California Real Estate Practice Chapter 5 Rockwell Slides

Listing Sources: Referrals

One of the most effective ways to get listings is through referrals. Listings often come from an agent's referral network, either through business associates or satisfied customers. It is particularly fruitful for agents to cultivate friendships with centers of influence, and to make contacts by participating in community service organizations. Every agent should try to cultivate a referral network. The network should include other professionals involved in real estate or other financial services who might receive referral business in return. Some examples of potential contacts are mortgage brokers, escrow officers, attorneys, and accountants. Many agents also obtain listings through satisfied clients, either through repeat business or word-of-mouth. The first step to building up referrals is to engage in networking, just as you would do when searching for any other job. An agent should let friends, colleagues, and other acquaintances know that she is in the real estate business, and is eager to help anyone they know who needs real estate services. The goal is to create an endless chain of referrals. Ex. Marie lets one of her friends from church know that she is looking for listings. Her friend isn't interested in selling, but she lets Marie know that two of her friends from her book group have expressed interest in selling their houses. Marie contacts those two people and is able to get two more referrals from each of those prospects. If she keeps contacting more referrals and adding more links to the chain, she will eventually have access to sources for dozens or even hundreds of listings. It can be especially helpful for an agent to let influential persons in the community know that he or she is looking for clients. These people, known as centers of influence, often have many acquaintances and are happy to help businesspeople and clients find each other. These centers of influence may be professionals, such as attorneys, doctors, or public officials, or they may be anyone else—a store owner or a bartender, for instance—who interacts and chats with large numbers of people during their day. Local community service groups are excellent opportunities for real estate agents to meet centers of influence and other potentially useful contacts. Many agents make important connections through membership in churches, the PTA, fraternal groups, political organizations, the Chamber of Commerce, and other service organizations. Some agents make the mistake of joining a large number of organizations, participating superficially while aggressively looking for referrals. A more fruitful approach is selecting one or two groups and getting actively involved; the listings will come naturally over time, as the agent's involvement in the community grows deeper. Get involved in: -Church -PTA -Chamber of Commerce -Political groups -Service organizations Successful agents maintain a referral file, where they can keep track of all their contacts, when they last contacted them, and what those contacts suggested. Sophisticated databases are available for real estate agents to maintain these contacts, which can generate mailings and even remind agents when it's time to contact a source again.

Floor duty

One agent is assigned to handle telephone calls and office visits for a particular time period.

Listing Appointment: Net proceeds to seller

A competitive market analysis is a comparison of prices of homes that are similar to the sellers' property. It includes recent sales, current listings, and expired listings. It should be given to the sellers at the listing presentation in order to help the sellers set a reasonable listing price that will be supported by the market. In addition to the listing price, one of the sellers' main concerns will be how much cash they will walk away with once the transaction has closed. An agent can use a "net proceeds to seller" form to show the sellers what the bottom line will be after expenses are paid. At this stage, expenses (and the actual selling price) can be only estimated, but this form will give the sellers useful information about their potential net proceeds.

Before the Presentation: Competitive market analysis

A competitive market analysis is a comparison of prices of homes that are similar to the sellers' property. It includes recent sales, current listings, and expired listings. It should be given to the sellers at the listing presentation in order to help the sellers set a reasonable listing price that will be supported by the market. Once an agent is familiar with the house and neighborhood, she will prepare a competitive market analysis (CMA). The agent will use the selling prices of comparable properties to make an estimate of a reasonable listing price. Comparable #1: $404,000 Comparable #2: $388,000 Comparable #3: $409,000 Subject property: $400,000 By using the prices of houses with similar locations and characteristics as a comparison, an agent can help a seller choose a listing price that reflects the property's true market value. Three types of properties can be used in a CMA: -homes that recently sold (BEST), -homes that are currently listed, and -homes where the listings have expired 1. Prices paid for recently sold properties are the BEST indicators of a property's value, since they represent what buyers were willing to pay in real-world transactions. 2. Current listing prices indicate what a buyer could pay for a comparable property that is currently available. However, EXCEPT in an overheated market, listing prices tend to set the upper limit for values. Usually, buyers are reluctant to pay more than the listing price. 3. The prices from expired listings are also useful because they represent what a reasonable buyer wouldn't pay for a similar home.

Servicing the Listing: Communicating with seller

A listing agent should be in regular contact with the seller, providing progress reports that summarize inquiries about the property, showings, and marketing efforts. It is important to remain in regular contact with the seller throughout the listing period, and to explain what steps will be taken during the listing period. This includes what marketing strategies will be used, how to prepare the property for showing, the role of keyboxes, and what the seller should do during showings and open houses. This is all part of keeping the seller informed—one of the most important aspects of servicing a listing. The agent should be sure to contact the seller frequently. Regular progress reports will reassure the seller that the agent is working hard and make misunderstandings less likely. The agent's reports should summarize inquiries about the property and any showings. They should also include copies of advertisements for the property and any comments from other agents or prospective buyers.

One-party listing

A listing agreement that is valid for only one particular buyer. Even agents who don't ordinarily pursue FSBOs may contact one if they have a particular buyer in mind for that property. In this situation, the agent may call the seller and ask for a one-party listing. A one-party listing is a listing agreement that is valid for only one particular buyer. A seller may be skeptical of a one-party listing, assuming that an agent doesn't really have a buyer lined up but is only trying to get a foot in the door. If the seller can be convinced there is a legitimate prospective buyer, though, a one-party listing can be an excellent solution for both the agent and seller.

Turnover

A neighborhood should have suffiecient turnover. An area where few people move in or out won't be a fruitful source of listings. On the other hand, a neighborhood that has seen a lot of activity may be ready for a dry spell, so an agent should look for a neighborhood that sees a steady, level amount of turnover.

Real Estate Assistants

A real estate assistant performs administrative tasks, freeing up a busy agent to spend more time finding and assisting buyers or sellers. An assistant may be compensated through salary or salary plus commission, and may be licensed or unlicensed, although unlicensed assistants may not perform any activities that require a real estate license. Many overworked agents reach a point in their careers where they have to decide whether or not to hire a real estate assistant. While a real estate assistant can be a big expense, having an assistant may allow an agent to earn even more by giving her more time to solicit and work with clients, while the assistant handles administrative tasks. A real estate assistant may be compensated either through a salary or a salary-plus-commission basis, and may work full-time or part-time. Additionally, an assistant may or may not have a salesperson's license. If an agent hires an unlicensed person as an assistant, he must take special care to make sure that the unlicensed assistant does not perform any duties that require a license. A number of activities are off-limits to an unlicensed assistant. According to California license law, it is unlawful for an unlicensed person to: -sell, buy, or exchange real property or a business opportunity; -lease or collect rents from real property or a business opportunity, or buy, sell, or exchange leases; -solicit prospective sellers, buyers, or tenants, or list real property or business opportunities for sale or lease; -locate or file applications for purchase or lease of state or federal government lands; -charge or collect an advance fee to promote the sale or lease of real property or a business opportunity; -solicit borrowers or lenders for loans, negotiate loans secured by liens on real property or business opportunities, or perform services in connection to loans; or -sell, buy, or exchange real property securities, land contracts, or promissory notes secured by liens on real property or business opportunities. Because there are so many activities that require a license, an agent may prefer to hire a licensed person as an assistant. This helps to avoid the risk of an unlicensed person performing duties that require a real estate license. Luckily, many licensees may choose to work as a real estate assistant rather than as an agent. A new licensee might choose to begin as an assistant rather than an agent, in order to gain more experience and connections before taking on agent responsibilities. A new licensee may benefit from a mentor-protege relationship while becoming more familiar with the real estate business. A licensee might also choose to work as a salaried assistant in order to alleviate some of the financial uncertainty associated with starting out in real estate. Or a licensee might simply be uncomfortable with the business of selling and negotiating, and prefer to work in real estate in a less stressful position. Reasons for a licensee to begin as an assistant: -Gain experience and connections -Avoid financial uncertainty -Less responsibility

Listing Practices

Acting as a listing agent involves a number of steps. First, you must locate listing prospects and give listing presentations to convince them to list with you instead of with a different agent. Even after obtaining the listing, an agent will still need to service the listing. Servicing the listing includes advertising the property, holding open houses, and communicating with the seller about what progress is being made.

Affinity

Affinity means that an agent must like the neighborhood and feel comfortable there. An agent should be enthusiastic about her "farm". For this reason, your own neighborhood is often a natural choice.

Servicing the Listing

After a listing agreement has been signed, the agent needs to begin servicing the listing. An agent can't simply sit back and wait for buyers to show up. An agent will need to help prepare the property for showing. It also involves marketing the property, which will include entering the listing into the MLS database and may include holding open houses. It will also require maintaining ongoing communication with the seller. Modifications to the original listing agreement may become necessary as the process unfolds. -Prepare house for showing -Submit listing to MLS -Hold open house

Listing Presentations

After an agent locates a prospective seller, the agent needs to make a listing presentation to the seller. In many cases, sellers will shop around for a listing agent, interviewing a number of agents to assess strengths and weaknesses. Since the presentation is often what will make or break getting the listing, it's crucial for an agent's listing presentation to be professional and thoroughly prepared. Even if a seller has already decided to go with you, the listing presentation is an important opportunity to discuss the listing price. An agent should encourage a seller to list the property at a competitive price, and the listing presentation is the agent's best chance to present information on the property's market value.

Making an Offer: Offer and counteroffer

Agents are required to submit any offer to the seller, whether or not it seems reasonable. The seller, not the listing agent or the buyer's agent, decides whether to accept an offer. When the buyer's agent prepares a written offer, it is given to the listing agent, who will then present it to the seller. The buyer's agent will often want to be present when the listing agent presents the offer, so if the seller has any questions (such as about the buyer's ability to pay) they can be answered immediately. Once the offer is presented to the seller, the negotiations will usually begin. Rarely is an offer accepted without modification of one of the terms, such as the purchase price, closing date, or date of possession. Negotiation typically take the form of counteroffers going back & forth. Guiding the parties through the negotiation and help them reach an agreement that satisfies everyone is one of an agent's most important duties.

Making an Offer: Negotiation

Agents must maintain their professionalism and discourage any hostility between the parties during the negotiation process. When presenting an offer, it is customary for an agent to present the positive aspects of the offer first, rather than the negative aspects. Focus on initial positives Focusing on initial positives discourages the seller from rejecting an offer out-of-hand before hearing and understanding all of its terms. This way, a seller is more likely to counter with another offer rather than rejecting an offer outright because of a particular negative term. Both parties should receive copies of any documents that they sign. For instance, a buyer should get a copy of the offer as soon as it's signed and the seller should receive a copy of any counteroffer once it's signed. Both parties must receive copies of the final purchase agreement when it's signed.

Safety Issues

Agents need to make sure that the sellers' possessions remain safe during a showing or open house, and make sure the property is secured afterwards. In addition, agents should protect their own safety by meeting clients at the office, rather than empty houses, and letting others know where they will be. Real estate agents always need to be mindful of safety and security issues, throughout the selling and listing process. They need to take precautions regarding the safety of their clients and customers, their clients' possessions, and themselves. A serious hazard is presented by houses that are in the middle of construction or renovation. In this situation, the agent should arrange for the contractor to show the property to potential buyers. Construction sites are filled with potential hazards, particularly if a buyer is accompanied by small children. Real estate agents should be mindful of the seller's possessions when showing a property or holding an open house. If possible, sellers should remove valuable items from the property beforehand. When finished, the agent must make sure that the house is securely locked. During an open house, an agent should encourage all visitors to sign the log book, and avoid leaving prospects unattended in the house. Agents should be particularly careful when a couple attends an open house and one partner distracts the agent while the other partner disappears; such suspicious behavior is a warning sign. Keyboxes present a unique hazard. After a showing, an agent must make sure that the house key has been properly secured in the keybox. Brokers need to take responsibility for keeping keyboxes as secure as possible. For example, when a salesperson is terminated, the MLS should be notified immediately and that person's keybox code should be deactivated. Real estate agents must also be concerned with their own safety. Violence against real estate agents is rare, but does happen occasionally. Agents come into contact with many strangers, often alone in houses, and so they need to take sensible precautions. Ideally, agents should work in pairs when hosting open houses or showing properties. If that isn't possible, ask a customer to meet you at your office, and proceed to the showing from there. That reduces the danger of meeting a stranger at an empty house. It's a good idea to ask a customer for photo I.D. upon first meeting them. -Work in pairs -Meet at your office -Ask for I.D. Legitimate customers are generally willing to abide by an agent's safety rules. A client who insists on meeting an agent at a property or who "cannot" leave a number or address where he can be reached is not a good risk. An agent may also explain that a customer who agrees to meet an agent for the first time is also at risk, meeting a stranger (the agent) at an empty house. Most customers will agree to begin at the agent's office when they understand it's in their own best interests as well. Agents who are showing properties should always leave word with their office where they are going and when they will return. They may also agree to check in with someone else by phone on a regular basis. If an agent feels he or she is at particular risk or simply wants further safety training, most local police departments are happy to provide additional instruction for real estate agents.

Listing Sources: For sale by owners

Agents often contact people who are selling their own property and try to convince them that listing with an agent would lead to a quicker sale for a greater selling price. Agents often prospect for listings by contacting sellers who are selling their houses on their own. An attempt to turn "for sale by owners" (FSBOs) into listings is often successful, since the sellers have already decided to sell. The trick is convincing the sellers that an agent has resources and skills that they don't, enabling the agent to sell the property in less time and for a better price. Some agents will contact any FSBO they can find, while others use a systematic approach, such as contacting only those in a certain neighborhood or price range. Agents can find FSBOs by observing "for sale by owner" signs and reading newspaper or Internet classified ads. Agents approach FSBOs in a number of different ways, but usually an agent will try to win over the seller by offering advice, rather than bluntly asking for a listing. An agent might send several letters to a FSBO or even a free service package, containing sample forms, hints on preparing a house for sale and staging open houses, and sample settlement instructions. Other agents may simply phone for an appointment or knock on the door. The key, no matter what the approach, is to convince the seller that selling a home is complicated, and that a professional can provide immense help. Even agents who don't ordinarily pursue FSBOs may contact one if they have a particular buyer in mind for that property. In this situation, the agent may call the seller and ask for a one-party listing. A one-party listing is a listing agreement that is valid for only one particular buyer. A seller may be skeptical of a one-party listing, assuming that an agent doesn't really have a buyer lined up but is only trying to get a foot in the door. If the seller can be convinced there is a legitimate prospective buyer, though, a one-party listing can be an excellent solution for both the agent and seller.

Holding Open Houses: Follow-up

Agents should follow up with all visitors who signed the guest log, by sending a thank-you card or personal note. If the agent made any promises, such as promising to perform a CMA for potential sellers, it is particularly important that the agent follow through.

Blind ad

An ad placed by a real estate licensee that does not include the appropriate broker indentification, often placed in order to give the illusion that property is for sale by owner.

Selling Practices: Finding a buyer

An agent can find buyers through the same methods as finding sellers (such as advertising and open houses) or by working floor duty at her brokerage and representing "walk-in" buyers. Buyers can be found using any of the techniques used to find sellers, such as advertising and holding open houses. "For sale" signs can attract buyers as well as sellers. Many potential buyers call agents after seeing their name attached to a sign on an attractive property. Often, buyers will call or visit a real estate office to find an agent to show them properties, without having a particular salesperson in mind. "Call-ins" and "walk-ins" are helped by the agent who has floor duty at that time. Floor duty means that one agent is assigned to handle telephone calls and office visits for a particular time period. Walk-ins who don't request the services of a particular agent are helped by the agent working the floor, which sometimes leads to retaining them as clients. While working floor duty, many agents use a prospect form, such as the one shown here, to gather information on potential clients. Agents sometimes find buyers by contacting people moving to the area from elsewhere. People often contact an area's Chamber of Commerce for information prior to moving to that area. Chambers of Commerce generally keep rosters of such contacts, and agents can obtain these rosters and turn them into potential buyers. Many real estate companies either specialize in relocation or have relocation programs, to help people moving from one city to another. Relocation specialists with national real estate firms can help with both ends of a cross-country move: selling the transferee's present home, and helping them find a home in their new community.

Holding Open Houses: Guest logs

An agent holding an open house should encourage all visitors to sign the guest log. The guest log is a source of potential leads, as well as a useful security measure. Not every visitor will want to sign the log, though, and an agent shouldn't insist upon it.

Holding Open Houses: Agent's presence

An agent should always remain at an open house for the entire scheduled duration, even if business is slow. Sellers won't be pleased if they arrive home, expecting a positive report from their agent, and instead find the house empty. Likewise, prospective buyers who arrive during scheduled hours and find the house empty are unlikely to follow up on that house or contact the listing agent. If an emergency arises, an agent should get another colleague to fill in for the remainder of the open house. And if business is slow, an agent can use that time to catch up on paperwork or call FSBOs. If the open house ends before the sellers return, the agent must make sure no visitors remain and lock up properly.

Listing Appointment

An agent should bring the following items to a listing appointment. 1. The CMA, 2. a listing agreement form, 3. an agency disclosure form, 4. information about the agent and 5. the agent's brokerage, and a net proceeds to seller form. These items help the agent explain the listing process to the seller and help the seller arrive at a listing price. They also help the agent build rapport with the seller and convince the seller that the agent is the right person for the listing.

Farming: Factors

An agent should choose a neighborhood to farm based on three factors: -Diversity -Affinity -Turnover Many agents are proponents of farming, and find that a little patience will pay big dividends later with a reliable stream of listings. However, other agents are not comfortable farming and rely on other methods.

Assistants' Duties: Updating information

An agent should give information about a listing to the multiple listing service as soon as the listing is taken. Any changes should also be posted to the MLS as soon as possible. In fact, a brokerage may be subject to fines or other action by an MLS for not reporting a pending or closed sale promptly. A real estate assistant may be in charge of submitting such information to the MLS. (Some multiple listing services, depending on their internal policies, may allow only licensees to submit information, though.) An assistant may also update information on an agent's website. Online information can and should be updated immediately, and a tech-savvy assistant may be responsible for this activity. An assistant may also work on print advertising, such as purchasing ad space or laying out ads.

Assistants' Duties: Appointments and open houses

An assistant may help an agent at an open house. Unlicensed assistants are restricted to certain activities, however; for example, they may provide information from a flyer, but they can't show the property. An assistant can be particularly useful to a busy agent who shows a lot of properties and hosts open houses. The assistant can coordinate the agent's schedule, reminding her of where and when she has appointments. The assistant may also act as a showing assistant, helping out with open houses. An unlicensed assistant's contact with buyers must be somewhat limited. For instance, while she can hand out flyers about a property (and provide information from those flyers), she can't give answers regarding financing or actually show the property. By contrast, a licensed assistant could take on more responsibility. A licensed assistant, for instance, could help prospective buyers write up an offer for a property. For this reason, an agent might prefer to hire a licensed assistant who can be more flexible about what he can and cannot do. Licensed assistant may perform more tasks, such as helping write up an offer

Assistants' Duties: Office administration

An assistant will maintain transaction files, and duplicate and send out any copies that need to go to other parties. An assistant can also update MLS postings and help an agent maintain contact with clients. Real estate transactions generate a large amount of paperwork, and real estate assistants are primarily responsible for maintaining agents' transaction files. A skilled assistant can free an agent up from spending hours maintaining these files. A typical transaction file might include a listing agreement, offers and counteroffers, a purchase agreement, modifications and addenda, a settlement statement, disclosures, an appraisal, and canceled checks and receipts. An assistant may be in charge of organizing these documents, and photocopying and distributing any duplicates that need to go to different parties. A real estate assistant may also answer and direct phone calls for an agent, or assist visitors to the real estate office. An assistant may answer general questions about properties, but should pass along more complicated questions to an agent.

Prequalify

Apply basic underwriting rules to the buyer's income to estimate how large a loan she might qualify for.

Listing Appointment: Background information

At a listing presentation, an agent should also present information about himself and about his brokerage, such as his success rate and available resources, in order to convince the sellers to work with him rather than another agent. An agent should be prepared to discuss herself and her company at a listing presentation. She should focus on positive aspects of her career, such as: -number of years of experience, -level of education and training, and -any awards or achievements earned The agent should also tell the seller about her brokerage, such as: -its success rate, -what resources it has available, and -the brokerage's membership in the local MLS.

Holding Open Houses: Directional signs

At every strategic location around the neighborhood, an agent should place an "open house" sign with an arrow pointing visitors in the right direction. As many signs as possible will ensure a better turnout; prospects who are lost and unable to find the house may be quick to give up and move on to another open house.

Listing Appointment: Listing agreement

At the listing appointment, the agent should go over the listing agreement with the sellers. The agent should review the basic terms of the form and answer any questions the sellers might have. A copy of the form should be left with the sellers, for a closer reading. (Of course, if they sign the agreement, the Real Estate Law requires the agent to give each party a copy of the signed form.) -Review basic terms -Answer seller questions -Leave copy for review

Before the Presentation: Visit the property

Before preparing a competitive market analysis, an agent should get the owner's permission to stop by and inspect the property. The agent will: -count the rooms, -look for special features, -check the quality of the construction, and -look for any other characteristics that might indicate whether the house is worth more than what one would assume, based on its: -location, -age, and -square footage The agent should also examine the surrounding neighborhood, looking for any external factors that might affect the property's value. Considerations will include: -the quality of nearby homes, -access to shopping and parks, and -the reputation of the local schools

Selling Practices: Determining needs

Before showing properties, an agent should determine a buyer's needs and desires. An important step is helping the buyer obtain lender preapproval, so that the agent doesn't show properties outside the buyer's price range. The agent should also help the buyer prioritize which property attributes are most important. Once an agent has found a prospective buyer, the agent and buyer should discuss the buyer's housing needs. This involves finding out the answers to two questions (for which the answers may be somewhat at odds): -what does the buyer want, and -what can the buyer afford? To determine the price range of affordable homes, real estate agents used to prequalify the buyer: apply basic underwriting rules to the buyer's income to estimate how large a loan she might qualify for. However, today's real estate agents are better off advising the buyer to get preapproved by a lender. When a lender preapproves a buyer, it agrees to loan her up to a certain amount, as long as the home she chooses meets the lender's standards. It's critically important to determine the maximum amount a buyer can spend before showing any properties. Showing unaffordable properties to a buyer is always counterproductive; at best, it simply wastes the agent's and buyer's time. At worst, it needlessly discourages the buyer, allowing buyers to become excited about ideal properties that they can't afford. More affordable properties lose their appeal, and some buyers simply give up looking at that point. Buyers usually know what kind of a house they want, but it's unlikely that they will find a house that has every feature they want, in the right location, for a price they can afford. The agent's role is to help the buyers prioritize their needs so that a house as close to ideal as possible can be found. Ex. The Ellis family approaches their agent, Sara, with a long list of needs and wants. They have two children, one of whom is into showing horses. They also entertain lots of out-of-town guests, so they need at least a four-bedroom, two-bathroom house with at least one acre of land, zoned to allow horses. Mr. Ellis also has a hobby restoring vintage cars, so he needs an extra-large garage with shop space. They add that they would also like a large kitchen, a hot tub, and to be within a half-hour commute of Mr. Ellis' job. Sara assesses their list of attributes and knows that no property in their price range is going to meet each of those criteria. Sara asks a number of questions and listens carefully to what the Ellises emphasize. Sara concludes that the most important criteria are that the house has at least four bedrooms and is on at least one acre of land. Shop space, kitchen size, and commuting time are less important. After a moment's thought, the Ellises agree. Now they and Sara can begin the process of looking for a house. An agent may need to do some creative problem-solving to find an appropriate house. This may involve finding ways to compensate for the shortcomings of a property that has some but not all of a buyer's desired attributes. Let's return to our example. Sara shows the Ellises a property with two acres of land and a four-bedroom farmhouse. It's nearly an hour from Mr. Ellis's job, but Mr. Ellis decides he's willing to trade a longer commute for much more land than would be available in their price range if they lived closer to the city. Another potential drawback is that the property doesn't have adequate garage space for Mr. Ellis's hobby. However, Sara points out that there is an old outbuilding that can be modified into usable shop space with a few thousand dollars' work. Instead of the lack of a garage being a deal-breaker, it becomes an opportunity for Mr. Ellis to create a customized workspace and increase the value of the property through sweat equity. The Ellises like this idea, and are happy to purchase the property. Unscrupulous agents sometimes encourage buyers to buy properties they don't clearly want. This may happen because the agent listed that particular home, or because it's a more expensive home and that means a bigger commission. An agent should never manipulate buyers into purchasing a particular home because it would benefit that agent. Buyers don't respond well to such pressure, and in such a situation will usually find another agent more willing to respect their needs and desires.

Selling Practices: Showing properties

Before showing properties, an agent should visit the property and the surrounding neighborhood, in order to become familiar with the property's pros and cons. An agent shouldn't show more than five or six properties on a trip, to avoid overwhelming the buyer. Showing property effectively is one of the most important tasks for a buyer's agent. Therefore, an agent should always research and plan her efforts. This means knowing not just what properties are available but also local and national trends in the real estate market. It also requires developing sales speeches that encourage buyers to move from interest in a property to actually closing the deal.

Showing Properties: Previewing properties

Before taking buyers on a showing, the agent should preview the listed homes. Agents from an office might do this in groups, spending several hours a week caravanning from one new listing to another. By knowing a house's best and worst features in advance, an agent can know what aspects of the house to emphasize and downplay at the showing. The agent should also research the area before a showing. This helps avoid the embarrassment of getting lost on the way to the showing. The agent will also be able to answer questions about school district boundaries and distances to shopping or recreational opportunities.

Before the presentation

Before the listing presentation, an agent should research the property using information gathered from a title company or the local government, visit the property, and prepare a competitive market analysis. An agent will need to do a lot of preparation before going into a listing presentation. She will need to research the property, visit the property, complete a competitive market analysis (or CMA), and prepare a marketing plan.

Holding Open Houses: Preparing the home

Before the open house, the entire property should be in the best possible condition. The interior of the house should be clean and uncluttered, with brightly lit and clean-smelling rooms. The lawn should be freshly mowed and other landscaping tidied up. First impressions are important, and can affect the amount prospective buyers offer for the property, so a little cleaning and maintenance can pay big dividends.

Assistants' Duties: Client communication

Constant contact with clients both past and present is an important component of an agent's success. However, it can be very time-consuming, and a busy agent can get overwhelmed by the number of calls and emails that need to be returned. Communication with former clients can easily be neglected, even though it is an important part of generating referrals. An agent might delegate some aspects of client communication to an assistant. An unlicensed assistant may, for example, prepare and send mass mailings such as newsletters and holiday cards. Unlicensed assistants may send out mass mailings

Listing Sources: Cold calls

Cold calling is a method of obtaining listings that involves calling homeowners within a community and asking if they or anyone they know is interested in selling their property. It's an inexpensive method, but time-consuming and with a low success rate. Many agents rely on cold calling to obtain listings, as it's an inexpensive method that can be done during any free time the agent has. It involves calling homeowners on the telephone and asking if they or anyone they know is interested in selling their home. This can be done randomly, or as part of a systematic plan (such as calling all homeowners in a particular neighborhood). Cold calling is effective only if an agent makes a large number of calls. Sometimes it can take over one hundred calls to generate one listing appointment. Many agents feel that these odds aren't worth the time spent. Others can be very successful generating listings through cold calling. A real estate agent making cold calls is bound by the some of the same laws that restrict large telemarketers. Most importantly, anyone making cold calls may not call persons on the Federal Trade Commission's Do-Not-Call registry. It is the agent's responsibility to check online to see if a number is listed in the registry. Even when calling people who aren't registered, an agent must always honor a request not to be called again. An agent may not block Caller ID, and may not call outside permissible calling hours.

Selling Practices:Empty-nesters

Empty-nesters are couples whose children have left home and who wish to trade down from their larger homes to smaller properties with less upkeep. They may be interested in moving closer to work or family, or moving from the suburbs back to the urban core. They can usually make a substantial downpayment using their built-up equity.

Diversity

Farming a diverse neighborhood, one with some variation in the style of houses and people who live there, makes it more likely that the neighborhood will be a source for business. This is true even if one segment of the market (such as high-end properties) is weak.

Listing Sources: Farming

Farming is a long-term method of obtaining listings, in which an agent selects a particular neighborhood as a place to build contacts and name recognition. This can involve making personal visits, mailing neighborhood newsletters, and giving out small items with the agent's name on them, such as calendars or magnets. Farming involves choosing a neighborhood to focus your efforts on, and then building a reputation within that neighborhood. Farming is a long-term process that won't yield immediate results, but it can lead to a steady source of listings once an agent has become well-established. Here's an example. Sheila is getting started in the real estate business, and she decides the best approach to getting listings would be to farm a neighborhood. She decides that her own neighborhood of Northwood would be ideal, since she already knows the lay of the land and many residents. She starts by sending out an introductory letter to each of the 400 homes in the neighborhood, introducing herself and describing what services she can provide. She follows up the letter with a personal visit to each home, where she leaves a refrigerator magnet with her name and photo. She then sends a monthly newsletter to every home in the neighborhood. The newsletter contains not only information on recent sales and property values but neighborhood news such as high school graduations and weddings. During the holidays, she revisits every home, leaving a calendar pre-printed with her name and phone number. Gradually, as she becomes a visible presence in the neighborhood, more of the local residents think of Sheila first when they decide it's time to list their property.

Selling Practices: First-time buyers

First-time buyers are usually inexperienced and may need a lot of education and encouragement. Typically, they have limited funds and are looking for smaller, low-priced homes. They'll have many questions and will often rely on family or older friends for advice. They may also depend on parents or other family for financial help, such as gift funds or a co-signature on the loan.

Trigger terms

If an ad contains one of the "trigger terms" specified by the act, the ad must include other required disclosures. If the ad doesn't have a "trigger," no disclosures need to be made. Trigger terms include: -the amount of the downpayment ("10% down"); -the amount of any payment ("Only $1,500 per month"); -the number of payments ("360 monthly payments"); -the amount of any finance charge ("1% origination fee"); -the period of repayment ("30-year financing available").

Making an Offer: Multiple offers

In an active real estate market, it is likely that a seller will receive more than one offer for a listed property. If so, the listing agent should present all available offers to the seller at the same time, without presenting offers in prejudicial fashion. The seller has a number of options: -rejecting each offer, -accepting one offer, -making a counteroffer to one offer, or -accepting one offer while making a backup counteroffer to another offer A seller is likely to choose the offer with the greatest purchase price, but other factors might be considered too, such as the length of the escrow period or an absence of contingencies. Some owners give weight to a personal appeal from the buyers, since the decision to sell is an emotional as well as financial decision. In a seller's market, some selling agents will have prospective buyers write a brief statement about themselves and why they chose the seller's house. Sellers feeling reluctant about selling may be reassured to know they're selling to someone who has made clear their enthusiasm for the property. For instance, a prospective buyer might write something like the letter shown here. "We're a newly married couple looking to purchase our first home. We're planning to start a family and will need more room soon. I really enjoy gardening and am looking forward to continuing the great work you've done on the front yard. My husband enjoys carpentry and loves the work space in the garage, and we know our German Shepherd will love playing the back yard." It can also be beneficial to let the sellers know that the buyers have been interested in other properties. This not only helps the sellers know that the buyers will appreciate the property, but also reminds them that they are competing in the marketplace against other properties. A buyer's agent might let the sellers know more details about how their house stacks up against competing properties. "The buyers' ahd to choose between your house and a similar house in the Larchmont neighborhood. In the end, even though that property was a few thousand dollars less, they chose yours because it's a shorter commute to their workplaces, and because of the big, sunny kitchen. It's always a good idea for buyers to be preapproved before making an offer, and it's even more important in a tight real estate market. Formal preapproval by a lender shows that the buyer is serious about purchasing a house and has the financial means to do so. A seller choosing between two similar offers is likely to choose a preapproved buyer over a buyer who isn't preapproved.

Selling Practices

In the same way that a listing agent must locate prospective sellers and convince them to list their property, selling agents must find potential buyers and convince them to enter into a buyer agency relationship. Once a relationship is formed, the selling agent determines what kind of home the buyers are interested in, shows them appropriate properties, and helps them with the process of making an offer and negotiating a sales price.

Listing Modifications

It may become necessary, over the course of the listing period, to modify the listing. Modifications of a listing, such as lowering the listing price or extending the end of the listing period, should be made using a listing modification form. For instance, the agent and seller might agree on a listing price that seems reasonable, but then discover there is little interest in the property at that price. The listing price might be too high because of slowing demand, other changes in the local market, or an error in the CMA such as using inappropriate comparables. Whatever the cause of the overpriced listing, the agent should meet with the seller to discuss lowering the listing price. The seller may be resistant, so it is best for the agent to offer evidence, such as prices of comparables that sold or that were listed after the seller's property. The agent may also bring evidence of her due diligence, such as the advertisements and flyers she created for the property. A listing may also need to be modified if the listing is due to expire soon and there is no pending sale. Even if the listing price remains the same, the agent and seller should meet again to sign an extension of the listing. The agent should be prepared to describe the marketing efforts he has made and discuss possible reasons why the property hasn't sold. Modifications to or extensions of the listing should be made using a listing modification form, to avoid any confusion about the changes.

Holding Open Houses: Setting day and time

It's important that the sellers not be present during the open house, so the day and time for the open house should be when it's convenient for the sellers to be away. The sellers may be reluctant to leave when strangers will be in their home. Let them know that potential buyers are often uncomfortable looking at a house with the owners present.

Listing Sources: Expired listings

Listings that have recently expired can be picked up by a skillful agent who is able to convince the seller that he can provide better representation. An agent should never convince a seller to drop an existing listing, though. Listings may expire for a number of reasons: -the property wasn't marketed properly, -minor repairs needed to be made, or -the price was not reduced when it needed to be Whatever the reason for the expiration, expired listings often can be picked up and transformed into active listings. Agents frequently keep their eyes open for listings that are about to expire. Once a listing expires, an agent may approach the sellers and see if they are interested in listing with someone else. The sellers may be wary because of a negative experience with their previous listing, but a gently persuasive agent may win them over by describing what he can do for them. An agent should avoid criticizing the previous agent's selling efforts, though; such criticism is unprofessional. Furthermore, it's possible that the listing failed to sell because the owners were not motivated; if that were the case, there would be little any agent could do to sell the property. An agent should never try to convince a seller to terminate an existing listing in order to switch agents. This could lead to a lawsuit based on interference with a contract.

Listing Appointment: Services and marketing plan

Marketing plan The agent should discuss the services that she plans to provide during the listing period, such as advertising the property and holding open houses. A written marketing plan will help with this discussion.

Listing Appointment: Agency disclosure

Of course, an agent needs to let all parties know whom he represents. An agent should give a copy of the required agency disclosure form to the seller during the listing appointment, before the listing agreement is signed. Signing the listing agreement creates an agency relationship between the agent and the seller. The listing agreement form itself will usually contain an agency confirmation statement.

Holding Open Houses: Advertising

Once the date is set, the open house should be advertised in the newspaper and online. Ideally, the advertisement should target a specific audience. For example, an ad for a small two-bedroom home could be targeted toward first-time buyers, while an ad for a five-bedroom house would probably be oriented toward families looking to trade up. Flyers should be sent to neighbors, who might know of friends or family who would be interested in such a property. The flyers might also encourage neighbors thinking of selling their houses to contact the agent. Sellers often prefer to list with agents they know are active in the neighborhood. Flyer packets should also be given to prospects who tour the house; these should include the agent's business card, information about other listings in the area, and information about neighborhood schools and features. -Flyer -Business card -Other listings -Neighborhood features

Showing Properties: Selecting listings

One major reason that buyers use agents is for assistance in sorting through thousands of listings to find the properties that most closely meet the buyers' needs. With their knowledge of what's currently available on the market, real estate agents can easily direct buyers to properties they might never have found on their own. An agent should choose to show only those houses that are within the buyers' price range. Buyers may want to look at houses that are priced well below the maximum amount they can afford. If so, the agent must respect the buyers' wishes. It is up to the buyers to decide how much to spend, even if they can afford to spend more. When selecting properties to show, an agent should never pick more than five or six properties for one day. After too many houses, buyers get tired and the houses start to all look the same. It's counterproductive to show houses to buyers who aren't going to remember any details about them.

Servicing the Listing: Holding open houses

Open houses are usually held soon after the property is listed. They don't usually lead directly to a sale, but are helpful in exposing the listing agent to other potential buyers and sellers. Open houses, like advertising, rarely result in immediate sales. Some real estate experts estimate odds of 250 to 1 that a person walking into an open house will actually buy the property. Instead, open houses are a great opportunity for listing agents to meet prospective buyers who are getting an idea of what's available in the market. Agents might also meet prospective sellers ready to list their own homes. The basic steps in arranging an open house include: -selecting a day and time when the sellers can be away from home; -preparing informational packets about the property; -cleaning and arranging the home for showing; -setting up open house directional signs in the neighborhood; -putting out a guest log; -welcoming guests during open house hours and giving tours; and -following up with thank-you notes to visitors who signed the guest log

Showing the Property

Open houses usually occur only once or a few times, typically when the property is first listed, and they generate few sales. Most sales are the result of showing the property to individual prospective buyers. This is usually done by buyers' agents, and will be discussed in more detail in the next section of the lesson.

Selling Practices: Types of buyers

Potential buyers may fall into one of four general categories. An agent may choose to specialize in one particular group, or may seek to represent all buyers. These categories are: -first-time buyers, -trade-up buyers, -empty nesters, and -retirees

Communicating with SellerRegular progress reports

Regular activity reports are a good way to keep the seller informed. These updates should summarize all of the inquiries about the property and any showings. They should also include copies of any advertisements for the property, and any comments from other agents or prospective buyers.

Making an Offer: Agency disclosure

Remember that California state law requires the selling agent to give a copy of the agency disclosure form to each party as soon as practicable. The buyer must receive the form BEFORE SIGNING the offer to purchase, and the seller must receive it BEFORE the offer is presented.

Selling Practices: Retirees

Retirees are also looking for smaller, easily maintained homes, such as condominiums or townhomes. They may be looking to move nearer to family, or to a locale with a better climate and many other retirees. They may be concerned with keeping monthly payments low, since they are often on a fixed income.

Before the Presentation: Marketing plan

The agent should be prepared to discuss what steps she will take to market the property to prospective buyers. This will include traditional methods, like listing it with the MLS and placing a sign out front, and also newer options, like Internet-based advertising.

Annual Percentage Rate

The annual percentage rate (APR) of a loan is the relationship of the total finance charge to the amount of the loan, expressed as an annual percentage. The APR takes into account both the interest rate and the various fees charged by a lender to make a loan.

Selling Practices: Making an offer

The buyer's agent will assist the buyer with making a written offer, which will be submitted to the listing agent. The buyer's agent may want to accompany the listing agent when the offer is presented to the seller. Most frequently, there will be a series of counteroffers rather than immediate acceptance of the offer. Once the buyers have found a property they want to buy, the next step for the agent is to help them write an offer. Because of the statute of frauds, any offer to purchase real estate must be made in writing. The offer, once signed by the seller, forms a valid purchase agreement.

Advertising the Property: Truth in Lending Act

The federal Truth in Lending Act creates important restrictions that apply to real estate advertising. Real estate advertising is subject to the Truth in Lending Act, which requires disclosures regarding key financing terms if any "trigger terms" regarding a consumer loan are used in an ad. For instance, if an ad mentions the monthly payment amount, the ad would also need to disclose the downpayment amount and the total annual percentage rate (or APR). Anyone placing an advertisement that offers consumer credit must comply with the terms of the act. This includes real estate agents who advertise homes for sale. TILA applies to ads for consumer credit, including real estate ads The Truth in Lending Act prevents an advertisement from describing only the most attractive aspects of a loan without disclosing the true costs of financing. For instance, an advertiser can't claim "Low payments of $500 per month!" without mentioning that those payments require a downpayment of 50% or a 40-year loan term. If certain details about a loan are included in an ad, the law requires that certain other details must also be disclosed. If an ad contains one of the "trigger terms" specified by the act, the ad must include other required disclosures. If the ad doesn't have a "trigger," no disclosures need to be made. Trigger terms include: -the amount of the downpayment ("10% down"); -the amount of any payment ("Only $1,500 per month"); -the number of payments ("360 monthly payments"); -the amount of any finance charge ("1% origination fee"); -the period of repayment ("30-year financing available"). Here's an example. Sam places an ad in a local newspaper for a house he has listed that reads, "Four-bedroom, two-bath split-level in Fair Pines neighborhood. Close to schools and shopping; move-in condition. Assume buyer's FHA loan for only $1,600 per month!" Because he gave the amount of the payment, this triggers the disclosure requirements. If any trigger terms are used in an advertisement, all of the following disclosures must be made: -the amount of the downpayment; -the terms of repayment; and -the annual percentage rate (APR) and whether that rate may increase. The annual percentage rate (APR) of a loan is the relationship of the total finance charge to the amount of the loan, expressed as an annual percentage. The APR takes into account both the interest rate and the various fees charged by a lender to make a loan. $300,000 loan amount at 6% interest for 30 years. APR (including: -origination fee -discount points -private mortgage insurance): 6,375% An advertiser can avoid the disclosures by avoiding all trigger phrases. For instance, an ad citing a loan's APR doesn't require other disclosures. Phrases in an advertisement that won't trigger required disclosures include: -"No downpayment," -"7% APR loan," -"Low monthly payments," -"Save money with an adjustable-rate mortgage," or -"Low-cost FHA and VA financing available." NO TRIGGER: Let's go back to Sam's ad. If he didn't want to make all of those required disclosures, he could simply change the last line of his advertisement to read "Assume buyer's FHA loan with low monthly payments." Because he doesn't give a specific payment amount, the ad now complies with the Truth in Lending Act without triggering the mandatory disclosures.

Before the Presentation: Researching the property

The first step is for the agent to gather: -the basic information about the property, including the legal description, -a plat map, -property tax information, and -ownership information This information can often be gathered from a local title company for no charge, or failing that, from the county recorder's office. Today, much of this information can be obtained easily online.

Servicing the Listing: Marketing the property

The most important advertisement is submitting a listing to the MLS. Other important advertising methods include "for sale" signs, flyers, newspaper and magazine ads, and online advertising. The usual first step, and one of the most important steps, in marketing the property occurs when the listing is submitted to the multiple listing service (MLS). This usually happens as soon as the listing agreement is signed. It lets all of the other brokers who are members of the MLS know that the house is available, and they can begin showing it to potential buyers. Also, an agent should immediately place a "for sale" sign on the property. This is a very effective and cost-efficient means of advertising. Many potential buyers who are interested in a specific neighborhood will drive or walk around, looking for "for sale" signs, and will call an agent who has listed a property that they like. An agent should prepare flyers, which are single letter-sized pages featuring photos and information about the property. These should be left in a conspicuous place inside the house (such as a kitchen counter) so information is accessible whenever prospective buyers tour the house. If possible, they should also be in a box attached to the "for sale" sign outside the house, so passersby can learn more about the house. Flyers should include: -the price, -terms of sale, -number of bedrooms and bathrooms, -square footage, -year of construction, and -other important information The flyer should also include a photo or sketch of the property. Many listed homes are advertised in newspapers or other periodicals, such as magazines devoted to real estate. Frequently, a newspaper ad will be a classified ad, which is a small ad consisting of only several lines of text. Display ads, which are larger and include graphics, are more expensive. Often, agents will advertise properties to increase their exposure to potential buyers. Buyers who don't have their own agent often call listing agents about listed houses, but it's rare that a buyer who visits a house wants to buy it immediately. Instead, these calls are an opportunity for listing agents to encourage buyers to discuss other properties they might like and perhaps enter into a buyer agency relationship. In recent years, the Internet has become one of the most important venues for advertising properties. Large brokerages and real estate professional organizations maintain websites that have photographs and detailed information on thousands of listed properties. Many smaller brokerages and individual agents also operate their own websites. As with newspaper advertising, web advertising often serves not so much to sell the property in question but to bring in new buyers. Prospective buyers curious about what is available in the current market will often browse online listings, and may contact the listing agents about particularly interesting properties. No matter what marketing tools an agent uses, he should make sure that they are cost-effective. Many agents keep a log of marketing efforts, which can help an agent make sure that the dollars put into a particular marketing effort have a good outcome. For example, by keeping track of how much is spent on different media and how many calls, showings, or sales come from each medium, an agent can decide which advertising methods are most effective in that area and which are the best use of money. Real estate agents must be aware of federal and state restrictions on advertising. These restrictions may involve the truthfulness of the ad, or making full disclosure about financing terms. California License Law: -Ads must be truthful -Blind ads are prohibited Truth in Lending Act: -If certain financial terms are given, then disclosures must be made

Servicing the Listing: Preparing the property

The property should be brought to top condition before showing it. All houses will, at a minimum, need to be cleaned. Minor repairs and renovations made before showing a property will usually pay for themselves in terms of creating better curb appeal. The typical house is not in showroom condition when a listing is taken. Most will need at least some cosmetic touches, and some will need a lot of work. At a minimum, preparing a house for sale will involve a thorough cleaning and some minor repairs. First impressions are lasting impressions, so a particular concern is enhancing a house's curb appeal, which is how the property looks from the street. Pressure washing the exterior, putting a fresh coat of paint on the trim, and planting some colorful flowers in the front can do a lot to enhance those first impressions. The interior should be tidied up, and repainted if needed. Neutral colors are ideal for interior decoration. Short-sighted buyers may reject a house simply because they don't like the interior paint color or wallpaper, so it's best to replace any potentially disagreeable colors or patterns. Closets should be emptied if possible, or at least cleaned and organized. Disorganized, overflowing closets give the impression of too little storage space. All equipment and fixtures should work properly. Leaking faucets, squeaking doors, creaking floorboards, and ripped window screens will all turn off potential buyers. A seller should bear in mind that renovations may make a house more marketable and may help the house to sell for more money. For instance, sellers may often recoup more than 100% of what they spent on minor kitchen renovations. Cost of new cabinet facing: $4,000 Property sells for $430,000 instead of $425,000 Here's a list of things that need to be done, either by the sellers or the agent, to get a property into prime condition. Some of these may need to be performed on a regular basis. -Mow and water lawns -Weed flower beds -Remove dead or damaged plantings and plant extra flowers -Prune trees and shrubs -Rake up old leaves and debris -Cover bare ground with bark or gravel -Pressure wash siding and roof and replace missing shingles -Fix broken fences or railings -Clean porches and decks -Repaint if necessary (especially exterior trim) -Remove toys and bikes from walkways and driveways -Clean up garage and/or shed -Fix any broken doors or window screens -Clear out clutter from rooms, basement, attic, and closets -Repaint brightly colored walls a neutral shade -Shampoo carpets and replace any outdated or worn carpets -Repair any cracks in walls -Fix leaky faucets and squeaky doors

Preparing the Property: Security

The seller should remove any small items that are valuable for the duration of the listing period. Items such as jewelry or coins should be kept in a safety deposit box. It is also a good idea to move or otherwise secure larger valuables, such as fragile vases or expensive artwork.

Preparing the Property: Keys and keyboxes

The seller will need to provide a copy of the house's front door key to the agent. This will be stored in a keybox, which is a locked box attached to the front door that only other agents can access.

Real Estate Assistants: Assistants' duties

The tasks that will be delegated to an assistant will vary, depending on the amount of experience the assistant has, and whether or not the assistant is a licensee. In addition, the assistant's duties may vary from broker to broker, depending on each broker's office practices. The agent and assistant must take care that none of the assistant's activities would require a license; the Bureau of Real Estate has guidelines on its website that explain what unlicensed assistants may do. The following duties, however, are those that a real estate assistant is likely to fulfill.

Listing Appointment: Presenting the CMA

The typical seller is probably most interested in hearing the agent's opinion of what his property is worth. The agent should stress that it's THE SELLER, not the agent, who sets the listing price. The agent is there only to offer advice as to what a reasonable listing price might be. That advice is supported by the CMA, which summarizes the evidence of an appropriate listing price. The agent should present the information on a CMA form, like the one seen here. This way, the information will be presented clearly, in an easily understood fashion. All information gathered for the CMA should be included in the form, as well as the agent's estimate of the property's market value. Then the seller can see that the conclusions are based on fact and that the agent isn't just guessing. When presenting the CMA, the agent should focus on objective data: (-the square footage, -room count, -age, -location, and -terms of sale) for both the seller's property and the comparables. The objective information in the CMA will help the seller to better understand current market conditions in the neighborhood, and encourage a more realistic approach to setting a listing price. Sellers often expect to receive more for their property than is reasonable, because of personal attachment to the property or other reasons. Focusing on the comparables can prevent the discussion from getting sidetracked, especially if the seller thinks about projects that required large expenditures of time or money but didn't affect the property's market value much, such as landscaping or redecorating. In a CMA, an agent will typically present three different figures. The first figure is a general price range. The second figure is a suggested listing price, which is usually optimistic, leaving room for negotiation. The third figure is what the agent expects the property to actually sell for. This estimated sales price should be close to the property's true market value.

Selling Practices: Trade-up buyers

Trade-up buyers own a house they want to sell, and plan to use funds from that sale toward the purchase of a new home. They are looking for a larger and more expensive home with room for a growing family. Because they are experienced home buyers, they rely less on the advice of others and have a clear idea of what they want. Typically, they can make a large downpayment using the equity from the sale of their current property.

Advertising the Property: License law restrictions

Under California real estate license law, advertising must be truthful and not misleading. Advertisements published or distributed by a real estate licensee must include a licensee designation, such as "agent" or "REALTOR®". An advertisement that doesn't fulfill this requirement is called a blind ad and is in violation of the license law.

Preapproved

When a lender preapproves a buyer, it agrees to loan her up to a certain amount, as long as the home she chooses meets the lender's standards.

Listing Sources

You should be familiar with a number of sources of listings and activities that can generate listings. These include: -farming, -cold calls, -expired listings, -for sale by owners, and -referrals

Showing Properties: Inside the homes

When showing a property, it's important to read the buyer's signals. Even when a buyer isn't saying whether or not she likes a property, she is still speaking volumes through body language. The buyer's nonverbal cues are very important to an agent, since they help the agent better understand the buyer's likes and dislikes. This will help the agent make sure that future showings are even better tailored to the buyer. Give buyers space to imagine living in the house Agents don't need to do a lot of talking during a showing. It's important to give the buyers time and space to picture themselves living in the home, and to discuss the property's pros and cons. A running sales pitch will just distract the buyers; instead, an agent should shadow the buyers and be available to answer any questions.

Referral file

Where agents can keep track of all their contacts, when they last contacted them, and what those contacts suggested.