes

D. They receive a listing

5. When choosing a broker a new agent should be interested in which of the following

offices?

A. An office that offers 90% commission plan

B. An office with only a couple of successful people

C. An office that has a very busy selling broker

D. An office that has excellent initial and ongoing training

6. What area of real estate are most agents involved in?

A. Subdivision home sales

B. Residential property

C. Commercial property

D. Land sales

7. Which of the following represents the core activity of real estae brokerage?

A. Prospecting for and qualifying potential customers

B. Buying and selling properties for one’s company

C. Procuring customers for clients and effecting transactions

D. Negotaitiating sales or lease terms for a client

8. Which of te following summarizes the crtical skill in real estate brokerage

 A. Selling skills law and qualisfication

B. Communications, market knowledge

C. Fiduciary duties

D. Listing , marketing,facilitating transactions and managing

9. The term “Realtor”

A. Is the identity for any duly licensed active agent or broker

B. Is the trade identity for all members of any properly chartered real estate trade

organization

C. Is the generic name used by brokers thouhout the country as a trade identity

10. In goal setting tasks are ?

A. Stating what you want to achieve

B. The manner in which you personally interact

C. The building blocks, usually the simple things you must do to attain a

major goal

D. All of the above

11. For gaol setting to be successful they must be?

A. Written

B. Realistic

C. Clear and specific

 D. All of the above

12. One characteristic of a Ccorporation is?

A. They do not provide any”corporate veil” to the ownres

B. Are the most common form of ownership

C. Passes all income to the owner who pay taxes on it

D. They are tax free

13. The following is a benefit of LLC ownership

A. They are tax free

B. Taxes are paid at the corporate level

C. Without being taxed ncome passes through to the individuals

D. The indviduals,s federal tax rate is reduced

14. A commercial broker would generally:

A. Sell commercial properties only

B. Lease commercial properties only

C. Sell and lease commercial and industrial properties

D. None of the above

15. To determine the dollar volume of a particular market in a a prticular year, the source

would be:
 A. The Chamberof Commerce

B. The National Association of Realtors

C. The Department of Labor and Industry

D. The local MLS

16. One requirement brokerage firms would have for all employees and salespersons

contract employees is:

A. An agreement to adhere to the Realtors code of Ethics

B. A requirement to keep all company information confidential

C. A dress code

D. A knowledge of licens law

17. One disdvantage of hiring an agent with no experience is:

A. They are receptive to training

B. They are eager to learn

C. They bring with them clientele and experience

D. They have wide knowledge about real estate

18. The Pareto Priciple applied to real estate brokerages staes that:

A. 20% of the sales are made by 80% of the agents

B. 80% of the agents make 20% of the sales

C. 80% of the sales generated by 20% of the agents

D. 80% of the agents generate 40% of the sales

19. A managing broker’s responsibilities to a broker include:

A. Attending the broker’s listing presentations

B. Providing access to marketing data

C. Provide tax couseling

D. Providing heath insurance