Chapter 2: An agent's perception of riches

Chapter 2 Learning Objectives (2):

1.) estimate potential income & expenses an agent will likely experience when employed by broker 2.) evaluate competing brokerage firms for suitability w/ an agent's professional goals & expectations.

After a few years of employment in the business of real estate sales, efficient agents generally want to earn more for the time they spend (3):

1.) listing properties & buyers 2.) locating buyers & properties; & 3.) engaging in all the activities surrounding a real estate sales transaction.

Chapter 2 Key Terms (2):

1.) net operating income (NOI) (employment) 2.) sales goal

As a prerequisite to an agent's use of an income & expense data worksheet, the agent needs to collect income dataduring an interview w/ a prospective broker, including:

1.) price range of property the agent is most likely to list & sell 2.) number of sales the agent is likely to close in that price range during the 1st year 3.) gross broker fees generated by the number of sales during the 1st year; & 4.) share of the gross broker fees the agent will receive under the feesharing schedule offered by the broker.

Thus, a realistic & relatively accurate disclosure of income, expenses & initial investment an agent is to make on entering the employ of the broker (3):

1.) reduces the office turnover of agents; 2.) reduces the broker's investment of time & energy hiring & training agents; & 3.) produces a sales staff whose income expectations are met based on their ability to attain the sales goals each have set for themselves.

No income tax withholding or employer contributions exist, such as for (3):

1.) social security 2.) Medicare; or 3.) unemployment insurance.

The 1st step for the agent interested in renegotiating their current employment arrangement w/ a broker or moving to another broker's office is to prepare a worksheet on their current operating conditions. The worksheet details (4):

1.) what fees the agent has generated 2.) the share of the fees the agent received 3.) the operating expenses paid by the agent & the net income; & 4.) the after-tax income experienced during the past 12-month period.

What is sales goal?

The amount of aftertax income agents & brokers intend to earn as a result of their real estate licensing activities.

What is net operating income (NOI) (employment)?

The net revenue generated by an agent's employment, calculated by subtracting business operating costs from the expected income from fees generated from sales, leasing or financing transactions

Before walking into the broker's or manager's office w/ a demand for the office to cover more expenses & give the agent a larger share of the broker fees, the agent is to 1st conduct __________ to determine how other brokers share expenses & fees w/ their agents.

comparative shopping