1. real estate

Chicago REALTOR® _ SPECIAL INSERT
FEBRUARY 2005 • Page 1A
Pull-Out: Reference Guide
New Agent
N
ewly licensed agents have a lot
to learn to succeed in the real
estate business. This resource guide will
give those new to the business that extra
nudge to get started on the right track.
PROSPECTING –
How Do You Find Clients?
Begin implementing these tips today!
What to Do in the First 3 Months
No matter how slick your brochures,
business cards, hardware, and personal
marketing plan, the key to successfully
launching your business is acquiring
clients. Follow these tips to find
prospects:
Make sure all family, extended family, and friends know that you’re working
in real estate sales and are available for
their buying and selling needs. Send
them your new business card and personal brochure and follow up with a friendly
phone call in the first few weeks.
If you’re involved in community
organizations, activities, or other personal interest groups, be sure to let everyone
in those groups know of your new career.
Inform members of your religious congregation, your children’s sports leagues,
your doctor, your insurance agent, your
dry cleaner, and other service providers.
Find a high-producing sales associate
in your office and offer to assist him or
her with open houses or other aspects of
his or her transactions to gain experience and possible referrals. Consider
joining the sales team of a high-producing practitioner until you can establish
your own client base.
Article courtesy of the National Association of REALTORS®
Offer to work floor time in your
office in order to answer incoming calls
and find prospects. If your company has
a general e-mail box, offer to respond to
incoming e-mail inquiries from potential
prospects.
Develop contacts with the human
resources departments of any major
employers in your area and offer your
services for relocating employees.
Contact organizations that you’re
involved with or that interest you and
offer to provide free homebuying seminars to its members.
inside: 2A | Advice from the 2004 Rookies of the Year
3A | Money & Budget Management 101
Page 2A• FEBRUARY 2005
SPECIAL INSERT_ Chicago REALTOR®
Pull-Out: Reference Guide
Advice from the 2004 Sales Awards
Rookie of the Year Winners
Questions &
Answers with
Kevin Asher,
Baird & Warner –
Rookie of the
Year for Central
Chicago Region
Kevin Asher
ASHER: Knowing what you want is
empowering... it gives you the ability of
figuring out what it takes to succeed. Do
you 'want' to be successful, or are you
'going' to be successful? The difference is
where you find the opportunity. Most
importantly, always
be an optimist.
CR: How did
you become so
successful?
ASHER: I put everything on the line
when I got into this business. After waiting
tables for eleven years, I chose to give up
the profession entirely so I could dedicate
all of my time to real estate. I chose the #1
office with the best broker in the city and I
never looked back. I worked as much as
possible with all of the tools available to
me, tirelessly devoted to building my business. My initial goal was to be rookie of
the year at Baird & Warner, so evidently
my ambition carried me a little further.
CR: What do you wish you would
have known as a new agent that you
know now?
ASHER: Everything. Seriously...
then It would have been a lot easier! You
have to start somewhere, though.
CR: What advice would you give to
brand new agents?
Questions &
Answers with
Janelle Dennis,
@properties –
Rookie of the
Year for North
Chicago Region
Janelle Dennis
CR: How did
you become so
successful?
DENNIS: Follow up on every lead,
every prospect you’re given, even if they
seem insignificant or small. I had a floor
call from a buyer wanting to spend
$199,000 for a new construction condo. I
found them a great place and, while we
were writing up the contract, they told me
theit family owned a brick 2-flat in Wicker
Park they wanted to sell. I sold it for
$500,000. Less than a year later the same
$199,000 buyer and his brother bought an
investment rental condo with me for
$275,000. Pursue every lead. Every client
can lead to a repeat buyer and great refer-
rals to build your business.
Apply smart, professional principles to
the way you conduct your business.
Buying real estate is one of the biggest
investments that any person makes,
whether they are buying a $200,000 first
condo or a million dollar home. Treat your
clients as if you were their financial advisor
on the biggest investment of their lives.
Treat them with that level of respect. Do
that kind of professional analysis on
whether it’s a good investment – as if you
were buying it for yourself. If you show
your clients that level of respect, you will
turn $250,000 first time buyers in to
$500,000 repeat clients.
It’s personality, baby! Success in real
estate is about good relationships – with
your varied clients, with all types of agents,
with many your business partners – attorneys, mortgage brokers, inspectors, developers – with lots of personalities and different priorities. Good communication skills
and a professional, but fun approach will
win every time.
CR: What do you wish you would
have known as a new agent that you
know now?
DENNIS: I now know how to do
things so much faster than I did my first
year. I wish I had known all the short cuts
right away!
Most important is just doing the work
– getting the actual experience of working
with clients, in all the different neighborhoods throughout the city, facing a challenge and finding a creative solution, just
get out there and start working it. Learn
from more experienced agents. Ask smart
questions. Observe good agents in action in
the office or at open houses. Take someone you respect to lunch to pass ideas by
them. Start working with every buyer or
seller who gives you the opportunity. There
is nothing better to teach you than real
world experience … just do it!
CR: What advice would you give to
brand new agents?
DENNIS: It’s important for all new
agents to work smarter, harder, and more
professionally than you did before. Follow
up on every lead, every prospect. Be more
professional than anyone else.
Prepare to be successful – if you prepare your business, extra copies of your
buyer’s packages, marketing and advertising samples for your listing presentations,
templates to help you do your CMAs,
attorney faxes, contract summaries and
searches faster. Then when you get the
opportunity to handle twice as many buyers as you think you can, you’ll be ready to
do it.
Top 7 Mistakes New
By Terry Watson
Learn what pitfalls to avoid early in your career and get a successful start in real estate.
In Trump: The Art of the Deal,
entrepreneur Donald Trump gives his
own take on what it takes to succeed in
real estate: If you take care of the downside, the upside will take care of itself.
In other words, if you have a contingency plan for everything that can go
wrong, you can’t help but succeed.
You may not end up as wealthy as
The Donald, but you should approach
your real estate sales career with the
same attitude: if you know the top mistakes that prevent real estate professionals from realizing their full potential, you can avoid them — and take
your career further, faster. Here are
what I believe are the top seven hurdles
that could stand between you and a successful real estate career.
No Business or Marketing Plan. If
you went into business for yourself and
approached a bank for a business loan,
your loan officer would want to see two
things: 1) your income statement and
2) your business plan. Well, when you
go into real estate sales, you are going
into business for yourself. But many
salespeople have no clear goals or
timeline for achieving their goals.
Consistently, real estate professionals
who have a written business plan are
more successful than people who don’t.
If you don’t know where to start, you
can copy a sample real estate business
plan from Palo Alto Software Inc.’s
Business Plan Pro. The company also
offers Marketing Plan Pro.
Not Using Available Resources.
Even if you’re new to the industry, you
don’t have to recreate the wheel. Take
advantage of all the resources that are
around you — from your brokerage,
your colleagues, and professional organizations. Find top performers in your
market or other markets and ask them
to mentor you.
Not Maximizing Your Productivity.
If you look at top-producing real estate
professionals who are selling 600-plus
units a year, you will notice that they
have two things in common: assistants
and systems. These practitioners are
multiplying their efforts and increasing
their output through people and technology. According to the 2003
NATIONAL ASSOCIATION OF
REALTORS® Member Profile, real
estate practitioners who used at least
one personal assistant had a significant-
ly higher sales volume than those who
didn’t. You may erroneously think that
you can’t afford a personal assistant. But
think again. If you can significantly
increase your income by increasing your
efficiency and the number of transactions you can close in a year, you can’t
afford not to get a personal assistant.
Not Earning REALTOR®
Designations. Many practitioners feel
that they aren’t making enough money
to allocate funds for education. This is
backwards thinking. You take the class
to acquire the skills to increase your
sales and earn more. The skills you
learn and the referral relationships you
develop with other students you meet
will dramatically affect your bottom line
and your potential for success.
Not Purchasing Equipment as a
Business Entity. Many real estate professionals purchase their laptops, digital
cameras, or PDAs as consumers. This is
Chicago REALTOR® _ SPECIAL INSERT
FEBRUARY 2005 • Page 3A
Pull-Out: Reference Guide
Money & Budget Management 101
By Haley M. Hwang
How you deal with the
unpredictability of getting
paid in real estate – and how
you spend that money – can
determine your success.
Remember in your old job where
you just had to show up and you would
get a paycheck every other week or
every month? All your taxes were taken
out for you and what you had left was
what you could spend?
Ahh, those were the days. But now,
you’re in real estate sales — and getting
paid is an imprecise concept with no
guarantees. There are no regular paychecks, tax withholdings, or automatic
retirement savings. Yet, no one tells you
when you get into the business how to
effectively budget and manage your
money so that you optimize your
chances for success. And ultimately,
how you make these budgeting decisions will impact your success in real
estate, according to some real estate
trainers who teach practitioners about
budgeting.
Following are some of their secrets
to effectively budgeting and managing
your commission income — so that it
catapults you to financial stability and
success.
Budgeting Tips
• Start immediately on a debtreduction plan. Strive to have your debt
be as close to zero as possible, says Terry
Watson, ABR, CRB, president of Watson
World Inc., a real estate and leadership
training company in Chicago. Watson
says that if you are overly burdened
with debt, you will
not make smart business decisions in real
estate because you’ll
feel a tremendous
pressure to make
money.
Planning and Marketing for the
Residential Specialist course – believes
that you should have an additional
savings of 10 percent to 15 percent for
personal marketing expenses, such as
advertising, business cards, and website.
• Set aside a business reserve. In
addition to the money for personal
expenses, you also should set aside
some money in reserves (it can be as
little as $100 per month) for unexpected business expenses, says Chuck Bode,
CRS, GRI, broker-associate with N.P.
Dodge Real Estate Co. in Omaha,
Nebraska. “If something breaks down,
you go into the reserves and you don’t
Continued on page 4A
• Build up a
safety cushion. You
should be able to
cover your monthly
expenses for three to
six months without
making a paycheck,
says Robert Morris,
ABR, CRB, a broker
with Prudential
Rowland Real Estate
Inc. in Murfreesboro,
Tennessee
Morris – who
teaches budgeting,
business plan development, and cost
plan analysis as part
of the Council of
Residential
Specialists’ Business
Practitioners Make.
a big mistake. If the technology breaks
or you need help with the device, you
will be sent to consumer purgatory, also
known customer support. When you
call customer support as a consumer,
expect to waste at least an hour of your
day. This purgatory is completely avoidable and unnecessary. The next time
you purchase equipment, buy it as a
business entity. You can do this by stating that you are a business when you
purchase the equipment in-store, choosing the business ordering option online,
or using the business-ordering phone
number through companies like Dell.
When you purchase equipment as a
business, your customer support will be
much better and less time-intensive.
When you need help, you can call a
support line that is reserved for business
accounts. That means that you only
spend about five minutes on the phone
with ONE person, and the needed part
or parts are sent overnight. In some
cases, you can even get a technician
dispatched to your home or office to
personally fix the problem.
Not Targeting Your Marketing to
Your Prospects’ Concerns. If you don’t
already own a copy, you need to run out
and immediately get the 2004 National
Association of REALTORS® Profile of
Home Buyers and Sellers. This survey
gives you insights into what really matters to the typical buyer and seller. The
typical mantra used in the real estate
industry is, “I am honest, hardworking,
and have sold millions of dollars in real
estate.” According to the 2003 survey,
the average homebuyer or seller doesn’t
care about your accomplishments.
What they do care about is finding the
right house, negotiating, and obtaining
help with the paperwork. Your marketing should target their concerns. Obtain
a copy by calling the NAR at 800.874.
6500 or order it online.
No Income Buffer, Passive Income,
or Nest Egg. What often kills new real
estate practitioners is the concept of
lag time. When you sell a house, you
typically don’t get paid when the contract is accepted. The average contract
is written for 45 days. In a perfect
world, you would get your commission
check 45 days from the date it was
accepted. In the real world, you don’t
always get paid on time. What could go
wrong? Maybe someone forgets to order
the title, water certification, village
inspection, pay-off letter, survey, termite
inspection, or income verification. If
you are in a hot market, the title company could be backed up for two weeks
or longer. The closing date could be
pushed back days or even weeks. A
successful real estate practitioner needs
a line of credit and a financial cushion
of three to six months of personal
expenses to survive. You also need
passive income — or income coming
in from investment property so that you
don’t have to be desperate to close a
deal. When that check finally arrives,
don’t forget to put some money aside
for your nest egg.
Usually it is the simple stuff that
derails a potentially successful real
estate career, eclipses your joy in helping consumers find a home, or causes
practitioners to burn out prematurely.
You are where you are today because of
decisions you have made or did not
make. Before you embark on a real
estate career—or before you try to move
your career to a new level of production—take a hard look at yourself and
see if you’ve been guilty of any of these
mistakes. Then make the decision to
not make them again. Once that decision is made, your path to real estate
sales success is wide open.
Article courtesy of the National Association of REALTORS®
Page 4A• FEBRUARY 2005
SPECIAL INSERT_ Chicago REALTOR®
Pull-Out: Reference Guide
Money & Budget
Are You Sold
on Real Estate? Management 101
Before you can sell homes to others, you have
to be sold on the idea of a real estate career.
By Mark Nash
The sharp contrast of a booming
real estate market and a sluggish economy has brought literally thousands of
new associates to residential sales over
the last few years. The business certainly looks enticing: the freedom to create
your own schedule, to be in control of
how much you earn, and to operate
your own business. But if you believe
that this rosy picture is the whole story,
you or some well-meaning friend has
sold you a bill of goods.
Industry estimates say that anywhere from one-third to three-quarters
of new real estate practitioners leave
the business in their first three years.
Many more struggle along making just
enough to survive but never enough to
reach the income level they want. If
you fall into either of these categories,
it might be time to make an honest
assessment of whether you have the
skills needed to have a successful career
in real estate sales.
• Do you have excellent people
skills? People skills are the No. 1 factor
in real estate sales success. If you dread
picking up the phone for fear it’s a
client, you may be in the wrong business. To be successful in sales—and to
really enjoy it—you need to like and
respect all personalities, ethnic groups
and lifestyles. (Failing to do so also may
put you in violation of fair housing
laws.) You must be able to quickly build
rapport with clients and to enjoy helping them solve problems and reach
their goals. Your people skills also are
essential for building and maintaining
good working relationships with other
sales associates, mortgage and title professionals, and property appraisers and
inspectors.
• Do you have a confident personality? Especially when you’re getting
started, you need the emotional
resilience to handle rejection. When
you’ve just given what you know was
the best listing presentation of your
career and the prospects says they’ll
have to think about it, it takes a strong
sense of self-worth to go on to the next
presentation and do it all over again.
It’s also critical that you can put your
own personal issues aside when you
work and focus on the needs of the
client.
• Are you comfortable with technology? Technology is increasingly driving the real estate business. You will
need to have or learn to use, at a mini-
mum, a personal computer, digital camera, e-mail, and software programs to
create effective marketing pieces and
communicate with clients. You don’t
need to be a geek, but you can’t shy
away from technology and hope to succeed.
• Do you read, write, and speak
well? Even though real estate sales
involves a lot of personal contact, you
need to be able to read, comprehend,
and often explain contract forms, policy
and procedures manuals, and disclosure
statements. You’ll also need good basic
grammar and spelling skills for marketing materials and routine correspondence.
• Are you self-motivated and well
organized? Because real estate salespeople work as independent contractors
with little supervision, the discipline to
work on a regular schedule is vital.
Good time-management skills also are
important in ensuring that you devote
the majority of your time to incomeproducing activities. In general, you
should spend 25 percent of your time to
marketing yourself and your listings and
15 percent in showing current listings
to buyers. Organizational skills also are
necessary for keeping track of the many
details that make up a real estate transaction.
• Are you flexible? The trade off
for being able to set your own schedule
and take two hours off in the middle of
the day is the need to work weekends,
evenings, and other times when your
clients are available. You—and your
family—need to understand these
demands on your time and how they
will impact your lifestyle.
• Are you healthy? Although there
is a lot of phone work in real estate, you
also have to have the physical stamina
to spend long periods in your car, lift
heavy for-sales signs, and stand for several hours at an open house.
As you can see, or already know,
real estate is a very demanding career
that requires a lot from you. But if this
list seems intimidating, don’t sell yourself short. You can learn to adopt many
of these skills even if you don’t currently possess them. Ultimately, it’s up to
you whether you succeed or fail in this
business. But when you do truly buy
into the hard work it takes to excel at
real estate sales, you’ll find that the
rewards are without limits.
Article courtesy of the National Association
of REALTORS®
Continued from page 3A
borrow money on a credit card at 15
percent interest,” Bode says.
• Have a business line of credit.
“Any good business should have a
business line of credit,” Watson says.
This will give you the financial buffer
you need so that you don’t feel the
pressure to push every deal through,
regardless of whether it’s in the best
interest of your clients.
• Spend 10 percent on personal
marketing. Even when money is tight
and you can barely pay your bills, you
need to spend money on personal
marketing so that you maintain an
income pipeline. “You need to spend
money to make money in real estate,”
says Mark Nash, author of Original
New Agent's Guide to Starting &
Succeeding in Real Estate and
Reaching Out: The Financial Power
of Niche Marketing. A broker associate
with Coldwell Banker Residential,
Central Street Office, in Evanston,
Illinois, Nash teaches a course through
Coldwell Banker called “Next Level”
for second-year salespeople. In addition
to the 10 percent on personal marketing, Nash recommends spending 2
percent on technology, 1 percent to
2 percent on accountants and business
professionals, and 1 percent on continuing education (including attending
real estate conferences and getting
additional training).
• Determine the biggest payback.
Analyze where you’re spending money
and how much you get back in terms of
generated income over the course
of a year, says Bode, who also
teaches budgeting in the
CRS course. “Some
people find that certain things they do
have a $15 to
$20 per $1
spent payback,
says Bode,
“That’s a real
revelation.
Most practitioners don’t
know what
works and
what doesn’t
work, so they
do it all.”
• Budget for
education. “Most
people go into real
estate to make money,”
Bode says. “They say that
they can’t afford money to take
education (attending state and national
conventions or taking designation
courses). But they can’t afford not to.”
Money Management Tips
• Track your expenses. Keep a
detailed log of everything you spend for
a month or so to see where your money
goes, Watson says. You may not realize
that you’re spending $400 on lattes.
• Anticipate your income and work
backwards. If you want to make $50,000
this year based on what you think you
need to live on, then figure out what
you need to do to achieve that income,
Morris says.
• Find creative ways to save money.
Watson says that he has an unlimited
plan on his cell phone; has always
bought cars that are tan, white, or silver
because the forgiving colors save him
almost $1,000 in car washes each year;
opted for higher deductibles on his car
insurance; and buys wrinkle-free clothes
that don’t require frequent cleaning.
Spend more to last longer. Especially
when it comes to buying technology,
the cheapest thing may not be the best
in the long run, Watson says. If you
spend a little more and it lasts longer,
it may save you money over the long
term.
Article courtesy of the National Association
of REALTORS®