2nd half: Sect 2: WA Business Skills & Procedures

Theo is the listing agent for a seller who's completed a property disclosure form. For how long must this form be retained?

3 years after the transaction closes

Maximum percentage of income to be spent on marketing and advertising

30%

Which of the following is a requirement if you set up a corporation in order to perform real estate services?

A separate bank account in the corporation's name

Farm area

A targeted group (area or niche) you market to consistently over time

Washington requires that real estate companies keep current transactional and trust account records in a specific location. Where must companies keep these records?

At the office address identified as the primary license location

In order to succeed in real estate, you need to ______.

Be disciplined and diligent

How would you qualify a member of your sphere?

By asking if they know someone to whom they would refer real estate business

Which of the following important components of a business plan outlines an organization's fundamental purpose?

Mission statement

Which one of the following options describes a budget deficit?

Overall, you've spent more than you've earned.

When an amount budgeted for a specific line item has been overspent, what has occurred?

Overrun

Identifying properties being sold by owners and persuading them to list with a licensee describes the ______ approach to finding listings.

Owner sales

Two best places to spend your marketing dollars

Sphere, farm area

An overarching business goal is designed to expand on which of the following?

The company's mission statement

Calli is a new licensee. If she wants to succeed in real estate, she should ______.

Work hard and stick with it

Independent contractor

Worker who sets own hours and work location and is compensated based on production, not time

Shaniqua's appointment with a prospective broker was cut short because the broker said he had a client meeting. This broker is likely _____________.

a practicing broker

How long must trust account-related records be retained in Washington?

at least 3 years

Gross income

is the total income from operations before expenses.

Which type of worker, though an independent contractor, is defined as an employee by statute for certain employment tax purposes? A food delivery driver who is paid on commission is an example.

statutory employee

What type of worker, defined under tax law as an independent contractor and not an employee, includes direct sellers and licensed real estate agents?

statutory non-employee

In which of the two situations is it most appropriate to depend on reserve funds?

1. A competitor has offered to sell her brokerage firm to you for an excellent price. 2. Your office building sustained severe damage in a storm, and your insurance policy won't cover the entire repair cost.

You do a listing presentation to a potential client over lunch at a nice restaurant. How much of your meal cost is considered tax deductible?

50%

What's the failure rate for new real estate licensees?

87%

In real estate marketing terms, what's a farm area?

A targeted market

Which of the following would be a receipt you should save for tax purposes?

A toll fee for a business trip

When using the farming approach, affinity is a key factor when identifying a neighborhood. Which statement best describes affinity?

An area that the licensee likes

Andrew just received a compensation check from his brokerage firm. Since Andrew is an independent contractor, what determines how he's paid?

Andrew sales

Niche

Area of specialized focus for a business (e.g., first-time homebuyers)

There are several things that a business planning document should include. For one, it should describe what your business does, its position in the marketplace, what distinguishes it from competitors, and the markets it serves. Which of the following standard sections of a planning document includes this information?

Company description

Which of the following describes marketing to one's sphere?

Connecting with your own network of friends

When finding listings, which statement describes the expired listings approach?

Contacting homeowners whose listing contracts have ended without a sale

When finding listings, which statement describes the referral approach?

Contacting prospective clients through previous clients, co-workers, networks, etc.

Amos is a new licensee who has just earned his first commission check. What should he do with it?

Deposit it into a business account separate from his personal account

Sally is developing a vision statement for her business. What should this statement do?

Describe the desired future position of Sally's company

Business plan

Document containing mission, vision, goals and objectives, followed by strategies, tactics, and financial budget to achieve business success

Alison, an aspiring business owner, and her team have done all the upfront work and now they are ready to draft the official planning document for Honesty Homes. She knows that the document will be unique to her business, but there are certain components that are standard and must be included. Which of the following is a standard component of a business plan document?

Executive summary

Which component of a business plan document is written last but is likely the first thing lenders and investors will read?

Executive summary

Choosing a neighborhood and concentrating real estate activities there is an example of the ______ approach to finding listings.

Farming

Operating budget

Financial management tool that establishes spending and income goals for the year

Gary is a good broker to his new licensees. That is most likely because he ______.

Has a robust training program

Stacey is a new licensee. In order to get the most out of her marketing efforts, what she should concentrate on?

Her sphere and farm area

A broker who provides a variety of marketing materials is most likely ______.

Invested in the success of affiliated licensees

Which of these is an advantage to maintaining business and personal accounts separately?

It allows you to track business expenses for tax purposes.

Which of the following is a true statement about working in real estate?

It involves nights and weekends

Which of the following is most true about a career in real estate?

It requires a strong work ethic

Which of the following is the best definition of a budget?

It's a detailed management and planning tool that serves as your earnings and spending goal for a period of time.

Michael scours the local newspaper, looking for homes for sale without real estate professional representation. This isn't because he wants to buy the house, but because he wants to represent the seller. What approach is this?

Owner sales

Sphere

People who know you and would be willing to do business with you and refer you to others

Of the following marketing techniques, which is most essential for a new licensee?

Perseverance

You should try to have a face-to-face meeting with each person in your sphere at least how often?

Quarterly

Which of the following should be retained for tax purposes?

Receipts for parking fees when visiting a client's condo

Criteria for selecting a broker

Reputation, training and support, compensation, policies, areas of interest, and personality fit

You've completed your budget, and it shows a projected net loss for the year. What should you do?

Review projected expenditures and revenue to see if there are acceptable adjustments to be made.

What are the two places you should concentrate your marketing efforts before all others?

Sphere and farm

This worker is treated as self-employed by statute for all federal tax purposes, such as a licensed real estate agent.

Statutory non-employee

Jill is trying to choose between two brokers. One no longer practices real estate, while the other is a very active broker. If training with her manager is a concern for her, which broker should she choose?

The one who's not practicing, because she'll likely get more time with the broker

Why are most new real estate licensees hesitant to market to their friends and family?

They don't want to seem pushy

In Washington, real estate companies must keep both accounting and transaction records for a minimum of ______ years.

Three

Sarah is a buyer's agent for the Tillet family, who were unable to find a property to purchase. So, when the agency agreement expires at the end of the 90-day agreement period, they part company amicably. How long does Sarah's firm need to keep the buyer representation agreement?

Three years after the agreement expires

Which of the following is a reason that the federal and state government classify workers into taxing categories?

To determine whether the worker is exempt or non-exempt for purposes of the Fair Labor Standards Act

Employee

Worker who is compensated based on time spent working and is usually paid a salary; employer dictates how, where, and when work is done

As a new licensee, you may find checklists very helpful. What's a checklist?

Written steps that both new and experienced agents can follow

This worker is classified by the common understanding of the profession, such as a food server.

common law employee

Which of the following would appear on your budget?

gross income

Because of the lack of control over the individual by the "employing party," this worker is not classified as an employee, such as a doctor.

independent contractor

What may real estate licensees be classified as for tax purposes, even though they're subject to supervision from a more experienced broker?

independent contractors

Net income

is gross income less all operating expenses.

An independent contractor who's treated as an employee for employment tax purposes, such as a delivery driver paid on commission.

statutory employee

Which of the following statements is true of independent contractor licensees?

their paid by the job