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.
Though the IRS may classify realtors as “independent contractors,” being a real estate agent is far from an independent job. In fact, all real estate transactions rely on a network of individuals doing their jobs properly to ensure the transaction goes smoothly.
Take sports, for example. There are a lot of sports out there that are independent - like swimming, tennis, or boxing. However, when you look at the sports, are the players really so independent, or do they have a crew of people behind them helping them?
They all have coaches, and a boxer will have the people wiping blood and tears from his face during the matches to ensure that he can go the next round at 100%. A real estate agent is not so different. Though you might be out there cold-calling or door-knocking alone, it’s really the team of professionals you’ve built that will ensure your leads turn into clients, and clients into satisfied customers with smooth transactions!
We have compiled a list of important people to include on your ‘support team’ once you’re a Real Estate Agent:
A sales assistant helps convert leads into genuine prospects. This person can assist the agent and make sure all leads are followed up on. Though this only applies to agents who are advanced in the process and who are receiving lots of leads, it’s an important one to mention first.
As we explained in 4 Challenges That Can Arise During Escrow, the escrow process can have many hiccups, and escrows have a way of falling through when you least expect it. Therefore, a good escrow officer can foresee any problems you might run into, and let you know ahead of time of any issues so you’re prepared!
Title representatives are also a crucial part of a good real estate agent’s support team, and there’s a reason that most real estate agents have their preferred title representatives. Title searches are only scratching the surface of an issue that can arise with title transferring, and a good title rep will know what to look for when issuing a title insurance policy. Ask around the brokerage when you’re hired who their favorite title rep is and why, and consider using them as well.
A good home inspector (and Natural Hazard Disclosure inspector) is also a good card to have in your hand. Especially if you are a buyer’s agent, you want a home inspector that will catch even the tiniest flaw, so that you know you are not proceeding with a bad home. You have a fiduciary duty to your clients, so you must keep their best interests in mind at all time. Just because the house looks good to the untrained eye, does NOT mean that a good inspector cannot spot current or future issues that will cost your clients thousands of dollars down the line - and possibly your reputation.
A good transaction coordinator (TC) can be an enormous help to high volume agents. He or she will ensure all transactions go smoothly by working with all of the people mentioned above on behalf of the agent. This enables the agent to really focus on their brand, or on gaining more business - maybe even leads that their sales assistant has vetted!
The TC tends to be a crucial position for a strong agent who has many ongoing deals at a time. The agent can focus on some of the more difficult or personal deals, and the TC can help focus on the other deals. By working with buyers, sellers, loan officers, title reps, and escrow officers, a good TC can be worth their weight in gold to a good agent!
Now that we’ve explained the different players who must work together to get the real estate “match” finished, tell us in the comments below - is real estate a team sport or is it an independent sport?
First, let’s ask a very basic question about home inspections: are they even required? The quick answer is: no. But, it’s hard to find a real estate agent who would advise against one. And why? Because home inspectors are trained professionals who have a job and a duty to disclose any problems or potential problems they see. Problems that may go unnoticed by a seller.
From the date of opening escrow, a homebuyer has 17 days to utilize the option to have a home inspection completed. Often, they will make the escrow contingent on the home inspection, meaning that the escrow process will be stopped based on the findings of the inspection report. For example, if there is a major damage, the escrow will be put on hold while the buyer and seller (via their agents, of course) negotiate on how to address the problem
They can address the problem one of four ways:
The last one is the bad one - the deal falls through and the house falls out of escrow completely. In fact - one of every 20 escrow transactions actually does fall through! And, incredibly, one in FOUR is delayed for some reason or another. Out of the 1/20 that fall through, a full one THIRD (1/3) are due to the home inspection findings.
Let’s say it was a real deal-breaker like a cracked slab or a cracked pool. These are things that, in addition to being extremely expensive to repair, can cause all sorts of damage down the line. For instance, if the gunite in the pool was cracked, that would allow water to seep out of the pool and into the ground. Or, in the case of a cracked slab, it could cause the house to shift unevenly and possibly leak water and mold into the walls. It all depends on the extent of the damage and the cost/difficulty of repair, which is why a home inspection is so crucial!
Even if the seller discloses some damage of the house, chances are that it would be cosmetic or outdated. It is important to keep in mind that the seller usually does not go on the roof frequently and inspect the house like an inspector would. Home inspectors go in every attic, attend to every part of the roof, under every eave, check the pool (if applicable), check the foundation, floors, windows, and more.
Hopefully, if any inspection issues come up on the properties you’re involved with, they will be simple ones - like mild termite damage or a few cracked roof tiles. These specific issues are easy (enough) to deal with. An air conditioner can be replaced easily, a garage door opener can be serviced or swapped out in a day, and cosmetic damage is always relatively simple to address.
In this week's blog, we answered a YouTube subscriber question (subscribe here)! Our friend asked if we should deal with real estate investors as an agent, how to work with real estate investors, and in general what investors are looking for in a property. Well, in short, it varies widely, but we wanted to give you a longer overview explanation.
Firstly - as an agent, you ALWAYS want to deal with investors. They are: (1) great clients, (2) less emotional (they're not looking for a home to permanently live in), and (3) usually have a better idea of how they will finance and pay for the house. However, investors tend to be demanding, and thus are in need of an agent who is experienced and knowledgeable
To gain experience and knowledge in the field, first you have to understand why the real estate investor is investing, and what they are looking for. It’s called ROI - Return on Investment. Though all investors want to make money, there are usually two main types: those looking for a short-term ROI (immediate cash back), and those who are looking for a long-term ROI and greater stability.
In today’s hot-hot-hot market, most investors are “flippers," or people who want to buy and sell houses quickly without ever living in them. This gives them quick cash (if the deal is executed properly) and a quick return on investment.
To flip a property, first the investor has to find a run-down property, or one in need of some love and care. This is often the shabbiest home on the block, or otherwise deficient for the neighborhood (this is key; they don’t want to over-improve). Then, they will put time and money into the property by constructing, remodeling, repainting, and otherwise improving the property. The trick to this is to bring the house up to, or above, the standard of the neighborhood.
Time is of the essence when doing these house flips. The longer the investor has their money tied up in the house, the less room and ability they have to make other investments - like buying other houses. Therefore, they want a house that can be improved quickly, and a good construction crew for any major work.
A few years ago, Robert Rico himself was listing an undesirable property here in Inglewood, Los Angeles, California. He knew that no typical family would buy this house, or be interested in it as-is. However, one day, someone with a vision approached Rico - an investor!
Rico sold the house to the investor, representing both the old seller, and the new buyer in the deal - double-ending the transaction for double the commission! Though it sounds insanely low now, the buyer was able to secure the dilapidated house for only $240,000. As his vision was executed, he put $30,000 in improvements into the house - a total of $270,000 spent.
Only a short while later, the investor put the house back on the market - and this time, it got $420,000! Rico represented him again, earning another commission (3 total) in the process. The investor also made $150,000 (minus commissions) - not a bad deal at all!!
However, with a hot market like today, most houses have been flipped recently and the quick improvements have been made, so it’s more about the long term investment. This would be someone buying a house, putting it up for rent, and (hopefully) having the renters cover the mortgage. The downside to this, besides maybe not having the house rented, is that the money is tied up in the house - it cannot be accessed immediately.
The silver lining to this is that, although it’s cyclical, real estate has always been a good long-term investment and almost always goes up in value. Therefore, buying real estate NOW, and waiting, is a better strategy than waiting now, and buying real estate later.
The key to being successful in the investor market is being diligent, competent, and efficient. Do your research, find the diamonds in the rough, and market them heavily to anyone you think might be interested in real estate investments. This is a great way to earn two commissions and repeat business.
Welcome to CA Realty Training’s weekly blog - this week’s topic is about credit scores, also called FICO scores. Are they important for buying a house? Who is looking at these scores? How do you improve them, if necessary?
First, let’s break down the acronym FICO: it stands for Fair Isaac Company - the company that came up with and computes these scores. These scores range between 300-850, giving a quick glance of how good that person is at paying back their debts on time.
These scores are compiled by three major agencies - (1) Equifax, (2) Experian, and (3) TransUnion. These three agencies will each give you one credit score, so every American adult with credit has three credit scores that are usually a little bit different from each other. Provided they are close, everything is good and there should be no red flags on your credit.
Now, we dive into the important issue - when are FICO scores used for buying a house? Well, since most real estate transactions are not all-cash, they have to involve a lender. When the lender gets involved, they are lending the buyer (“borrower”) a significant amount of money, and they, the lender, want to know that they will be paid back, in full, on time.
When a buyer first approaches a lender, they visit a bank or mortgage broker, start chatting, and then the lender/mortgage broker will start to qualify the buyer as a potential borrower. They might ask questions like, “How much money do you make? How long have you been at your job?” and more, to get a sense of how reliable your income is. However, they don’t know how good you are at paying your debts, until they run your credit score.
When they run your credit score, they get three numbers back - let’s say, for the sake of argument, that one bureau gives you a 700, one gives you a 729, and one gives you a 725. You have very good credit and they are all close to each other, so there are no red flags here. The lender (or bank) will then take the middle of those three scores (so, the 725) and use that as your credit score when determining your eligibility for the loan.
Let’s say you make a lot of money, but for some reason, you’re very bad at paying back your debts. Even though your income might be great for the loan, your FICO score will suffer if you have unpaid debts or late charges on your record. Every late credit card payment matters, every missed car payment or especially a missed mortgage payment -- these are all big dings to your credit score!
If you don’t have a good FICO score, the lender will think you are too risky to lend money to, because they might not get paid back. Since getting their money back is the most important mission of every lender, they are not likely to take a risk on you if you have a bad track record of paying back debts.
Let’s take an FHA loan, which stands for Federal Housing Administration. It’s a special loan designed to help first-time homebuyers, with only 3.5% down instead of the traditional 20%!! So, as you can see, most first-time homebuyers would be much better off with an FHA loan than a conventional loan. However, buyers have to have a credit score of 580 or better to get an FHA loan. What do they do if their score is, say, 575?
There are a number of quick, simple fixes to raise your credit score by a few points. Once your credit is run, your lender should review the findings with you if the score needs to be brought up or if there are any outstanding debts on your report.
A few small unpaid bills from years ago can impact your score negatively by a few points, so if you have any old unpaid debts, pay those off before applying for a loan! If you weren’t aware of them, don’t worry. Your lender will often counsel you to simply pay off those old debts, and then they’ll do what’s called a rapid rescore -- running your credit again quickly just to confirm that the score raised enough to qualify you for the loan.
If your score is further from the mark, there are credit counseling services to look into. There are many types of credit counseling and their main mission is to improve your credit score and get rid of your past unpaid debts or late charges.
As we reviewed, getting a good loan is dependent on having a good FICO score. So to recap, is the FICO score important? YES, YES, YES!!! Keep on top of your score, find out what it is from the three credit bureaus, and do everything you can to improve it if you are trying to buy a house or even apply for an apartment lease. It gives people a quick look at your credit worthiness on an easy, universal scale, and makes or breaks the loan.
Any questions or comments? Leave them in the comment section below, or on our YouTube page!
When you work in real estate it is bound to happen at some point. A homeowner will die on their property. As an agent, if you have never dealt with this situation before you’re going to have questions.
Do agents have to tell buyers if someone died in a house? How does the death disclosure work? What do you do as an agent if someone dies in the house and it’s in escrow?
As a real estate agent, there is essential information that you need to know when dealing with a death in the property. When you know the procedures and disclosures involved, selling a home that has had a death on the property will be easier to handle, just like managing a distressed property where additional complications may arise.
How you handle the death disclosure will be different depending on when it’s discovered. We’ll discuss each scenario, what disclosures are involved and the proper procedures to follow.
Let’s start by talking about the basic rules as it pertains to California real estate.
Death on the property is considered a “material fact” and must be disclosed.
A material fact is considered to be any information that can influence the decision of the buyer involved in the real estate transaction.
Material facts include items like a cracked slab, known plumbing issues, or anything else that can be considered a defect. Yes, “death” is included as a material fact.
This is critical because a death on the property would definitely be a deciding factor that a potential buyer would want to know.
Many people are uncomfortable with the idea of living in a house where death occurred. It could be due to superstition, the belief that the house could be “haunted,” or it could be a personal issue. The fact remains that some people are very adamant about this and will not purchase a house where someone has died.
If you are the listing agent selling a home with death on the property, you must disclose this information. But per California civil code 1710.2, you only have to disclose this information if the death occurred within 3 years of the buyer making an offer.
So as we just discussed, it’s important to disclose this information when you are representing the seller and have the listing.
But what if the death in the home happens after the offer has already been made and you are in escrow? It can happen and in this scenario, you will want to make sure you are still following the correct procedures.
Per the California civil code 1710.2, you are only required to disclose a death before an offer is made, right? Not the case and we’ll explain why.
You need to approach this like you would any other transaction once the house has been modified while in escrow. If the home had a new leaky roof or was recently flooded, you would disclose this new information to the buyer because it has affected the integrity of the house.
In this case, the death in the home is treated in the same way. It is a new variable that has modified the home and may influence the buyer’s decision to continue with the transaction. You must disclose this information.
If you are lucky enough to have the buyer agree to continue with the purchase, it’s crucial to document everything.
Whenever there is a critical change in the property materially, it’s important to document it. You can do this by using an Addendum to the contract.
When completing the addendum, be as detailed as possible. You will want to note that there has been a death on the property and include the address and date of occurrence. State that the buyer has been informed and accepts the new condition of the home.
Then, have all parties acknowledge and sign it. That includes you as the seller’s agent, your seller, the buyer, and the buyer’s agent. Once executed, send that change to escrow immediately.
Disclosures and documentation are designed to limit your liability as an agent and these will also safeguard your client.
At the listing stage, we disclose the death in the property on the seller disclosures and on the Multiple Listing Service in the private remarks.
If the death occurs during escrow, we use the addendum.
What happens if the buyer discovers that there has been a death in the property AFTER escrow closes? What then?
With all the need for disclosure and documentation, you might be wondering how this can even happen. Although it’s not the usual, there is an instance where this can occur.
We’re not referring to any properties where it has been more than three years later. Technically the death does not have to be disclosed.
However, we recommend always erring on the side of disclosure — it’s better to be honest than to conceal facts when trying to be a reputable agent.
As we discussed, it’s required to disclose a death on the property if it is within 3 years, although there is one exception.
An exception to this rule is when the house is a foreclosure or a bank-owned property. Since the bank could not have reasonably known what was happening in the house, they are exempt from the rule about disclosing deaths within the last 3 years.
Unfortunately, there isn't much that can be done at this point. If the buyer finds the information too overwhelming to remain in the home, they can always choose to sell the house and move.
As an agent, there are a couple of things you can do to prevent this from happening if you are actively seeking out bank-owned properties for your buyer.
ASK YOUR BUYER
During the consultation, ask your buyer up front whether or not death on the property is an issue.
DO SOME RESEARCH
If it’s a deal-breaker, make sure to do your due diligence beforehand to find out if there has been a death on the property. You can check public records or ask the neighbors.
Taking these simple steps will make sure you are on the same page with your buyer and can prevent a bigger issue from developing later.
Having to deal with death on the property is never the ideal situation. But knowing what to do when you are faced with that situation will make all the difference.
Whether you are representing the buyer or seller, the key to closing the deal is proper disclosure.
Death in a property will not be a deciding factor for all buyers. Make it a practice to ask your client before you start looking at houses. There is always going to be a buyer that is willing to overlook this material fact.
Remember, a death in the property does not mean the death of the deal.
Working with buyers is a great time as a real estate agent. You get to see homes with excited people, you get to show them a place where their dreams can happen, and they are usually ecstatic when you successfully complete the purchase! However, not everything is easy when working with buyers. There are a number of mistakes that can be made when doing a listing presentation, from not connecting with your buyers to insulting their home. Today, we’ve compiled a list of the more common mistakes that new agents make. Don’t make these - these can cost you a buyer, and therefore a commission!
The common mistakes new real estate agents make can be remembered with the ‘5 Ps’:
You have to be prepared as a real estate agent, or as any career! If you’re not
prepared, you’re not focused and thus buyers may lose trust in you. Be sure to be prepared with all of the information pertaining to the houses you are showing (like the routes to the house, how many bedrooms/baths, year built, etc.)
Don’t waste time, or stall time. If your buyers want a type of house that’s not on the market, try your best to go out and find what they are looking for. Be diligent and try to be the best agent you can be, for your clients, and for yourself. Being proactive requires hard focus and determination. Wasting time will only make you look sloppy and seem unreliable.
Mark Anthony said it best when he says, “If you do what you love, you’ll never work a day in your life.” We completely agree! Love what you do and let the passion illuminate through you. Your clients will see this and feel good throughout the process. Think- emotional contagion. If you are passionate and radiate positive energy, your clients will feel positive and will want to purchase a property. If you do not seem passionate, you will seem like you don’t want to be there, and this will of course make you lose clients.
Presentation is everything in real estate. Well, not everything, but certainly a good percentage! As a real estate agent, you must dress professionally, speak professionally, have good hygiene, and generally take care of yourself! Even if you have to fake it -- fake it till you make it! Another key tip is to generally look good at all times, since you are technically always “on the clock” even when you’re not with clients. It all starts with being professional and looking polished. This is a business, after all, and people love professionalism.
It is important to remember that Real Estate is a people-business. You need to be approachable, likeable, personable. It is one of the biggest purchases and investments a homebuyer's life, and they'd want to make a connection with the agent selling them their home. If you come off as an intimidating person, people will be fearful and not want to approach you, and then how would you get clients? The best way to be personable to is to be yourself, and engage with your clients on a genuine level. The best way to get to know clients is by asking questions and by simply being yourself. Talk about your kids, your pets, your hobbies!
As a real estate agent, it is crucial to have characteristics that encompass the 5 Ps - Prepared, Proactive, Passionate, Professional, and Personable. These qualities will help get you clients and not lose out on commission!
This week, we received a question from a viewer: does real estate affect the national economy, and how?
Of course, it does! Real estate is one of the primary drivers of economic activity in the country, from the transactions of buying and selling homes to all the related activities. Think of each individual home in the country -- all your neighbors, all the areas you drive through each day, and all the homes that you pass. Each one represents an investment by someone - usually a family - and the hard work that they are putting in so that they can own this piece of property.
For example, when Head Trainer, Robert Rico, bought his first house, in 1993, it cost him only $106,000! This sounds like a very small amount of money right now, but it’s still a significant amount to save. In the long run, a home is like a savings account for the homeowners -- since property values, over time, will trend upward. A home is a great place to put your money.
If you own property and hold it long enough, it can be treated like a savings account - and the Ricos were able to sell that house later for close to $400,000! That’s an enormous increase in the value and enabled them to do things like go out to dinner, and spend money on various things, which thus increases value in the national economy.
Because homes also require a lot of maintenance and upkeep, that’s another whole category of economic activity simply because it creates jobs. There will always be a need for gardeners, construction workers, and home repair workers. This drives the economy because those people drive vehicles that cost money, they use fuel which drives the national economy, and they also own or rent their own homes - and the cycle keeps going.
Home improvement is also another huge driver of economic activity. Like the gardeners and construction workers, home improvement contractors will also have to drive trucks, spend money on fuel, and further drive the economy. When people improve their homes, they buy raw materials, which drives the economy (for example, the lumber and metal industries).
If we think of the time between 2007-2008, what happened? Home values dropped, so the equity in people’s homes disappeared, and they no longer had money to spend on other things. This recession affected the economy drastically, putting people out of jobs and putting people out of money. It slowed down the economy as a whole - which is why we called it the great recession.
So to answer our reader’s questions - Does all this real estate activity drive the economy? And to that, we say, OF COURSE!!! Whether you own, invest, or work - you are driving the economy and helping it grow.
See you next week for our following blog post - and don’t forget to subscribe to our YouTube channel!
As the saying goes, there are two things in life that are certain - death and taxes. In the meantime though, the benefit of being a real estate agent is that you get to have a flexible schedule and make a good amount of money -- but be careful when it comes to paying your taxes, since it’s very different than a typical employee of a company.
First things first, after getting your license, you will interview and pick a brokerage that’s right for you. It’s very important to make sure that you’re at the right office that best fits your needs! Once you are licensed and working at a brokerage, the IRS will now classify you as an independent contractor -- meaning, you’re no longer an employee of a company and you are responsible for your own tax payments.
As we have covered in our blog, How does a real estate agent get paid?, this is a commission-only position and thus you are not going to be receiving a typical hourly or salary wage. However, the upside to this is that -- when you sell a home, the commission checks are usually very generous!
However, a KEY piece of information to remember is that when the broker hands you your check, no taxes have been taken out yet. This is a complete departure from a paycheck you’d receive as a salaried employee, where the deductions are already done and you get a tax refund at the end of the year. In fact, if you don’t set aside the right amount of each commission check for taxes, you will owe the government a heavy amount in April! The other thing is, since your brokerage is not going to do it for you, you are the one that must keep track of your income, expenses, and actual tax filing.
The best thing to do, especially as a real estate agent, is to have a certified tax professional (especially one who’s got experience with other real estate agent-clients) look over your income and see what deductions you can make. After all, as an independent contractor, you essentially are your own business, and therefore can deduct some expenses as business expenses. A great way to find a tax professional like this is to network with experienced agents and ask them who they use to do their taxes.
When you and the professional are doing your taxes, there are many things that count as legitimate business expenses that you can (and should!) deduct to reduce your tax burden. For example, the miles on your car showing houses to clients can be written off. So can expenses for advertising, some office expenses, and further out-of-pocket costs you’ve incurred over the past year.
For far too many agents, the saying applies - “money in hand is money spent.” Don’t be one of those agents -- they are the ones with back taxes that owe money to their brokerages. Since you are given so much freedom as a real estate agent, part of the tradeoff is that you have to be diligent about setting aside money for taxes so that you are not in debt later.
So, what are the takeaways from real estate agents’ taxes?
Thanks for reading our weekly blog! We’ll see you back here next week, and if you have any questions or comments, you know what to do...
One day or another, every agent has been faced with (or will face) this problem: What do you do with a buyer that doesn’t qualify for a loan on the home they want to purchase? It’s a common problem and one that’s only becoming more common as loan payments increase.
A great benefit to working with buyers, especially first time homebuyers, is the excitement that they bring to the table. They are often transitioning from renting and very happy (giddy, even) to be embarking on this new chapter of their lives. You get to share this chapter with them too -- enjoy it!!
However, sometimes they do not have perfect credit, employment, or income -- and they cannot qualify for the loan that will get them the house they really want. Many times, people have a FICO score that is not up to par for the lender to work with. As we covered in our previous Credit Score blog, the buyers’ FICO scores will reflect their payment history and debt percentage.
Sometimes, there’s a small debt or past-due account that’s hurting the credit, and a great lender will know how to look over a credit report and decide what to pay off and what to adjust for a “rapid rescore.” This is one of the reasons why you want to help homebuyers get in touch with a mortgage broker and not necessarily with the banks directly. A bank is not as likely to recommend a rapid rescore or give advice as a mortgage broker would.
In a rapid rescore, once the debts are removed from the credit, usually by paying them off in full, the credit is re-run in a process that takes from 3-7 business days. After that’s done, the score is often many points higher - often bringing the buyer above the threshold to qualify for a loan!
There are three credit bureaus - Equifax, Experian, and TransUnion. The lender takes the middle score of the three, and therefore sometimes a buyer (borrower) can raise one score and qualify for the loan. Again, it’s really best to advise buyers with iffy credit to go to a mortgage broker and explore their options there, rather than just going directly to a large bank or corporation.
However, the FICO score is not always the reason that someone does not qualify for a loan. The lender will also look at employment history and debt-to-income ratio (DTI) to see if the borrower’s income seems stable, if they are tapped out with other debts or if they can easily afford the proposed monthly loan payment. A car payment is a common payment to eliminate, if the borrower has the cash reserves to pay off the loan or lease. It’s usually a few hundred dollars a month and can dramatically affect the DTI ratio, so it’s often one of the big ones to be considered.
Sometimes the borrower has not been at their job long enough, or their income is not a stable W2 income (for example - if they are a real estate agent!!). In this case, the lender is likely going to want copies of bank statements to verify the dollars coming in compared to the dollars going out.
Very often, a smaller lender (for example - a credit union instead of a bank) will have more relaxed guidelines on the above criteria and they will allow a borrower to obtain a loan when a bigger lender would not lend money. Ideally, it will be an institution such as a credit union or small bank, but every once in a while, borrowers will go to a “hard money” lender. A hard money lender charges high interest and usually wants the money paid back in a short period of time, so this is really not an ideal situation unless the borrower plans to refinance fairly soon after purchase.
All in all, it’s really best to steer clients toward a mortgage broker you know and trust - hopefully an intelligent and creative one that can come up with alternative ideas to the big banks. Like everything in real estate, it’s also important to have a good relationship with these mortgage brokers so that they can refer business your way as well. Some people actually contact their mortgage broker before their real estate agent, and that could be a source of business for you!
Don’t hesitate. Don’t let your buyers walk away. Keep your good connections with lenders and mortgage brokers, and steer your buyers in the right direction. Real estate is all about relationships and ensuring that the customer comes first -- keep that in mind, even when they don’t qualify for the first loan!
Welcome back to CA Realty Training’s weekly blog! This week we’re covering a touchy subject - sexual harassment in real estate, and what to know in general about real estate agent safety.
Though some people prefer to shy away from the topic, the reality is that it happens, and we wanted to address it for all of our curious subscribers! Where is that line in the sand that you shouldn’t cross? What types of situations make a client uncomfortable?
First, keep in mind that you are a professional as a real estate agent, so you should reflect that with your conduct. Yes, it’s important to be personable, but keep that line in mind and don’t cross it! It would be better to seem “overly professional” -- which isn’t really a criticism -- than to seem overly casual, and overly personable.
When people hire you as their agent, they are often heavily swayed by your first impression. Do they see you in a suit, business casual clothing, or are you unkempt? How do you carry yourself, and how do you introduce yourself? All these things are very important factors in making a positive first impression.
Second in their decision is usually evaluating the professionalism of your mind, your conduct, and the presentation of the facts you have. Do you speak professionally and keep slang to a minimum? Do you have an explanation for your recommendations? Keep in mind, these are not your buddies from the bar or from bowling club; this is not your sibling -- professionalism is key in these situations so that you can impress the clients and earn the listing.
Thirdly, use your actions to make a client reassured you’ll be professional. Don’t make any inappropriate comments, don’t suggest anything unethical, and make sure you keep your interactions above-board at all times. People respect honesty and integrity -- key factors in someone’s decision to do business with you.
Also, it’s important not to be overly physical with clients -- it could easily give off the wrong impression if you are not already friends. A hug can be good, but can also be too much depending on the situation. Be cautious, and see how your clients express happiness, and then match their personality.
Don’t mix business with pleasure - keep your relationship professional. Sure, you might be attracted to some clients more than others, but that’s no excuse for making anyone uncomfortable. Be reasonable!
Today’s world is one of political correctness and minding what you say, and especially so in work situations. Don’t let a small slip-up create a negative impression, because impressions are lasting and could lose you business!
Just as a reminder, these are not your friends from a bar, these are not your family, these are potential clients that you want to impress! Keep everything professional and be tactful, and make sure you don’t give off the wrong impression which could send clients packing.
Balancing a career in real estate with personal life is challenging – especially when you’re just starting out!
New agents often find themselves working long hours, juggling clients, and trying to manage family responsibilities all at once.
While the flexibility of real estate is appealing, achieving true real estate work life balance takes time.
In this article, we’ll explore practical strategies to help you stay organized, set realistic goals, and focus on what matters most—both in your career and personal life.
Achieving real estate work-life balance starts with setting a structured daily schedule.
Real estate can be unpredictable, but by creating a plan for your day, you’ll be better equipped to manage client needs, personal responsibilities, and downtime.
Having a consistent routine ensures you stay productive without sacrificing your well-being.
One of the best ways to stay organized is by using time blocking.
Dedicate specific blocks of time to tasks like prospecting, returning client calls, or paperwork.
This method ensures every aspect of your business gets attention without overwhelming your schedule. For example:
By assigning tasks to specific times, you avoid multitasking and stay focused on what matters, leaving space for personal time with family and friends.
It’s crucial to establish clear start and end times for your workday. While real estate often requires flexibility—like handling last-minute showings or negotiating contracts—you should aim to protect your personal time whenever possible.
Inform your clients of your availability, and use scheduling tools to ensure tasks stay within the designated work hours.
Balancing your schedule early in your career will set the foundation for long-term success and prevent burnout.
With time, you’ll build the flexibility needed to enjoy both your professional and personal life.
Managing clients, appointments, and paperwork can quickly become overwhelming.
By incorporating the right tools, agents can streamline their workflow, save time, and reduce stress.
Below are two key ways technology can help agents stay organized and maintain balance between work and personal life.
Scheduling apps like Google Calendar, Calendly, or Microsoft Outlook allow agents to manage their day efficiently.
These tools provide real-time visibility into your schedule, helping you plan showings, meetings, and personal time.
These apps ensure you aren’t scrambling to keep track of tasks, making it easier to create boundaries and protect your personal time—one of the most important aspects of work-life balance.
Automating routine activities can free up valuable time, allowing you to focus on what matters most.
Automation not only saves time but also helps maintain consistency in your operations.
This frees up mental space, allowing agents to dedicate more energy to personal priorities and client relationships, which are both crucial for sustainable success in real estate.
Incorporating these technologies can significantly improve work-life balance for real estate agents, giving them the flexibility to manage both work and family responsibilities.
An underrated element of a good work life balance is your personal health. When you feel good, you have more energy. When you have more energy you can do more. We'll you decide if "more" is more work or more relaxation.
Real estate can be a demanding career, with long hours, constant client communication, and high-stakes transactions.
Prioritizing health helps prevent burnout, improves focus, and ensures you stay energized throughout your busy days.
Here are two key strategies for maintaining your well-being.
Regular exercise is not just about staying in shape—it also boosts energy levels, reduces stress, and enhances mental clarity.
By maintaining a regular fitness routine, agents will find it easier to manage stress and stay sharp, which ultimately benefits both their personal and professional lives.
In real estate, it’s easy to get caught up in the hustle and forget to slow down. Mindfulness practices help agents stay present, reduce anxiety, and handle high-pressure situations with calm and clarity.
These small but impactful habits can help you recharge, making it easier to maintain focus and engage meaningfully with clients, family, and friends.
A healthy body and mind are foundational to creating a balanced and successful real estate career.
How do you set good goals for work and personal time?
While it’s tempting to aim for large milestones, breaking those goals into smaller, manageable steps ensures steady progress without becoming overwhelmed.
Instead of focusing on lofty goals like closing several deals in a month, narrow your efforts to specific, actionable tasks.
For example, make a plan to contact five people from your Sphere of Influence (SOI) each week or attend one networking event a month.
These smaller tasks build momentum toward bigger achievements and help you stay focused along the way.
Real estate can be demanding, but taking on too much at once can lead to burnout.
Set boundaries for how many clients or deals you can manage without sacrificing personal time.
It’s important to recognize that progress in real estate takes time—trying to rush the process may negatively affect both your performance and your well-being.
Remember, steady and consistent work leads to sustainable success.
Focusing on high-quality clients is more effective than spreading yourself thin across too many.
Building deeper relationships with a select number of clients allows you to provide better service and increase the chances of repeat business or referrals.
Focusing on fewer clients gives you the opportunity to provide personalized attention, which leads to stronger connections and long-term loyalty.
When clients feel valued and well-cared for, they are more likely to refer you to others and become repeat customers.
These relationships often become the foundation of a lasting and successful real estate business.
Not every inquiry will lead to a closed deal. Prioritize your time by focusing on serious buyers or sellers who are ready to act.
By identifying and investing in these high-value leads, you maximize your efforts and free up time to manage other aspects of your life.
This approach reduces wasted time and ensures that the work you put in directly contributes to your success.
Achieving a real estate work life balance is no easy task, especially for agents just starting out.
The reality is that balance doesn’t happen overnight—it requires time, intentional effort, and sometimes a bit of sacrifice.
In the early stages of your career, long hours and unpredictable schedules may feel overwhelming.
But with thoughtful goal-setting, strategic use of technology, and a focus on building meaningful client relationships, you can gradually create a lifestyle that supports both personal and professional success.
If you want to know how to find more clients, close more deals, and earn bigger commissions, then check out our program, From Rookie to Rockstar.
This is a residential training program that teaches you how to become a successful agent. There's practice tips, thoughtful insights, how-to guides, scripts, and more. It's built to teach you how to revolutionize your career.
Learn more about the program and see what it takes to grow your career while achieving more personal time.
There are many reasons why people set their sights on a career in real estate. From unlimited earning potential to the freedom and flexibility, the benefits of a career in real estate seem endless.
Perhaps that’s why the United States Bureau of Labor Statistics expects the overall employment of agents and brokers to grow by 4% between 2020 and 2030.
Oftentimes, there are 10 reasons why people start a real estate career:
Let's dive into each reason to learn why it makes so much sense.
A real estate agent is paid a commission when they represent a client through the transaction process. The commission is based on a percentage of the final sale of the home.
As a real estate agent, your yearly salary depends on many factors. These include: number of completed transactions, your commission percentage, and your brokerage commission split. This is why your earning potential is unlimited. Nobody else dictates how much you earn in a year. It is entirely dependent on how many properties you sell.
Real estate agents work as much or as little as they want. Because real estate agents are paid a commission, they choose to work full-time, part-time, or in their spare time. Remember that the income will likely be higher the more hours the agent dedicates to their job. That's because they dedicate more time to finding new clients and more work.
A real estate agent can work from anywhere. Most agents work from home or on-site at the brokerage firm that sponsors them. However, the industry affords agents the flexibility to work from wherever they choose. In fact, an agent can work from an island in the Caribbean! But, I don't recommend that. What if a client wants to tour a house in Sacramento?
A licensed real estate agent can't work without being sponsored by brokerage. Agents represent their broker. But, this isn't like the standard employee-boss relationship we associate with 9 to 5 jobs.
Agents are like entrepreneurs. They finance expenses, take ownership of their actions, and find their own work. They sign with brokerages to offset the legal responsibility of running their business. That's why agents split their commission with their broker.
In other words, agents run their own business inside a brokerage. The broker won't tell them when to show up to work. Agents are free to make their own decisions. If they want to work in the afternoons only, that's fine!
The beauty of the an agent's freedom is that you can enter into contracts on your terms. If a client asks an agent to represent them, the agent has a right to turn them down. It is entirely up to the agent to decide who they want to work with.
Many agents exercise this freedom when they pick clients. If the agent ever gets a "bad feeling" in their gut about a client, they don't have to work with them.
People don't need a college degree to become a real estate agent. This makes real estate one of the highest earning careers for people without a college education.
In fact, most people enter the industry without experience in sales. Learning on the job is popular quality of being a real estate agent. That's because most brokerages provide training courses, workshops, and seminars. Agents who succeed always focus on learning new skills and ways to run their business.
Those who don't prioritize learning and growing struggle the most. Just because you don't need a college degree doesn't mean you don't need to learn.
Getting a license is more accessible and affordable than most people think. While getting a license won't happen overnight, it's by far easier and quicker than other career options.
Although the time frame will vary by state, the average time to complete real estate school and pass the real estate licensing exam is approximately 5-6 months. There are hundreds of real estate schools that helps students get their license, study for the exam, and launch careers. CA Realty Training, in our opinion, is the best. But we could be biased.
Every day is different for real estate agents. Because agents have flexibility, they can schedule each day however they want. Some days, agents need to give an open house whereas another day may involve presenting a sales pitch to a potential seller.
Whatever the agent needs to accomplish, they can stack their calendars with new and exciting activities. This keeps the agent's job ever changing and engaging.
Another aspect of a real estate career is choosing your specialty area. Some agents love working with families looking for a new home, whereas others may love working with investors buying commercial property.
Real estate markets include:
A career in real estate doesn’t necessarily mean that you need to work as a real estate agent, either.
In addition to being a buying or selling agent, other typical real estate jobs include:
Agents meet new people every day. Whether it's a lead at a coffee shop or new mentor, an agent's network is always growing. For agents to be successful, it has to!
Agents will also meet interesting people who are leaders in their community, local celebrities, big time celebrities, representatives, and other high performing people. The reason why is because everyone uses real estate. The type of people who are buying and selling are typically people with wealth. Agents still represent these people, because they need a home, too.
Meeting interesting people is what keeps people interested in real estate.
As you can see, there are many reasons why people become real estate agents. Unlike most conventional 9 to 5 jobs, a career in real estate offers freedom and flexibility. Additionally, agents work with interesting people and manage large investments. The excitement factor is ever present.
A real estate agent is much more than just a salesperson — they guide their clients through one of the most important transactions of their life. And while Hollywood has shown the glamorous sides of being a real estate agent, it’s a tough job with a lot of responsibility.
That’s why real estate agents have a unique set of skills and personality traits that help them succeed in the industry. Here are some of the most common personality traits in real estate agents, and how they can be helpful throughout their careers.
Are you comfortable going up to a stranger at a coffee shop? Do you enjoy mingling at parties? Being sociable and outgoing is the key to getting new business as a real estate agent. Real estate agents, like other salespeople, should be able to build connections and sell themselves to people they meet daily.
You have to leave a good impression on clients, earning their trust and building connections so they feel confident that you can help them in a major life purchase. While you don’t necessarily have to be an extrovert to succeed as an agent, you should feel comfortable meeting and talking to new people in a variety of settings.
Whenever you’re selling something or working with a salesperson, there can be a natural level of distrust between parties. However, Realtors work under a code of ethics and should always strive to be honest and transparent in their business.
Whether disclosing information about a property they're selling or guiding their clients through the buying process, being honest and building trust is key to succeeding as a realtor. Showing you have integrity and are ethical and honest is a fundamental quality to have in any profession - but especially in real estate.
Your reputation will quickly plummet if clients and other agents feel there’s any dishonesty in your work.
As a real estate agent, you are your own boss. You decide what hours you work, set your own goals, and pave your own path. That's why real estate agents have to be disciplined in their work ethic. This is especially true when you’re just starting out in your career and building your network.
Once you’ve completed all of your training and education, agents should expect that it will take time to find clients to work with — and you will have to work hard to find business! Sometimes that requires countless phone calls and sending dozens of emails without a lead.
But, despite the hard work needed to get there, the freedom of being a real estate agent is appealing to many who are capable of staying disciplined without much direction.
Real estate is a complicated industry — there are legal terms, multiple steps in the transaction, and lots of back-and-forth communication. That’s why real estate agents need to be clear and direct. In today’s age, clients expect to be frequently updated on their home buying or selling process from their agent regularly.
With clear and direct communication to clients, you’ll provide better service and they’ll be more likely to refer business to you — a key step in growing your business early on as an agent! Whether you’re explaining the terms of a contract to first-time homebuyers or working to negotiate with another real estate agent, real estate agents should be excellent communicators who can clearly articulate in any situation.
Most real estate agents are go-getters, ready to take their business to the next level through hard work and proactivity. As an agent, you must proactively grow your business through networking, marketing, and stellar customer service.
New clients or listings won’t just come to you without taking the first step. Being proactive also means remaining professional and in control of the situation at all times. A real estate agent must be able to keep a positive attitude and address any challenges that arise with a can-do attitude to solve them.
While being honest as a real estate agent is always important, you should also be prepared to handle any situation tactfully. Buying or selling a home is a highly emotional process, and as an agent, you should be able to be mindful of all the complexities at play.
In times where being brutally honest can hurt someone's feelings or be disrespectful, you must exhibit tact to manage the situation skillfully. For example, if a client tells you they think their house is worth $1 million, but you know, based on your expertise, it’s really only worth $900,000.
In this situation, you’ll need to tactfully explain your reasoning and walk them through your thought process.
Real estate can be a cutthroat and challenging industry for new agents to enter. They might think being an agent is filled with glitz and glamor as portrayed on TV, but in reality, it involves unique skills to navigate each transaction and client with finesse.
That’s why, according to some statistics, nearly 87% of real estate agents fail in the first five years. With only 13% succeeding after five years, it’s essential to consider what personality traits you have and if they’re aligned with becoming a real estate agent.
While this number may seem staggering, the reality is that the barrier to becoming a real estate agent is generally low, with the possibility of high earnings, driving many people to seek a real estate license without examining if they’re a good fit for the job.
If you struggle early on in your career as an agent, find a mentor or someone who can give you advice. With guidance, you can understand your areas of opportunity to improve.
As with any career, you can succeed as a real estate agent with hard work and perseverance. Maybe you’re not the most extroverted. Or maybe you’re working to become more disciplined in your daily life.
The key is understanding your weaknesses and how they impact your work in the real estate industry. With the right knowledge and positive attitude, you’ll be poised to use your personality traits to your advantage!
What does a property manager do?
Is property management a good career? What exactly does a property manager do?
If you’re curious about what a property manager does, then you’re in the right place. This article breaks down the key expectations of a property manager, including their daily responsibilities, how much they earn, and the different types of property management roles available.
Whether you're considering a career in property management or just want to understand more about this profession, we’ve got you covered!
A property manager is a professional who oversees the day-to-day operations of real estate properties on behalf of the owner.
Their responsibilities typically include maintaining the property, handling tenant relations, and ensuring that rent is collected on time.
Property managers can work with both residential and commercial properties. They help property owners maintain their investments, reduce vacancies, and increase profitability.
So, what is a property manager? In short, they are the bridge between property owners and tenants, ensuring that everything runs smoothly and the property remains in excellent condition.
Is a property manager a landlord? No. While it may seem that a property manager is the same as a landlord, they’re different. A property manager is hired by a landlord or property owner.
A landlord is typically the property owner, whereas a property manager is their representative. This means that property managers handle the daily responsibilities that landlords might not have the time or expertise to manage, making it a valuable profession in the real estate industry.
Property managers wear many hats. Property management duties can vary depending on the type of property they manage—residential home, a commercial building, or even a mix of both.
What property managers do involves looking at a broad range of responsibilities, from ensuring the property is well-maintained to balancing budgets and even handling tenant relations.
Below, we’ll explore the responsibilities of a property manager. Also, we’ll explain the expectations of residential and commercial property managers.
One of the core property manager responsibilities is managing tenant relations. This includes everything from screening potential tenants and signing leases to handling tenant concerns and maintaining positive relationships.
For residential property managers, this often means dealing with tenants on a more personal level, such as handling issues inside their homes, addressing noise complaints, or resolving disputes among tenants.
In commercial property management, tenant relations may involve working with businesses and ensuring that the commercial space meets their operational needs.
Property managers are the main point of contact for tenants, acting as a liaison between them and the property owner. They ensure that tenants follow the lease agreement and address any concerns that may arise during their tenancy.
Keeping tenants happy is crucial! A positive relationship often leads to higher tenant retention rates and fewer vacancies.
Another key responsibility is ensuring that the property is always in good condition. This involves scheduling routine maintenance checks, hiring contractors for repairs, and responding promptly to emergency situations.
For residential properties, this could mean arranging for lawn care, fixing plumbing issues, or addressing safety concerns.
In commercial settings, the expectations of commercial property management might include overseeing larger maintenance projects like elevator inspections, HVAC system management, and ensuring that the property meets safety codes.
Top tier property managers are proactive. They identify potential issues before they escalate. This keeps tenants satisfied and protects the property owner’s investment by avoiding costly repairs and prolonging the lifespan of the property’s infrastructure.
Collecting rent and managing the property’s finances are crucial aspects. Residential property managers are responsible for ensuring that rent is collected on time each month, handling any late payments, and occasionally negotiating payment arrangements.
For commercial properties, this responsibility can extend to managing multiple leases, coordinating with business tenants on rent escalations, and even tracking the property’s overall financial health.
Property managers possess strong financial acuity. This includes budgeting for maintenance and calculating return on investment. Also they are excellent bookkeepers. They maintain accurate records and provide financial reports to property owners.
Property managers are often responsible for advertising and leasing vacant units. For residential property managers, this might involve listing properties online, conducting open houses, and screening prospective tenants.
When it comes to commercial property management, marketing can include working with brokers, showcasing the property to potential business tenants, and negotiating complex lease agreements.
The expectations of residential property management are to keep vacancy rates low and find reliable tenants quickly.
Commercial property managers focus on securing long-term tenants who will use the space effectively for their business operations.
Ensuring legal compliance is a critical responsibility that all property managers must uphold. Property managers must be well-versed in local, state, and federal housing laws, as well as any regulations specific to commercial properties.
For residential properties, this means ensuring the property is compliant with fair housing laws, safety codes, and eviction procedures.
In commercial settings, property managers need to ensure that the property meets zoning laws, accessibility standards, and other regulations that apply to business operations.
The salary of a property manager can vary widely depending on several factors. These factors include:
On average, property managers in the United States earn between $50,000 to $75,000 per year. This can go up significantly with experience or if they manage large commercial properties.
Property managers who specialize in luxury residential properties or commercial spaces can even make six-figure salaries.
Some property managers earn bonuses or commissions based on the profitability and occupancy rates of the properties they manage.
Property managers typically earn a combination of a base salary and additional compensation, such as commissions or fees. This extra compensation depends on the number of properties they manage, the scope of their responsibilities, and their performance.
Independent property managers or those running their own property management companies often charge clients a percentage of the monthly rent.
This brings us to the next question: What percentage do property managers take? Most property managers charge between 8% and 12% of the monthly rent as a management fee. For example, if a property rents for $2,000 per month, the property manager would take between $160 and $240 each month.
In addition to the monthly management fee, you might be wondering, “What do property managers charge?” Property managers may also charge additional fees for services outside their typical scope. This could include:
These extra charges can range anywhere from a flat fee of $100 to $500, or they might take a percentage of the total cost of the project.
This means that how much property management companies make depends on the range of services they provide and how many properties they manage.
A property management company is an organization that handles all aspects of managing real estate properties on behalf of property owners.
So, what does a property management company do? They offer a full suite of services to ensure that the properties under their care are well-maintained, tenants are satisfied, and the property owners see a return on their investment.
The main difference between a property management company and a solo property manager comes down to scale and resources. A solo property manager works independently and has a limited number of properties. A management company has more resources and staff. They have the bandwidth to take on more and bigger properties.
This is a rewarding career path for those interested in real estate, customer service, and problem-solving. So, is property management a good career? Absolutely!
It’s a role that allows you to work with different types of properties, interact with a variety of people, and tackle diverse challenges on a daily basis.
For individuals who enjoy multitasking, building relationships, and have strong organizational skills, property management careers can be both financially and personally fulfilling.
The growing demand for rental properties and commercial spaces ensures that there will always be a need for skilled property managers. That makes it a stable and secure profession.
What are the requirements to become a property manager? Generally, you’ll need a combination of education, experience, and a real estate license.
Requirements vary depending on the state and type of property you plan to manage. Most aspiring property managers start by gaining experience in real estate or customer service. They may pursue additional certifications, such as the Certified Property Manager (CPM) designation, to enhance their credentials.
For a detailed guide on how to get started, check out our full article on How to Become a Property Manager.
If you’re organized, enjoy working with people, and have a knack for managing multiple tasks at once, property management is a rewarding career path. With the right qualifications and a passion for real estate, you’ll be well on your way to becoming a successful property manager.
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