Office Administration
law of agency
. The relationship a consumer has already established with another broker cannot be disrupted. The company needs a strict policy that its salespeople will not engage in discussions about future agency relationships with another broker's client unless invited to do so.
Small businesses are most likely to fail in their first _____ years because of
3 years because of lack of planning, undercapitalization, unrealistic expectations of a company's productivity in its early years, and the owner's lack of experience in running a business.
monitoring listing activities
A comparative analysis of length of time on the market, terminated or expired listings, and differences between listing and actually selling prices over time can indicate economic trends or consumer behaviors in the marketplace. But the statistics can also indicate efficiencies or deficiencies in the company's or an individual salesperson's marketing efforts or pricing practices. The numbers that raise immediate red flags are listings that sit on the market longer than the norm, large numbers of listings that don't sell, and wide disparities between listing and sales prices.
training adults
Adults are very time-and-benefit-oriented. They want their time to be respected (begin and end punctually) and the content to be substantive and worthwhile. Adults are more likely to be anxious over their performance and need to feel respected. It's important to minimize intimidation and the potential for embarrassment. the older the adult, the slower the process. It takes patience and a little extra time to help adults adopt new behaviors. Adults, especially those over age 50, experience changes in visual, auditory, and motor skills. Adults have learned to think and analyze. They are less likely to accept facts without explanation and rationale. Adults have many life experiences from which to draw. They integrate new information by relating it to their experiences and finding correlations. Stimulating them to recall experiences helps them as well as others in the group to learn.
AfBA
Affiliated business arrangement network of interrelated companies, owned by one holding corporation, that offer services tied to a real estate transaction. mortgage lending, title insurance, and settlement services. significant capital is needed to set up separate companies, and no one should venture into these arrangements without considerable legal oversight, in light of antitrust concerns and the Real Estate Settlement Procedures Act.
deciding on compensation
Analyzing the importance of job positions in the company, the level of responsibility, and the sophistication of expertise (knowledge, skills, and abilities) required, all of which are revealed in job descriptions and job qualifications Analyzing the pay structures of other similar organizations for similar jobs, as revealed from compensation surveys Developing a pay structure for the organization, using job evaluation and survey data to classify jobs and pay grades (or ranges of pay) within the organization Developing pay structures for individual positions, including a process to use performance appraisals to evaluate individuals Institutionalizing the company's compensation program with communication, implementation, and monitoring
Receipts and disbursements differ from revenue and expenses shown on other financials because the cash flow statement does not include accounts receivable and accounts payable—that is, they are still pending collection and payment.
By analyzing cash receipts and cash disbursements over a period of time, management can assess how much liquid capital is required to meet monthly obligations.
Institutionalizing Ethics
Clearly state the ethical conduct that is expected. Establish systems within the organization to ensure that the behavior is consistent with the words. Provide penalties for people who deviate from the code of ethics. Although businesses need to survive financially, they need to decide what price they are willing to pay for pursuing a dollar. Put the code of ethics in writing Communicate the code of ethics. Demonstrate that the code of ethics is important. Enforce the code of ethics Reinforce the code of ethics. Constant exposure.
Managers can do constructive things to cause behavior to change.
Decide whether the unacceptable behavior deserves attention. Pick your battles. No one works well in an environment of constant criticism. The stress alone is counterproductive, and eventually people feel that there's no way to please the manager anyway. Intervene only if the achievements of the organization, the individual, or other workers are in jeopardy or there's significant legal or public relations risk. Clearly describe to the offender the behavior that is unacceptable and the reasons why. The offender may not even be aware of the manager's displeasure. The person chose an alternative to act on, but the manager saw a preferable one. Develop an action plan. This is a participatory exercise with the manager in which the offender devises a plan for doing things differently or preventing such a transition from occurring again. The manager has to agree with the action plan and the offender's behavioral choices. Follow up to ensure the behavior changes. This is the step that holds the offender accountable for implementing the action plan. The manager's role is to praise the change in behavior and coach continued efforts to do things differently.
decision making
Define the situation—clearly describe the problem or circumstance and the cause or causes. Develop alternatives—list all the possible courses of action to solve the problem or address the situation. Evaluate alternatives—consider the pluses and minuses, feasibility, short- and/or long-term ramifications, and the perceived acceptance of each option. Select the appropriate alternative—decide on the most desirable course of action, which then becomes the decision. Implement the decision—inform the appropriate people about the decision and institute any necessary changes in policies, procedures, or systems that are affected by the decision. Follow through—monitor the implementation of the decision to ensure that the new directive has been institutionalized. Evaluate the outcome—decide whether the decision produced the desired results. Did it do what it was supposed to do? Address the situation or correct the problem? If the wrong alternative was chosen or the implementation was faulty, take corrective action.
the importance of a lawyer and accountant can't be overemphasized. One of the most valuable lines in the company budget is their monthly retainer and the roles they play at management meetings
Define which services will be performed for the retainer and the services that the company will pay for as billable hours. Also, clarify exactly which company personnel are permitted to contact these advisers and for what purposes. `
Performance Management
Discussion of past performance is an opportunity to praise, listen to frustrations, and identify skill enhancements or competencies that can be incorporated in the coming year's performance standards. Targets for future performance must be realistic. High performance standards are desirable for professional growth and organizational accomplishments, but arbitrary or overstated outcomes set up a person to fail. Targets must be tailored to the capacity, experience, and skills of each person. The process of developing standards is a two-way process, which also creates an opportunity to achieve buy-in. Workers often have good ideas about what they can or should be doing and will support a plan they have an opportunity to influence.
Franchise
Franchise affiliation provides a logical connection for referrals with other franchisees around the country. However, this association can also be a drawback. If consumers have had unsatisfactory experiences with one franchisee, they may resist referrals to others Franchise costs typically include entry and exit fees, monthly royalties, and transaction-specific charges for referrals or other franchise services. Often there are also mandatory expenditures or vendor-purchasing agreements that must be honored. legal counsel should also scrutinize the contract because franchise agreements often give franchisors considerable latitude to change operating procedures while also restricting the franchisees' ability to pursue legal action against the franchisor.
The process of structuring work
Identify all the work required by the company's business plan Group interrelated tasks associated with that work Assign those collected tasks to work groups (Groups generally have certain primary functions that relate to administrative, operating, and product or service activities.) Convert that work into job positions (Analyze the relationship and scope of work that can reasonably be accomplished by an individual, considering the time and effort involved.) Determine the roles and responsibilities associated with each position. This becomes a job description for the position. Identify the skill sets or talent needed to perform each job and discharge the responsibilities of the position
Disciplinary meetings
Identify the problem before scheduling a meeting study the problem before confrontation describe problem from your point of view gather information from person keep meeting objective - minimize tension and defensiveness don[t sugarcoat the problem agree that the problem exists develop mutual acceptable alternatives and possible solutions agree on course of action agree on follow up meeting conclude meeting once you've reached an agreement focus on one problem at a time acknowledge the change document the proceedings
For an indicator of where we are in inflationary cycles, look at the spread between short-term interest rates set by the Federal Reserve and the interest rates on long-term bonds.
If the spread is large or getting larger—the government is trying to fuel the economy by loosening its monetary policy. This encourages people to spend and grow the economy. If the spread is small or shrinking—the government is attempting to cool the economy by tightening the money supply. This discourages people from spending to guard against another inflationary spiral.
IC contract
Independent contractors work in a much less structured environment. An IC agreement is a service-for-hire contract in which the company engages the IC to achieve certain outcomes or objectives. The independent contractor controls the methods used to accomplish these objectives. A written contract defines the responsibilities of the IC and the company, but the contract cannot unduly restrict the independent contractor's methods. The end result of an IC agreement is that management can't impose but can recommend, suggest, or encourage certain behavior. The IC controls conference and vacation schedules, daily activities (the number of sales calls, listing presentations, or open houses), and the properties and buyers the IC services.
finding an office space
Where are the company's target markets located? What are their consuming patterns Does the office need to be within the traffic patterns (vehicular or pedestrian) they are likely to travel? How likely are they to be "walk-in" business for the company? How important to the salespeople is the proximity of the office to those consumers? Where do the company's most significant competitors have offices? How much potential business is there in those locations? Does the company have to be located in the same locations to preserve or increase market share in its target markets? How much name recognition does the company have in the target market area? Because this office is typically the only place where the consumer actually meets the company (the image space), an attractive reception area and comfortable conference rooms are a priority.
Decentralized Organization
a number of work groups or departments, but, unlike a monolithic organization, there are fewer layers of management at the top of the organization. more efficient than monolithic fewer levels of management to bog down the process. managers can make calls rather than waiting for direction from intermediaries. each unit functions on its own financial platform and is expected to produce enough income to cover its costs of operation plus make a profit for the company. challenge: achieving proper balance between autonomy and control. groups function independently but must be unified as well.
tactical planning
breaks plan down into manageable pieces. identifies responsibilities.
gross domestic product (GDP)
broadest indicator of the strength of the economy, showing the economic output and growth. Healthy industrialized economies have an average annual increase in the range of 3 percent. A higher percentage indicates that the economy is overheating.
One- to Ten-Agent Organization
broker/owner role now includes supervisory responsibilities. Growth means that the cost of doing business increases and the organization becomes more complex. Increased cost of facilities, information systems, and other support services that today's salespeople expect can be disproportionately expensive per person until the organization grows closer to the eight- to ten-agent size As soon as one salesperson is hired, the broker becomes a sales manager. Typically, one-tenth of the broker's time is devoted to this activity. With each additional salesperson, another tenth of the broker's time is added to sales management activities.
Monolithic Organization
centralized operation, functioning as a single (mono) unit, with work being structured to flow from one singular source of authority at the top of the organization. The one-person and one- to ten-agent organizations are monolithic in the sense that one person at the top of the organization (the broker/owner) is the chief in charge of the entire scope of the organization's work. work is highly controlled by the top of the organization. the work becomes more focused the lower the position on the organization chart, skill sets become more task oriented.
issues are included in an employee handbook
ch 11 section 12
do list for trainers
chapter fifteen section 10
real estate practices are constantly scrutinized for antitrust violations
company's policies must address the prohibited acts of price fixing, group boycotting, territorial assignments, and tying agreements. Policies should explain the business rationale for the company's fees and its various fee structures. Equally important are procedures that tell all personnel what they need to do and say in their representations of the company's fees to protect the company from antitrust violations.
business plan
company's work plan for the year. It comes together very easily because it's simply an extrapolation of the goals and strategies that were bench marked for completion that year, perhaps with some refinements, and makes them priorities. include new strategies that may be needed to address emerging situations that can threaten the attainment of goals in the master plan.
CMA
comps similar in size, features, and amenities, and were all recent. houses for sale: reveal what the competing sellers are hoping to get. houses that failed to sell: provides a price ceiling. houses that sold: show what buyers are willing to pay.
transition after a merger or acquisition
containment - contain news and cut off the rumors until ready to make formal announcement organization - A smooth transition requires a well-thought-out plan for leadership and assignment of responsibilities, operating policies and procedures, business systems, and the allocation of personnel. This is an interim plan that enables the organization to get up and running while it phases in various changes that will become permanent. Launch - company needs good marketing plan to convey message of new identity to these two audiences. get staff on board with company's services and business policies and procedures. duplicate administrative departments mean that excess personnel must be assimilated elsewhere in the organization (sometimes by demotion) or let go.
analyze risk
determine how threat occurs and why it happens determine level of financial, legal, or public relations risk to the organization.
EAW
employment at will employers have right to hire, fire, demote, and promote who they choose and employees have right to quit whenever they want. can seek legal recourse if breached
corporate relocation management companies
enter into agreements with large corporations to handle employee transfers. The downside of these arrangements is that the relocation company may expect the real estate company to provide services above and beyond those it normally provides. - For listings, services could include yard care, plumbing (winterizing), supervising painting and other cosmetic repairs, and providing weekly or monthly status reports of merchandising efforts. - For buyers, corporations may expect buyer representation (buyer agency) and perhaps other assistance to help a family relocate to a new community. third-party equity contractors charge brokerage companies numerous fees for handling referral transactions.
Return on investment (ROI) is the most widely accepted valuation approach
expressed as present value returned on investment, internal rate of return, or financial rate of return. While working through the analysis, also consider that the business being analyzed may not continue to be the same business, so any of its assets could be worth either more or less after the merger or acquisition.
essential software for a real estate company includes:
financial management-accounting, spreadsheets, can provide analyses that help managers monitor company's operations sales management-monitor transaction activity, pending closings, and listings about to expire. track business by region, office, or salesperson. forecast cash flow. monitor performance of salespeople. trends. word processing internet virus protection utilities-keeps hardware working efficiently.
Organize for a strong beginning and a strong ending.
first words people see on their computers or mobile devices or in the first paragraph of a document accomplishes AIDA. Once people are hooked, they'll read through the middle (as long as it's clear and logically presented) and reach the conclusion. A strong conclusion makes a lasting impression and reinforces the beginning. An executive summary, which is a synopsis of the most important findings or facts, gives the report a strong beginning. People get the important need-to-know, which is supported by the rest of the report as well as a cover sheet that helps them locate the report in the future. A strong ending frames specific conclusions from the report.
The Fed's low interest rates fostered considerable economic growth, but this action also had unintended consequences.
Interest rates were at their lowest point in a generation and created an extraordinary credit boom. But that prompted unexpected extraordinary risk-taking, which sent billions of dollars in subprime mortgage loans into foreclosure. The fallout rocked financial sectors (and put some lenders into bankruptcy), tightened credit, canceled corporate takeover plans, and in the summer of 2007, set up a tidal wave of volatility in the stock market. The Fed cut short-term interest rates by 50 basis points sooner than it wanted to in an attempt to shore up a rapidly weakening economy, an action that renewed concerns over rising inflation.
The MOST blatant errors are caused by
gross negligence and nefarious schemes. Senior management or the sole owner is ultimately accountable for the truthfulness and accuracy of the company's financial records, which means being accountable for every person and step involved in the recordkeeping process.
the capital requirements of a real estate business will vary. Basic necessities, however, typically include:
Legal fees (establish the business) Accounting fees (advice and to set up books) Telecommunications and computerization (equipment and installation) Initial fees for affiliations (MLS, franchise, etc.) and professional associations Business licenses and taxes Office space (buy or rent, remodeling) Office equipment (facsimile machines, duplicating equipment, desks, chairs, file cabinets, etc.) Office supplies Personnel (payroll and Social Security, workers' comp, unemployment, income tax withholding) Graphics (logo, signs, stationery) Promotion and advertising (initial entry into the marketplace) Signage (office and yard signs)
Be conservative when estimating income and generous when estimating expenses.
Overestimate expenses by 10 percent to cover the miscellaneous and the unexpected. Although the math can overstate the capital required, it's better to apply for a larger loan (if a loan is required) than to try persuading a lender to advance more money after just a few months.
the cause is the failure to present a well-defined marketing plan at the outset and to deliver periodic follow-up reports that demonstrate performance.
Owners vigilantly watch the amount of exposure their listings get and are often critical of the way their listings are advertised. A salesperson may have made promises just to get the listing, or perhaps a frustrated property owner would not be satisfied with any amount of advertising for a property that hasn't yet sold.
Equity is the perceived fairness of what a person gets paid in relation to what another person does.
People measure fairness in comparison with what others in the organization do and get paid (internal equity) and what people in other companies do and get paid (external equity).
black and white vs grey
People who tend to see the world as black-or-white are often less likely to consider other people's opinions, are less anxious about making the wrong choices, and are more likely to make quick decisions. People who see the variations of grey in the world are more likely to be receptive to multiple points of view and very thoughtful about making the right choice. They are often hesitant or reluctant decision makers, perhaps to even rethink or regret a decision once it is made.
Customer feedback
his can be done using toll-free phone numbers or Web site comment forms. Companies can also engage the services of commercial enterprises that develop quality service programs and surveys, such as QSC (www.qualityservice.org) Survey questions must be short and easy to complete. Several yes/no queries, several scaled queries, and one or two open-ended questions should be adequate. Meaningful feedback is gathered when questions are framed around known weaknesses, as well as strengths, and are worded in ways that elicit the most candid responses, not just what the company wants to hear. Gather only information that the company plans to act on. Develop a plan for reviewing the surveys and acting on the information. Customers appreciate the opportunity to speak their minds, but they become dissatisfied when the company doesn't pay attention to what they say.
planning a business meeting
hook people into the meeting - benefits make meeting relevant - gather the right people publish an agenda - tell people what's going to happen ahead of time take charge - start on time, get into subject matter quickly, and proceed through agenda. anticipate objections avoid pitfalls - establish a cell-phone-off rule. punctual ending
What is one of the greatest sources of controversy?
in a real estate office is the distribution of referrals and leads. The company should have clear procedures (that are publicized and followed) for distributing and tracking referrals. Keep a master ledger as these assignments are made, and also record them in each salesperson's file so that authoritative documentation is available.
Noncompete covenant
in employment contracts intend to diminish negative impacts by imposing certain restrictions on a worker's future employment. However, the clauses may or may not be enforceable depending on whether the courts deem the time and place (geography) restrictions to be reasonable.
contingency files
including insurance policies, that resides off-site. The contingency file needs to include the answers to several questions. Who should be contacted first, and how would they be reached? (Secondary contacts should also be included in case the first-line contact doesn't work.) What information about the company, its financial accounts, and its pending business would be needed immediately? What evidence (inventories, photos, purchase receipts, etc.) would be needed to prove loss, especially for insurance? Who are the vendors, contractors, and other professionals with whom the company customarily does business? How would they be contacted? What archived records would be the most critical in the event of tax or regulatory audits or litigation?
evaluations provide useful information for:
merit or performance adjustments in wages, salaries, and variable pay. identifying candidates for promotion (or demotion) to other positions in the company or for termination. identifying situations in which a person's skills are better suited for a different job in the company. determining whether management's expectations of people are unrealistic, which will be obvious if everyone is performing poorly in certain areas. determining job descriptions that may need to be revised based on changes in the marketplace, in the company's business plan, and in jobs of other personnel. determining the effectiveness of training programs, hiring procedures, and company policies and procedures, including revisions that may be necessary.
MPA
minimum average production use to see if salesperson is producing a profit. begin with desk cost and add a percentage that represents minimum profit. Divide that figure by number of salespeople. Compare to actual production.
Monthly Operating Budgets
monthly benchmarks, typically one-twelfth of the year's projections for each budgeted line item. Most computer software programs can trigger these computations. These numbers are useful for comparing the actual income and expense figures with the budget numbers to monitor performance throughout the year.
calculating transaction revenue
multiply average sales price of property by number of transactions expected. result is gross sales volume. then calculate income that can be expected from gross sales.
safety in the office
Program telephones with emergency numbers and be sure everyone knows how to use them. Install smoke detectors in all the appropriate places and be sure they are functioning properly. If the building has a sprinkler system, be sure it works properly as well. Purchase a first-aid kit and fire extinguishers, particularly for the workroom. Instruct everyone how to use these items so that people don't create more problems than they solve. Familiarize people with safety procedures. More injuries and loss of life occur when people ignore the alarms that were intended to protect them. Conduct fire and disaster drills, including for weather-related emergencies. Secure handrails and clear walks and stairways of obstacles. Make certain the electrical service is adequate to accommodate the computers and other office equipment and appliances. Familiarize yourself with the labor laws in your state to be sure you comply with any safety requirements.
RETS
Real Estate Transaction Specification - standardized digital format which makes it easy for companies to update that listing information.
limited liability companies
The investors in LLCs are members, rather than partners or shareholders, who have membership interests (rather than stock) in the company. LLCs may be an appealing alternative to S corporations and limited partnerships. Some of the restrictions that are imposed on an S corporation can be avoided. An LLC partially limits the liability that otherwise exists in a limited partnership, provided the appropriate steps are taken to accomplish this.
fax
The major downside is that fax machines operate in fixed locations, which may not necessarily be near the person who needs to receive the message. This can be overcome by software and Internet services that send and receive faxed documents in electronic formats, transmitted by e-mail attachment or online server, or delivered to a stand-alone fax machine. easy to manage.
Cost of sales, or transaction expense.
This category of expenses includes direct transaction or service costs (commissions, referral and franchise fees, and the like) and expenditures made to assist a transaction to settlement, such as minor repairs or the purchase of an appliance. For the typical real estate company, this category of expense is one of its largest. companies more commonly use the format of an income statement and enter these costs as operating expenses
The U.S. Department of Labor and the Internal Revenue Service suggests that thousands of companies are calling workers ICs who are really full-time employees.
This has led to an increase in IRS audits and some states proposing higher fines and criminal sanctions for companies that misclassify workers to cut costs.
S Corporation
offers the same first four advantages of a corporation and overcomes one of the major disadvantages, the double taxation. Income, losses, and capital gains are passed directly to the stockholders. They, rather than the corporation, pay taxes (or deduct losses) on their personal tax returns. restrictions: number of shareholders is limited 25% of S Corp's income may be generated from passive investments, such as stock dividends, rental of investment properties, and interest from money deposits.
limited partnership
one person (or a group of people), known as the general partner(s), organizes and operates a partnership. Other members of the partnership, the limited partners, are merely investors. These individuals don't personally participate in the operation of the partnership or its business. They share in the profits from the efforts of the general partner and are liable for losses only to the extent of their investment. General partners, however, have unlimited liability and their actions are closely regulated by state and federal agencies, including the manner in which limited-partner investors are solicited.
company's general operating structure needs to be explained
organization chart and relationships with superiors and senior management. the organization's hierarchy and the way people interact with one another.
policies and procedures need to be committed to in writing.
This prevents misunderstandings, provides consistency (which is extremely important when certain matters of law are involved), and minimizes the amount of time managers devote to directing processes, solving problems, and resolving controversy. A policy and procedures manual—the general operations manual that spells out the rules and processes that govern all of the company's operations A personnel procedures manual—the human resource "bible" for managers that directs internal procedures governing employment and employee relations (this manual is meant for managers, not for employees) An employee handbook—the general circulation document for everyone who works for the company that tells people the day-to-day rules of conduct
debt financing for start ups
Unless debt financing can be arranged privately (family, friends, or business associates, with debt perhaps being convertible to stock at some point), the logical place to go is an institutional lender. Banks and the Small Business Administration are good sources, as are government incentive programs for emerging companies and, if applicable, programs for minority-owned businesses.
Blockbusting or panic selling violates the fair housing laws.
Use care when making comparisons between you and the competition. False or misleading statements about competitors are unethical. Knocking the competition looks desperate or unprofessional, neither of which will enhance reputations. Unauthorized use of affiliation with professional organization may also violate state license law. Display the equal opportunity slogan and logo in all printed material and publications. Selective use of media (broadcast, print, or electronic) could lead someone to conclude that your services are available only to certain populations.
the company must protect the ownership of its property and must respect the copyrights and trademarks of other owners (and not use their property without permission). Listings are proprietary information and should be posted only according to the MLS rules.
Web site managers can track visitor behavior—the pages that visitors view, the amount of time they stay connected to a page, whether they interact with or download a page, and the performance of links to other pages or sites.
general partnership
organization formed under a state's Uniform Partnership Act in which two or more co-owners engage in business for a profit. All of the owners are general partners and share full personal liability for the debts or other obligations of the partnership. The partnership itself does not pay taxes, although it does file an information return that reports the income distributed to each partner. The partners are responsible for paying their own individual taxes. Losses or capital gains also are passed along to the partners. can hold a real estate broker license, provided that each partner is also a licensed broker. not a sole legal entity and doesn't have a life of its own (unlike a corp). death, withdrawal, bankruptcy, or legal disability of any partner will dissolve the partnership.
Income Statement
picture of an organization's financial performance during a particular period of time. The income side reflects all of the revenue generated by the company in the ordinary course of doing business. The expense side reflects expenses incurred in generating that income. Each expense entry is charged against the income account that incurred the expense. The total income over total expense is net income, or (pretax) profit. If expense exceeds income, the bottom line shows a negative number. cash method reports entries in the period they were paid. a sale in February that is collected in April is entered as April revenue. The accrual method reports entries in the period they occurred. That February sale would be entered as February revenue.
double entry bookkeeping
platform on which financials are prepared system of capturing debits and credits, each offsetting the other, to result in an equal balance.
add-on fees
problem under RESPA provided as part of transaction anyway ABC - administrative brokerage commission do not provide demonstrable benefit to consumer or an additional real estate settlement service as required by RESPA. safer way to defray cost of overhead is to charge higher rate of commission. a-la-carte menus of services (find prices suitable for each service) holy or contingency fees - hourly could be capped at some amount; contingency could be collected when agency agreement is signed and a performance clause could provide for return of initial fee is company is unstable to perform stated service in a given time period. company could also include reimbursement for expenses in either of these cases. take legal restrictions into account.
disadvantage of a corporation
profits are taxed twice - once at corporate level (before dividends are distributed) and again as dividends are distributed to the stockholders. salaries paid to officers are not considered profits.
Problem-Identification Meetings
purpose is clearly announced and people come prepared to discuss the issue Meetings that are singularly focused can be managed by keeping conversation on topic. Everyone will have an opportunity to speak. Participants will have a certain amount of time to talk. Conversation will be limited to descriptors and analysis of the problem(s) and will not delve into solutions. The meeting will end at a pre-stated time, if not before. The manager's job is to create a relaxed risk-free setting and then sit back, listen, take notes, and maintain order. Generally, people feel freer to express themselves in a group (as opposed to one-on-one with the manager). Issues that fall under the manager's responsibility are ones the manager must do something about. Others must be referred to the appropriate people in the organization. In either case, people deserve feedback or status reports,
lenders and investors want to assess exposure to risk
rarely willing to bankroll a venture where their risk is greater than the company's risk. company must be willing to place significant amount of capital or collateral on the line.
Clerical and Administrative Support Positions
receptionists, secretaries, transaction coordinators, data entry and computer-support personnel, bookkeepers, and others who are trained specifically to handle paper and process, the behind-the-scenes support a company needs to operate. Transaction coordinators are clerical personnel that are responsible for orchestrating the flow of documents between the time a sales contract is signed and escrow or title closes.
The professional systems adviser can help assemble the appropriate hardware system
someone in-house must be savvy enough to communicate the problem and keystroke through solutions. budget and pay for technical support.
statutory independent contractors and common-law independent contractors
statutory independent contractors (described in the federal tax code as statutory nonemployees) and common-law independent contractors. Federal tax law prescribes a three-part test for a salesperson to be considered a statutory independent contractor—(1) a properly issued real estate license; (2) a written IC agreement with the company/broker; and (3) substantially all of the compensation must be based on output or production, not hours worked. The distinction between statutory and common law ICs is especially significant where state laws vary with federal law. The salesperson could be an IC for federal tax purposes but considered an employee by the state, which then requires withholding for taxes and payment of unemployment and workers' compensation.
sales compensation
straight salary, though that is usually done only for a short-term base period. straight commission, which is a sell-to-earn plan. salary and bonuses, which include base salary plus a range of bonuses or other performance incentives, including expense accounts, profit sharing, and the like (for employees). The larger the difference between the base and the bonus, the more incentive-dependent the pay.
public speech organization
telling people what you're going to say, telling them your tale, and then, telling them what you told them. plan for the setting-anticipate arrangement of venue rehearse plan for questions and comments be prepared to go with the flow choose humor wisely
Rightsizing
term for what companies do to realign their operations. The major part of that involves the workforce. Often, realignment (by whatever term is used) is associated with job loss. the long-term result is new jobs are created with different or refined skill requirements.
Sole Proprietorship
the broker is the sole owner, personally reaps all of the rewards of being in business, and bears all personal liability for its losses. The sole proprietor has exclusive command over the business, without the entanglements of other owners, so the success or failure of the enterprise is attributable to one person.
cross training
traditionally used job rotations or job-shifting assignments to familiarize senior executives with different departments or sectors of their companies. The obvious benefit is that trained talent is available to fill vacancies, but the company's decision makers also gain a holistic view of the organization. foster teamwork across specialties and departments, as well as help people develop new skills. This strategy not only gives people a chance to test-drive other jobs but also enhances morale and retention. The company also learns where people fit best into the organization and develops a pool of diverse talent, especially for promotion.
The practice of treating both buyers and sellers as customers in the same transaction is known as
transactional brokerage.
protecting from cyber takeover
use diagnostic tools that find weak spots in infrastructure protect individual files from unauthorized use purge data (shredding) limited hardware portals - (USBs) Use only secure wireless networks Monitor internal and outside traffic Monitor the postings
current wave of recovery
waves always break
Insurance
workers' comp property casualty and liability employee practices liability -ex: sexual harassment computer fraud business interruption - helps businesses pay expenses when it can't operate. errors and omissions - E&O insurance covers claims against company because of professional actions of workers Automobile liability
Best practices that protect against workplace fraud or embezzlement
-Separating the accounts receivable function from the accounts payable function so that unauthorized money can't be hidden with offsetting entries. -Authorizing only certain individuals to approve disbursements and establishing a document trail to hold them accountable. Electronic disbursements are most vulnerable without sufficient safeguards. -Requiring that two people handle payroll—one to write the checks and one to distribute them. This may sound inefficient, but the easiest way for someone to skim money is by writing and pocketing a check. An option is to outsource the payroll function. No one handling payroll should be authorized to approve pay rates. -Requiring that checks in excess of a certain amount be approved by the owner of the company or a designated senior manager. Companies can also require dual signatures on checks. The logistics can be a problem, but this can be overcome with sufficient lead time so that checks can be disbursed timely. Under no circumstances should dual-signature checks sit in a checkbook pre-signed by one of the parties. -Reconciling all bank statements monthly so that any discrepancies can be tracked down quickly. Most theft occurs over a period of time, so the sooner errant funds are detected the less the company loses.
corporations
A corporation is a sole legal entity created under state laws of incorporation. Although it's an association of one or more persons (as stockholders), a corporation is treated as a single individual that has legal capacity to contract and otherwise conduct its affairs as prescribed by the articles of incorporation. A corporation may be closely held, meaning that the shares of stock are owned by relatively few people, all or most of whom are directly involved in the corporation's business. Or the corporation may be publicly owned, meaning that the corporate shares are publicly traded in accordance with securities and exchange laws. Limited liability. Liability incurred by the corporation becomes an obligation of the corporation, not of the individual owners. Unless a shareholder has signed a personal guarantee for the corporation's obligations, actions for damages, judgments, or bankruptcies will not affect the person's assets. Only the amount of the stockholder's investment in the corporation is at risk. Perpetual existence. Because a corporation is a legal entity that exists indefinitely (until and unless it is properly dissolved), it technically never dies. Any officer who dies, retires, or resigns can be replaced. Centralized management. The stockholders elect a board of directors that, in turn, elects a slate of officers. The officers are responsible for the general affairs of the corporation. At least one of the officers, the licensed broker, is directly responsible for the real estate brokerage activities under state license law. Transferability. The corporate stock may be transferred freely from one stockholder to another. Lack of income limitations. A corporation may have an unlimited number of stockholders and is permitted to earn an unlimited amount of income.
accountability-based compensation plan for managers
A flaw in an accountability-based compensation plan for managers in lower levels of the organization is they have less or little control over all the variables that affect the performance outcomes of the office or department they supervise. If they don't have the authority to select or hire the personnel they supervise, that only exacerbates the situation
Variable Expense Budgets
A general operating budget cites categories of expenses that are allocated for specific purposes. To guide the use of these funds, variable expense budgets are needed to identify individual expenditures within those categories. These more specific budgets are particularly helpful for monitoring expenditures throughout the year.
business plans fail when they aren't supported with cold, hard facts.
A plan is only as good as the research that supports it. Quantified evidence demonstrates opportunities and reveals pitfalls, which establishes credibility for the plan.
Decisions fall into four general categories
Entrepreneurial or institutional decisions. These involve significant strategic directions, policies, or fundamental systems within the organization. Corrective decisions. These resolve problems, dilemmas, or crises that require solutions to keep the organization on track or to maintain order in its systems and processes. Resource decisions. These involve the allocation of personnel or money. Mediation decisions. These are essentially negotiated solutions, primarily involving personnel issues and customer service.
Exempt versus nonexempt workers
FLSA which workers must be paid for overtime generally salaried executives, managers, and administrative and outside sales personnel are exempt. 2004: salary level test - Employees making more than $455/week ($23,660 yrly) are exempt. people earning over $100,000 are exempt. salary basis test - worker must regularly receive a predetermined amount of compensation that cannot be reduced because of variations in quality or quantity of work performed. regulations provide 7 exceptions to this rule that protects exempt status. job basis test - This defines the duties that entitle executive, administrative, and professional positions to exempt status. The executive must customarily direct the work of two or more employees and have the authority (or influence) to hire and fire others. The administrative position qualifies if the primary duty is to perform office or nonmanual work related to the management or general business operations of the employer, and to exercise discretion and independent judgment over matters of significance. Professional positions must perform work requiring advanced knowledge in a field of science or learning that is predominately intellectual and perform work that requires invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
Laissez-Faire Style
Managers (by title anyway) provide little, if any, guidance and exercise little of the decision-making authority that is customary in their positions. self-directed workplace evolves when managers fail to do their jobs. This can happen when managers fear making the wrong decisions or losing popularity, have too many or conflicting roles (sales managers who also sell), or after they've lost control and see little hope of reestablishing their authority.
mentoring
Managers play a mentoring role. Sometimes that involves directing certain assignments and other times the manager actually accompanies the salesperson in the field. The salesperson learns the ropes of real-life situations from the manager while the manager learns about the salesperson's skills and the frustrations the sales staff encounters in daily practice. ` Mentoring programs give mentees the opportunity to see various work strategies in action as well as to receive one-on-one attention.
Franchise advantages
Marketing and advertising. While all franchises provide brand name or identity, that brand identity is the primary focus of many franchises. The appeal is their professional marketing and advertising programs, typically including television, radio, or print media campaigns; Web site links; and brochures, newsletters, signs, and other marketing tools. National franchises also have the purchasing power to assemble coupon and merchant-discount programs, and other cross-marketing strategies. Target market services. These franchises' primary focus is specific consumer services, such as counseling owners who want to sell their properties themselves or services associated with buyer agency. The primary advantage of consumer-service-oriented franchises is the technical expertise they offer to the franchisees. These franchises appeal to companies whose business focus is similar to the franchise's focus. Business operations. These are the franchises that provide operating structures, such as the 100 percent commission companies and the pyramid ownership plans. The appeal of these franchises is they offer greater financial benefits to the salespeople than are customary in other kinds of organizations. Ultimately, brand-name recognition is the primary benefit of a franchise.
reverse mentoring
Mentoring programs give mentees the opportunity to see various work strategies in action as well as to receive one-on-one attention.
policies and procedures should address a number of issues for salespeople
Sales teams (the way they are accommodated in the company, including notification to management about how the team has structured its relationship) Relationships between the company and qualified legal entities as permitted by state license law (whether the company recognizes such legal associations as corporations or partnerships formed by the licensee(s) and associated administrative procedures, including whether the company will pay the legal association or the individual licensees) Part-time agents, full-time agents, and mobile officing (including definitions, hiring policies, and the way people work) Referrals (procedures for distributing in-house leads and referrals between salespeople and referrals to other companies) Cooperation among salespeople in-house (including sharing customers and clients) Standards for servicing customers and clients (listings, sales, and other applicable services) Open house procedures (including sales procedures and safety precautions) Transactions Listing and buyer agency agreements (types, situations in which each is used, policy on written versus oral agreements) Forms and contracts (policy for written and oral contracts, written disclosures, contingency forms, transmittal to company files and to contract signatories, and record keeping) Escrow money (tracking procedures, deposits and withdrawals, cooperating broker procedures, disputes) Litigation and legal expenses Settlement or escrow procedures Commission programs Insurance (coinsurance on autos, errors and omissions) Dues and fees (professional association, MLS, franchise) Education and designations Advertising and marketing procedures (who pays and for what, which media are used, frequency, content and approval of copy even when salesperson is paying the bill, solicitation) Web sites, blogs, social media, and Internet advertising (requirements of license law, copyright and trademark infringement, defamation, sexual harassment, discrimination, wire fraud) Telephone, fax, and e-mail solicitations (including do-not-call-list rules, spam, and other solicitation laws) Telephone procedures (personal and business calls, phone log, who gets the lead on an inquiry, expectations for returning messages) Dissemination of information (about the company and its listings, including the nature of information to be discussed on the phone and who is permitted to disseminate what information) Lockboxes and signs (inventory control procedures, who pays) Postage, printing, and direct mail (who pays, limits, review of copy) Attendance (recommendations for floor time, sales meetings, training sessions) Parking at the office Salespeople selling and purchasing real estate for themselves Handling disputes (between salespeople, with customers and clients, with licensees in other firms) agents with papers Termination (disposition of listings, leads, pending closings)
When is the exit interview usually conducted?
Several days after the employee's last day of work
staff authority and line authority
Staff authority is given to the people who are responsible for support services, the work groups providing administrative support. These groups contribute indirectly to the achievement of the company's objectives. They provide services such as accounting, marketing and advertising, training, purchasing (materials for the operation of the business), and maintenance. Line authority is given to the people who are responsible for contributing directly to the achievement of the company's objectives. These include work groups such as the sales offices or the property management, leasing, or new construction departments.
committing a plan to writing
Table of Contents Executive Summary—the condensed version of the plan Summary of the Situational Analysis—the key factors that show the rationale behind the plan (which is just as useful for future reference as the actual plan) Mission Statement General Objectives (or Initiatives or Competencies) Goals and Strategies—the key outcomes of the plan, supported by their respective strategies The final item that is written is the executive summary. This is a several-page report that presents the essence of the plan and provides a user-friendly reference for the document. The summary is also the part of the document that outsiders—lenders and investors—typically look at first, so it must present a persuasive argument for the merits of the plan. The summary includes a brief history of the company; its current activities, particularly its distinguishing features and services, and position in the marketplace; and important factors about its financial position. The summary has to be supported by hard evidence (research, statistics) of the key risks and opportunities on which the plan is based, along with general objectives (or competencies) and significant goals that indicate what the company intends to do about them.
a company should expect to be totally capital-dependent for at least the first six months.
That capital may very well be funded by the proprietor's personal credit cards, which adds to the personal risk of starting a business. It's a risk many people are willing to take, though, because nearly half of small start-ups are funded with personal credit.
UFOC
The Federal Trade Commission requires franchisors to provide a great deal of information about the franchise in a standardized format, known as the uniform franchise offering circular (UFOC). The UFOC intends to help prospective franchisees make informed decisions before signing an agreement. As lengthy as the disclosure is (sometimes hundreds of pages), a critical piece of information is not required the historical data about franchisees' earnings. This is a persuasive argument for talking to people who are affiliated with the franchise before making a final decision.
IDX model
The MLSs formed Internet Data Exchanges (IDXs) which gave consumers access to an MLS's entire database through a member-company's site (within the limits of MLS policies). The IDX model provided landing places for consumers and served the purpose of promoting listings. But this was purely an informational model and did not provide an interactive business setting for the consumer and broker. That led to the development of Virtual Office Web sites (VOWs), which added an e-commerce component to the IDX model, again administered according to MLS's policies.
voice messaging
The appeal of these systems for the workforce is that messages often eliminate the phone-tag cycle and allow the recipient to hear the exact message left by the caller. Voice mailboxes are secure (protecting confidential information) and are available 24 hours a day with remote access. Mailboxes can also be used for people to leave themselves messages, like to-do lists or reminders. To overcome negative public relations, some companies have abandoned the automated answering feature (or shortened it) so that callers can actually speak with someone, who can then direct the call to the appropriate person or mailbox.
A company can fix its pay levels to fall at the bottom, middle, or highest range in comparison with other companies.
The bottom range says that 75 percent of the companies pay more. A company may choose this strategy when it's short of funds or the labor market is flush, but the likelihood is that the company will experience greater turnover. The highest range says that the company is near the top 25 percent compared with other companies. This is an aggressive strategy that is very attractive for recruiting and retaining top personnel and increasing productivity. But the company must be very selective in its hiring and vigilant about monitoring personnel performance to gain maximum financial benefit. The middle range pegs the company in the mid-market, with 50 percent of the companies paying more and 50 percent paying less. This is a moderate strategy that has neither enormous competitive advantage nor disadvantage, but it keeps the company in the running and is the strategy many companies use, particularly because it's more affordable than the highest sector.
Equal opportunity
The company should express its philosophical commitment to equal opportunity in housing and employment. Then establish specific policies and procedures to ensure that everyone in the organization serves all customers and clients properly under federal, state, and local fair housing, civil rights, and disability laws.
The first step in procuring financing is to engage an attorney and an accountant and make them an integral part of the decision-making process.
The decision-making process consists of evaluating financial projections and determining the appropriateness of debt or equity financing. One or the other is typically more desirable, depending on the purpose for which financing is needed, the amount, the urgency and duration of the need, tax consequences, the relationship the company's owners desire to have with others, and the creditworthiness of the company.
Experienced versus newly licensed sales force
The obvious benefit of experienced salespeople is they have a customer base and the skills to make a productive contribution immediately. But experienced salespeople can be expensive to recruit. Top producers command top dollar and top amenities in the workplace. While it's tempting to try buying talent with generous compensation arrangements, that strategy will backfire if these people are treated more favorably than current, equally desirable salespeople. New licensees require considerable indoctrination, training, and supervision to get them started, which is a significant investment of time and money, and most don't begin producing for several months. it usually takes several years to get established and about five years before people start earning a good living. studies of median gross personal income show a dramatic jump from less than $20,000 during the first one- to five-year period to the mid-$40,000s in the next six- to ten-year period. It's relatively easy to train a newly licensed salesperson in the company's way of doing business, which is sometimes a difficult retraining process for experienced people.
The broker must clearly define the company's policy regarding law of agency relationships.
The policy must state whether the firm represents buyers/tenants, sellers/landlords or both as disclosed dual agents or as designated agents, and state a position about subagency. Procedures must explain how fiduciary obligations are to be fulfilled, including agency disclosure, and how those obligations are preserved (especially confidentiality and loyalty) if the company practices disclosed dual agency or designated agency. If state law permits nonagency (or nonrepresentation), the company needs policies and accompanying procedures relating to those services.
scripted training
The presumption is the script provides fail-safe, proven comebacks to effectively handle any situation that could arise. The flaw in the modeling approach is that people focus on the memorized lines (and have to try remembering all of them and sound natural delivering them) and don't learn to listen, size up situations, and think on their feet.
evaluate business for merger
Why is the business for sale? Are the current owners just ready to retire, or are they bailing out because they can't make a go of the business any longer? What are the business's primary assets (or appeal)? What are its liabilities? How much is the business really worth? Is the profit overstated or understated? Has the owner deferred expenditures that should have been made? (The profit will look better than it really should.) Or is the business incurring expenses that should be trimmed? (The profit won't look as good as it could.) What's the reputation of the business in the marketplace? In the case of a merger in which both companies will retain some identity, will the association portray a positive message? How well is the company managed? Is it a well-run organization that just needs the power in the marketplace that can be achieved with affiliation? Or is it a lingering organization that can be made better with more astute oversight? the more compatible the organizations are, the more attractive the acquisition or merger will be. The greater the differences, the longer the transition period and the time before the venture can reach its financial potential.
When writing for business consider that
Writing is writing, regardless of the delivery system—digital or paper, e-mail or text, a document attachment, or a report that lives online in the digital "clouds." Once we send our words, we can't take them back, shred them, or control where they go. Every written word can live forever and become a liability for the company and fodder for everyone to use as they please. Grammar, punctuation, and spelling do matter. People may not recognize the "good," but many more people than we realize notice the mistakes. Good writers rewrite. Even the shortest text messages need a second look before they're sent. We don't have to make a project out of writing, but we do have to project the right message. Writing has to capture the eye or make a visual impression in order to capture the mind. This is the writing equivalent of "we eat with our eyes" that uses short paragraphs, white space, and formats (i.e. bullet lists, bold-face and italics) to sell readers on the writer's words Writing says a lot about the writer's professional abilities. Sloppy or disorganized writing (and grammatical errors) tarnishes reputations, jeopardizes promotions, and can create more problems than the words are intended to solve.
financing portfolio
a fairly comprehensive financing portfolio will be required so the request can be scrutinized in detail and considered by a lending committee or potential investors. It begins with an introduction of the company and the request in a three-paragraph summary of the merits of the proposal. educate the potential lender or investor about the business's industry and the marketplace; demonstrate the industry and business management expertise of the company's principals and that they are character worthy (references); describe the company's business and its operations, including a business plan, the financial statements, and budgets; and demonstrate a sound plan for using and repaying the money that is requested.
A Web site is written for viewers or users, not readers. People scan, looking for information they want
a site that gives visitors the opportunity to request assistance, complete a survey or form, or take some other action provides a centralized lead-gathering process for the company. Someone has to be responsible for responding or handling inquiries and tracking the site's performance. subscribe to a pay-per-click service, which takes charge of placing the site in return for a fee that is tied to the number of viewers that click on the site. Another approach is to arrange links with other sites. Some sites are more compatible for linking, and some offer better exposure than others (perhaps for a fee). The ADA.gov Web site provides guidance for accessible sites, including several suggestions. Add text to images. In fact, you can also add HTML codes for screen readers and tags that include words that are more descriptive of an image than the ones seen on the site. Post documents in text-based formats. PDFs are the most desirable formats for posting forms, brochures, and other documents. Because PDFs aren't accessible to screen readers, printed matter should be available as text documents as well. Include audio descriptions and captions for video and other multimedia. A Web site is only as good as it is useful and informative for every visitor.
Service fees
accounting and bookkeeping services, various insurance policies, legal services, credit reports, computer consultant, and communications services, including basic, local and long-distance telephone service, fax and computer lines, and Internet services.
servicing buyers
address agency disclosure and contract procedures, standards for preparing and negotiating sales agreements, and assisting buyer through transaction to settlement. Consumer protection and risk-management procedures, including procedures for documenting the showings, conversations, and negotiations with a buyer, should also be addressed.
risks identified
advertising - what is said and how company is portrayed. Accuracy of data in MLS listings is also an issue. Equal employment and housing laws are also a concern, as is the company's brand and reputation. Agency relationships - disclosing Antitrust - price fixing, group boycotting, territorial assignments, and tying agreements are prohibited. company fee and commission policies conduct of sales staff Cultural diversity Disability Document management - stored for certain periods of time to satisfy requirements of various laws as well as to provide evidence in the event of litigation. There are also legal as well as business reasons for disposing of documents containing confidential and proprietary information in a secure manner. employee-at-will and equal employment laws - recruitment, hiring, training, advancement, discipline, and firing practices as well as pregnancy, family and medical leave, military service considerations, and wage and salary laws. Practices that target older workers (persons age 40 or older) and terminate any worker without just cause and due process in accordance with employment-at-will (EAW) also create vulnerability. fair housing financial management - the way client funds are handle and obligations. Harassment Internet personal identity personal injury property conditions RESPA - practices governed by Real Estate Settlement Procedures Act (disclosures of settlement charges and AfBAs social media soliciations workplace safety
Reserve for contingencies
allocate a certain amount of anticipated revenue to the company's reserve account. In effect, this is a savings plan that causes the company to set aside reserves for unexpected expenses or for capturing opportunities that present themselves.
Real estate companies already function on narrow profit margins
and cost of operations must be managed very carefully. Costs that diminish bottom lines are often the very expenditures that help an organization work more efficiently and productively.
Once the most desirable form of legal ownership is determined, the next issue to consider is the mode of operation. That is, whether the company is going to be independent or affiliated in some fashion with other organizations.
independent - appeals both to owners, who want maximum freedom to guide their affairs, and to consumers, who want to do business directly with people who own and operate their own companies. totally self-reliant. company's success and struggles is due to its efforts alone. Franchise - a "packaged program" for a business, presumably a proven formula for running a business that provides a tested product or service that has appeal in the marketplace. Franchisees are independent business owners who, at the same time, are affiliated with other companies who are part of the franchise's network. National Corporations - typically purchase existing local real estate firms, selecting those that meet certain criteria for size or market share. The terms of the agreement with the corporation will determine the structure of the company under the corporate umbrella, the broker/owner role and responsibilities in the organization, and the degree of financial independence (or dependence) the company will have. Once the business is sold to a national corporation, the broker/owner essentially becomes a manager. While this means relinquishing some prestige and decision-making authority, the attractive trade-off may be the power of the corporate name along with advertising and promotional programs and strategies to enhance the company's internal operations. Depending on the financial arrangements, the company may also realize an infusion of cash with which to enhance its brokerage activities. Local Affiliations - pooling financial resources for such expenses as training, marketing, and advertising programs and secretarial and accounting services. Brokers can also pool their expertise, as professional sales teams, to offer complementary services such as land development, commercial leasing, and property management. maintain their local identity.
Equity financing gives investors the opportunity to be part of an enterprise they feel has attractive growth or earnings potential
instead of sitting on the sidelines simply as note-holders. Generally, equity financing is desirable for capital expansion or improvements rather than for covering temporary cash-flow requirements. Because equity financing involves restructuring ownership, and possibly business operations (if the investors are going to have an active role in the organization)
describing the company
its mission statement, a brief history of the organization, and a description of its target markets by geographic area and types of properties or services. This is also where the company's general philosophy of doing business is explained.
license-in-referral organizations (LIFROs)
licensed brokerage firms that hire licensed salespeople, but these people don't actually engage in any sales activities. Instead, they provide business leads (referrals) that the LIFRO then refers to the affiliated brokerage firm. LIFROs are a way to attract or retain salespeople who don't meet a company's full-time criteria but can contribute by referring business.
Debt financing and Equity financing
loans vs. ownership interests
balance sheet
reports the organization's assets, liabilities, and owner equity and provides a snapshot of the organization's general financial position or condition as of the date it is prepared. Assets consist of what the company owns that exist as cash or can be converted to cash in less than one year. Depending on the nature of the organization's business and current holdings, entries are categorized as either current or fixed assets. Liabilities are obligations incurred during the normal course of doing business, including those to creditors. Tax obligations, employee benefit and mandatory pension programs, and restricted funds are also entered as liabilities. Owner equity is the net worth of the business, the difference between assets and liabilities. This also includes net income and the equity financing provided by investors (as opposed to financing provided by creditors). must balance. - total assets and total liabilities plus owner equity should be identical figures. ratio of owner equity to liabilities -- number that owners or stockholders of the organization have the greatest personal stake in.
Telephone Consumer Protection Act
required to search the do-not-call registry every 31 days and eliminate from their call lists the phone numbers of registered consumers. required to search the do-not-call registry every 31 days and eliminate from their call lists the phone numbers of registered consumers. may not telephone a residence before 8 AM or after 9 PM; must identify the business name and telephone number and the name of the person making the call; must adopt a written policy and maintain a do-not-call list of residences requesting that they not be called; must advise and train all personnel and independent contractors engaged in any aspect of telephone solicitation regarding the do-not-call list maintenance and procedures; must share the do-not-call list with an affiliated entity (one that a consumer reasonably would expect to be affiliated with the soliciting company based on the company's name); may not use an automatic telephone dialing system in such a way that two or more telephone lines of a multiple-line business are engaged simultaneously; and may not use a telephone, computer, or other electronic/mechanical fax machine device to send unsolicited advertisements to another telephone, computer, or electronic/mechanical receiver. ALLOWED: The law allows calls to "existing customers," who are defined as people with whom the salesperson has done business in the past 18 months. A cold call is permitted to a FSBO (for sale by owner) who is registered on the do-not-call list if the salesperson has an actual buyer for the property, but not to solicit the listing.
Servicing sellers
return phone calls and emails communicate frequently give plan on how to get property sold fulfill promises be creative and aggressive to get it sold make settlement smooth A comparative market analysis and a discussion about contemporary market conditions go a long way toward avoiding unrealistic expectations about prices and the time within which a property will sell. For risk-management purposes, service standards should also address contract preparation and consumer protection issues such as agency, property, and lead-based paint disclosures.
brokers must have a permanent space
salespeople must work out of that location as well. technology has changed this so it is not the primary base of operations. virtual offices
exmployee vs. independent contractor
the employee model has a number of advantages, despite the cost (like statutory benefits and administration of tax withholding). In a word, control. There is no freewheeling marketing and selling (as with an IC), but rather a shorter leash with which to manage and supervise specific tasks and hold people accountable. The payback to the company is presumably better production and better quality service. The employing company/broker is responsible for the IC's conduct in accord with real estate license law, but otherwise ICs are free to work wherever and however they choose The IC model is traditional in the real estate industry, originally because it's a less expensive way for a company to field a sales staff and supports the notion that the sales staff would work harder as independent business people. The IC incurs a considerable amount of expense and the company reaps the majority of the income benefit, without any obligations for tax withholding or statutory benefits. This saves costs for the company, and the IC gets the income tax deduction for expenses.
merger vs. acquisition
the intended gain is efficiency and/or effectiveness for the organizations. For the company being pursued, joining forces with another may provide additional financial resources with which to aggressively pursue selected company objectives or achieve greater power in the marketplace. Depending on the role the broker/owner would have, this may be an opportunity to relinquish some management responsibilities and concentrate on activities in which she or he has particular expertise or interest. joining forces with another may be the most suitable way to expand operations, or gain managerial or staff talent or other assets to strengthen the organization or its position in the marketplace. If a company's business plan calls for adding new products or services or expanding geographic territory, purchasing an existing company that offers these features is one way to accomplish those goals. Often the motive for acquiring a real estate business is to capture its sales talent. However, the market position of the acquired business can quickly deteriorate if that talent is lost, making this a very costly recruiting exercise.