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California Real Estate Exam: Everything You Need to Know
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Being a new real estate agent is both exciting and sometimes daunting. With so many agents in the market, you might doubt the value you can bring compared to someone with decades of experience.
But don't be intimidated—every successful agent started somewhere. Here’s how to sell yourself and stand out as a new agent.
As the saying goes, if you don't believe in yourself, why would anybody else? This is especially true in real estate. As a new agent, it's crucial to articulate why clients should choose you and the unique value you bring.
Take time to explore your unique selling proposition—what sets you apart from the competition—and practice how to communicate this with potential clients.
Consider what specific advantages you offer over others in your area.
For instance, maybe you have an intimate knowledge of your neighborhood, a strong passion for community involvement, or experience with social media marketing that older agents might lack. Use these to craft your message with confidence and authenticity.
Tip: Be confident that you are uniquely you, and that is why clients will be drawn to work with you.
Regardless of experience, clients expect real estate agents to be experts in the market they serve. Years of experience don't necessarily mean more market knowledge, but studying and understanding your area does.
A new agent dedicates time to researching their community—learning which neighborhoods have the best schools, current market trends, how home features impact value, and average time on the market for different property types.
They are then able to provide informed, confident guidance to clients, making them stand out despite their limited experience.
Tip: Study the market thoroughly. Know details like how fast homes are selling, key school districts, and what features affect home values. This knowledge will boost your credibility.
Most real estate agents come from other industries, which means they bring valuable transferable skills that can help them excel. Skills like customer service, project management, or sales are incredibly useful in real estate.
If you previously worked in hospitality, use those customer service skills to create a seamless experience for clients. If you worked in sales, highlight your negotiation skills.
One agent, for example, previously managed a retail store, and now uses their experience with inventory and managing expectations to effectively manage client needs and timelines.
Tip: Think about how your previous experience benefits your clients. Skills like listening, managing expectations, and customer service are all valuable in real estate.
Even if you’re new, the training, certificates, and designations you’ve earned can help establish credibility. Certifications can show potential clients that you have specialized knowledge in specific areas, such as working with veterans or first-time homebuyers.
A new agent earns a certification in working with first-time homebuyers and proudly displays this in their marketing materials.
When speaking with new clients, they emphasize their expertise in helping first-time buyers navigate the process smoothly, leading to increased trust and more clients choosing to work with them.
Tip: Lean into your education. Certificates and specialized training can be particularly compelling to clients looking for specific expertise.
In sales, being genuine and unique is often more important than experience. Clients can tell when an agent is being authentic versus using a sales pitch. Your personal story can be your greatest selling tool.
Create an elevator pitch that explains who you are, what you do, and how you can help.
For example, "I'm Alex, a new real estate agent with a passion for helping young families find their dream home. My background in marketing helps me get homes sold quickly, and I pride myself on clear, honest communication."
Tip: Work with mentors to refine your story. Persuasive storytelling is powerful in real estate and will help clients remember you.
You’re not in this alone! Behind you is a team of mentors, resources, and vendors that help guide you and your clients through real estate transactions. Choosing the right brokerage is essential, as you want a team that aligns with your goals and supports your growth.
A new agent is proud to be part of a well-respected brokerage and introduces clients to experienced mortgage brokers, home stagers, and inspectors from their network. This helps clients see the agent as a well-connected resource.
Tip: Highlight your network to clients. Let them know they are getting not just you but an entire team of professionals working on their behalf.
One of the biggest advantages of being new is that you’re adaptable and open to new strategies and technologies. Established agents can sometimes be resistant to change, while newer agents have the freedom to innovate.
A new agent uses digital marketing strategies, such as social media ads and virtual tours, to appeal to tech-savvy clients.
Meanwhile, established agents in the area rely on older, less efficient methods. As a result, the new agent attracts more first-time homebuyers and young clients looking for an agent who is up-to-date.
Tip: Take advantage of new technology and innovative marketing techniques. Not being tied to the old ways can be your greatest strength.
With the right mindset and practice, you can compete with the most seasoned real estate agents in your market. Focus on what makes you unique, build strong client relationships, and adapt to industry changes.
Ultimately, being a successful agent isn’t about years of experience—it's about guiding your clients through an exciting life change with confidence and expertise.
Is it worth becoming a real estate agent in 2024? If you follow the real estate industry, you might know about the factors that make it unstable.
This is concerning for people in the industry and who want to join it. But, these concerns could be sensationalized hype used to by clickbait headlines.
In this article, I explore the current state of the industry and whether or not it's a good time to be an agent. Let's get into it!
In 2024, we see a transitionary market. There are buyer's markets, seller's markets, and balanced markets. The prior two are referred to "unbalanced markets." When the market is balanced, we see roughly equal demand to buy and sell real estate. You might have already guessed that seller's markets mean more leverage for sellers (fewer supply of homes.) Buyer's markets are the opposite: more leverage for buyers (more inventory of homes.)
Today, we are transitioning into slower market. For the past few years, we saw ourselves in a seller's market because there was more demand for homes. This was because of lower interest rates. In the last year or so, interest rates have increased, which has made owning a home less desirable. Thus, a transition into a buyer's market because there is less demand to buy.
But, home prices are still high. As we see the inventory increase, the price of homes could come down. But, right now, we're seeing high prices and low demand.
Keep in mind, this not the case everywhere. Every state, every city, and every town has their own local economy that dictates demand. This is just broad overall observation. Take it as you will.
Let's now explore how this current state of the real estate market affects real estate agents.
A real estate agent's job never changes. An agent's job is to represent buyers and sellers through the transaction process. No matter what, there is demand to either buy or sell property.
As I mentioned in the previous section, there are times when sellers sell homes and times when buyers buy home. Then there's times when they want to do both! Those are good times.
No matter what the state of the market is, there are people who need real estate agents. A good agent will know this and adapt their business to the market. Instead of representing sellers, you represent buyers, vice versa.
I've been doing real estate since the 90's. Whenever there is a shift in the market, people always do the same thing: freakout and dropout! Don't let a changing tide get to you, just ride the wave. That is the job of the agent.
That's why now is always the best time to become a real estate agent. Not yesterday, not in another year. Now! The industry will always change. That's part of the job.
Recently, the National Association of Realtors® (NAR) resolved in court that their practices around commission sharing and competition in the real estate market was unfair.
This legal case resulted in a modification to the practice of how agents earn their commission checks. Now, buyers are required to disclose how they are compensated and sellers are no longer obligated to provide commission to the buyer.
How does this affect real estate agents?
In reality, very little has changed. The buyer is now informed on how their agent is compensated and can make a decision based on this information. The major argument against modification is buyers will have to finance their agent and therefore will stop them from buying a home.
However, this case doesn't prohibit buyer's agents from accepting a portion of the listing agent's commission. It stipulates that the buyer's agent must inform the buyer of this. The buyer is free to make their own decision based on this information.
People may be misinformed and not understand the full effect. As we mentioned earlier, there will always be demand to buy or sell real estate. There will always be this demand no matter how agents are compensated.
The reaction for some is to freakout and dropout. For others, it's to stay in the industry and run a successful business helping clients. As the months go on, we may see less real estate agents in the industry because they left it or they chose not to become an agent.
This is great news for those who stay in it, because they get more market share.
So, is now a good time to be a real estate agent? There is a lot of uncertainty as the industry involves. It's hard to predict where it will land but I can assure you that it's just part of the job.
It is always a good time to get into real estate. People will always buy and sell real estate. The change to the market and the change to commissions just means our business follows a new system, and that is just part of the job of the agent.
There are so many real estate jobs, you might not even know some of them even exist. Below you’ll find descriptions for the real estate jobs you can expect to see in the industry.
For example, if you’ve ever wondered what do real estate agents do for a living, you’ll have a full grasp of the job description. Alternatively, you’ll learn the details of specific career descriptions, such as a real estate broker description.
Deciding what career in real estate to choose is daunting. The sheer amount of options is overwhelming to everyone.
To choose the right career path in real estate, you’ll have to do your research. This list of the types of real estate jobs will make choosing a career path easier:
Getting your real estate license will open the door to more than one job. Some job titles require a license in order to qualify to fulfill the role. In this section, we'll explore what real estate jobs require a license.
The residential real estate salesperson facilitates the home buying process between sellers and buyers. Having a mediator is a valuable part of the transaction, because, without one, the transaction will have a higher chance of dissolving.
The success of a residential real estate salesperson is dependent on how well they meet their client's needs. Along with this, agents conduct their own methods of finding clients. This is why having great customer service skills are essential to the agent’s success.
Since the agent’s income is commission-based, they will earn more when they find more leads. That’s why growing your network as a salesperson and putting your client first are the most important parts of the job.
The commercial real estate salesperson is similar to the residential real estate salesperson, but they are focused on the commercial sector of the industry.
Instead of houses, townhomes, and condos, a commercial real estate agent will sell the property to businesses.
Working in the commercial sector means you’ll need to have analytical knowledge in business and finance. This is because you will be working with gross rent multipliers, capitalization rates, and internal rates of return.
Regarding their salary, a commercial real estate agent has commission-based earnings.
However, according to the National Association of Realtors® (NAR), an agent working in the commercial sector earned twice as much as an agent working in residential during 2017.
A real estate broker and agent are very similar in their job. The only difference is who they work for. Real estate agents sign with a brokerage. Therefore, agents work for the head broker, also known as the broker of record.
Brokers, on the other hand, have the option to work independently or start their own brokerage. So, if you have an entrepreneurial drive, consider a career as a broker.
For those interested in becoming a broker, you will need a real estate broker license. According to the Labor of Statistics, the average real estate broker salary in 2017 was $57,730.
The goal of the property manager is to ensure the financial and physical well-being of the property. They also have to ensure the tenants of the property are satisfied.
Similar to the real estate broker, property managers must also own a broker license. Along with this, they should have great customer service skills, managerial skills, and have the ability to problem-solve while on the go.
The manager works with the property owner to ensure everything is functioning smoothly.
For some people, managing a property is daunting. However, others will jump at the opportunity to ensure the security of the property, work with tenants, and collaborate with an owner.
If you’re interested in a property management position, you’ll need a fair understanding of finances, marketing, facility operations, and documenting important information. When you’re not managing the property, you’ll be managing your own time.
A leasing agent is responsible for finding the perfect tenant to lease a property. They work directly with the property owner. They also have the choice in choosing the sector of real estate they want to work in.
When working on the commercial side, they work with businesses as opposed to individual tenants.
For those who want to work in the field with clients and potential tenants, becoming a leasing agent is a perfect career choice. Because of this, you’ll need great interpersonal communication skills.
There’s plenty of face-to-face time with the client and tenant, so you’ll need to know how to navigate negotiations and conversations.
Real estate listings play an important part in the leasing agent’s career. These listings help drive leads and promote the property.
This is why having a fair understanding of marketing and promotion will help excel you in a career as a leasing agent.
The real estate transaction coordinator is responsible for assisting the real estate agent and broker through filing a transaction.
In which case, the coordinator will have to oversee and track the valuable documents. Purchase agreements, titles, escrows, and broker documents are a few of the assets the coordinators will manage.
Having great organization, scheduling skills, and attention to detail is a necessity for this job.
Transaction coordinators will also keep track of client information, and help grow relationships between the client and brokerages. This can be done by scheduling 30, 90, and 120-day customer service follow-ups.
You don’t need a real estate license to be an assistant. However, having one will help you perform in your job. That’s because real estate assistants are the administrative support to agents and brokers.
Most of the time, an assistant will be filing documents, answering phone calls, and posting property listings. On paper, the job doesn’t sound the most glamorous. However, they’re an important part to any real estate operation.
Having an understanding of how real estate works will help you perform your responsibilities quickly and efficiently.
Agents and brokers both agree that assistants are irreplaceable. They’re a necessity if an agent or broker wants to grow their business. By tackling administrative projects, agents and brokers can focus on finding clients, marketing their services, and other aspects of their business.
Showing assistants work almost entirely in the home showing process. They are responsible for presenting the house to the home buyer and providing them with information about the property.
They’re the perfect resource for home buyers.
However, without a real estate license, they are limited in how they can interact with the client. For example, a showing assistant cannot discuss pricing or conduct a sale. They would need a salesperson license in order to do so.
The showing assistant doesn’t just work with prospective home buyers.
They work hand in hand with the lead agent to update them on the status of listings and client development. They also help promote the larger team or brokerage.
A large portion of this job includes scheduling showing dates and times with the buyer. Therefore, you should have the ability to consistently keep people up to date.
You’ll be working as the middle man between the agent and the buyer, so having great communication skills and knowledge in real estate is recommended.
Real estate financial analysts and consultants research current market trends and statistics to predict the future of the industry. Analysts and consultants will not commonly work in the commercial sector. These predictions help decide investments, sales, and lendings.
The financial analyst and consultant work behind the scenes.
They’re most comfortable in an office environment, where they can conduct research. When they work with others, they are providing valuable information regarding important investment decisions.
They’re an asset to any real estate company that needs financial recommendations. This is especially true with investors.
A real estate investor or entrepreneur is someone who invests in land and property. They try to maximize profits by buying then selling land. However, there’s more to the position than just transactions.
Understanding where and when to purchase land is important. Over time, land appreciates, but its appreciation rate depends on several factors.
One of them is whether they purchased a dud piece of land. That’s why investors and entrepreneurs are dealing with high financial risk in their jobs. A person who is interested in becoming a real estate investor or entrepreneur can make serious money.
However, they have to be comfortable with the risk involved with the career.
They may also want to force equity by improving the land they purchased. But, doing so will cost more money.
This requires them to have extensive knowledge of real estate.
Buying land that people will want to use is the best way to earn a living as an investor or entrepreneur. However, if you blindly purchase land, you run the risk of losing out on cash.
Becoming a real estate investor or entrepreneur has a high barrier of access. Not just anyone can walk into this position. Someone who wants to purchase and own land will need the property funding to do so. In this market, that can be a lot of money.
It helps to have the funds before trying to make a career out of it.
Real estate marketing specialists are the professionals who execute marketing duties. Their goal is to get a brand seen by the public. Without them, agents and brokerages will experience a dramatically less amount clientele.
The marketing specialist will often manage social media, create digital content, develop printed materials, write campaign emails, and manage the overall brand.
In other words, they touch up the presence of the agent or broker’s business. The reason why this is necessary to so many agencies and brokerages is that, without marketing specialists, the business will have a hard time generating leads and clients.
This includes marketing the property to prospective clients.
The marketing specialist works behind the scenes. They don’t usually have the opportunity to interact with buyers or sellers. They will also need to have detailed knowledge of the industry they work in. Without that, the marketing specialists will have a hard time marketing to their target audience.
This is why having a real estate license will help a real estate marketing specialist.
Real estate developers create the buildings on any given property. This includes everything from office buildings to a 4-bedroom house for a family. Their mission is to coordinate the construction of these buildings on raw land.
The real estate developer also works with existing constructions on properties. They can re-lease buildings and the sale of already developed land.
They’re heavily involved with everything development-related.
This means that real estate developers also have the opportunity to work with architects, engineers, and construction teams. They also work alongside the contractors, leasing agents, and lawyers surrounding the legal aspects of the property.
Overall, the real estate developer is always involved in the planning and building process.
Having skills in multitasking, interpersonal communications, and project management is a necessity to excel in this career.
The value of a commercial or residential real estate property is determined by the appraiser. They are most often used before the property is sold, taxed, or developed.
An appraiser will decide the value of a property based on its characteristics and where it’s located.
They’re also able to determine the value by comparing it to other, similar, properties.
You’re not required to have a real estate salesperson license, but you are expected to own an appraiser's license. This is done by completing 75 hours of basic appraiser education and passing an exam by the state.
You will also work in finance and economics, so having an educational background in these areas is helpful.
According to the national average, a real estate appraiser's salary in 2018 was $52,512.
They also have the option to work independently or with a larger business. No matter where they work, they will be collaborating with agents, buyers, and sellers.
Escrow officers serve the closing transaction in real estate by acting as the third, neutral party. A real estate escrow officer is familiar with the overwhelming headaches of closing a real estate transaction - and how to manage it. These professionals work closely with agents, lenders, and other service professionals.
The experience needed to become a real estate escrow officer is rigid.
You must become a licensed professional, have training in escrow, and have served as an apprentice in the field. To get your license, you will also need to enroll in a specific school.
You will need to be familiar with handling money on a large scale. Having good attention to detail will help you keep track of fees, commissions, and payoffs. It also doesn’t hurt if you are familiar with the law surrounding escrows and funds management.
A real estate inspector examines a property for any defects or issues that will cause problems for the purchaser, seller, and agent. Inspections are a critical part of the transaction.
This is because inspectors help point out faults and blemishes that might go unseen.
In the state of California, you do not need to be licensed to become a real estate inspector. However, the requirements to be an inspector changes depending on your state. Therefore, you need to always check the requirements.
Despite not needing a license in California, you should still have the proper training in real estate to meet your client’s expectations.
Real estate inspectors need to know every aspect of a house. This means they have to be familiar with roofing, wall structure, plumbing, and electricity - just to name a few. That’s why most home inspectors seek out trusted training before they jump into the career.
The real estate or loan officer helps clients with obtaining a loan to purchase a home. They strictly collaborate with the buyer to finance their dream home while working with their budget.
Real estate loan officers must be registered with the Nationwide Mortgage Licensing System.
In order to become registered, you must meet the qualifications. In addition to becoming registered, you must also have knowledge of finance.
As a loan officer, you will need to help the client navigate the financial waters of their real estate purchase. You’re their guide through the stress that follows money problems. Along with having knowledge in real estate, loans, and finance you’ll need to have excellent customer service.
Real estate title officers conduct searches on the title of a property. They look for problems associated with the house or land, that would deter a buyer’s purchase. After doing a background check on the title, they report their findings to the property buyer.
They also provide information and resources on title insurance to protect the buyer.
To become a real estate title officer, you would have to earn a title agent license or a notary license. The requirements of becoming licensed depend on your state, but you should always expect a state exam.
Title officers are detailed oriented. Having attention to detail in writing, research, and communication is expected if you want to be a successful title officer.
You will also have to be familiar with insurance and closing practices.
Real estate attorneys are professionals who apply their skills to the legalities behind property disputes. When there’s speculation or issues with the title, documentation, transfers, or other legal problems, the attorney’s job is to step in and settle the tension.
Attorneys are the most helpful when they’re providing their client's guidance during the transaction process.
They want to ensure the sale of the home is legal. Then, if any legal issues pop up, the attorney is there to help serve the best interest of their client.
To become a real estate attorney, you will have to undergo the extensive educational experience. You need to have graduated with a bachelor's degrees, pass the LSAT, earn a Juris Doctor degree, and then pass the bar exam. In total, this process could take upwards of 6-8 years to complete. This is before you spend another 2 years accumulating experience as a lawyer.
A real estate paralegal is similar to a real estate attorney. You can expect to find the paralegal working closely with the attorney and the real estate agent in the transaction process. They're responsible for preparing the proper documentation and drafting agreements, letters, and insurance.
The real estate paralegal must have an understanding of taxes, title insurance, and the transaction process.
This is because the majority of their work will center around the closing deal. Paralegals are a cost-effective alternative to hiring an attorney.
To become a real estate paralegal, you will have to go through a certified paralegal training program. People interested in becoming a paralegal will have to take paralegal studies at an accredited school, college, or university.
Overall, having a wholesome understanding of law, finances, and real estate is necessary to become a successful real estate paralegal.
Ready to get started in a real estate career? It's easier than you might think. Click the "Enroll Now" button below to see just how easy it is.
From time to time, Real Estate Agents may meet a cash buyer that is interested in purchasing real estate property, but the majority of the time, buyers take out home loans to purchase their homes. Since home loans are very common, home buyers typically look to their real estate agent for a lender recommendation. Therefore, the lender-agent relationship is extremely crucial for all parties involved to succeed with the home purchase at hand.
To put it simply, a real estate agent representing a buyer will have a successful transaction and earn their commission if their client is ready, willing, and able to purchase a home, whether it be an all-cash purchase or a home loan. Typically, most clients need the assistance of a home loan. This is where the Lender (or loan officer) provides the financial help! A Lender’s job is to get their homebuyers approved for a mortgage loan, thus purchasing their home becomes a reality. The lender is compensated for their services by charging the buyer points, or fees. This three way relationship helps the process of home buying run smooth and efficiently.
Communication is key. Always keep the client in the loop of your conversation with the lender.
Real estate agents can refer their homebuyers to the lender, and vice versa. In this way, by both parties promoting each other, they help each other with leads and thus help each other build their careers. Teamwork!
Quick pro tip and warning- be careful not to use any transactional benefits (kickbacks), between real estate agents and mortgage lenders since The Real Estate Settlement Act (RESPA) does not allow this. It is against RESPA regulations for any lender to provide real estate agents with any kickback, as the lender should be selected purely for their abilities, not for the gifts provided to real estate agents. The focus should strictly be on the borrower, and provide them with quality, lending service.
To avoid wasting the buyer’s time and the agent’s time, it is best to have the buyers prepared for home financing. A pre-approval letter from the lender will ensure you that the buyer can afford to purchase a property with a maximum loan amount, thus providing you with a price range when house hunting. A pre-approval letter also demonstrates that the buyers are serious about purchasing a home. In general, finding the right lender is important! One that remains in constant communication with the real estate agent and informs them about the status of the loan throughout the process. This will make the purchasing experience pleasant.
There are several lenders available to real estate agents in the real estate world. But how can an agent locate an effective and efficient lender? One of the best ways to find a great lender is to communicate with your colleagues within your brokerage and ask for a recommendation. Word-of-mouth is extremely helpful.
Mortgage brokers are the middlemen between banks/mortgage lenders and borrowers. This is a good option for borrowers who have trouble qualifying for loans or if they are simply searching for the best possible interest rate. Mortgage brokers communicate with numerous banks and lenders on a daily basis to help get their clients a mortgage loan.
Your buyers have no obligation to use your preferred lender. Many buyers have existing relationships with certain lenders through past transactions and prefer to utilize their services. However, a first time buyer typically does not have a previous relationship with a mortgage lender and depends on the real estate agent for a recommendation. Either way, once a lender is chosen and a pre-approval letter is presented to the buyer, the real estate agent can begin their search for a home for their client.
As an intending home buyer, the first thing you need to know is that financing is the most vital aspect of acquiring a property. It might interest you to know that in the US, about 42% of homes are financed by mortgages. This figure serves as a source of hope to many buyers who do not have the financial means to purchase a property.
If you are looking to get a home soon, this article will help you understand the most common types of home loans and give you some insight into which might be best suited for your needs.
A mortgage loan is a sum of money that a homebuyer will borrow from a lender (such as a bank or credit union) to finance the money needed to buy a house.
The mortgage market is divided into two basic categories: the primary and the secondary mortgage market. The primary mortgage market allows homebuyers to borrow mortgage loans directly from primary lenders such as banks, mortgage brokers, mortgage bankers, and credit unions.
The secondary mortgage market, on the other hand, is a large market with several participants where mortgage loans and servicing rights are bought and sold by various entities. Some of the participants involved include investors, mortgage originators, mortgage aggregators, and securities brokers.
One factor that markedly influences your chances of obtaining a mortgage loan is your credit score.
Many lenders use credit scores to measure the risk involved in lending people money. Typically, a high credit score implies low risk, while a low credit score implies high risk.
This implies that the higher your credit score is, the more likely you are to get easy approvals, lower down payments, and favorable interest rates, and vice versa.
Credit scores below 580 are generally considered to be low, while credit scores of 700 and above are considered high.
Take, for example, a buyer with a high credit score of 760 who gets a 30-year, fixed-rate mortgage for $200,000. With this credit score, he or she might get a low interest rate of 3.612%.
At this rate, the monthly payment would be $910.64, and the buyer ends up paying $127,830 in interest over 30 years.
However, with a lower credit score of 635, the interest rate will likely be high at perhaps 5.201%, which might seem negligible until the numbers are added up.
The buyer’s monthly payment is $1,098.35, which is an extra $187.71 monthly and the total interest for the loan is $195,406, of which an additional $67,576 has been added.
The conventional home loan is the most common mortgage type available to buyers. This type of home loan is not financed by any government agency but is made available through private lenders such as banks and mortgage companies.
It is important to note that the conventional mortgage has strict rules that guide its lending system hence, not everyone qualifies to obtain it. To be a well-qualified buyer, one must have a solid financial foundation evidenced by:
Once an investor has met the listed criteria, he or she is required to fill out an official mortgage application, pay the necessary fees and then supply the lender with the necessary documents to conduct a thorough check on their background, credit history, and current credit score.
Here are the great benefits of a conventional home loan for home buyers:
An FHA home loan is a government-backed home loan insured by the Federal Housing Administration and issued by an approved lender such as a bank.
This type of mortgage is popular amongst first-time buyers and low-to-moderate-income earners because it is specially developed to help applicants with low financial standing.
FHA loans require a lower minimum down payment than several conventional loans and applicants may have lower credit scores than are typically required.
However, borrowers are required to pay FHA mortgage insurance, which is put in place to protect the lender from a loss in case the borrower defaults. This insurance premium is approximately 1.75% of the total loan amount.
To qualify for an FHA home loan, home buyers must meet the lending requirements guiding an FHA mortgage. These requirements include:
Here are the great benefits of an FHA home loan for home buyers:
A VA loan is a mortgage option available through a program established by the U.S. Department of Veterans Affairs (VA). It enables veterans, service members, and their surviving spouses to purchase homes with little to no down payment, no private mortgage insurance, and get competitive interest rates.
While the U.S Department of Veterans Affairs sets the qualifying standards, decides the terms of the mortgages offered and backs the loan, they do not offer the financing. Instead, approved private lenders, such as banks and mortgage companies, provide the loans.
To qualify for a VA home loan, here are the criteria that must be met by home buyers:
Here are the great benefits of a VA home loan for home buyers:
According to most lenders, a FICO credit score of 580 or less is considered poor or bad credit and the buyer has a minimal chance of getting a mortgage. However, this does not automatically mean you can not qualify for mortgage loans as there are several loan options and mortgage lenders who cater to buyers with poor credit scores.
Some of these options include:
A secured personal loan is a loan that is backed by collateral. This means that the borrower must pledge an asset or collateral to obtain the loan. There are several kinds of secured loans for bad credit, including mortgages, auto loans, and home equity loans.
An unsecured personal loan is a loan that does not require the borrower to pledge any asset or collateral to obtain a loan. This is the most common type of loan option available for bad credit. Lenders who offer unsecured personal loans include banks, credit unions, and some online lenders. The repayment terms of unsecured loans typically range from two to seven years.
While funding is an essential part of acquiring a home, it is also an aspect that confuses a lot of buyers. As an intending buyer, you should carry out thorough research on each home loan option available to you before making a choice. It might also help to consult with a professional, such as a real estate agent.
In this insightful interview, Richard Shulman, a highly successful real estate agent who was once ranked the #2 agent in the U.S., shares valuable advice for new agents on how to succeed in the real estate industry.
Shulman emphasizes the importance of prospecting, mindset, mentorship, and continuous training to build a sustainable and thriving career.
He also discusses the new course he developed in collaboration with U.S. Realty Training to provide agents with a practical roadmap to success.
A recurring theme throughout the interview is the need for relentless prospecting, especially in the first few years of a real estate career.
Shulman explains that agents must make consistent outbound calls to build a solid pipeline, even if results don’t come immediately.
He shares an example of advising a new agent to make 5,000 calls over two months, underscoring that this daily effort, though difficult, is essential for long-term success.
Shulman warns that without this commitment, many agents quit prematurely.
Shulman also highlights how effective prospecting requires learning and iteration.
It’s not just about volume but quality—agents need to refine their scripts, practice objection handling, and experiment with different techniques to find what works best for them.
Mindset plays a critical role in real estate success. Shulman stresses that flexibility in the job can sometimes lead to complacency.
He advises agents to treat real estate as a full-time profession, setting clear goals and routines, such as making 50 to 100 calls daily and scheduling at least two appointments.
Drawing from his own experience, he shares how shifting to a structured 40-hour workweek was a pivotal moment in his early career.
Shulman notes that many new agents struggle with mental challenges, such as self-doubt, especially when the first deal takes time.
It took him nine months to close his first transaction, and he emphasizes that perseverance is essential during this initial phase.
He encourages agents to stay motivated and develop a passion for the process, rather than focusing solely on the financial rewards.
Shulman recommends that new agents consider joining a team or working under a mentor, particularly for guidance through their first few transactions.
Teams provide valuable support, ensuring agents don’t make critical mistakes that could harm their clients or reputations.
He emphasizes that while brokerages offer limited hands-on training, teams are better equipped to help agents develop practical skills.
He acknowledges that success is possible without a team but requires exceptional discipline and self-motivation.
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Real Estate Agent, REALTOR®, Broker, Broker Associate. There’s enough titles in real estate to make your head spin!
When you’re not familiar with the world of real estate, the titles and designations get confusing.
Real Estate Agent, REALTOR®, Broker, Broker Associate: they all sound like the same job. People who are unfamiliar with the industry really don’t know the difference or why it matters.
But, there’s a big difference between these titles. Especially when it comes to what they actually do while practicing real estate. So, let’s begin by defining these titles and talking more in detail about how they differ.
A real estate agent is anyone who has completed the three required pre-licensing courses and passed the state exam. That means that they are licensed in real estate. Real estate agents are also known as a real estate salesperson.
But it doesn’t mean that they can legally negotiate a deal and write contracts.
In order to properly represent a buyer or seller, an agent must first join a local board of realtors. The board of realtors is how an agent gains access to the contracts. The contracts are what legally brokers the purchase or sale of a property.
So, let’s back up and talk about what a real estate agent can do if they’re not a member of a local board of realtors.
This is a great way to make money as a real estate agent. When you get a lead, the buyer or seller is given to another REALTOR®. Then the real estate agent gets a “referral fee” for sending the client. Referral fees are typically 20-25% of the sales price but can be negotiated higher.
This is possible because the real estate agent is not writing contracts or negotiating terms.
Some people earn their license and decide to work with a REALTOR® or a real estate team as their assistant.
As a licensed assistant, you can do virtually everything related to the real estate deal short of negotiating terms and writing contracts. Licensed real estate assistants are also eligible to receive referrals.
You do not need a license to be a real estate assistant. But, without one, you are limited in what you can help the REALTOR® with. That’s why getting a license as a real estate assistant is recommended.
While each brokerage is different, generally commercial real estate doesn’t require agents to become a member of a local board. The contracts used for commercial deals are different so most commercial agents are considered real estate agents.
With the exception of working in the commercial sector, the main factor about being a real estate agent is not having the ability to write contracts and negotiate terms.
So, what’s the difference between a real estate agent vs REALTOR®?
All real estate agents are not REALTOR®. But, all REALTORS® are real estate agents.
Both an agent and a REALTOR® have a real estate license. Agents who are members of the National Association of REALTORS® (N.A.R.) are REALTORS®.
Usually, when an agent joins their local board, fees will include membership to both the California Association of Realtors (C.A.R.) and the National Association of Realtors (N.A.R.).
N.A.R. is a trade association that represents agents across the country. The term REALTOR® is a designation given to agents who have membership. That designation informs the public that they practice real estate with ethics.
Members follow a strict Code of Ethics and pledge to abide by them. There are 17 articles within that Code of Ethics that they follow at all times. They speak to how they treat their client, the general public, and colleagues.
Also, members get access to perks and resources that supplement their career.
Most agents realize the benefit of having the designation of REALTOR® and will become a member of N.A.R.
So, if you hold the title of REALTOR®, you are able to fully represent a buyer or seller in a transaction. You will also be seen as upholding the ultimate standard of ethics.
Let’s talk about what a brokerage is first. A real estate brokerage is a firm that has the capability of legally brokering a real estate transaction.
So what is the difference between a real estate broker vs REALTOR®?
A real estate broker is an independent agent who has the capability of brokering a real estate deal independently. Unlike a real estate agent or REALTOR®, who are required to hang their license at a brokerage firm.
To become a broker you must start as a real estate agent or REALTOR®. The Department of Real Estate then requires a certain amount of experience:
After gaining the required experience you will also need to satisfy the education requirement. This is usually the 5 remaining elective courses.
The last step is to take the brokers exam. Once you pass the exam, you are considered a real estate broker and can run your business independently from a brokerage.
There are many advantages to being a real estate broker. The title itself lets others know that you have more education under your belt.
As a broker, the biggest benefit is earning commission on all your deals and not splitting them with an office. That means more money in your pocket.
Another advantage of becoming a broker is the capability of having other real estate agents under your license. Why would brokers want to do this? Because as the broker, they are entitled to a portion of their agents’ commission.
Being a real estate broker is a great way to work independently or have a team under their licence to create passive income.
A real estate broker associate has the same license as a broker, but works for another broker as a salesperson. While being a broker does have its advantages, it also means having all of the liability as well.
When you are operating on your own as a broker, you are solely responsible. That means handling all the costs associated with lawsuits, compliance, and insurance.
This is why some brokers choose to join a traditional brokerage. When a broker decides to hang their license with an office, the broker is then known by the term broker associate.
While being a broker associate may not have the same freedoms as a broker, there are benefits to joining a brokerage. When a broker associate runs into an issue with a transaction, they have the resources provided by the brokerage firm to help resolve it.
A traditional brokerage will have a broker of record to answer any contract questions. They also employ a risk management company that agents have access to for legal questions. A compliance officer reviews their transaction files to ensure they are in order in case of an audit.
Due to their experience, broker associates may also enjoy a higher commission split.
So, one of the main advantages of a broker joining a brokerage firm is to limit their liability.
As with many industries, there are titles that help differentiate a person’s skill level or education. They also speak to their responsibilities within that role.
In the food industry, there’s a difference between a short order cook, a cook, and a chef.
While each may have a different title, what do they all have in common? They all prepare and cook your food.
Understanding the difference between a Real Estate Agent, REALTOR®, Broker, Broker Associate helps you know what you want in your career. These positions each have different responsibilities or limitations within their title.
The most important takeaway? Whatever the title, each is able to help with buying and selling real estate.
I got started in real estate about 20 years ago, and I got right into real estate after I finished business school. I realized I had a passion for helping people and I originally was looking to get into commercial real estate but decided I can help more people by getting into the residential side first.
In business school, I realized I had a good act for business and I thought that this industry needed people in a higher level and it was a great opportunity for me to come in and make a change. I saw this as an opportunity to really grow, develop and make good money while I could also help people.
I had great mentors. First thing I would say for a new person is that they should get a great mentor. Mentorship is critical. I got the best training and really focused on generating leads. We’re in the real estate business but it’s really about lead generation. Lead follow ups get you the business. You can do all the real estate in the world, but if you don’t have a client, you’re not gonna make money. That’s my motto.
When I first got approached to being the first agent in Los Angeles for Keller Williams, I saw it as an opportunity to have a business model that really supports my real estate sales career. And then I saw the bigger opportunity, which is why I went to business school and own my brokerage. I always had that vision and this became the right platform for me to exercise that vision and I now own 20 Keller Williams offices in California and Hawaii.
It’s not simple, but I am very determined. The way I ran my real estate business is the same way I run my real estate companies. It’s all about how I help the agent, consumers and how I provide the best level of support so that my agents thrive and be successful as well.
They have to have passion and drive. You can’t motivate people, they have to love the business. The skills can be learned, but you have to have passion. Passion can’t be learned.
I learned early on that it’s all about who you’re in business with that matters. Whether that’s a client, people that support you or who you help support. I’ve learned how to develop people. I believe in investing in people and those people invest back in me and because of that we’ve grown an incredible business. There’s no way I can run these many businesses without the help and support of others.
Yes of course, there’s Gary Keller who built Keller Williams- one of the people I look up to for inspiration. He’s an incredible leader and not just in real estate, he’s written all these books, and he really looked at this business in a different way, and because of that I respect what he’s done.
And there are a lot of people, like John Maxwell, Tony Robbins and others that influenced me as well. I learned to create habits when I want to get better at certain things, whether it’s personal or business.
I put sticky notes on my mirror. And I do it for 30-40 days. It’s the first thing I see in the morning and the last thing I see at night. It’s a constant reminder. I don’t put more than three things at once and I succeed at more than 90% of it. I believe a habit is developed over 26-27 days. Creating those habits becomes a pattern.
If you want to make money in the real estate business you need to be disciplined in the most important areas. That’s lead generation, lead follow up and really being focused in certain areas.
Constant balance is important. I work really hard and I make sure I’m playing really hard too. I work at the extremes, but my family is important and at certain times my phone gets turned off and everything else has to wait. You got to be present at work and you got to be present at home.
If you’re really effective the first four hours of the business day you can accomplish a lot and become one of the top agents in the entire city. It’s about laser-focus for at least part of the day.
I define success by less monetary and more about when people recommend me to others. It makes me feel like I’m accomplishing something. I’m making a difference in people’s lives, I’m making a difference in my own life, and the money is the bi-product.
We’re due for more interest rate hikes because the economy is actually doing well and I feel like we’re going to have a pretty good period right now, but I think that’s a short window because we’re due for a downturn in the market. We will stay strong because of the lack of inventory right now, but that’s the only thing really that’s propelling us through what should’ve been and already is a downturn market.
I believe we saw part of it last Fall and even into January. I think we’re having a robust Spring because the fundamentals in the difference of government is causing part of that, and the fact that we have a 4.8% unemployment rate really helps so people can buy. The problem is when interest rates start going up, the affordability changes and causes a problem.
There is another big issue too, which is the affordability in the new construction development to meet the demands of first time home buyers. There’s so much demand and not enough supply and mainly because the cost of land, the cost of development and entitlement is so expensive that why build a lower income project when you can build much more expensive homes.
If you look at the cap rate of apartment buildings, it’s unprecedented numbers. It’s probably because of the lack of supply. Until they allow for more building to go on or create some sort of government sponsored thing in order to create more supply necessary for our economy to support that growth, we’re gonna have a really tight and difficult market.
Be in it for the passion or don’t be in it (at all).
As a mother, Veronica wanted that freedom to be able to work from home. She also gravitated towards the great financial aspect tied into being a Real Estate Agent.
Veronica’s career began at CA Realty Training. She went to in-class training sessions at the Westwood location. She goes on to say that this decision was the best decision she has made for herself. She explains that the support, the courses, and the schedule that CA Realty Training provided all worked out very well for her.
Veronica explains how she felt an abundance of emotions- from excitement to doubtfulness. Now that she got her license, she quickly wondered what her next step was and knew she had to get to business!
The reason for doubtfulness was due to the fact that she did not truly believe that she could do it. However, the support from CA Realty Training has helped her get perspective and gave her the confidence to get out there and begin her career. Her new-made connections and co-workers provided her support and influenced her to get started.
The first people that Veronica approached before getting any clients were her sphere of influence. She goes on to say that her last client was actually from her part-time job at the retail store she worked at prior to getting her Real Estate Agent Salesperson License. Alvarez tells Robert that she told people in her sphere of influence that she had her license, and two months later she got clients!
Veronica advises people that want to get started in this career that they should strive to get past insecurities and doubts (because fear is what ultimately limits people from becoming successful). Alvarez also advises people to pick the right brokerage for them- which will encourage them to stay focused and determined.
Veronica has zero regrets about her decision and career change. She is happy with all of her decisions and with the path she chose for herself. Next time this year, she hopes to have more listings and sales, and will work hard to ensure her goals are achieved.
One of the most critical choices you will make at the start of your career as a newly licensed or potential real estate agent is whether to work solo or alongside a team.
This decision is crucial because it shapes the entire future of your practice and determines how much financial and professional success you can gain.
Let us take a quick look at the advantages and disadvantages of joining a real estate team:
Pros of Joining a Real Estate Team
Cons of Joining a Real Estate Team
As a new agent, you are bound to be faced with a lot of challenges, including:
Let’s face it, handling all of this could get overwhelming. You just might need to join a team to ease the burden. Let's explore whether this is a good idea:
A real estate team consists of a group of real estate agents working together under a brokerage. These agents do everything together, including managing listings and collecting commissions.
While it might seem like a wrong idea to team up with your competition, you should know that joining a real estate team might be a good idea – especially if you are a new agent.
Working in a team allows you to be closer to other agents, some of which will be more experienced than you are.
You get to see how they handle their leads and clients and learn things from them, thus helping you to become a better realtor.
Additionally, the leads given out by the team leader are pooled together. With a combination of effort from every team member, it is easier to find and land a client.
As a new agent, it could get overwhelming trying to keep afloat. But, if you work with a team, you get professional support from other agents and your team leader. You can also enjoy proper training and education that benefits your career.
Like any business, being a real estate agent comes with its expenses. These include licensing fees, brokerage fees, operation costs, continuing education, marketing materials, office supplies, self-employment income taxes, MLS fees, and lots more.
However, in a real estate team, all these expenses are shared amongst everyone, thus helping each teammate to save some extra money.
Some expenses you get to share with your teammates include MLS fees, office supplies, marketing material, operation costs, and others.
In the real estate industry, the competition is usually agent against agent, and in the case of a team against team.
This simply means that rather than working against your teammates, you are working with them, thus giving you fewer people to compete against.
This way, you get to pool together resources and marketing power to land clients. And suppose one teammate is unwilling to work with a particular client. In that case, the client can quickly be passed on to you rather than have them go to the competition.
While working alone allows you more control of your time, it also gives you the chance to become lazy by dilly-dallying and procrastinating.
However, suppose you are working in a team. In that case, you are automatically accountable to your team leader and teammates. You will thus be pushed to work harder and be more productive.
When working as a team, your sphere of influence is no longer limited to the people you know.
Instead, it spreads to include everyone your teammates know, which increases your chances of landing a client.
While joining a real estate team might be the best for new agents, the same cannot be said for experienced agents.
This is because they might be looking for more independence and freedom that a team cannot give them since they have more experience.
While sharing expenses with your teammates will help you cut costs, it will also mean you get a smaller commission cut. Unfortunately, this will limit your earning potential.
Real estate teams always have team leaders who are in charge of running the entire team.
When working in a team, you don’t get to be your own boss and call the shots; you have to answer to the team leader and other teammates.
This loss of independence and decision-making makes you less of the entrepreneur you would be if you were working solo.
When you work in a real estate team, you put all your efforts into building another person’s brand rather than yours.
Unfortunately, this means you might not get the chance to pursue your interest because you are pursuing that of the brand and team leader.
It also means that if you ever decide to go independent, it might seem like starting from scratch.
Personality is so important in a team that some teams won’t accept agents based on their personality. Different people have different personalities, and when working as a team, you have to deal with all these personalities, good or bad.
While some teammates might have personality types that agree with yours, others might be more difficult to work with. This affects how well you can get along with your team and produce results.
Joining a real estate team is not a prerequisite to success in the real estate industry. But, it has many benefits that could help you kickstart your career as a real estate agent.
If you are a newly licensed agent, joining a team is advisable. But, in the end, whatever decision you make, just make sure you consider both your short-term needs and long-term goals and ensure you are getting the most out of it.
Is a commercial real estate license different from a residential license?
Absolutely not! There’s a big misconception that you have to obtain a different license for commercial real estate. When you get your real estate license, it allows you to practice in both sectors of the field.
This is one of the advantages of having your license. You are not limited to one or the other. You can practice residential or commercial real estate and some people decide to do both.
While you are still helping people buy and sell real estate, other business-related factors will be different. Let’s compare the actual differences between residential and commercial real estate and what agents deal with.
With residential real estate, agents focus on selling properties for residential use. Single-family homes, condominiums, and any multi-unit building up to 4 units are common property types. This will also include duplexes or triplexes.
Commercial real estate is focused on properties that will have a return on investment for their clients. A typical commercial agent will focus on negotiating properties such as office buildings, entire apartment complexes, strip malls, and retail locations.
The average price of a home in residential real estate can vary depending on the area and market. For instance, the current median price of a home in California is about $800,000. The average commission percentage is 3% per side.
While the commission percentage is the same, the size of the commission check in commercial real estate is substantially more. That’s because the price point of a commercial building exceeds the price of the average single-family home in comparison.
When working in residential, a majority of your business will come from your sphere of influence, or the people you know. Referrals from your past clients will also make up a portion of your client list. Because all people need a place to live, there is no limit to who you can target as a lead.
Commercial agents deal with companies and investors as their clients. Commercial clients expect agents to be informed about data such as cap rates and gross rent multipliers. They tend to be less emotional and more data-driven.
Is residential better?
That’s relative depending on what you consider a priority when practicing real estate. Let’s compare some of the advantages in the field of residential.
It has often been said that real estate is a “people business.” Buying a home can be very emotional for buyers. If you love working with people and making meaningful connections with your clients, then residential is the right field for you.
Again, commercial agents are dealing with investors. These people tend to be more interested in data, react less to emotion, and are more analytical.
A commercial investor is not as concerned with moving in by the end of summer or falling in love with a dream kitchen. They think in terms of numbers, rent schedules, and insurance rates more than anything else.
The average time it takes to sell a home can be anywhere from 30-70 days. That’s an advantage in residential real estate. You have more opportunities to close deals and make more in commissions.
While commercial real estate can get you more in commissions, the transactions can take longer to close. This is simply because there is more research and data that has to be done on a commercial deal. Some commercial deals can take a year or longer depending on the property and the market.
Can you do both commercial and residential real estate?
Absolutely. As we mentioned before, your real estate license allows you to practice in both sectors. Although, most agents will specialize in one or the other.
Each area of real estate will have different methods of lead generation, marketing, and training. Becoming familiar with commercial practices will help you close more deals.
In terms of marketing, while residential agents might reach out to potential leads through social media and mailers, commercial agents are much more likely to formally present data and numbers to their clients.
Because commercial real estate is focused on investment return, it relies more on hard numbers. If you are a residential agent interested in getting into commercial, here is some of the terminology you should understand and get familiar with:
You must be more adept at calculations and realize that your clients are looking for a good investment. Learning how to evaluate and interpret the data based on these calculations, will help identify the appropriate properties.
When you work in commercial, there’s a much greater risk but often a greater possibility of a larger financial reward.
Residential real estate allows you to work with people and make connections. Your initial leads are the people you know. You can potentially close your first deal within 3 to 6 months if you work your database.
Residential transactions have fairly quick closings allowing for more earning potential.
As a commercial agent, your commissions may be 10x as large, but they definitely don’t come as frequently. There is typically less of a turnover rate on a commercial sale since investors tend to hold on to their buildings for many times longer than people usually stay in their homes.
That's why it’s important to save money for living expenses–even more so than a residential agent–and be able to weather the storm if nothing sells within a year or more.
Commercial agents need to know the data and how to interpret it. They also need to be patient, confident, and persistent to succeed in the competitive field of commercial real estate.
If you are a newly licensed agent, you may be asking yourself whether you should practice residential or commercial. With each sector, there will be advantages and disadvantages. The most important question to ask yourself?
“Which is better for me?”
Getting your clients under contract on a property is a feeling like no other for real estate agents. But next comes the escrow process, bringing with it its own set of potential challenges.
Escrow is the process of transferring the funds from the buyer to the seller through a third party. While the escrow process should go smoothly, some common escrow problems include:
Throughout your real estate career, you will likely experience one or more of these problems.
As you and your clients navigate escrow, here are some of the most common issues you could encounter and what you can do to save the transaction.
Suppose the buyer has included an inspection contingency in their offer. In that case, they have the right to bring a third-party inspector to the property, and potentially back out of the deal depending on the findings.
In a property inspection, the home is examined thoroughly for various issues like structural damage, electrical, plumbing, and HVAC systems.
Depending on how the purchase contract is written, a buyer can back out of a home purchase if the severity and cost of the issues are more than they want to deal with.
Usually, with an inspection contingency, a buyer can indicate how much they’re willing to pay towards inspection repairs before they have the option to walk away.
However, if a buyer decides they still want the house despite the inspection report, there are still options! Using your negotiating skills, you can work with the seller’s agent to try and agree on the repairs.
If the buyers are still interested in the house, you can go back to the seller to determine if they’ll lower the cost of the house or potentially contribute to the cost of repairs.
The appraisal is an evaluation of the property's value from a third party to gauge whether a buyer is paying a fair price for a home.
There are a few reasons why a house could potentially appraise for less than your purchase price. In competitive markets with low inventory, it’s not uncommon for homes to sell for more than they’re listed.
Sometimes when this happens, the appraisal value hasn’t yet caught up with the market’s value. Other times, a real estate agent has priced the home too high, and the listing price will have to be lowered to meet the appraised value.
If your client's home appraises for less than the purchase price, you have a few options. You can negotiate with the seller to either lower the listing price or the buyer can make up the difference in the amount of down payment they offer.
If neither option is available and your buyer has an appraisal contingency in place, your client can walk away from the deal without losing any deposits.
In some cases, you might be able to appeal or dispute an appraisal in which the buyer’s lender submits a request to re-evaluate the home.
The chance an appraiser changes their decision is slim, but in some instances, it can work to correct the low appraisal value.
Buying a home is a stressful and intense process that some buyers don’t anticipate when starting their home-buying journey.
A lot can change in a buyer’s life - both financially and personally - from the time they start the search to when they’re under contract on a property. Sometimes they can get cold feet, resulting in buyer’s remorse after the contract is already in place.
Ultimately, homebuyers could decide for reasons outside of the real estate agent or seller’s control that they no longer want to purchase that home.
It could be because they weren’t able to sell their current home in time, or perhaps they found a house they like better. Whatever the case, staying positive and empathetic with your client is important.
Getting a loan today is much different than in past decades. There is intense scrutiny into every aspect of the loan applicants' finances and strict guidelines on debt, income, job verification, and more that can result in funding being revoked.
During the escrow process, it’s important to counsel your client to make no major changes to their current financial situation. They shouldn’t make large purchases or suddenly change jobs, as it could change their loan eligibility.
Sometimes these things are out of your clients' control, like if they lose their job or have an unexpected medical bill.
One way to avoid this is to have your clients get pre-approved by a lender before they write a contract. This can prevent any surprises and give your clients a good idea of what they can afford.
You can certainly take steps to avoid these escrow problems and save the deal from falling through — and it starts with your negotiating abilities.
When these issues arise, it’s crucial to utilize the power of negotiating to help find a middle ground between the buyers and sellers.
Communicate with your clients to understand what their needs are and what is the best way to support them during this time.
You’ll likely have to work with the seller’s agent to find a middle ground, or the deal might not succeed.
Clear communication and transparency can go a long way in working to settle the problems.
No matter how good of an agent you are, these problems can pop up in any transaction. How you handle them will indicate how confident of an agent you are.
As you navigate your clients through the escrow process, remember to stay positive, communicative, and solutions-driven to provide the best service possible.
The H.O.A. (Homeowner’s Association) can affect home ownership in numerous ways- mainly for its high cost, but also its many benefits. First we will discuss what the difference between an apartment and a condominium (condo) and then we will explain how the H.O.A. is involved.
An apartment and a condo are very similar, but primarily vary in terms of ownership and use-restrictions. While both are usually units within a larger building, the primary difference is that a condo will have an individual owner per unit, whereas the whole apartment building will all be owned by one entity such as a person or a corporation. For a renter, there is not much of a difference, but for those looking to purchase a property, a condominium may be an affordable stepping-stone to a larger, detached home. And while an apartment building has rules written into the lease that are set by the owner/manager, a condominium complex has an H.O.A. with rules set by agreement between the homeowners of each condominium.
An H.O.A., or Homeowners Association, is a small housing “government” that sets the rules and restrictions allowed in the community in which you live. As mentioned, it’s made up of the owners of the individual units so each person has a say at the HOA meetings, and an opportunity to become part of the Board that oversees the H.O.A. (Being on the Board is not always fun and games - many times you will have to settle complaints between other homeowners and act as a referee between two angry neighbors.)
H.O.A.s are not only in condominiums - some single-family communities have them as well - but they are present in every condo building to ensure some common items like maintenance and upgrades of common spaces and the exterior of the building(s). Unlike a detached home, a condo owner cannot just paint the outside of his or her home - all units must be painted and upgraded together to ensure a common, cohesive look. Also, upgrades to amenities - like a pool or a gym - have to be agreed upon by all homeowners of the complex, both for aesthetics and for cost.
Another aspect of H.O.A.s that can’t be overlooked is the monthly cost, which must be factored into total ownership costs of the house. For example, if a monthly mortgage payment is a stretch, the extra $100-500 (on average) in Homeowners’ fees can really make or break a sale. Though there are benefits to H.O.A.s, the fees are usually the least pleasant part of the experience. Some Associations even have fees over $1000 per month! These are probably the ones that provide the most benefits, but that can definitely make or break a sale if the buyer is stretching to afford the monthly mortgage payments.
However, an expensive and important aspect of H.O.A.s is their insurance for the building, common spaces, and any incidents that may arise in the common spaces. For example, if a guest of one of your neighbors falls in the back courtyard, the H.O.A. should carry liability insurance to cover the guest’s medical bills. If a fire starts in one condo and burns down the entire building, the H.O.A. should carry insurance to help defray the costs of rebuilding the entire complex.
As you can see, these differences are important to keep in mind when renting an apartment or condo, and it’s very important to review all the rules of an H.O.A. before buying a condo. Some H.O.A.'s dues may seem too high for the benefits they offer, but keep in mind that they do oversee many services and insurance for common areas. As always, do your research thoroughly and keep everything in mind when buying your own home.
Choosing a real estate brokerage can affect your success, the training you get, and your satisfaction in the industry.
Different brokerages provide different support, commission rates, and resources. Evaluating your options carefully is important.
If you are choosing a real estate broker, your choice matters. Picking the right broker will make or break your future career. This guide will help you determine the best brokerage for you.
When deciding how to choose a real estate brokerage, it’s important to understand the different types available.
Franchise brokerages, like Keller Williams and Century21, are national and global companies. They offer many resources and strong branding, but they may also have higher fees.
Independent brokerages offer agents more freedom and personalized support. However, they may not have the same recognition as larger franchises.
Virtual brokerages are becoming more popular. Agents can work from home and save money. However, they may provide less face-to-face interaction and community support.
When choosing a real estate broker, think about the benefits and drawbacks of each type. This will help you match your career goals, work style, and the support you want.
To choose the right brokerage, research the brokerages in your area. You want to evaluate the brokerage based on the following factors:
Let’s dive into each one of these factors and see how to identify a good brokerage – especially for new agents.
When choosing a real estate broker, it’s important to know how the commission works.
Most real estate agents earn a percentage of each sale, known as the commission split, which can range from 60/40 to 70/30 or more.
In addition to splits, some brokerages charge desk fees or other administrative costs, which can reduce your overall earnings.
As a new agent, these factors can greatly affect your income. Understanding the commission structure will impact your earnings and future growth. This is key when you are looking for a broker as a real estate agent.
For new agents, choosing a brokerage that offers robust training and mentorship programs can be a game-changer.
To learn about real estate, you need more than just a license. You also need real-world experience, guidance, and ongoing education.
When choosing a broker as a new agent, look for a brokerage that offers training programs. Make sure they provide access to mentors and resources to help you succeed.
A solid mentorship program will accelerate your growth and help you avoid common pitfalls as you pick a real estate broker to work for.
The culture of a brokerage plays a crucial role in your long-term success and satisfaction as an agent.
When choosing a real estate agency, think about more than just commission splits. Consider the support system the brokerage provides.
A supportive environment, where team members help each other, can really help new agents.
Brokerages with a strong office culture and good agent tools can help you succeed. They provide the support you need as you learn to choose a real estate brokerage that matches your values.
Some brokerages offer lead generation and marketing support to help agents grow their client base.
When choosing a real estate brokerage, inquire about how the brokerage helps agents secure leads and market their services.
Some offer many tools, like CRM systems, paid ads, and client referrals. Others may let agents find their own leads.
This support can greatly affect your success as a new agent. So, think carefully when choosing a real estate broker that meets your needs.
A brokerage's knowledge of the local market can be a critical factor in your career success.
When you search for a broker as a real estate agent, consider their knowledge of the area. Your brokerage should understand the local market where you want to operate.
A brokerage with local knowledge can guide you better. They will help you build a network and connect with clients.
The location of your brokerage affects the properties you will work with. It also impacts the clients you will serve and your career growth. This makes location an important factor when choosing a broker as a new agent.
In today’s competitive real estate market, modern technology and tools can greatly impact your success as an agent.
A brokerage with advanced CRM systems, digital marketing tools, and transaction management software can help you work better. It can also help you manage clients more effectively.
When considering how to choose a real estate brokerage, look for one that provides access to the latest tech resources.
This saves time and boosts your efficiency. You can focus more on building relationships and closing deals.
You can choose between a traditional office or a real estate agency that operates online. Having the latest technology is critical in both cases.
A brokerage’s reputation is one of the most important factors to consider when deciding where to work.
A company with many happy clients and successful deals can give you credibility. This helps you build a strong career.
To make the right choice, research the brokerage's reputation. Check online reviews and industry awards.
Choosing a real estate broker to work for means looking at more than just commission splits. Finding a brokerage with a good reputation is critical. This can help you attract clients and grow your professional network.
When you have found a few brokerages that you like, it’s time to schedule an interview.
To do so, simply call the brokerage front desk or send them an email. In your outreach, mention where you are in your career, your goals, and that you would like to interview.
Most brokerages are excited to recruit agents. You can interview and secure a job. Make sure to prepare interview questions based on the criteria we listed above.
Asking those interview questions will help you learn more about the brokerage and its resources.
Choosing the right real estate brokerage is a crucial step in building a successful career.
From evaluating commission structures and technology to considering training programs and company culture, there are many factors to weigh.
When deciding how to choose a real estate brokerage, take the time to assess your goals, needs, and long-term vision. Whether you’re just starting or looking to make a switch, understanding your options will help you make an informed choice.
Purchasing a house is perhaps one of the biggest purchases many make in their lifetime. Research puts the United States homeownership rate in the second quarter of 2022 at 65.8%, a slight increase from 65.4% in 2021.
Of this 65.4% in 2021, 34% were first-time home buyers. While being a first-time buyer can be both an exciting and frightening experience, the statistics above prove that you are not alone.
This article provides a step-by-step guide on buying your first house, avoiding costly mistakes, and making the best out of your home-buying experience.
Having decided to purchase your first property, these are a few tips you must know and consider when buying your property:
The choice of mortgage lenders or financing institutions is a major step in purchasing your first property. This step must be handled thoroughly as its impact lasts for several years after the purchase has been completed.
When choosing a lender, it is important to consider their interest rates, down payments, additional fees, and repayment periods to ensure that these terms are favorable and suit your needs.
The next step is to obtain a mortgage preapproval from your lender stating that the lender has offered to finance your purchase with a particular amount under certain terms. Obtaining a pre-approval letter gives you an advantage over other buyers by demonstrating to sellers that you are a serious buyer.
It is important to note that your lender will review your credit history, debt-to-income ratio, and other financial documents to verify your income, assets, and debt. Depending on the mortgage lender, you could get a preapproval in as little as one business day. However, it usually takes a few business days to be finalized.
No rule in the real estate industry makes it compulsory for buyers to engage the services of real estate agents. However, it is advisable to hire professional and experienced realtors to ensure ease and protection from start to finish of the buying process.
A good realtor will get you the best properties that meet your needs at the best prices, guide you through the negotiation, handle all necessary documentation and investigations, and, most importantly, oversee the closing. When scouting for realtors, you can begin your search on the internet or seek referrals from recent buyers around you.
After selecting your potential realtors, during the interview, inquire about their experience with assisting first-time buyers and how they plan to help you find a home, especially those not on the market yet.
One of the perks of working with a realtor is it increases the likelihood of finding your ideal property -whether it be a single-family unit or a condominium- within your budget in record time. Due to the vast network of contacts and knowledge of the market available at their disposal, realtors are invaluable to buyers looking to find the best property in the market.
When searching for property, consider your budget, the location of the property, the safety of the environment, other surrounding neighborhoods, and its proximity to necessary amenities important to you, such as schools and hospitals.
After finding an appropriate property, proceed to make an offer on the property. This is a crucial aspect of the procedure that must be handled with expertise to prevent your offer from being rejected. Your realtor would guide you on how to draw up a strong offer that would be accepted.
They will also assist you in deciding how much money you want to offer for the house, ensure that the necessary documents are contained in the offer, and inform you of important conditions you want to ask for.
Some experts advise going the extra mile, especially in a highly competitive market. This entails adding little gestures such as flowers or the seller’s favorite cookies -if you are privy to this information. Bear in mind that you may also be offered a counteroffer for different reasons, such as a change in the property’s value after appraisal.
Once your offer has been drawn up, it is sent to the seller, typically through your realtor. Most of the time, this is done via email, but it can also be sent to the seller’s residence via mail or eBay. Your agent must also inform the seller’s agent so they can look out for your offer.
Once your offer has been selected, and an agreement has been reached with the seller, an escrow account is opened – typically by your realtor. This enables a neutral third party to protect the money and documents of the two transacting parties and only release each to the respective recipients when all of the terms of the contract are met.
An escrow typically takes about 30 days to close so as to enable the lender to verify your financial security and the value of the property in question.
One of the important requirements to meet in order to obtain financing from a lender is to carry out an appraisal of the property in question.
This is typically carried out by an approved appraisal company, usually, one that the lender suggests. Lenders do this to confirm the actual market value of the prospective property and ensure that they are not issuing loans higher than the property value.
The most common method of appraisal is the comparison approach which compares the prospective property to at least 3 recent sales in the area. This method typically uses properties sold within the past 12 months to provide an up-to-date picture of the current market.
Before purchasing a property, employing a professional inspection agency to carry out a thorough house inspection is paramount, regardless of the state of the property. This gives you a general idea of what you are getting into in terms of the quality, safety, and overall condition of your potential home.
It also helps you draw up a comprehensive budget to foot additional expenses, such as repairs that may arise while acquiring the property. On the other hand, you can negotiate to have the seller make the repairs or give you a discount on such expenses.
This phase involves signing all documents related to the purchase of your property, including loan documents, to finalize the deal. It is important to hire a professional solicitor to handle all legal affairs related to your property in order to ensure you are well protected before signing any of the documents.
Your realtor would also inform you of the documents you are required to bring along to the closing, such as a means of identification, i.e., a government-issued ID card and all other necessary documents.
The process of acquiring a property does not end with the payment and signing of documents; it is necessary to have the purchase documented with the appropriate authorities. After closing the deal, your title or escrow agent typically files for the original deed of the property in the appropriate government office in your county.
This document legally proves that you are now the owner of the property. When there are no discrepancies in the title of the property, this process typically takes a couple of hours from the closing to a few weeks.
Purchasing a first property can be a life-changing experience for anyone. However, like any other transaction, it is important to conduct thorough research and employ the required professionals. This is to help you avoid incurring losses and possibly legal issues during the purchase process.
As a real estate agent, the ability to connect with the people who need your services and satisfy their needs is your most important duty.
And achieving it all boils down to one thing - your sphere of influence.
Let’s take a look at what this means, and how you can cultivate a sphere of influence that rocks.
A sphere of influence (SOI) consists of people whom you are personally connected with.
These are people that you have a relationship with and who are very likely to influence your business by recommending your services and/or providing valuable feedback.
Examples of people in your sphere of influence include your friends, family, past clients, old schoolmates, business colleagues, and every other person that you are connected to in one way or the other.
Many new real estate agents knowingly or unknowingly become secret agents – people who do not tell other people that they are real estate agents. This secrecy could either be because of shame or embarrassment at sharing they are agents, or because they do not want to look like they are begging for business.
However, you need to understand that there are certain dangers to being a secret agent.
Every day, we are presented with several opportunities to tell our SOI about what we do, and failure to take these opportunities could result in a loss of potential clients.
Being a secret agent simply means that you are limiting the amount of business that you can get, and giving another agent the chance to get your potential clients.
It is therefore very important for you to make a conscious decision to quit being tight-lipped about your business and publicize it any chance you get. Remember, if you are not gaining new clients, you most likely are losing new clients.
While you can make use of other forms of advertisements such as social media, newspapers, posters, and the likes, your sphere of influence is really your best bet to finding leads in the real estate world. Here’s how:
Firstly, your sphere of influence consists of people who know you, love you, and want to support your business.
These people are familiar with your work ethic and have a sense of trust in you. All of these give you an edge over the random real estate agent whom they are not acquainted with, thus making them more likely to work with you.
Advertisements only advertise your business; they do nothing in the way of building a relationship between you and potential clients.
Your sphere of influence, however, gives you a chance to provide people with solid proof of your reputation and outstanding service.
As a result, there is a higher guarantee that you’d sooner get a lead from your SOI than you would from the posters you put up.
There are three main lead temperatures -cold leads, warm leads, and hot leads. Cold leads consist of people who fit your target audience but haven’t yet interacted with your business. These people are the least likely to purchase your services.
Warm leads are people who have interacted with your business, either by visiting your website, clicking on an email link, or engaging in a social media post.
People in this category are more likely to become clients than cold leads. Finally, hot leads are people who have shown interest in your services and are willing to purchase.
Your SOI provides you with more warm leads than cold leads because these people have had interactions with you and can easily contact you to find out more details about your services.
This makes your SOI one of your best bets in finding leads.
Have you ever felt like you do not know anyone, or that you have an extremely small or non-existent sphere of influence?
Well, you might want to think again, because everyone has a sphere of influence, and you are not an exception. The people you grew up with, went to school with, work(ed) with, play sports with, live next to, and relate with daily are all part of your sphere of influence.
You no doubt have one or more categories of these individuals in your life.
Having identified the people in your sphere of influence, the next thing to do is familiarize them with your business. To achieve this, you should:
The first step to building your SOI is reaching out to the people in your inner circle; people who know you well, love you, and want to see you succeed.
Informing them that you are a real estate agent automatically makes you a candidate for their patronage or referrals. You can reach out to them via calls, texts, or a one-on-one meeting.
The next step is to reach out to people who you are quite acquainted with, although not on a personal level.
These people include your neighbors, co-workers, gym pals, mailman, apartment building doorman, grocery store attendant, or bartender at your favorite bar.
The best way to inform these people about your job is through a personal meeting since you are not very likely to have their contact details.
This category consists of people who do not know you, and who have had little to no interaction with you.
Examples of this include the uber driver that picks you up, the guy you jog past every morning, and some random friends on Facebook.
It is not enough to reach out once and inform your sphere that you are an agent.
You have to remind them often so that when they think about a real estate agent, you are the first person that comes to mind. Here are some ways to achieve this:
The best time to start building your sphere of influence is the moment you realize you want to be an agent.
Even before getting your license and practicing, you should begin telling your friends and family about your goals. By doing so, you are laying a foundation that you can begin building upon as soon as you get your license.
Everyone has a sphere of influence, no matter how little it may be. The ability to fully utilize your sphere of influence is a key determinant of how well you can beat the competition and become a successful real estate agent.
Remember to begin building your SOI even before you get your license, no matter how difficult it might be, and in no time, you’ll see that it is totally worth it.
Technology has put down roots in almost every aspect of our lives… whether it’s work, socializing, dating - or, yes, home shopping! It’s no secret that home shoppers are heavily using sites like Zillow and Redfin to research homes for sale, but there are also many other tools that can help today’s savvy agent stay ahead of the curve and on top of leads and clients.
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One key way to stay in touch with your clients is by putting a chat feature on your website, or having a robust Facebook messenger presence. Since everyone is so used to discussing things over text or messenger, an instant message-based way to get in touch with you is essential. This also enables more people to reach out to you, and any potential person reaching out to you could become a client!
Another key way to stay in touch with your clients is with a good CRM: a Contact Relationship Manager. This software will help you manage your SOI (sphere of influence) and save you all the details of remembering when you last spoke with someone. The best CRM will integrate with your email and phone calls to automatically track contacts and will even suggest creating a new contact for any unknown number.
Thirdly, a good web and social media presence is truly crucial to stay current and to get leads converted into deals. Among Facebook, Instagram, Twitter, and Snapchat, social media is a huge tool for real estate agents to build their brand - and in Snapchat-talk, the disappearing nature of “stories” encourage visitors to check back every day, so they don’t miss anything! Another one of Snapchat’s benefits is its low “permission level,” meaning that users get to choose when they view your stories, rather than receive a notification that has to be attended to or ignored immediately. Because the current generation of internet users is now so overwhelmed by advertising and promoted content, it’s VERY important to share organically - what you’re really doing and what you’re actually passionate about.
Once your technological outreach has gotten you clients and a listing, you should be very conscious of the technology now available and expected from a seller’s standpoint. 360-degree cameras and tours are nearly a must nowadays, and they greatly enhance a property’s marketability via online channels such as Zillow and Redfin. Most agents are now creating websites with the house’s address, for example: www.123mainstreet.com, which should show an even more in-depth tour of the home with all details such as square footage, pictures of the view, and more. Another photo method gaining popularity is fly-over “drone” photography of the house and neighborhood, since buyers are now ranking the neighborhood as a greater decision-making factor than in the past, and aerial photos of a home and yard can be much more informative than the average and traditional on-the-ground photos.
Another possible factor that can help sell houses more quickly, especially to younger buyers, is a smart/connected home, which is sometimes referred to with the new term “Internet of Things.” The I.O.T. is a reference to connected light bulbs, thermostats, outlets, and more, which allow users to control their home through an app on their smartphone, and monitor energy usage to reduce their carbon footprint. This is especially prominent for the millennial generation, but also becoming more and more popular among older buyers as well - since everyone is so used to controlling everything from their phone, controlling their home is the next logical step.
Overall, technology is pretty cool, and it is constantly growing at a rapid speed. It is important for Real Estate Agents to stay up-to-date with all that is new in real estate tech- for the sake of their clients, for the sake of making more money, and for the sake of staying with-it.
It can feel overwhelming to build a website from the ground up, but an elegant and informative real estate website goes a long way in making a name for yourself and putting yourself out there. A well-designed website will attract more clients, help you sell more homes, and build your online presence. Take it one step at a time, and your new website will be central to your online marketing efforts in the real estate industry. The following is a quick overview of what you can do to build a powerful website.
To get started, your real estate website should include an aesthetically appealing logo — either for your company or for yourself as an independent agent — next to your company name or personal name in large font. Next to this, you will need navigation tabs along the top of your website. You can deviate from these standards, but make sure your website is still easy to navigate for new visitors.
You’ll design and publish a variety of landing pages to promote your real estate services to potential clients. For example, you may publish multiple landing pages that are each optimized for different segments of your target market. Some real estate agents choose to optimize landing pages for different neighborhoods and cities, or they create landing pages specifically for an email newsletter sign up form.
Navigation tabs on a real estate website typically include contact information, social media buttons, about page, services, blog, and FAQ. You may also want to include a navigation tab for your local listings; easy access to your listings is a fantastic way to generate leads. On the about page, feel free to include information about yourself and/or your team, which is especially helpful for agents who are just starting out and would like to introduce themselves to potential clients.
Best practices for real estate websites dictate that you should also do the following for your new website:
- From the start, optimize your website for mobile. People are always on the go nowadays and multitasking, so they need to be able to easily and conveniently browse your website from their mobile devices.
- Visual content, especially videos, are proven to be more effective and engaging than textual content. The best option is a website on which you can upload videos for your potential clients to watch and learn about your services and listings.
- Start off on the right foot and save yourself a headache by setting up your website analytics and prioritizing Search Engine Optimization when you build your real estate website. When set up properly, analytics will help you understand what is working and what isn’t working for lead generation, including which pages are effective and which are not. Proper SEO practices will make your website easier to find for potential clients when they run a web search to find a real estate agent. Be sure to optimize for location, so clients seeking you in the area will be sure to find you and contact you.
- In business, looking professional is important if you want to be taken seriously. The same concept applies to your website. Your website design should be engaging and visually impressive, because it is your online representation of yourself and your work. A top-notch website design will be worth its weight in gold when your engagement and credibility with website visitors and readers begins to grow.
- Post a blog on your website to showcase your expertise in the real estate industry. Always update your blog posts on a regular basis. A successful blog has the potential to double your website readership! You can hire a content writer to produce your blogs, or you can write them. Writing your own blog shows potential clients that you know what you’re talking about and that you’re passionate about the business. Additionally, offering evergreen content on your blog is an excellent way to generate leads; post your own e-book, publish tips for buying and selling homes, provide white papers, and submit other evergreen content for your target audience to download.
- Your website footer should include a copyright statement and your contact information. Include your address, phone number, email, logo or company image, and site map. There should also be easy-to-find links to your website pages, like the homepage, about page, services, blog, and contact page. Don’t forget the social media buttons as well, so your audience can navigate to your Facebook, Instagram, Pinterest, Twitter, LinkedIn, etc.
While hiring a professional website designer may cost more than creating a website yourself with a free template, you will see a return on your investment if you have it professionally done. Let someone else manage and design it while you focus on your career and your clients. Look at samples/portfolios, pricing, and details on services offered by website designers and programmers. An expertly crafted website will also stand out as unique and compelling and will have a foot up on websites that are built from plain, over-used templates. If you do use a template, just be sure to focus your attention on making it look professional and one-of-a-kind if possible.
That being said, there’s nothing wrong with using a template to build a website, especially if you don’t have the budget when starting out to hire a professional website designer. There are inexpensive options on the market that allow you to customize templates and add features that are relevant for real estate agents to use. Choose a domain name that is short and easy to remember. If you can, use your company name as the domain name. You can still craft and run a successful and effective website for your real estate business.
Before launching your real estate website, be sure to check the entire website for any bugs or inconsistencies. You want to work on fixing these before launching the website. Otherwise, potential clients may become frustrated; you wouldn’t want to accidentally seem unprofessional.
We wish you the best with creating your new real estate website. Exercise your creativity, and have fun while creating an online presence for yourself. Now get out and market your new website!
This is a guest post contribution from Valerie Kriss, Executive Assistant at Square 1 Group.
Feel free to contact Square 1 Group for your real estate website.
Client testimonials are one of the most powerful tools for real estate agents looking to build trust and credibility.
Just like reviews on platforms such as Google, Yelp, TripAdvisor, a collection of positive testimonials on your site or social media can greatly influence potential clients by showcasing your expertise and reliability.
Testimonials serve as real, relatable endorsements that can make prospective clients feel confident about choosing your services.
This article explores effective strategies for requesting, encouraging, and leveraging testimonials to grow your real estate business.
Timing is key when asking for a testimonial.
The ideal time to request one is when your client is most satisfied, often shortly after a successful closing.
This is when clients feel the value of your service and are most likely to share their experience positively.
Consider sending a follow-up email or making a quick call, letting them know how valuable their feedback is for your business.
When asking for a testimonial, a personalized approach works best. Consider using a short, friendly message such as:
“Thank you for trusting me with your home journey! If you’re happy with my services, would you mind sharing a review? Your feedback helps future clients know what to expect.”Tailoring your request to reflect specific aspects of their experience can prompt a more genuine response and higher-quality testimonial.
Make it as easy as possible for clients to leave a review. Provide direct links to popular review platforms like Google, Zillow, or Facebook in your emails or messages.
Include step-by-step instructions if necessary, and even consider creating a dedicated page on your website with instructions and links to simplify the process further.
A specific and detailed testimonial holds more weight than a generic comment.
Encourage clients to share particular aspects of their experience.
For example, rather than simply saying, “John was a great realtor,” they might say, “John helped us find a home in the perfect school district and sold our old house quickly to make the transition seamless.”
This depth of detail allows potential clients to visualize themselves in similar situations, making the testimonial more impactful.
Let clients know that specific details make a big difference in testimonials. Explain that a review like, “Sarah helped us find the perfect home in our ideal neighborhood within our budget” is more powerful than just “Great realtor!”
Providing examples can help clients understand what details are helpful to include, such as what made the experience stand out, how their needs were met, or any unique challenges addressed.
To prompt clients to be thorough, consider asking open-ended questions like:
Open-ended questions invite clients to share specifics, which makes their testimonials more relatable and engaging for future clients.
Place testimonials on high-traffic areas like your homepage, landing pages, and specific service pages. Positioning them strategically reinforces credibility as visitors browse.
Use testimonials that relate to each page’s focus. For example, a review highlighting neighborhood expertise would fit well on a location-based page.
Regularly post client testimonials on social media platforms like Facebook, Instagram, and LinkedIn to reach a broader audience.
Pair testimonials with visuals, such as client photos (with permission) or images of properties sold, to add authenticity and catch attention.
Add testimonials to email newsletters, brochures, and direct mail to strengthen marketing efforts.
Highlight recent or highly relevant testimonials in digital ad campaigns or on listings, allowing new prospects to see positive client experiences immediately.
Encourage clients to mention specific services or locations in their reviews, like “helped us find a home in Downtown Austin.” This adds valuable keywords that improve your site’s SEO.
Detailed testimonials with location and service specifics can help your site rank better for local searches, making it easier for potential clients to find you when searching for agents in their area.
Positive testimonials are a powerful trust-building tool. They allow potential clients to read about real experiences and gain confidence in your expertise.
Since clients rely on reviews to assess credibility, having a robust collection of positive testimonials increases the likelihood that new clients will reach out to you.
Prospective clients often consider the volume and quality of reviews before making a decision, so consistency is key.
Client testimonials are an invaluable asset in establishing trust and credibility in the real estate industry.
They provide prospective clients with genuine insights into your expertise, reliability, and the satisfaction of past clients.
By strategically gathering, encouraging, and showcasing detailed and positive reviews, you create a powerful tool that not only strengthens your online presence but also helps convert leads into loyal clients.
When a house is listed, the price is determined by the realtor and the seller after research and conversations.
However, once the property is under contract, an appraiser will have to come in and confirm that the home is, in fact, worth the amount it’s being sold for.
The appraisal process is a standard step in any real estate deal involving bank financing.
But, problems can arise, and it’s essential to fully understand the appraisal's role in the real estate transaction.
A home appraisal is a third-party opinion of how much the home is worth based on the fair market value.
During the appraisal process, a real estate appraiser will go to the home and take note of the home’s condition, what repairs might be needed, and how it compares with other homes nearby that have recently sold.
Once complete, the appraiser will send a report to the mortgage lender and include a final determination of the property's value.
Appraisals are required whenever a property purchase or sale involves a bank or mortgage, as the bank wants to ensure the home is sold for what it’s worth.
An appraisal is also used to determine the property taxes the county will charge every year.
Both the appraisal and inspection will look at a home’s condition and file a final report. However, they serve different purposes in the homebuying process.
While the appraisal will judge the home’s value, an inspection is a more in-depth look at the home’s condition.
The home inspection report will look at all home details like outlets, plumbing, electrical, and other major home systems to see what areas of the house may need repair.
The most significant difference is that an appraisal won’t uncover deeper issues in the home, and will simply outline the home’s valuation based on the required guidelines.
That’s why it can still be recommended to get a home inspection to understand the home’s condition fully.
An appraiser will consider several things when determining the property's fair market value. Most appraisers use the Uniform Residential Appraisal Report that Fannie Mae publishes.
This outlines the interior and exterior condition of the home, and requires a list of homes that are similar in location and size which have recently sold.
This will ensure the property’s value is in line with current market trends and pricing.
They will also conduct an in-person visual inspection of the property to judge the home’s condition and if any things would adversely affect the property’s value.
The property’s appraised value is influenced by a lot of factors but can include things like the number of bedrooms, bathrooms, the floor plan layout, and square footage.
Each appraisal report has a few standard sections that describe the home and how the appraiser reached the conclusion.
Assuming the appraiser used the uniform report, it will outline several sections including:
At the end of the report, the appraiser will outline based on all the above, what they estimate is the home’s fair market value.
Since the appraisal mainly protects the lender, the individual buying the house or borrowing the money pays for the appraisal. Ranging in cost, you can expect the appraisal to cost several hundred dollars depending on how big the house is and the condition of the property.
While most of the time an appraisal is required for a traditionally financed purchase, obtaining an appraisal can be valuable in a variety of transactions.
For buyers, the appraisal confirms that they’re paying a fair price for the home. For the sellers, the appraisal confirms that the home is priced in line with others in the market.
If your appraisal comes in higher than the original price you’re planning to purchase the property for, you’re in good shape!
This means that you will buy the house for less than the market value. The purchase price of the property won’t change, but you’ll be getting the home for a good deal.
However, on the other hand, problems will arise if an appraisal comes in lower than the property's purchase price. While this doesn’t happen frequently, it can happen, and it’s important to understand how to negotiate the process.
Since the home's value is lower than the purchase price, a lender will only agree to loan the appraised value. This means the buyer will have to cover the gap between the appraised amount and the purchase price in cash.
Or, if the buyer is unwilling to pay the difference, the seller might have to decrease the property's price to the appraised amount.
This is why it’s important to have an appraisal contingency in place. If the appraisal comes in lower and the seller won’t negotiate on the difference, an appraisal clause will allow you to walk away from the deal and keep your earnest money deposit.
The appraisal protects not only the bank but also provides a system of checks and balances for the buyer to ensure they’re paying a realistic price for their home.
Protect yourself with an appraisal contingency and speak to your realtor to address any outstanding questions.
With proper knowledge and understanding of the process, you’ll be prepared to handle the appraisal of your home with ease.
A lot of people assume that selling their homes themselves, that is, without the services of a real estate agent, can be a good idea.
The common notion among these homeowners is that not having to pay sale commissions to their listing agents can save them some money.
However, selling a home without professional guidance or assistance comes with many hidden pitfalls.
In this article, we will discuss in detail the meaning of “For Sale By Owner,” the problems associated with it, and how to land an FSBO client as a real estate agent.
“For Sale By Owner” (FSBO) is a method through which homeowners sell their property without the representation of a real estate agent or broker.
FSBOs can be very complicated and time-consuming, and although some homeowners still prefer this sales method, only a few percent succeed.
Due to the workload involved in selling their homes themselves, many homeowners would only opt-in for this sales method when they already have a lineup of potential buyers.
According to the National Association of Realtors, only 7% of home sales in 2021 were FSBO sales this year. This shows that FSBOs do not happen very often, and for good reason too.
The typical real estate agent's commission on any transaction is 5% - 6%, so selling your property yourself may seem like an incredible way to save money.
This may not be entirely true as, in most cases, the risks that come with “For Sale By Owner” listings outweigh the benefits. Here are six problems that affect FSBO deals.
It isn't uncommon for homeowners who sell their homes themselves to significantly undervalue their property because they do not have enough real estate knowledge to estimate the value of their homes correctly. Guessing the value of a home is a two-edged sword; on one end, the homeowner could realize substantial financial losses from underselling, and on the other end, a price that is too high can scare off potential buyers and keep the house unsold for a long time.
This is where the expertise of a real estate agent comes into play. A real estate agent’s understanding of the local market and their experience selling similar houses can help sellers allocate realistic listing prices to their property.
When selling a property as an FSBO, homeowners either market their property or utilize the services of online listing companies rather than the conventional Multi Listing Service (MLS).
Since these sellers have complete control over the home listing and are not made to follow the MLS rules and guidelines, it is not unusual to find the information provided on “For Sale By Owner” homes wrong and misleading. This is one of the biggest issues buyers come across regarding FSBOs.
Although there are quite a number of legitimate sellers out there, many people still regard all FSBO listings as scams. This is a problem that hinders the success of most FSBO sales.
Without an agent, there are huge chances that someone may try to sell a property they don't own. Buyers don't want to go through the stress of having to fix issues like this, so they’d rather just avoid them.
When listing a “For Sale By Owner” property, it is vital to understand that the homeowner is liable for everything and anything listed. This means that if a seller gives wrong information on the house, that seller will be held accountable by law.
And while some homeowners provide inaccurate information on purpose, others do it out of sheer ignorance.
If you are uncertain about specific details of your home, it is advisable to work with a real estate agent. This way, you can be sure that all details about your property will be professionally researched and accurately listed.
This would eliminate the possibility of your clients being disappointed during inspections and any legal problems arising further down the line.
“For Sale By Owner” properties often have awful marketing. This is because only a few online marketing companies allow FSBO property to be listed, and the homeowners themselves have little to no experience in real estate marketing. If a property listing isn't placed in front of the people, it may never be sold.
A real estate agent has the knowledge and experience to get property listing right and market to the right people better than the homeowner would. This makes real estate agents who typically have access to Multi Listing Service (MLS) indispensable tools to sell a home successfully.
There is no doubt that trying to sell an FSBO property can be strenuous and time-consuming. When selling your home yourself, you have to take up all the responsibilities of a real estate agent and even put in more hours than a professional normally would. This can make balancing time with work and family challenging for the homeowner.
If a “For Sale By Owner” seller is lucky enough to find a buyer, chances are the property would be sold below the home’s actual value.
According to the National Association of Realtors, FSBO homes sold at a median of $260,000 last year, which is significantly lower than the median of $318,000 that agent-assisted homes sold for.
This is because the search for an FSBO buyer is stressful enough for any homeowner to forget about negotiations. However, with a real estate agent looking out for your best interest, you can be sure that the value of your property will be correctly estimated and a worthy price negotiated with potential buyers.
As a real estate agent, the most efficient way to get an FSBO client is by pointing out the flaws of FSBO sales to the homeowner and showing how much value you can offer them.
“For Sale, By Owner” sellers advertise their homes on platforms such as Facebook, real estate sites, or with just yard signs because they lack access to the Multiple Listing Service(MLS). You can point out that this doesn't do much good as their property remains unsold for long periods.
You could also point out to them that they run the risk of not achieving the maximum price by selling FSBO.
Let them see that even though they might be saving some cash by avoiding a listing agent’s commission, they will still have to offer a buyer’s agent commission. This, coupled with the chances of them underselling, and in the end, they might not end up saving anything.
Additionally, you could make them aware of all the processes they need to take to complete the transaction successfully – drafting up documents, handling showings, negotiating with buyers, overseeing the closing – and how stressful these processes can be.
The basic idea is to show them how much of the behind-the-scenes work you can help them with to ensure they are safer and can sell for more.
“For Sale By Owner'' is used by homeowners who prefer to sell their property themselves. Although the main reason for this sales method is to save money on real estate agents’ commission fees, it is usually not worth it, and things could easily go wrong at any time.
One of the best ways to grow your real estate business is through word-of-mouth referrals.
Past clients and people within your sphere of influence can be a great source of new business. When someone recommends you to their friends or family, they are passing on their trust and positive experience, which helps you build trust with potential clients before you even meet them.
The key is to actively ask for these referrals. Let your past clients know that you value their recommendations and would appreciate them spreading the word about your services.
One of the best ways to grow your real estate business is through word-of-mouth referrals. Past clients and people within your sphere of influence can be a great source of new business.
When someone recommends you to their friends or family, they are passing on their trust and positive experience, which helps you build trust with potential clients before you even meet them.
The key is to actively ask for these referrals. Let your past clients know that you value their recommendations and would appreciate them spreading the word about your services.
To maximize referrals from past clients, it is important to stay top-of-mind. This means staying in touch even after a deal has closed.
Regular follow-ups, whether through email newsletters, phone calls, or even seasonal greetings, can remind your clients that you are still in business and available to help their friends or family.
Not only does this help generate new leads, but it also encourages repeat business from past clients when they are ready to make another move.
Another way to encourage referrals is by supporting your clients' businesses. Many of your clients may be self-employed, and if you can send business their way, they are more likely to refer clients to you in return.
For example, if you know trustworthy painters, movers, landscapers, or stagers, be sure to refer your clients to them when needed.
Building this reciprocal referral network not only helps your clients, but also strengthens your relationships and your reputation as a knowledgeable, connected agent who adds value beyond just buying or selling homes.
Sometimes, your clients may be moving to a city where you don't operate, but you know an agent there. This is a great opportunity to earn referral income by connecting them with a trusted realtor in that area.
Typically, the agent you refer them to will agree to give you a pre-determined percentage of their commission once the transaction closes.
This not only allows you to maintain the relationship with your client, but also earn income for making the connection.
In addition to referrals within your city, you can also refer clients to agents in other states where you are not licensed. This is done through a referral agreement and typically earns you around 25% of the commission when the deal is completed.
Referring clients to a trusted local agent helps ensure that your clients are in good hands and that the transaction goes smoothly.
When your clients have a positive experience, it also strengthens your relationship with them and increases the likelihood of future referrals or repeat business.
Another way to earn passive income is by helping out other agents. For instance, if an agent is going on vacation, they may ask you to manage their clients and leads while they are away.
Depending on the agreement, you may receive a portion of the commission or have the opportunity to take over the client relationship long-term. Similarly, if you refer clients to another agent because the deal is outside of your expertise or area, you can receive a portion of the commission.
These types of arrangements not only provide passive income but also help build trust and goodwill between agents, leading to future opportunities for collaboration.
Referrals are a fantastic way for real estate agents to earn passive income while helping others in the industry.
Whether you are asking past clients for referrals, supporting your clients' businesses, or connecting clients with other agents, referrals can help you build strong relationships and generate consistent income.
By leveraging the power of your network, you can grow your business, increase your earnings, and enhance your reputation—all without putting in much extra effort.
Start incorporating these referral strategies today to make the most of your relationships and take your real estate business to the next level.
One of the most daunting things about a career in real estate is the sales aspect - many people fear that they wouldn’t be able to handle the rejection. However, rejection is actually a good thing because it ultimately is what steers you in the right direction. Rejection is already part of daily life, and if you don’t experience rejection, chances are that you aren’t putting yourself out there enough!
Real estate is one of those careers that you have to really own and put 100% of your efforts - if you are not giving it your all, you are most likely leaving money and deals on the table. For example, when you meet new people, tell them that you are into real estate!
Part of putting yourself out there is being sure that if you fail, you will learn lessons and not beat yourself up over it. Failure is more about the lessons you learn than the act of failing itself. The worst thing people can say is “no” - and then you’re right back where you started! But if you want to move ahead, you usually have to ask for it, people are not just going to give you everything you want on a silver platter.
Again, it’s key to remember that most rejection will not set you back, but will just keep you where you are currently. For example, not getting a promotion means you’re still doing the same job. Not getting the listing agreement doesn’t mean you never will. In fact, most agents take 3-9 months to close their first deal… and that’s OKAY! Some of the most successful, biggest names in real estate took years to establish their career and get off the ground.
In fact, that’s something that most super-successful people have in common - it’s not their first business or venture! They have tried and failed, often more than once, before finding their sweet spot and success path. Failure truly can be an opportunity if you frame it in the right way.
Keep in mind that practice makes perfect, so being rejected many times will make you better at failing and better at learning lessons from your missed opportunities. Seek out opportunities to ask for a deal or put yourself out there - if you get rejected, pick yourself up and try again. If not, even better - you just got a discount or a client!
Always remember that rejection is not the end of the world - it’s often the beginning of something completely new and awesome. Have faith in yourself, keep trying, and don’t let rejection get you down. As stated previously, rejection is actually a good thing because it ultimately is what steers you in the right direction.
Let’s hear from you in the comments below - what was your biggest failure? Success story? Share it for our readers!
Timing is key in many aspects of life, but especially so in real estate. Since all real estate deals are done on a timeline, it’s very important that real estate agents are good at time management to ensure a smooth transaction process (or ANY transaction process!).
One prominent saying that definitely applies to real estate is “time is of the essence.” For example, people often go with the first agent that gets in touch with them (after they submit their name on a website, for example), so it’s important to contact your leads quickly.
As a buyer’s agent, you’ll have to be on top of your game when it comes to timing. It’s especially important in a hot market like today’s, where inventory is scarce and there is a lot of competition for each house on the market. Your buyers want to be the first to see the homes that go on the market, so they can have the first choice of the house to buy.
Once your buyers have settled on a home to purchase, they of course have to make a purchase offer. In the real estate world of multiple offers and very few days listed on the market, time is definitely of the essence when submitting an offer!
Let’s say it’s the late afternoon, and you and your clients have just come from a home they really like. You sit down in your office and come up with the terms of the offer, including the price, days in escrow, and financing. They leave, telling you to submit the offer immediately so they will be first in line. (Usually, the highest and first offer gets accepted - so if your offer is the same dollar amount, but comes in before the second offer, you will usually get the home.)
However, what if your buddies then call you from the bar, or your friends want to go out to dinner with you? What do you do? Well, if you’re an efficient time management machine like you should be, you will submit the offer right then and there like you promised your clients.
A lot of new agents fall into the trap of “oh, I’m my own boss, it’s okay.” Well, you are your own boss, but you are still working for your clients. If they find your work unsatisfactory, or you are lollygagging around, they will certainly not recommend you to their friends. They might even stop using you and go with a different agent, which would obviously lose you the commission and relationship. That’s why it’s so important to be an effective, reliable, and efficient agent!
Another area where timing comes into play is after the offer is accepted and the clients are in escrow. Escrow is usually a defined period of time, around 30 days, and both buyer and seller expect that the deal is completed in that time. Agents on both sides have to do their jobs in an efficient and timely manner so that the deal does not get delayed, or worse - fall through. Time is once again of the essence!
Once the sale is done and escrow is completed, time is still a driving factor. To gain referral business, it’s important to follow up with your clients in the right timeframe - usually a few months after they’ve settled into the new home - to make sure you’re still at the front of their minds. It's important to never fall off their radar.
As was stated previously - time is of the essence! Keep this in mind when striving to become the most successful real estate agent possible. As always, check back soon for another great installment of our blog.
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