One of the most difficult skills for new Realtors to learn is budgeting. Along with good time management, the two skills are probably the core requirements for first-year success in this challenging profession. Read more...
One of the most difficult skills for new Realtors to learn is budgeting. Along with good time management, the two skills are probably the core requirements for first-year success in this challenging profession. What does it take to create a realistic budget for a new agent? In one word, the answer is "planning." Approach the task in much the same way as a family might make an annual or monthly budget, with research and tracking. Here are the three steps to building a budget that can work for any new agent and is adaptable as time passes.
Track and Analyze
Carefully log every penny you spend for two weeks running and then apply some honest analysis to what you come up with. Logging of all the money you spend will reveal where there are "leaks" in your current monetary habits and will also show what expenses are absolute necessities. The effectiveness of this step, the only one that takes place before making a pro-forma budget, is based on the ancient adage, "Know thyself." Until you know what you spend, when you spend it, and why, there's no way to make a realistic budget.
Build a Budget
List every monthly expense and use a worst-case scenario to estimate average monthly income. If there's more income than expenses, you're still not off the hook. Be certain to go through each expense item and determine whether it can be reduced or cut out entirely. Are you spending too much on eating out, clothing, gifts? If so, snip those expenses down to levels that make sense.
After working with all the data in a spreadsheet and getting a feel for what an "average" month looks like, write out a separate document called "Pro-forma Monthly Budget," and save it to your desktop. For the next two months, allow yourself to fine-tune the pro-forma budget with new revelations or data your forgot on the first go-round. At the end of 90 days, you should have a pretty accurate and useful monthly budget that can serve as a guideline for at least the first year of your practice. In several months, your skills and network will have changed enough to require another round of budget-making. Remember, budgets help you identify ways to cut costs and increase profits, and those are good things. The budget is your friend, not an entity to be feared.
Plan for Emergencies
Real estate agents can take a tip from personal budgeting theory: it's essential to have an emergency fund in place that can cover at least three months' of expenses. Every smart family has a fund like this and so should every real estate professional. Especially in a field where income is notoriously volatile, an emergency fund will help to smooth out the natural income vicissitudes.
Final Thoughts
There's no reason to reinvent the wheel, so do some online research about typical real estate agent budgets to get ideas about common expense categories that might not occur to you as a new agent. Be careful, however, not to assume anyone else's categories or specific dollar amounts will apply to you. Always do the hard work of tracking and analyzing before you begin to create your own personal budget.
Remember, the real estate business is a marathon not a sprint. Being able to weather the storm is more important than ever now.
Love,
Kartik
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When most people think about working in real estate, they immediately think of selling houses. While residential sales are the most common occupation for those with a real estate license, it’s far from Read more...
When most people think about working in real estate, they immediately think of selling houses. While residential sales are the most common occupation for those with a real estate license, it’s far from the only option. In fact, there’s a lot you can do within real estate that has nothing to do with the conventional sale of houses. Here are some of the real estate jobs available for those that don’t want to just sell houses.
Commercial Real Estate
If you like sales but don’t love the idea of selling homes to residents, you can still find the career of your dreams within real estate. Instead of selling homes, you’ll sell and lease office space and property to businesses. But the differences between commercial and residential real estate sales don’t end there. In commercial real estate, agents must be knowledgeable about the sectors in which they work and provide valuable analysis to potential buyers. Since newcomers to an area might not know much about the region’s demographics or traffic levels, it’s the commercial real estate agent’s job to fill them in and help find the best location or tenant for a given area. Because of this added analysis, it can be a longer and more difficult process to make a sale in the commercial realm than in the residential space, but the rewards can be greater -- a commercial Realtor can make a great living.
Real Estate Broker/Owner
Although it’s commonly believed that a real estate license is the same across the board, most states actually have levels of real estate licensure. And if you’re not content to act as a conventional real estate agent -- or if you’ve been an agent and want to try something else -- there’s still a way for you to get involved in real estate without being an agent. Becoming a real estate broker requires a healthy dose of ambition, but there could be serious benefits down the road. As a broker, you’ll have your own firm where real estate agents will work for you. It’s a way to keep your hands in a lucrative business while also allowing you to start your own business, applying your knowledge and expertise in an industry for which there’s always demand.
Property Manager
Earning a license also opens up the door to becoming a real estate property manager. Property managers oversee buildings for owners. A common role for a property manager that’s responsible for the units within an apartment complex (or a series of homes owned by a person or company) and is charged with fixing repairs, collecting rent and finding new tenants when existing tenants move out. This type of job is for someone who loves real estate and likes accounting, but doesn’t want to become a Realtor. Property managers are generally paid based on the gross rents collected; property managers can also receive leasing commissions for screening and finalizing deals with tenants.
Real Estate Assistant
The life of a real estate agent isn’t for everyone. Not everyone wants to travel to open houses and to meet with clients. However, for those that simply want to work in real estate while remaining in one location, there’s a way to make it happen -- and you may not even need a real estate license to do it. A real estate assistant provides support for agents and brokers, including answering phones, posting listings and preparing paperwork. These tasks help the agents tremendously as they manage their workflow. It’s also a good introduction for those who are unfamiliar with the inner workings of real estate. A real estate assistant may realize that they want to be an agent after all, and they can continue to work as an assistant while they take real estate license courses.
Financial Analyst
Real estate agents and brokers are often too busy with their everyday duties to take note of emerging trends in the marketplace. That’s where financial analysts come in. Analysts look at real estate data and attempt to predict where real estate is going, particularly in the local area. Financial analysts that work in real estate are also tasked with finding attractive investment opportunities so that the company can properly allocate its resources. Being a real estate financial analyst means being based largely in an office; it also doesn’t require a real estate license. Most large commercial real estate companies will have analysts on their team.
Real Estate Appraiser
If you like numbers, but don’t want to be tied to a desk all day, real estate appraisal might be the career for you. You don’t need to go to real estate license school but you will need to obtain a separate appraisal license. Once you do that, you’re able to determine accurate property values for the houses you examine, based on the home’s characteristics and comparable sales data. Appraisers are used when houses are sold or refinanced.
Inspector
Outside of the agent, the bank and the buyer, an inspector is the most important part of any real estate transaction. Inspectors visit properties before they’re sold and look for potential issues that would not only impact the sale, but would cause problems for the buyers down the road. Inspectors must be highly knowledgeable in all areas regarding houses; they don’t need a real estate license, but if you’re interested in being a real estate inspector, you’ll need to understand the inspector requirements of your state.
Loan Officer
Real estate loan officers don’t actually issue loans. Instead, they’re the intermediary between the bank and the buyer. Loan officers help buyers to get approved for financing, point out any issues that inhibit a buyer’s ability to obtain a mortgage and recommend products based on the unique situation of each home buyer. To become a loan officer, you don’t necessarily need a real estate license. Instead, you’ll have to take a 20-hour pre-licensure class that covers the laws and legalities around real estate lending. After that, you only need to pass the NMLS SAFE Mortgage Loan Originator Test and you’re ready to start working as a real estate loan officer.
There are plenty of cogs in the real estate machine. If any of these fails to function properly, the entire operation fails. Even if you don’t want to be a Realtor or obtain a real estate license, there’s a career option for you in our great business.
Love,
Kartik
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Frankly, Instagram has brought us a ton of new students. So many of our students enroll because they have seen social media posts from agents about how much money they make. Programs like Million Dollar Read more...
Frankly, Instagram has brought us a ton of new students. So many of our students enroll because they have seen social media posts from agents about how much money they make. Programs like Million Dollar Listing have contributed to this perception. While some of these stories are true and many agents do make a lot of money in our business, I wanted to write a quick article about things you should know before starting a career in real estate. I wrote a few pieces of advice - I thought the title was catchy - before anyone takes the first step in entering our business. You Are the Boss It may seem obvious, but people who have spent the majority of their lives working for a manager or supervisor are often surprised by how much discretion they have over their daily schedule. There aren’t any wake up calls in our business. No one complains if you show up 5 minutes late - or don’t show up at all. Worse yet, if you work for a “virtual brokerage” there might not be a person available to bounce ideas off of or to get advice from when you find yourself in a rut. When a decision needs to be made, you are often the person who has to be decisive and take action. You Need a Business Plan Being a self-employed person means that you need to come up with a business plan that provides a roadmap for your real estate business. How much money are you setting aside for marketing and advertising? How many transactions do you plan to close in a month, or in a year? Does your business plan call for you to work from a real estate office or work from home? How much time are you setting aside for your business if this is part-time work? In addition, you also need to understand your tax obligations. You will have to pay quarterly taxes and budget for this. You'll need to track your business income and deductions to ensure you pay enough every year. Most agents have a CPA or other tax advisor that they lean on regularly for this. It’s Useful To Have a Cash Reserve What social media posts and television rarely show are the slow periods. There will be a time when you don’t close anything and your pipeline isn’t progressing as quickly as you would like. This period can especially hold true for the brand new licensee that will have a minimum 90-day window to get a handle around the business. Always have at least a small cash reserve built up before starting, and keep adding to it little by little. By having a nest egg, you'll be able to weather slow periods and continue to build until you are at the point where you have a steady pipeline of closings. Your Schedule is Flexible... Sort Of It's true that you can work whenever you want. So if you are a night person who loves working at 2am because it is quiet and calm, you can do all your paperwork and get your online marketing accomplished during those hours. On the other hand, remember that you will have clients that can and will contact you at unpredictable times. A certain property may show up that a client wants to see right away and that showing may not have been “in your schedule” but you may feel the need to drop everything and pivot. If you become a residential real estate professional you will likely have clients that work 9-to-5 jobs. The only times they have to look at a house or arrange for a showing are evenings and on the weekends. Are you accounting for this in your plan? Somehow Differentiate Yourself from the Rest of the Pack You have a real estate license. That is an accomplishment not to be undermined. Remember, however, that you were in a full classroom of other people who also obtained their licenses. They’ll likely be working in the same neighborhoods as you. Additionally, you will also be competing against established, veteran Realtors which will be an even more competitive field. Establishing your personal brand and differentiating yourself is absolutely mission critical. Figure out what makes you unique, whether it is your marketing skills, market knowledge, or negotiating techniques. Then let people know about your skills so that they each out to you first. Start Your Real Estate Career Today Are you ready to make the move into real estate and gain the education you need to succeed? Visit our website to learn about how you can gain your license and start this exciting career. Side note - My intention with this article is not to discourage anyone from starting in our business. It’s simply to pepper a little bit of realism in the basket of fake Instagram and YouTube videos. I have many students that make into the 6 and 7 figures annually. It is possible, but everyone is looking for the secret sauce that’s going to make them successful. The truth is that there is no secret - it’s just hard work. Love, Kartik
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The Dream vs. The Delivery: A Reality Check
The "Real Estate Dream" is often sold as a low-risk side hustle. The pitch is enticing: get your license, work a few weekends, and pocket $15,000 commissions Read more...
The Dream vs. The Delivery: A Reality Check
The "Real Estate Dream" is often sold as a low-risk side hustle. The pitch is enticing: get your license, work a few weekends, and pocket $15,000 commissions while keeping your 9-to-5 safety net.
Here’s the truth I’ve seen after coaching thousands of students at ADHI Schools:
Real estate is a professional service, not a hobby.
The market rewards speed, availability, and consistency. Your current employer, however, also demands your focus. To bridge this gap, you don't need more "motivation"—you need a system.
Before you commit your time and money, you need to ask the fundamental question: Should You Become a Real Estate Agent in California? Success in part-time real estate only works if you can systemize around three specific conflicts:
Time, Responsiveness, and Lead Flow.
TL;DR: The Binary Decision
GO if: You have 15+ hours a week, a flexible day job for emergencies, and a 6-month financial cushion.
NO if: You cannot take calls during the day, have zero weekend availability, or need a commission check within 90 days to pay rent.
The Three Conflicts of Part-Time Real Estate
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Obtaining a real estate license after passing the real estate exam is only the beginning of your career in our great real estate business. The next step (and in many ways the more important piece of the Read more...
Obtaining a real estate license after passing the real estate exam is only the beginning of your career in our great real estate business. The next step (and in many ways the more important piece of the puzzle) is to prospect for clients.
The high level question the must be asked and answered by the new agent is: What does a buyer or seller want in their Realtor? And next - How do I meet those needs?
Simply put - buyers and sellers are looking for a local real estate expert. Buyers want someone who knows what local restaurants are great, where the nightlife is, what schools are perfect for their kids, and what amenities are popular in the neighborhood.
Sellers, on the other hand, want a local Realtor who knows what the current and future market outlook is, what the comparable sales look like for the house when compared to other similar properties on the market, and at what price to market the home.
So how do you become a local real estate expert for your clients? Here are several strategies to implement once you finish your real estate courses and become a Realtor.
Go to Local Government Meetings and Chamber of Commerce Events
Government meetings and chamber of commerce events will play important factors on how you grow your business and connect to community members. You'll want to pay attention to any changes, regulations or votes coming up with the city council or planning commission that will impact the local real estate market. These meetings could discuss zoning regulations or upcoming development projects, for example. Information gathered at this event can allow you to better track the market and inform clients of developments that can affect the home buying or selling process.
I remember one friend of mine who was showing a high-rise condo to a buyer on Wilshire Boulevard in Los Angeles. The buyer found a home online that he wanted to see and reached out to the agent for a showing. Directly across the street was an empty parking lot that was in the early stages of being the site for a new high rise development. If approved, the new structure would have completely obscured the southern view from the living room and bedroom and would have also casted a dull shadow over the pool deck. The fact that the agent was plugged into the local planning commission and had actually attended some of the Homeowner Association meetings meant that he was in the know and ultimately able to advise the buyer on the proposed development. Surely a large building blocking your view that breaks ground shortly after the close of escrow would be a nightmare scenario for the uninformed buyer.
At chamber of commerce events, you can network with other businesses. You can learn about the roles these employers have in the community, and can share this information with buyers. It’ll also be a great chance to meet other entrepreneurs and refer business to one another.
Get Involved in Social Events and the Community
Prospective clients like to see that real estate agents are getting positively involved in local events. Whether it is partnering up with a local blood drive or volunteering time at an animal shelter, these tactics show that you want to invest your time and work in building a strong and welcoming community.
Also, attend social events such as festivals and get to know people. Shake hands with organizers and speak with the local residents. People will remember your friendly demeanor at the event as they will be inclined to speak positively about your real estate business with others.
There’s nothing wrong with telling people that you are in the process of obtaining your real estate license now and start building those relationships early. Of course, you won’t be able to do anything that would require a real estate license, but there aren’t any laws against getting to know people in the area.
Show You Are an Expert in Emails, Social Media and Personal Interactions
After taking real estate classes Los Angeles, you've gained the knowledge to help people with their real estate dreams. Yet you also have to show them that you are a local expert. You can do this through your correspondence, social media accounts and interactions with clients.
Once you get your license, you’ll need to define the areas where you’ll want to build your real estate practice. Study the properties in those areas and the overall market on sites like www.dqnews.com and in the Multiple Listing Service. Over time, you’ll get to know the types of properties in those areas, the number of certain residential properties (single-family homes, duplexes, and multi-family structures). Also, you've gathered the data about recent home transactions, buyer trends, and average sales prices. Take all of this data and pepper it throughout your emails, newsletters and social media sites.
Drop in facts that will draw in a person's interest and convince them to take the next step in calling for your services. You want to impress them with the market insights that you've gathered as they will feel confident about your skills. In addition, you want to do the same at face-to-face meetings and appointments with clients. Showing people that you've done all the real estate homework will allow you to gain repeat business and positive reviews that will help your career.
By immersing yourself in community events, attending government meetings, and sharing your local expertise through social and other media, you can solidify your position as a top real estate expert in the local market. It’ll be easier to convert leads into real estate transactions by showing your in-depth knowledge about local market trends.
As always, please call my office at 888 768 5285 or visit our website for information on real estate classes online or in the classroom. If you are getting ready to prep for the real estate exam and you need a real estate crash course click here.
Always looking to bring you value.
Love,
Kartik
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Are you thinking about enrolling in real estate license courses? If so, your first thought may be whether or not now is a good time to start.
How’s the market doing?
A career in real estate can Read more...
Are you thinking about enrolling in real estate license courses? If so, your first thought may be whether or not now is a good time to start.
How’s the market doing?
A career in real estate can be very rewarding and it all starts with the right real estate school. The U.S. Department of Labor reports the demand for real estate agents and brokers will grow by 7 percent from 2018 through 2028, a rate that’s faster than average for all job growth.
Demand is out there for well-qualified, dedicated agents willing to learn the industry from the ground up.
Should You Enter a Career in Real Estate?
Timing Is Everything
Those wondering if they should become a REALTOR often ask themselves whether now is the right time based on market conditions. The short answer is that while your initial timing can matter remember that getting your license now can open the door for years, no matter how the market swings in the short term.
Here are some answers to common questions:
#1: What Is the Market Like?
The real estate market grows and expands on a consistent basis. There are times when market activity can and does cool like back in 2008 and 2009. However, the current market remains robust with the possibility of ongoing appreciation.
Put that aside for one moment, though. Remember that people are always buying and selling real estate no matter what the market does. Keep in mind that there are always consumers looking for their first home or to downsize after the kids move out. There are always new developments and opportunities. In other words, there is always the need for a qualified real estate agent.
#2: But Is The Economy Slipping?
While there are valid concerns over how long the economy will continue to grow at its current rate remember that transactions happen in all economic conditions. More so, many people move into real estate investing when the stock or other markets begins to decline. I talked briefly about this in an earlier article.
That’s because real estate is viewed as a safer and more tangible investment for some. This also creates opportunities for individuals looking to grow their career.
#3: Are Houses Selling Today?
The answer here is “yes” as well. More so, in the long term, there will be an even higher demand for homes. I don’t think anyone believes that the population is going to decrease throughout the United States any time soon.
The current economic climate has helped push home values high. A combination of low interest rates and high demand have sent prices soaring in many areas.
In some areas, they are simply out of reach for some buyers. As home prices begin to slow their rate of growth, they will become in reach for more consumers, especially those looking to buy their first home. Homes are selling and will continue to sell.
Starting a Career in Real Estate - Is It Right for You?
People will always be buying and selling homes. Demand will ebb and flow. Real estate agents committed to providing a high quality of service to their clients will continue to see significant demand for their services. Your buyers be might everyday consumers looking for their first home as home prices fall. Or, you may be able to work hand-in-hand with investors who are looking for good deals. Real estate classes help you prepare for every market condition, too.
If you:
• Enjoy real estate and looking at homes and buildings
• Love helping people
• Like to negotiate
• Want the flexibility of working on your own schedule
• Want unlimited income potential
A career in real estate could be right for you. You can meet the California real estate license requirements though our real estate school in as little as 54 days and start taking advantage of the current market climate. Once you establish yourself, there’s no telling how the market will work in your favor.
A shameless plug, ADHI Schools is the number one real estate school in California. We can walk you through the pros and cons of being a real estate agent.
Call us at 888 768 5285 or visit adhischools.com to pass your real estate exam the first time.
Love,
Kartik
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How to Choose a Real Estate School
I know that many of you who are considering our real estate school are also cross-shopping — as you should. During this decision process, you're going to look at Read more...
How to Choose a Real Estate School
I know that many of you who are considering our real estate school are also cross-shopping — as you should. During this decision process, you're going to look at our program and stack it up against other real estate schools, community colleges and online schools. This makes sense, because smart shoppers do their homework.This is why I want to take a moment to explain why our program might be a good fit for you.
The Numbers Speak for Themselves
First off, you should compare our pass rate for the real estate exam with the current statewide statistics. In a recent month, there were 3,987 people who scheduled to take the real estate exam. Out of those scheduled, 3,494 showed up. Of the 3,494 that took the exam, only 46 percent passed that month.As a potential real estate agent, it’s very important to align yourself with an education program that has a proven system to give you the greatest chance of passing the exam - the first time!
Why Does Our Program Work?
I chalk it up the overall process of our entire program. We're going to provide you with excellent support, flexibility on when and how to take classes, a great faculty and solid course materials.
• Full-time support: Our knowledgeable and friendly staff is available five days a week, Monday to Friday. Our representatives are all professional and highly trained. Compare this with smaller real estate schools that simply don’t have the resources that we do.
• Flexible locations: We have many brick and mortar locations if you want to do the classes with a classroom component. This definitely plays into the convenience factor when you're trying to find a school near your home. Here's the best part about it: You get unlimited access to any of these locations' classrooms for twelve months! So, if you need a place close to your friend's house or dentist's office, we have your back. We also have online classes too if your schedule is more scattered.
• Great online real estate classes: No other online school in California has the amount of video that we do. These aren't amateur videos either, but instead are done with professional lighting and audio and great camerawork to ensure you have the most professional set of real estate materials available.
• High-quality instructors: Our faculty is simple the best out there. All of our instructors are extremely professional and knowledgeable. Some of our teachers have been presidents of large real estate organizations. One was even the VP of the global MLS. Another has done over 700 short sales and foreclosure transactions during his career. These are not isolated cases, each one of our instructors is screened for their teaching ability and personality before we hire them.
• The right course material: When you take classes with us, you'll get three tangible college-level textbooks, not just PDFs. You get that "real school" feel by having a solid book in your hands. These textbooks contain hundreds of practice questions to help prepare you for the real estate exam.
• Convenient (and affordable) crash courses: Start out with a bang! Our upper-tier packages also include an intense (and fun) two-day live crash course. This is going to give you the skills and knowledge needed to pass the real estate exam - the first time!
Try It Before You Buy
Naturally, you don't want to commit to something before you have a chance to try it out. That's why I'd like to offer you a free guest pass. With this pass, you can visit any location of ADHI schools at no cost or obligation.To sign up for a physical classroom guest pass, go to the main part of our website, scroll down and then enter your email in the information box. We will immediately send you a guest pass. Come hang out with us! We would be excited to have you in the classroom! If you can't come in person, you're welcome to try out one of our online classes. Sign up for a trial account of our online real estate school. Scroll to the bottom of the page and check it out!
Shop Smart
I highly encourage you to compare our programs side by side with other real estate schools that you might be considering. I'm confident that you'll find that we have much more to offer than the competition.At the end of the day, you need to make the right decision for you. However, I think you'll be very happy if you choose us. Check out ADHI Schools today!
- Kartik
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Once you complete our classroom real estate courses in California or real estate classes online, you’ll need to put your license with a broker if you want to go to work.
At this early stage in your Read more...
Once you complete our classroom real estate courses in California or real estate classes online, you’ll need to put your license with a broker if you want to go to work.
At this early stage in your career, you are probably full of enthusiasm and at the same time have some serious questions and perhaps some lingering fears about whether not you’re making the right career decision.
One of the most important steps you will take as a real estate salesperson is to choose a broker, the place where you will, in effect, hang your hat along with your license, and build your initial reputation in the field. Whether you’re already licensed, or are shopping for a place to take your real estate classes, finding the right environment is all-important to your future. Even though it’s not a lifetime commitment, your choice of initial affiliation will affect not only your earning ability, but also your learning curve, your growth potential as a real estate agent, and your long-term success and fulfillment as a professional.
Brokers also want to ensure that new agents who join their firms will be compatible, hard-working, knowledgeable, committed, enthusiastic, and a good match for the company culture.
How should you evaluate your opportunities? What are the steps to take to assure the best possible fit?
To prepare for your interview, expect to be asked the following questions by a potential employing broker:
1. What drives your decision to become a licensed real estate agent?
Do you have previous sales experience? Is money your primary goal? How do you intend to support yourself until the sales (and closings) start rolling in?
2. Do you have a monetary goal in mind?
If you’ve given even a little thought to this, you will probably answer this question with a specific dollar figure; then you can go on to explain that you intend to grow your earnings over time to reach your ultimate goal. Also, you’d be wise to impress a potential broker with your knowledge of real estate facts and figures. It’s not detrimental to disclose that, in the beginning, you view real estate as a part-time gig, until you can build a reputation and a clientele. This disclosure is important because it will help to understand whether or not the brokerage’s training calendar is going to be a fit.
3. How much time and energy can you devote to the business?
Real estate, unlike a 9-5 job, requires evening and weekend work, coupled with high levels of client accessibility. A broker will want to know that you understand the time commitment, as well as the energy it takes to see a transaction from listing to closing, or from initial contact with prospective buyer to the accepted offer by the seller and the escrow ultimately closing.
Real estate can be an extremely rewarding — and profitable — profession. But it requires knowledge, dedication and commitment. Show a broker those three qualities, and you’ll be on your way to a mutually beneficial association.
If you need help being placed with a broker or are considering the first steps to real estate licensing or passing the real estate exam, call us at 888 768 5285.
Love,
Kartik
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Recently, I’ve been getting many questions regarding “off-the-top” fees that real estate companies charge their agents.
If you are working at a real estate company, you are probably subject to Read more...
Recently, I’ve been getting many questions regarding “off-the-top” fees that real estate companies charge their agents.
If you are working at a real estate company, you are probably subject to some kind of commission split between you and the company. Imagine it’s 60/40, 70/30, 80/20 – whatever it is you’ll have some split with your broker. This means that you will get a portion of the real estate commission and your brokerage gets a portion of the commission.
Generally if you go work for a massive franchise like Century 21 , Coldwell Banker, RE/MAX or Keller Williams, they are also going to have an “off-the-top” fee. Remember, this is in addition to your commission split.
Typically, this is anywhere between three and eight percent of the total commission. This represents a royalty to the franchisor. So Keller Williams corporate in Austin, or Coldwell Banker corporate in New Jersey gets a portion of your commission before you do.
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As an example, let’s say you earn a $10,000 commission and your company charges a 6% off-the-top fee. Before your commission split is calculated the company will take $600 out of the $10,000 and send that to Coldwell Banker in New Jersey.
Now you have $9,400 left. Your commission split will be calculated on that $9,400.
Once you finish taking real estate classes, you are naturally going to interview with various real estate brokers and an important question to ask is “What’s my commission split?”
However, you’ll also want to ask if there are there any other fees that are deducted before the commission split is calculated. Some brokers will charge an errors and omissions insurance fee for professional liability insurance. Some brokers will charge you a document scanning fee, or some other “desk fees” to work there.
As a newer agent these are questions that you need to ask of the broker and be as educated as possible so you are fully aware of what you’re getting into.
If you are interested in taking real estate classes in Los Angeles or Orange County, please visit our website.
If we haven’t yet connected on Instagram I would love to get to know you – I’m @kartikspics.
Love,
Kartik
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What Does It Cost to Become a Realtor®?
To start, we should differentiate between a “real estate licensee” and a “Realtor”. Remember, that to become a Realtor, it’s not only the exam and Read more...
What Does It Cost to Become a Realtor®?
To start, we should differentiate between a “real estate licensee” and a “Realtor”. Remember, that to become a Realtor, it’s not only the exam and license fees, but also association of Realtor’s membership dues that you have to pay. I’ll discuss all of these through this blog post.
A little plug – Don’t forget to follow me on Instagram,and subscribe to our YouTube channel.
It’s also important to keep in mind that prices for real estate education, exams, and licensure will vary state-by-state. That said, let’s look at the costs below. The main expenses you’ll incur on this journey are:
Statutorily required pre-license education
Classes at our real estate school currently range between $150 and $499. The price difference depends on whether you want to take the classes online or with an in-person component. Our online classes are great and our in-person classes are legendary. It’s really up to you. One other thing – please keep in mind that these prices are subject to change. While we haven’t raised the prices of our program in years, depending on where and when you read this post, things may have changed. The best thing to do is check our website or call us at 888-768-5285.
Also, realize that some states do not allow the future real estate professional to take their classes online. Arizona, for example, requires that you take classes in person. California allows you to do either or a combination of both. Check with your state to determine what the requirements are.
Exam fees
In California, the current cost of the real estate examination is $60 for salesperson applicants and $95 for the broker exam. If you happen to fail the test, the state requires that you pay this fee again.
Pro tip: Don’t fail the exam. Study with our amazing real estate exam prep site here.
Not sure what the difference between the sales license and brokers license are? Check out our video about this here.
License fees/criminal background check
The fee mentioned above is only for the exam. The state of California requires that you pay a license issuance fee as well. This is $245 for the sales license and $300 for the broker license. This fee is to be paid every four years when the real estate license is renewed.
You’ll also need to go through a Livescan criminal background check – even if you’ve been through this before. This will cost $49 to the Department of Justice in California plus whatever the livescan operator charges. Typically it’s another $20 on top of the $49.
Association of Realtor dues + joining a brokerage
If you’re a residential real estate professional, you will need to join the National Association of Realtors, the California Association of Realtors, as well as join a brokerage in order to do any act that would require a real estate license. Your board dues will cost between $1,000 and $1,500 per year depending on the association of Realtors that you choose.
Joining an association is mission critical as membership will provide you:
◦ The MLS (The most accurate database of current and former real estate transactions and tax information)
◦ Zipforms (ultra-convenient program that helps you draft complete contracts)
◦ E-Key (grants access to show properties)
Join a brokerage
Each company offers unique fees to agents that join them that vary. You may have a monthly office fee, website fee or pay up front for photocopies. You’ll want to interview a few of them first to make sure that you’re in the right spot.
Optional Expenses
Just because I’m terming these “optional”, it doesn’t mean that they’re not important. Being a full-time agent requires paying careful attention to your image online and in the community. Investing in these following items can boost your reputation.
• Getting professional headshots that are updated yearly can cost between $100 and $500 per session, depending on the photographer you use, nature of the photo shoot and number of photos you need. Accurate and good-looking professional photos are important in order to appear credible to new prospects. Imagine a fuzzy, outdated, 10-year old MySpace selfie being used on an agent’s website and business card. This looks lazy and doesn’t help the agent gain credibility. When you take the time to invest in your professional image, it helps win the trust of new leads.
• When it comes to marketing and promotion expenses, the sky is the limit. Your marketing expenses will depend on how much you want to invest in these:
◦ Boosting posts on social media: $5-as much as you want to spend.
◦ Open houses: Varies depending on how much food and drink you’re providing.
◦ Fliers and ads: Physical fliers are still necessary in many cases. The costs are minimal if you have an office printer and a set amount of prints you can do per month. Postcard marketing is also a tried and true method to gain new seller leads. We recommend our affiliate farming.cards listed here.
Get Your Real Estate License in California
If you want to know more about getting a real estate license in California, feel free to contact us today.
-Kartik
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