1. finance
2. investing
3. brokerages

WORKBOOK
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Virtual Brokerage:
How to Do It Workbook
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GENERAL
CONTINUING EDUCATION
SERIES
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Virtual Brokerage:
How to Do It Workbook
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This publication is designed to provide accurate and authoritative information
in regard to the subject matter covered. It is sold with the understanding that the
publisher is not engaged in rendering legal, accounting, or other professional
advice. If legal advice or other expert assistance is required, the services of a
competent professional should be sought.
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President: Dr. Andrew Temte
Chief Learning Officer: Dr. Tim Smaby
Executive Director, Real Estate Education: Melissa Kleeman-Moy
Development Editor: Jennifer Brandt
VIRTUAL BROKERAGE: HOW TO DO IT WORKBOOK
©2013 Kaplan, Inc.
Published by DF Institute, Inc., d/b/a Dearborn Real Estate Education
332 Front St. S., Suite 501
La Crosse, WI 54601
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All rights reserved. The text of this publication, or any part thereof, may not be
reproduced in any manner whatsoever without written permission from the
publisher.
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Printed in the United States of America
ISBN: 978-1-4754-2069-2 / 1-4754-2069-2
PPN: 3200-4255
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CONTENTS
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UNIT ONE
TODAY’S VIRTUAL BROKERAGE 1
UNIT TWO
TECHNOLOGY AND COMMUNICATION 11
UNIT THREE
MANAGING RISK 17
UNIT FOUR
THE OPTIMIZED VIRTUAL BROKERAGE 23
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Course Overview v
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2809.0140 NOTICE TO MN STUDENTS: This educational offering is recognized by the Minnesota Commissioner of
Commerce as satisfying 3.75 hours of credit toward real estate continuing education requirements.
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COURSE OVERVIEW
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Welcome to the changing world of real estate brokerages! Virtual brokerages have answered the call of today’s client whose expectations have never
been more demanding or steep. Come learn about the evolution of virtual
brokerages and what has made it so appealing to so many. Learn how real
estate professionals in the virtual brokerage are armed to work for their clients
utilizing sophisticated technology, enabling lightning-fast communication,
immediate response to inquiries, electronic document expediting, and more!
Learn what brokers need to know and what agents should understand
about their duties and liabilities in a virtual brokerage environment. You’ll
learn to identify the advantages and recognize the challenges, as well as what
it takes to thrive in this setting. You’ll discover what systems and technologies
are necessary for successful virtual brokerage operation. Also, you’ll examine
how an array of communication tools and resources facilitate effective communication and transactions, providing a seamless experience for the client.
You’ll recognize potential risks and identify solutions specific to virtual
brokerage, while learning about appropriate broker management of salespeople, liabilities of overseeing conduct, and policy compliance to adhere to ethical and legal principles. Join us to learn about the critical factors of successful
virtual brokerages and how your clients will benefit.
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1
UNIT
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TODAY’S VIRTUAL BROKERAGE
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LEARNING
OBJECTIVES
Upon completion of this unit, you will be able to
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■■ recognize the evolution of virtual brokerages and client expectations; and
■■ identify the advantages and challenges of a virtual brokerage.
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I.
Unit 1 | Today’s Virtual Brokerage
WHAT IS A VIRTUAL BROKERAGE?
A. Virtual brokerage versus traditional
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1. A virtual brokerage, in a pure form, gives agents and consumers the same experience as a brick and mortar establishment.
a) Creating the identical experience (services, technology, performance, communication,
training, supervision) in both non-traditional (virtual brokerage) and traditional (brick and
mortar).
II. EVOLUTION OF REAL ESTATE
A. Keepers of the listings historically
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1. 1960s: National Association of REALTORS® creates MLS systems
2. Listing book every two weeks
B. Technology improvements made brokerage structure changes possible
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1. Technology changes the way real estate is done.
a) 1994: property listings available on the internet
b) Early stages of mobile agent
C. Changing client/agent demographic
a) Agents and clients have the same information.
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1. Consumers use the internet to shop for homes.
(1) Why use a real estate agent when you can access the same information?
(2) How do real estate agents add value to clients by representing them?
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Unit 1 | Today’s Virtual Brokerage
2. Brokerages no longer control information.
a) Professional analysis of real estate information is where value is added.
(1) Expert interpretation
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(2) Becoming an information clearing house that not only spills out information but creates
useable information that enables making better financial decisions
3. Clients expect and accept technology.
a) Real estate professionals are trained to be experts in the real estate profession and to be
technology savvy.
b) Client expectations increase regarding access and response time.
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III. EVOLUTION OF BROKERAGES
A. In the beginning
1. Brick and mortar brokerages
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2. Agents needed company’s resources
3. Sense of community
4. Traditions established
B. Over time
a) Computers became mobile.
b) Phones got smarter.
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1. Technology changed everything.
c) Scanners and printers became affordable.
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Unit 1 | Today’s Virtual Brokerage
d) Agents didn’t need company resources.
e) Agents could work from home or remotely.
C. Today
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1. Cell phones and tablets are the office.
2. There’s an app for everything.
3. There’s less need for physical space.
IV. TECHNOLOGY MAKES VIRTUAL BROKERAGES POSSIBLE
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A. Technology and the four elements of running a business
1. Communication
2. Training
4. Supervision
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3. Transaction/accounting
V. EVOLUTION OF VIRTUAL BROKERAGES
A. In the beginning
2. Small staff
3. Controlling cost and overhead
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1. Handling the transaction and paying agents
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Unit 1 | Today’s Virtual Brokerage
4. Timeline
a) 1989: first virtual brokerage in Minnesota and one of the first in the country
b) Motivation
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(1) Agent economics
(a) Costs less to operate business (pay less for broker services)
(2) Broker economics
(a) Less office space/overhead
(b) Never intended to open store front office
c) Purpose: to transact real estate without renting an office space
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(1) Technology expanded
(a) Access to information
(b) Mobility of sales agent
B. Over time
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1. Advances in technology allow brokerages to
a) communicate better,
b) supervise better, and
c) train better.
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2. Timeline
a) From the humble beginnings of fax machine usage to today’s smartphones and electronic
signatures
(1) Landlines are extinct.
(2) Shoe phones are cartoonish memories.
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Unit 1 | Today’s Virtual Brokerage
(3) Mobile phones are inarguably necessary.
(4) Smartphones with internet, texting, and so on are today’s mobile office.
b) While technology enabled successful transactions, re-creating an effective virtual office with
equivalent communication, training, and supervision remained a challenge.
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C. Today
1. Timeline
a) Use technology for all aspects of running a business
b) Improvements in technology allowed brokerages to offer a similar/same experience to agents
and clients as traditional brokerage.
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c) Communication
(1) 24/7, anytime/anyplace access via smartphones, email, voicemail, and texting
d) Training
(1) Streaming video, webinars
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e) Supervision
(1) Written, verbal, and visual via distance bridging tools
VI. TWO TYPES OF VIRTUAL BROKERAGES
A. Process paperwork only
2. In response to expense of running a brokerage
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1. Carryover from earlier models
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Unit 1 | Today’s Virtual Brokerage
B. Full brokerage services
1. Same services as traditional real estate model
a) Training
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b) Communication
c) Supervision
d) Back office
2. Modest office space
3. Agents share common facilities
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VII. ADVANTAGES OF VIRTUAL BROKERAGE
A. Brokerage level
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1. Cost, staff, rent, overhead, basically anything related to expenses
2. Can add more agents without increasing costs
3. Can perform all functions of a brick and mortar
4. Home office takes place of brick and mortar offices, formerly funded by brokerage
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5. Run multi-state brokerage without redundant costs
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Unit 1 | Today’s Virtual Brokerage
VIII. CHALLENGES (DISADVANTAGE TO BROKERAGE) OF A VIRTUAL BROKERAGE
A. Keeping up with technologies
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1. Continual investment of time to investigate and vet usefulness, plus adapt/integrate
into business
2. Cost to upgrade existing and purchase new technology
3. Cost to educate agents on new technology use
B. Cost to create own technology support systems
1. Large upfront investment to build infrastructure of systems and processes
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a) Paperwork tracking
b) Online webinars
c) Library of education resources
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C. Changing roles/positions in office
1. Former office manager now is technology manager who can build online training
materials, oversee technology improvements, and communicate effectively with
agents.
D. Creating meaningful culture
1. Communication (frequency and number of vehicles)
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2. Interaction (via webinars) for discussion of business issues and education
3. Resources for training that creates shared experiences
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Unit 1 | Today’s Virtual Brokerage
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E. Sterile environment
1. Can be perceived as such due to lack of physical presence in traditional office
environment
F. Supervising agent activities
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1. Paperwork completed properly
2. Agents acting legally, ethically
a) More agents, less supervision, more potential lawsuits
G. Some states require physical presence
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1. Determined by each state
IX. ADVANTAGES AND DISADVANTAGES TO AGENT
A. Advantage to agent
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1. Usually better commission splits/fees
2. No floor duty, not tied to office hours
3. Can work from anywhere, anytime
4. More independence and self reliance
1. Add-on fees
2. Paperwork administration
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B. Disadvantage to agent
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Unit 1 | Today’s Virtual Brokerage
3. E&O per transaction
4. Technology fees
5. Responsible for own technologies to run business
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a) Obtain technologies for lead generation, lead management, and digital marketing
6. No floor duty
7. Fewer opportunities to network
8. Lack of supervision/direction
9. Lack of training
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10. Extensive data entry of listing, filing, and storing client information and files
a) Timing of paperwork, contracts, client checks, process for payment by brokerage
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11. Sense of being alone
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Career-Building Titles from Dearborn™ Real Estate Education
Dearborn is committed to providing a wide variety of fundamental continuing education titles.
Our continuing education products, as well as our collection of professional development titles,
cover relevant hot topics to keep professionals in tune with real estate changes in the industry.
General & Specialty Continuing Education
Professional Development & Reference
21 Things I Wish My Broker Had Told Me
Commercial and Investment Real Estate:
Tools of the Trade
Before Hitting Send: Power Writing Skills for
Real Estate Agents
Fair Housing
Power Real Estate E-mails & Letters
Foreclosures, Short Sales, REOs & Auctions
Sales and Marketing 101 for Real Estate Professionals
Know the Code: Real Estate Ethics
The Big Book of Real Estate Ads
Mortgage Fraud and Predatory Lending
The Green Guide for Real Estate Professionals
Property Management and Managing Risk
The Insider’s Guide to Commercial Real Estate
Real Estate and Taxes
The Language of Real Estate
Real Estate Finance Today
Up and Running in 30 Days
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Buyer Representation in Real Estate
Red Flags Property Inspection Guide
Reverse Mortgages for Seniors
Sustainable Housing and Building Green
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The Truth About Mold
Title Insurance for Real Estate Professionals
Understanding 1031 Tax-Free Exchanges
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WORKBOOK
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332 Front Street South, Suite 501, La Crosse, WI 54601
www.dearborn.com, 800.972.2220
For comments or queries about this product,
please email us at [email protected].