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
