General Real Estate Careers Articles

Cheat Sheet / Updated 09-20-2022

Being a landlord certainly sounds easy. All you have to do is line up responsible residents, maintain the property, and count your money as the rent rolls in, right? Actually, no. Owning and leasing residential real estate requires that you comply with a host of federal, state, and local laws. Certain residents may complicate your life by taking legal action against you or forcing you to take legal action against them. This snapshot explains some important landlord legalities and helps you avoid the most common legal pitfalls of owning and leasing residential rental property.

Article / Updated 08-16-2022

How you choose to structure your business as the landlord depends in part upon your willingness to share its future and yours with others. Forming a corporation is a fairly complex legal endeavor that involves the following steps: Choose and register a name for your corporation that complies with state requirements. Write and file your articles of incorporation. Write bylaws to govern corporate operations. Issue stock certificates to your [email protected]’s owners and investors. Obtain any business licenses and permits required by your state and local governing bodies. You can take any of the following three approaches to form your corporation: Do it yourself. If you’re the sole owner of the business and don’t intend to add owners, seek outside capital, or do business in multiple locations, you may be able to incorporate without expert assistance. Use a third-party service. Hire a reputable, local attorney. Outsourcing to a business-formation service Numerous firms offer services to help you form a business entity. Three of the best known are Legal Zoom, Rocket Attorney, and The Company Corporation. Others include Inc Authority, and Directincorporation.com. Before using a service, check with others who’ve used it, and expand your search to include LinkedIn, Facebook, and Twitter. Find out how they’re regarded by the Better Business Bureau and local consumer protection organizations to determine whether any complaints have been filed against them. Keep in mind that these firms are ordinary retailers who tend to advertise low prices “Starting at …” for only a few of the services you need. Comparison shop. Find out what’s included and what’s not. Get a price quote from a reputable local attorney, as well, for comparison purposes. Make sure you get a price quote that covers everything you need to form your corporation. Hiring an attorney and accountant We recommend that you hire a reputable, local attorney to guide you through the process of incorporating your business and an accountant to manage the corporation’s payroll, taxes, and financial reporting for several reasons, including the following: Your attorney can help evaluate your specific needs for the area where you’re setting up shop and recommend the best business structure to meet those needs. Choosing the wrong business structure may imperil your personal assets and limit your tax benefits. Your attorney makes sure all documents are filed properly with the right government agencies and in a timely manner. Your attorney can refer you to experts in accounting, banking, financial planning, insurance, and web design. A good business attorney will have an ongoing professional interest in your success. Your accountant keeps the books and creates and files financial reports in compliance with federal, state, and local laws. Running your operation as a corporation As complicated as forming a corporation is, running it requires even more attention to detail. You must fulfill the obligations of corporate governance, which include: Paying yourself and other owners and investors salaries or distributions Holding at least one director and shareholder meeting annually Typing up and filing minutes from those meetings Updating the bylaws Practicing generally accepted accounting principles (GAAP) — standards and procedures for recording financial transactions and producing financial reports Producing and filing an annual report with your Secretary of State Preparing the corporation’s annual tax return

Cheat Sheet / Updated 03-15-2022

Property management is a job of detail and preparation. You need to prepare empty units to show them to new tenants, be able to match potential tenants with the right unit, and, most important, be able to collect rents effectively.

Cheat Sheet / Updated 03-09-2022

The real estate business is a dynamic market. And to be a successful real estate agent, it helps to have a few key skills at the ready. Being prepared to use your time wisely, creating an online presence, converting online lookers into clients, and prospecting for business are important tools that every successful agent should possess.

Article / Updated 08-22-2017

Current clients are people you're actively representing, right now, in real estate transactions. Current clients are a rich pool of referral opportunity mainly because, more than any other group, they have real estate on their minds. They're in the midst of deals that they're constantly talking about with their friends, associates, family members, and neighbors. They're posting pictures of their dream home or their new home on Instagram and Facebook. They're pinning real estate pictures on Pinterest boards. Their online and offline conversations revolve around their real estate wants and needs, their moving plans, real estate trends, and market activity. They're churning the waters for your next prospect with every post, tweet, and pin. If you don't ask your current clients to recommend you to their friends or to refer their friends to you, you're really missing out on a huge opportunity to reach potential prospects. You can bet that your name comes up in your clients' conversations, even if it's just to say that they have an appointment or that they're awaiting information from you. Putting in a few good words on your behalf is a natural and easy thing for them to do. You just have to ask. You talk to your clients regularly to communicate about selling their home, finding a home, monitoring their transaction progress, or working toward closing. During the course of those conversations, ask for referrals. The following figure shows a timeline for real estate agent referrals. The following figure illustrates a winning strategy for the referral ask. Don't forget to have your clients include you in their social-media world. Getting your clients to post about their experiences and tag you on their Facebook pages brings you into their circle of friends. It opens the door to them liking your business page and forming a service relationship. Be sure to engage in posting and include your clients in your posts.

Article / Updated 08-22-2017

The purpose of prospecting is to develop prospective clients for your real estate business. The prospecting method, even in today's world where people text more than answer the phone, still has merit and success attached. The figure shows a hierarchy of pyramid of sales and communication. This pyramid shows the power of persuasion is increased, as well as the impact, the higher you move on the pyramid. As the figure shows, informational marketing strategies are the lowest level of communication and influence. The direct mail and advertising we do, for example, through billboards or other advertising mediums, require a lot of impressions because of the limited persuasion they contain. Incorporating some type of social proof or validation can increase the effectiveness, but they are at the bottom of the information zone. When you move up into email, social media, text communication, and video email, you are still in the information zone. You are transferring information — creating a connection but not selling. You will achieve a higher response rate to a Millennial prospect if you send a text. Millennials use texting to communicate. Response rate is part of selling. It's an important part of selling . . . but it's not the only part of selling. You have to persuade, handle concerns, and change thinking in order to make a sale. There is no evidence, in fact, that you can do that better via text than via phone or face-to-face conversation. All evidence is that the conversion rates are better in face-to-face and phone-to-phone voice communication than in electronic communication. All the electronic options are part of an effective sales strategy. You need to build effective social media messaging. That messaging needs to create engagement and a relationship. The text messaging needs to be short and effective and have a solid call to action (CTA). The missing element in most text communication is the CTA. All electronic communication is in the information zone of communication. Because of the image and public perception of salespeople, especially real estate salespeople, the more you can break through that consumer mind-set of agents that know little, earn a lot, don't do much, and are out for their self-interest, the more effective you will be in establishing trust and credibility. You need to smash that mental image of a salesperson that they have. This is especially true for online leads, whether that is pay-per-click, organic, Craigslist, Facebook ads, or other forms.

Article / Updated 07-03-2017

A service encounter happens any time a consumer interacts with a servicing organization. Every website hit or incoming ad or sign call is a service encounter. When a prospect talks to you, your staff, your company receptionist, your closing coordinator, or your broker, owner, lender, escrow or title attorney, or anyone on your service team, that person is having a service encounter. If one person in the long chain of people who help you get your job done says or does anything negative, it affects the impression of the nature of the service you provide. There's no way to separate yourself from your colleagues if they mess up. It's even possible for your service to be tainted by those outside your service team. For example, say that a buyer uses a lender other than the one you recommend. If the transaction closes late and with a higher interest rate than originally quoted, that client will leave with a bad impression about the whole transaction and everyone involved in it. Your future business and referral opportunities are affected by the actions of someone entirely outside your influence. To direct your service encounters toward superb outcomes, follow these steps: Control service encounters by using your own people to conduct transactions. Direct and drive as much business as possible to the best providers. Work hard to convince the client to use people on your team when securing a mortgage or closing the deal. Some may call this "steering," but I view it as taking care of your clients. Make sure your clients work with lenders who know their stuff and are responsive. Be aware that the lender triggers the choke point in most transactions. Take time to counsel your clients toward a resource you know will perform. Have a plan for recovering from service disasters if necessary. If your client is reasonable, no situation is too far gone to salvage. In fact, handle the problem well and you're apt to turn a disgruntled client into one of your most vocal supporters. Take these steps: Do what is necessary to right the wrong. Find out from the client what it will take to turn the unsatisfactory situation into a satisfactory outcome. Ask what it will take for them to be delighted. Be cautious here. I don't really believe that forgoing a fee or reducing a cost ever creates a more satisfied client. The service and the cost are not linked at this stage of customer satisfaction. Avoid the blame game. If you point out that it was the client's decision to use the service provider who caused the problem, you only make the situation worse. Conveying that "I told you so" is never a way to soothe feelings. Follow up. Eventually sore feelings will wane, but the only way to replace the negative impression is to make a better one through continuous, professional contact. In the early stages after the mishap you may not see many referrals, but when they start to come through you'll know your service recovery plan was a success. If you can't turn the situation around, don't concede your profit. Some clients only feel placated if they get into your pocketbook and win cash compensation. If you did something that caused them to be hurt financially, you may have to buck up. Most of the time, though, that won't be the case. Before you ever give up your hard-earned money, ask yourself three questions: Will offering cash really turn this client into a raving fan? Is there another way to turn this client into a raving fan? Is there a reasonable chance that I'll win future business and referrals from this person? If your answers don't cause you to feel confident that giving up money will net a future return at a low risk, keep the cash in your pocket. Developing a service plan The best way to provide the level of service you and your client agree upon is to create two checklists, a New Listing Checklist that details the steps you will follow when accepting a listing and a Sale Agreement Checklist that details all the steps that happen from contract to close. The following figures present samples of each of these checklists to guide you as you develop forms that work for your own business. Standard procedures vary from state to state and MLS board to MLS board. You need to customize them to fit the requirements of your state, region, municipality, and code of ethics. Extending extra touches that create gold Ask the agents in your office what extra touches work for them. Ask your broker what she thinks falls into this category. Following are two of my favorites: one that is extended right after the closing and one that works well for long-term clients: Right after closing, arrange for two hours of complimentary handyman repair work. The cost of this much-appreciated added value is only about $100, and the perceived value is huge. More often than not, clients use more time than the amount covered by your gift, so the handyman acquires new clients and as a result will probably give you a great deal on the time he sells to you. Also, by sending in a handyman, you help the clients resolve small issues the seller didn't handle before they fester into something bigger that leads to frustration with the transaction, which leads to frustration with you. This idea is an inexpensive win/win. For long-term clients, consider buying four season tickets to an event series you enjoy in your town — perhaps the symphony, theater, or professional or college sports games. Be sure the events are ones you enjoy attending and that the activity is consistent with your professional image. (Tickets to WWE wrestling probably won't make your list.) Shortly before each event date, invite clients to attend the event with you. Don't issue invitations when you first buy the tickets. Wait until a few days or a week before each event. At that point, your invitation will seem spontaneous and genuinely friendly. Some of your invitees will already be booked and will have to decline. You may have to call six to ten people to give the tickets away. If so, you'll win their appreciation, and you'll still have the tickets to share with another long-term client.

Article / Updated 07-03-2017

As a new real estate agent, the first, second, and third place to invest your marketing dollars is online. The two main issues you face with the Internet are quality and quantity. You want to drive visitors to your site so you can increase the odds of generating leads from it. You also want to increase the quality of the prospects so you can separate the really good buyers and sellers from all the rest. You want to achieve a reasonable conversion rate, preferably much higher than the 0.5 to 1 percent many agents now experience with web leads. You have to do a delicate balancing act in terms of quality and quantity. If you had to choose one, which would you choose to do first — quality or quantity? Before you select, let me tell you the truth of the Internet. The volume of traffic is important. At the end of the day, the one who has the most visitors usually wins. You may build a beautiful website, but you have to drive traffic to make money with the Internet. When you get the traffic, you have to convince people to stay and leave a trail of contact information. You need them to at least leave bread crumbs: their first name and email address. You can bring a couple of thousand people to your site monthly and end up with two or three prospects. I'm not talking about clients; I'm talking only about prospects. You now have to do the work of moving them up the loyalty ladder to becoming a client by converting them from web visitors to buyers or sellers. You can do this by offering a free report, a market trends report, best values list, a newsletter, or something that a potential buyer or seller deems valuable enough to give you at least their first name and email address. You need to walk them up each step of the conversion track. With each level or step they take, your probability of earning a commission check grows. The object is to move the visitors to prospects, prospects to clients, and clients to referral sources. The more complete the contact information you can get people to leave, the higher the probability you can move them up to the client stage. More information increases the opportunity to move them to a fundamental sales channel of send > call > see. The balance in this approach is you will have a higher bounce rate. A bounce happens when the online consumer bounces off your site or landing page because you have asked for too much information. Rather than filling out your form with their information, they leave your site. Getting prospects to reveal their full contact information when they make their inquiries is paramount. For example, too many Internet leads come in without phone numbers. Getting a prospect's phone number enables you to text them or call them back — these raise the conversion ratio substantially. Additionally, you have that 90-day window of opportunity for future phone contact within the confines of the National Do Not Call Registry. Most agents are chasing a lot of low-probability prospects through the Internet. They have an email address and are sending property-match searches daily. They even put prospects into a drip sequence. A drip is a series of emails over time that you send. They also have the prospects on an electronic newsletter list. These agents start the prospecting process but often let it stall at this stage. All those methods are automated, so agents invest limited time — but also reap limited rewards.

Article / Updated 07-03-2017

Help sellers achieve the lightest, brightest, and largest interior possible by taking the following advice to heart. To help sellers prepare their home interiors for showing, have them take two initial steps: Get them to rent a drop box or dumpster and throw away or donate anything they haven't used in a while. Convince the sellers to rent a storage unit. After filling a dumpster to the gills, they may still have things that should be moved out of the house — if not out of their lives. A storage unit provides an inexpensive, readily available solution. After these initial steps are taken, you and the sellers can focus on other ways to make the home more appealing to potential buyers. Staging a home The term staging describes the process of rearranging and decorating a home's interior in an effort to downplay deficiencies and accent strengths. In its simplest form, staging involves adding specialty accessories like towels, candles, throw rugs, bedding, pillows, dishes, napkins, and stemware. Staging at its most extensive level involves rearranging or replacing furniture or even adding specialty furniture pieces to create a feeling of comfort and livability. Before you advise clients on the staging process, gain knowledge about basic staging techniques and outcomes by visiting newly developed neighborhoods with model homes. Invest the time to see how new homes are being shown. Notice how the most appealing homes present master baths. Take a close look at desirable kitchens to see what is and isn't on the countertops. Note how towels, dishes, and glassware are displayed. Most of all, study how furniture is arranged in variously shaped rooms to create an environment that is open, warm, and comfortable. Clearing the clutter When buyers are house shopping, they're given the challenge of mentally removing the seller's stuff before deciding whether they actually want to move in. This type of mental gymnastics helps buyers assess how well the home they're viewing will accommodate their own possessions. Some sellers' homes are so full of garage-sale and flea-market finds that the buyers honestly can't see the home through the clutter. They can't "move in" because they can't see anywhere for their own things to go. If you're working with sellers who are surrounded by clutter, do the following: Advise them to remove excessive amounts of accessories and knickknacks. Dismantle the "shrine wall." A wall of pictures of children, grandchildren, nieces, nephews, friends, acquaintances, and snapshots of every experience the owners fondly remember adds clutter with little to no buyer appeal. Follow the design rule "When in doubt, take it out." Advise sellers to keep clutter, wall décor, and placement of figurines and mementos to a bare minimum. Knowing what to keep and what to remove The point of showing a home is to allow prospective buyers to mentally move in and assess how well the home fits with their lives and possessions. Real estate agents know to listen and watch for buying signals, and one of the clearest and best signs is when buyers discuss how their own belongings may fit in various rooms. Buyers can hardly think about where their piano, china cabinet, or most-treasured family heirloom will go when they can't get their eyes past the visual onslaught of the furnishings, accessories, and clutter of the current owners. Use the following information to guide your recommendations regarding what sellers should leave in place and what they should move out prior to the home presentation. Pictures: Suggest that the owners pack up all but a few of the personal photos in the home. Appliances: Except the ones that get used daily, store all small kitchen appliances. Leave the coffeemaker on the counter, but lose the blender and maybe even the toaster. Vanity items: Remove most of what is on the bathroom vanity, including decorations and toiletries. A collection of items draws attention to a small vanity size. Closets: Thin clothes out of closets to create the illusion of greater space. Even a good-sized closet that is crammed with clothes looks undersized and inadequate. The garage: Too often, what gets removed from the home goes into the garage. Don't let your sellers make this mistake. Ask them to move household items into a rented storage unit instead. While they're at it, they can move garage items — from extra sets of tires to out-of-season recreation equipment — to the storage unit. Then advise them to organize what's left. The objective is to end up with a clean, spacious garage that adds openness and perceived square footage to the home — and dollars to the final sale price. If you encounter seller resistance, remind your clients that they're going to have to pack their stuff up anyway. By preparing their home for presentation, they eliminate visual clutter and get a leap on the packing process at the same time. Simplifying traffic flow The design rule "When in doubt, take it out" applies to furniture as well. Rooms that feel cramped and hard to move through usually have too much furniture in too little space. To make a diagnosis and suggest recommendations, do the following: Walk through the home to find the spots that feel cramped. Where do transition areas from room to room, or from one part of a room to another, feel restricted? Make recommendations to improve traffic flow. The sellers can't move walls (without great expense), but they can move furniture that restricts movement. Evaluate the number of pieces of furniture in each room and note the sizes of each piece. Ask yourself the following questions: Are too many pieces of furniture crowded into one room? Are furnishings too large and beefy for the room? Does the furniture arrangement work in terms of space and flow? Be on the lookout for small, decorative pieces of furniture. These pieces are often the biggest culprits when it comes to restricting walkways and creating a crowded feeling. Most people have too much furniture in too small of a space. Be ready to recommend that the sellers remove furniture to create more open spaces, which makes the home appear larger and more comfortable. Your furniture-removal recommendations will most likely be met by owner resistance. Sellers will resist because they think that there won't be any place for people to sit. Stick to your story: Tell them a home with too little furniture almost always shows better than a home with too much. Making a clean-up checklist Don't assume that sellers understand what needs to be done before a showing, even if they've bought and sold a home before. Take a proactive stance by providing a detailed step-by-step checklist of the steps they need to take before the first buyer presentation. the Figure is a good sample to follow as you provide your clients with valuable counsel and help them ready their home for presentation.

Article / Updated 07-03-2017

The success of a listing presentation is determined by what you do before you even walk through the door. Most real estate agents enter the meeting flying blind, ill prepared and oblivious to the needs, wants, desires, and expectations of the prospect. Make this pledge to yourself right now: Before you enter another listing presentation, ask your prospects quality questions in advance. Using questions effectively before your listing presentation Ask questions that enable you to obtain important information about the customer's desires, timeframe, motivation level, experience, and expectations of outcome and service. Without this information, you can't possibly serve the client well. You won't be able to sell your value as well either. Many salespeople, especially in real estate sales, think they'll offend the customer if they ask questions. Without good client information, a listing presentation becomes an explanation of your services and service delivery system. But what if the prospect sitting in front of you wants to be served differently? Then what? The customer ultimately determines whether your service is outstanding, fair, or poor. Because the customer judges the quality of service received, the only way to start the service process is to learn what customers want, rather than trying to guess their desires and expectations. Additionally, your level of service satisfaction determines the level of referral volume you receive from that client in the future. Knowing why and how to question listing prospects Question prospects for two main reasons: Question listing prospects to safeguard your time. By questioning prospects before you meet with them, you assess their motivation, desire, need to take action, ability to act, and authority to make selling decisions. You also assess the odds that the prospect will result in income-producing activity. The questioning process increases your probability of sales success by determining which prospects are likely to result in commission revenue and which are likely to consume hours without results. Question listing prospects to determine their service expectations. What kind of service do they expect? What selling approach do they follow? Is there a match between your philosophy and theirs? If not, can you convince them that your approach is better than their preconceived notion of what and how you should represent their interests? If not, are you willing to turn down the business? The only way to address these issues is to learn what your prospects are thinking before you make your presentation. Before you enter a listing presentation, diagnose the situation you're entering and the opportunity it presents by learning the prospect's answers to key questions. Acquire this base of knowledge over the phone when you're scheduling the presentation appointment. If you wait until you're face to face with the prospect, it may be too late. By then you want to be offering a tailored presentation, not acquiring baseline information. Focus your pre-appointment questions around the following four topics: Motivation and timeframe: Ask questions that reveal how badly the prospect wants to buy or sell, and in what timeframe. Sample questions include: Where are you hoping to move? How soon do you need to be there? Tell me about your perfect timeframe. When do you want this move to happen? Is there anything that would cause you not to make this move? Experience: A prospect's view of the real estate profession is filtered through personal experience and experiences related by friends and family members. The following questions help you gauge your prospect's real estate background and preconceptions: How many properties have you sold in the past? When was your last sales experience? What was your experience with that sale? How did you select the agent you worked with? What did you like best and least about what that agent did? Pricing: The following questions help you gauge the prospect's motivation or desire to sell. They'll also help you determine whether the prospect is realistic about current real estate values. The higher the list price, the lower the motivation; the lower the list price, the higher the motivation. Listen carefully to the answers to the following three questions. They'll reveal whether your prospect is ready to sell or just fishing for a price: How much do you want to list your home for tonight? How did you arrive at that value for your home? If a buyer came in today, what would you consider to be an acceptable offer for your home? If you want to approach the seller with a softer series of questions in the pricing area, you might try these: Most people do a little investigation on real estate values before they sell their home. What have you found? Most people have a general idea of what they want for their home. What's yours? Service expectation: Learning your prospect's service expectation is absolutely essential to a good working relationship, but when you begin to ask the service-related questions, you'll likely hear silence on the phone. Likely your prospect has never met a service provider concerned enough to ask what he wants, values, and expects. As a result, you may have to probe and ask follow-up questions to help the prospect open up and enter a dialogue. What do you expect from the real estate agent you choose to work with? What are the top three things you're looking for from an agent? What will it take for you to be confident that my service will meet your requirements? Following your phone interview, use the answers to questions in each of the four categories as you compile a qualifying questionnaire on the prospect. This figure provides a good format to follow.