Real Estate Marketing:Exam 1 Study Guide

TREC's Definition of Advertisement

"Advertisement" is any form of communication by or on behalf of a license holder designed to attract the public to use real estate brokerage services and includes, but is not limited to, all publications, brochures, radio or television broadcasts, all electronic media including email, text messages, social media, the Internet, business stationery, business cards, displays, signs and billboards. Advertisement does not include: (A) a communication from a license holder to the license holder's current client; and Federal Laws (B) a directional sign that may also contain only the broker's name or logo. To ensure that agents conform to TREC advertising rules, they should identify themselves and their sponsoring broker. Any posts that listings or open house notifications should contain the name of the agent's broker. There should also be images of a completed IABS and CN 1-3 on an agent's Facebook profile.

Twitter Symbols

# - Searchable @ - Visible to one @. - Visible to all

Fair housing definitions

(1) race; (2) color; (3) religion; (4) sex; (5) national origin; (6) ancestry; (7) familial status; or (8) disability. (b) For the purpose of this section, disability includes AIDS, HIV-related illnesses, or HIV infection as defined by the Centers for Disease Control of the United States Public Health Service. Familial status: - Presence of 1 or more persons under 18 - includes pregnant women - occupancy standards cannot be used to limit children Handicapping Condition - physical or mental impairment - includes persons with AIDS and HIV - reasonably accommodations must be made in units and policies - ADA It is illegal discrimination to take any of the following actions because of race, color, religion, sex, disability, familial status, or national origin in the sale or rental of housing. Refuse to rent or sell housing Refuse to negotiate for housing Otherwise make housing unavailable Set different terms, conditions or privileges for sale or rental of a dwelling Provide a person different housing services or facilities Falsely deny that housing is available for inspection, sale or rental Make, print or publish any notice, statement or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation or discrimination Impose different sales prices or rental charges for the sale or rental of a dwelling Use different qualification criteria or applications, or sale or rental standards or procedures, such as income standards, application requirements, application fees, credit analyses, sale or rental approval procedures or other requirements Evict a tenant or a tenant's guest Harass a person Fail or delay performance of maintenance or repairs Limit privileges, services or facilities of a dwelling Discourage the purchase or rental of a dwelling Assign a person to a particular building or neighborhood or section of a building or neighborhood For profit, persuade, or try to persuade, homeowners to sell their homes by suggesting that people of a particular protected characteristic are about to move into the neighborhood (blockbusting) Refuse to provide or discriminate in the terms or conditions of homeowners insurance because of the race, color, religion, sex, disability, familial status, or national origin of the owner and/ or occupants of a dwelling Deny access to or membership in any multiple listing service or real estate broker's organization.

Emotional Phases of Buying

The emotional phases are: 1. Attention - A buyer sees an advertisement for a property that catches their attention. Once you have the buyer's attention, you need to arouse their interest. 2. Interest - Interest is a more advanced stage of attention. Develop it by providing information about a property or demonstrating its suitability to the buyer. When you can generate significant interest, enthusiasm or desire takes hold. 3. Desire - The buyer begins to picture themselves in the home, enjoying its amenities. They may even start imagining their furniture and artwork in the house. 4. Act - The buyer is ready to buy or act on their desires.

Civil Rights Act

The first federal fair housing law was the Civil Rights Act of 1866, which essentially prohibits discrimination in housing based on race or color. It is a very broad law and is still in effect today. The subsequent major legislation affecting housing is the Federal Fair Housing Law, officially called Title VIII of the Civil Rights Act of 1968. It prohibits discrimination on the basis of race, religion, and national origin. Sex was added as a protected class in 1974, followed by physical handicap and familial status in 1988. In January 2021, President Biden signed an executive order preventing and combating discrimination on the basis of gender identity and sexual orientation.

Employee

The following guidelines set forth by the Internal Revenue Service are appropriate for the designation of employee status. If there is a guaranteed minimum monthly compensation. If the broker pays the agent's licensing fees. If the broker or company has the right to discharge an agent for violation of instructions, or if the company sets up quotas and minimum sales requirements for their sales agents. If the company operates with a policies and procedures manual, and there is an attempt to control the sales agents on a day-to-day basis. If the agents consider themselves a team and the company regards them as such instead of individuals with individual goals. If the company's plan for dividing commissions between sales agents depends on a rotation basis for outside referrals and time spent in the office.

Logical Steps of Buying

The logical steps are: 1. The customer acknowledges a need to buy. 2. The customer acknowledges that a particular property satisfies his needs. 3. The customer is pleased or satisfied with the source of supply. (YOU) 4. The customer has determined an acceptable price. 5. The customer is ready to buy.

Niche Marketing

The process of finding small but profitable market segments and designing or finding products for them. Niche marketing requires agents to become specialists in some areas of their communities. Specialize in: the second-home market raw land sales for development the upscale housing market urban neighborhoods master-planned communities

Qualities of Good Salesperson

The underlying theory is that a good salesperson must have at least two essential qualities, empathy and ego drive.

Macro Marketing

There are generally two methods of macro marketing practiced by residential real estate professionals today. The first and the oldest accepted form of macro target marketing is geographic farming. The second is demographic farming.

Learning Styles

There are three primary ways humans take in and process information: • Visual - Visual learners sort information primarily through pictures or are drawn to visual aspects more than written detail. When speaking, they use visual terms, such as, "See what I mean," or "Get the picture?" Speak rapidly and in a higher tone of voice for these buyers. • Auditory - Auditory learners process information through sound cues. You may hear them say phrases such as, "How does that sound," or "Does that ring a bell?" Speak evenly and in a soothing tone. • Kinesthetic - Kinesthetic learners process information through their feelings and from the environment. Phrases likely uttered by kinesthetic learners could include, "This feels like," or "Get a grasp of." Speak slowly with many pauses; they are taking in a lot.

Advertising in Real Estate

There are two broad categories of advertising in Real Estate: Institutional advertising promotes the firm in a broad array of categories such as its reputation, history, success rate, % of market share, its logo. It creates name recognition and gives information about the business in general. We see or hear this type of advertising on billboards, in print, on television and radio, in magazines, direct mail, and on the Internet. Individuals advertise themselves this way with business cards, name tags, and magnetic car signs. Product or marketing advertising is geared to attract people, to obtain listings and find buyers. This marketing is done through television, radio, the Internet, print magazines, and direct mail.

Three tests for specifying agent is Independent Contractor

Under the Tax Equity and Fiscal Responsibility Act, there are three tests for specifying that a sales agent is an independent contractor: 1) The sales agent must hold a real estate license. 2) The sales agent must be paid on a commission basis. 3) The sales agent must have a written contract with the broker specifying the sales agent is not an employee.

Driver

Values actions ("actions speak louder than words"); results-oriented; direct; frank about events, situations, and people; down to earth and practical in working.

Analyst

Values facts, logic, caution; analyzes situations and events in detail; procedure and process-oriented; evaluates alternatives leading to decisions and conclusions about actions.

Feeler

Values human interaction; is persuasive; reflects emotion; demonstrates an understanding of people; is patient and talkative; shows concern for personal impact on an organization.

Theorist

Values ideas, innovation, original and new concepts that have long-term implications; inquisitive and imaginative; challenged by problems and finding solutions.

Marketing Trends under Covid-19 pandemic?

Virtual tours have been a real boon during the COVID-19 pandemic.

DIFFERENT TYPES OF PERSONALITIES

Whales: The color yellow can also classify whales. These personalities are humanitarians. They love to be involved with the community and often get involved with charity work and non-profit organizations. Professionally, whales may be teachers or work for non-profits. If you believe that a particular client may be a whale, you can draw them in by talking about your community service and charity work. Ask them which causes they support. Do not be overly aggressive with this personality; it will not get you very far. It could harm or hinder a developing client relationship. Dolphins: The color blue can also identify dolphins. Dolphins are typically outgoing and easily amused. Most of all, dolphins like to have fun. When discussing potential properties with a dolphin, be sure to mention local entertainment like restaurants and bars where they can go out and meet people. Dolphins are very social and enjoy a good time. They are not detail driven and tend to make decisions quickly. Dolphins might be in entertainment or even marketers themselves. When working with a dolphin, sit back and listen to them. Dolphins like to talk. Dolphins tend to get bored quickly, so do not be offended if they may be shopping around for agents. Work with them on their level to convince them that you are the right agent for them. Urchins: The color green correlates with urchins. When you think of an urchin, think ofthe phrase, "Just the facts, ma'am." Urchins are interested in data and like to analyze and synthesize copious amounts of data before making a decision. If you suspect your client may be an urchin, show up prepared with as much information about the properties that you will be viewing as you can. Engineers often fall into the category of urchins. Accountants also display urchin tendencies, dealing with facts and figures. Working with an urchin may take much of your time. This personality type may need to view several properties over time to compare and contrast their different facets. They are slower to decide because they want to make an informed decision. Be ready to answer questions like, "How long will it take for me to get to work? How far is the closest park? What school district serves this community?" Sharks: The color associated with sharks is red. In life, sharks are out for blood; they are competitive and do not have much time to spend on frivolous pursuits. Think of the movie quote, "Show me the money!" Sharks are "big picture" people who are usually in a hurry to get somewhere or do something. The word most commonly used to describe sharks is "aggressive." Do not be offended by their aggressive nature; it is just how they approach most things that they do. When working with sharks, understand that they do not want to spend time listening to you talk about yourself. They will not be interested. They do not want to pour over pages of information about neighborhoods. These are people in leadership. They are typically in charge at work, so do not tell a shark what he or she may need. They are used to making the rules, not following others' rules. Get to the point with a shark.

Types of Inflation

When there is an excess of money in the market, the result is monetary inflation. Often, this occurs when governments (Central Banks) try to make up for an economic shortfall by printing more money. Demand-pull inflation is created when there is more money in the market and fewer goods for sale. Cost-push inflation occurs when the costs of production and services increase, thereby causing manufacturers and tradespeople/vendors to raise their prices accordingly. The costs pass on to the consumer.

Why do People Buy?

Why do people buy? They buy to satisfy a need. What do people buy? In real estate, people buy amenities. Amenities are the expected benefits of ownership. The ability to blend buyers' logic with their emotions can lead to a successful sale. In other words, successful sales agents can help buyers recognize how owning a specific property will satisfy their needs.

Types of Prospecting

macro marketing is geographic and demographic marketing. canvassing - going door to door, cold calling etc micro marketing - marketing to specific communities geographic farming - working a market based on location. demographic farming - based on demographics cold-calling - calling prospects to garner business niche marketing - marketing specialties like upscale housing.

TREC Rules About Advertising

§535.155 Advertisements. (a) Each advertisement must include the following in a readily noticeable location in the advertisement: (1) the name of the license holder or team placing the advertisement; and (2) the broker's name in at least half the size of the largest contact information for any sales agent, associated broker, or team name contained in the advertisement.

DTPA Guidelines

• A license holder should always disclose any defects or information that a prospective buyer would want to know about the property. • Use the Seller's Disclosure Notice, either Texas REALTORS® or TREC. Give the seller completed form to the buyer prior to placing an offer to buy. • Recommend that an inspection be done on the property. Inspectors in Texas are licensed through the Texas Real Estate Commission. Inspectors must use TREC promulgated forms for residential inspections. • Give a list of at least 3 inspectors to the buyer and have the buyer choose the inspector. Have the inspector talk directly to the buyer about the outcome of the property inspection. The agent should not be the middleman interpreter of an inspection report. • Have the buyer reinspect the property to conclude that repairs were done properly. • If the buyer is unwilling to have an inspection, have the buyer initial next to a written statement that you, the agent, highly recommend that an inspection of the property, but the buyer declined. • Stay clear of giving your personal opinion on the condition of the property. • Keep copious notes on all aspects of the transaction from the first face-to-face meeting through the sale's closing and funding. Remember that you are always building a paper trail, just in case.

Marketing Objectives/Goals

• Goals should be attainable. • Goals should be flexible. • Goals should be measurable. • Goals should have a timeframe.

Advantages of Independent Contractor Status

• The agent is not required to have or keep specific office hours. • The agent does not have to attend office meetings. • The agent pays their own income tax to the IRS. • The agent makes their own hours. • The agent decides when and if they will hold a house open to the public. • The agent decides when and how often to go on vacation. • The agent dictates their own personal time. • The agent determines what educational courses they will take and pay for. .• The agent decides if they want to take floor time, opportunity time. • The agent uses all related real estate expenses as a deduction on their income tax return.

Trends in Real Estate

•People are renting more than they are buying homes. •People are living longer and staying longer in their homes. •Less supply of single family. •Air BnB taking away from hotels. NAR 2020 Home Buyers and Sellers Generational Trends Report shows that older GenY/Millennials 30 to 39 represent the largest group of homebuyers, at 25%. A whopping 40% of this age group purchased a home out of a desire to own their own home. GenX tends to be in the prime of their earning years, and many are looking to relocate or move to better neighborhoods. Older Baby Boomers tend to be retired, and many are looking for active lifestyle communities that cater to their age group. Also, many of them are downsizing and researching more affordable living. They often look for ranch style homes, or at least homes with the primary bedroom on the first floor. Read real estate publications religiously in order to stay abreast of current trends in buying and selling. Research the recent trends in the sales price vs. listing price to determine the market's strengths.

Trec Article 4 - Consumer Information

(a) The Commission adopts by reference the Consumer Protection Notice TREC No. CN 1-3. This document is published by and available from the Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188, www. trec.texas.gov. (b) Each active real estate broker and sales agent shall provide the notice adopted under subsection (a) by: (1) displaying it in a readily noticeable location in each place of business the broker maintains; and (2) providing a link to it in a readily noticeable place on the homepage of each business website, labeled: (A) "Texas Real Estate Commission Consumer Protection Notice", in at least 10 point font; or (B) "TREC Consumer Protection Notice", in at least 12 point font. (c) For purposes of this section, business website means a website on the internet that: (1) is accessible to the public;(2) contains information about a license holder's real estate brokerage services; and (3) the content of the website is controlled by the license holder. (d) For purposes of providing the link required under subsection (b)(2) on a social media platform, the link may be located on: (2) providing a link to it in a readily noticeable place on the homepage of each business website, labeled: (A) "Texas Real Estate Commission Consumer Protection Notice", in at least 10 point font; or (B) "TREC Consumer Protection Notice", in at least 12 point font. (1) the account holder profile; or (2) a separate page or website through a direct link from the social media platform or account holder profile.

Employee vs. Independent Contractor

-As an employee, the employer is liable for their actions in the scope of the agency (liable for taxes too like SS), protected under employment laws, has less freedom. -Independent Contractor needs a "work for hire" agreement from the broker. Unlike employees, independent contractors conduct their business with a high degree of freedom. They receive 1099's and are responsible for paying their own taxes.

VA loan requirements

1. Certificate of eligibility 2. Certificate of reasonable value (CRV) 3. Will be appraised by VA. VA loans are loans that are guaranteed by the U.S. Department of Veteran Affairs. These loans are often available with no down payment. The guarantee is free to the Veteran. The Veteran must receive a Certificate of Eligibility from the VA before applying for the loan. The VA must appraise the property. A veteran applying for a VA loan must sign a document stating that he or she will occupy the property. As with FHA loans, most loans have thirty-year terms, and the interest rates are set by the market conditions. The maximum loan amounts for FHA and VA change periodically to accommodate real estate values over time.

Market Research Steps

1. Determine the research objective or "problem." 2. Plan research approach and design. 3. Gather data from multiple sources. Categorize data and then loosely divide information into categories related to the purposes of the project. 4. Analyze data while looking for trends, opportunities, and solutions related to the research questions. 5. Draw conclusions and chart a course of action.

Types of Buyers and Their Needs

1. First-time buyers who lack experience and want a professional to guide them through the process. They may also worry that an experienced seller might take advantage of them. 2. Buyers who are changing homes in a particular area or "moving-up" to their dream home. They often have plenty of time and often enjoy home shopping. They work very hard to get a bargain. 3. Investors who want to buy low and sell high will only look at income producers or properties with desperate sellers. If they are very knowledgeable, they will work independently, though most use professionals to guide them toward good opportunities. 4. Relocators are buyers relocating to the area. They are often tight on time, and since they are unfamiliar with the area, they will almost always work through real estate agents. Relocators depend on agents' knowledge of property values and closing processes so that they can settle other matters before the move.

TREC Minimum Levels of Service

1. Put the interest of the client above all others, including the broker's interests. 2. Inform the client of material information about the property or the transaction received by the broker. 3. Answer the client's questions and present any offer to or counteroffer from the client. 4. Treat all parties to a real estate transaction honestly and fairly.

Broker

A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. A BROKER'S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): Put the interests of the client above all others, including the broker's own interests; Inform the client of any material information about the property or transaction received by the broker; Answer the client's questions and present any offer to or counteroffer from the client; and Treat all parties to a real estate transaction honestly and fairly.

Multiple Listing Service (MLS)

A comprehensive listing, updated daily, of properties for sale in a given community or metropolitan area; includes a brief description of each property with a photo and its asking price but can be accessed only by realtors. Provides information on new and current listings.

Subagent

A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

MLS vs Paid and Unpaid Websites

A source of information about current and expired listings and sales can be found on the local MLS. MLS is up to date, website information may not be up to date. There is potential legal issue with paid and unpaid sites.

Intermediary

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary: 1) Must treat all parties to the transaction impartially and fairly; May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. 2) Must not, unless specifically authorized in writing to do so by the party, disclose: a) that the owner will accept a price less than the written asking price; b) that the buyer/tenant will pay a price greater than the price submitted in a written offer; and c) any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless required to do so by law.

Acceptance

Acceptance of a contract must include full acceptance of the entire offer without change.

THE SALES PROCESS - RESIDENTIAL

Agent meets with buyer. Buyer is pre-qualified or pre-approved for loan. Buyer receives and acknowledges disclosures and agency information. Buyer enters into an agency agreement with broker. Agent shows properties to buyer. Agent writes offer for buyer on seller's property. Buyer's agent delivers offer to listing agent. Listing agent presents buyer's offer to seller. Negotiations begin. Contract negotiations are completed and agreed to by all parties. Option Fee is paid to Escrow. Contract and earnest money are delivered to escrow (title). Title is opened by escrow agent. Title examination is done. Title commitment is issued. Buyer makes loan application. Lender sends out verifications. Credit report is ordered. Buyer arranges homeowners insurance. Buyer has inspections done. Seller and Buyer negotiate repairs. Survey is ordered. Appraisal is ordered. Buyer gets loan approval. Buyer and seller close on property when all contract requirements are complete. Lender delivers money on buyer's behalf. Seller delivers deed to buyer. Buyer receives possession of the property at funding. Seller receives the sales proceeds. Brokers receive commission.

Open Houses

Agents should try to hold open houses on Saturdays and Sundays. A good time for the open house is from 9 am - 4 pm on Saturdays or 1 pm - 5 pm on Sundays.

Counteroffer

An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

Appraisal Principles

Anticipation, change, supply and demand, substitution, balance, conformity, contribution, opportunity cost, utility. Substitution - appraisal principle of substitution tells us that an informed person, acting rationally, would pay no more for one item than for an equally desirable substitute. Therefore, the prices in a market tend to be similar, and the value of one item can be inferred from the price of a comparable one. Supply and demand are perhaps the primary determinants of real estate values. When the demand for real estate is high and the supply low, prices in the marketplace go up. Likewise, prices decline when the supply is high and demand is low.

Inflammatory

Arousing anger or strong emotion.

Types of plans for entrepreneur success.

At first, setting up your daily and weekly schedules may seem time consuming; many agents are tempted to omit this step. Remember that a plan is a strength. It is proof that you have committed to completing the tasks that are essential to meeting your goals. It can keep you focused and on track and aid in the efficient use of your time. You are much less likely to waste time and duplicate effort if you have taken the time to get organized before you begin. Making lists will help you put tasks in order of importance to complete the most critical items. It is good practice to put your tasks into categories. Three obvious groups are: Obligations - Things you must do (appointments) Things you should do - (farming, cold calling) Things you could do (practice listing presentation techniques)

AIDA - psychological steps or emotional steps of buying.

Attention, Interest, Desire, Action

Blockbusting

Blockbusting is any attempt to induce panic selling in a neighborhood for financial gain. The most common tactic is to imply the entrance into the neighborhood of a new ethnic or racial group and suggest to homeowners that they sell now, "While values are still high." Blockbusting perpetrators often bought properties at below-market prices from concerned sellers, only to sell them later at above-market prices to minority buyers. Blockbusting is also known as panic peddling.

Use of forms - CMA, IABS, Seller's Disclosure

CMA - Comparative Market Analysis - used to determine a reasonable market value. Helps the seller realistically price properties. IABS - Information About Brokerage Services - mandatory disclosure notice that must be presented to both prospective buyers and sellers. Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. Seller's Disclosure Notice - The purpose of the Seller's Disclosure Notice is to have the property owner disclose all facts and knowledge of any defects concerning the property. The Seller's Disclosure Notice is an excellent tool to use as a defense in a DTPA lawsuit. The seller should fill it out, NOT the seller's agent. If not given before buyer signs sales contract, buyer has 7 days to terminate contract AFTER receiving.

Agent and Broker Income

Commission is the most common form of income.

Antitrust Act

Commission rates and any other means by which brokers are compensated by sellers and buyers are always negotiable between the parties. Any attempt by a group of brokers to set the commission rates in their area or between a group of brokerage firms would be considered illegal price-fixing. The federal laws that have the most significant impact in this area are the Sherman Antitrust Act and the Clayton Act. The Sherman Antitrust Act is specific concerning this violation. All commissions are negotiable between brokers and clients and are not set by any Board of REALTORS® or between competitors or by TREC. Any attempt to fix prices would be a violation of federal law. Any agreement to limit competition by assigning market areas would also be a violation. Likewise, boycotting discount brokers is also a violation of federal law.

Requirements of the Offer

Communicated to a specific offeree. Intended to be a serious offer. Definite and specific enough to be accepted by the offeree.

CMA

Comparative Market Analysis - A report prepared by an agent to help a seller realistically price their property.

Ways Agents Add Value to Buying Process

Counseling, Negotiating, Managing Transaction

Data Tracking

Data tracking, also referred to as analytics and social media research.

Measures of Central Tendency: mean, median, mode

Descriptive data analysis and quantitative data collection are often presented visually in charts and tables that illustrate measures of central tendency, including averages (e.g., means, modes). Mean - Average Mode - Value that occurs most frequently in a given data set. Median - Middle score in a distribution; half the scores are above it and half are below it. Average - Mean

Descriptive Data Analysis

Descriptive data analysis. This type of analysis "describes" the obtained results. For example, how many people like or dislike a proposed change in a brokerage's marketing approach. Used to calculate measures of central tendency (averages, means, medians, and modes) of a sample size. Using the sample to summarize data.

Types of Loans

FHA loans are insured by the Federal Housing Administration. VA loans are loans that are guaranteed by the U.S. Department of Veteran Affairs. Conventional loans are loans that are neither insured nor guaranteed by the federal government. These loans often have requirements for a higher down payment of 20% of the market value or more, unless private mortgage insurance is to be paid by the borrower. On these loans, interest rates, loan- to-value ratio, and amortization periods are usually negotiable. A good rule of thumb is that the lower the down payment and the longer the amortization period, the higher the interest rate. Amortized loan -Borrowers make regular equal payments of principal and interest until they repay the loan in full. The term can be anything from 10 to 30 years, but the most common terms are 15 years and 30 years. This loan is often referred to as a fixed-rate loan. Adjustable-Rate Mortgage (ARM) - This loan is paid like an amortized loan, but the interest rate changes or is adjusted periodically. The rate is usually tied to some readily available index, and changes from period to period are usually limited or "capped." This loan can often give the buyer the lowest available monthly payment at the start of the term. However, the rate will fluctuate, and so will the payments. The maximum allowable adjustment over the life of the loan is also usually capped. Graduated Payment Mortgage (GPM) - This is an amortized loan in which the loan payments in the early years are set lower than normal. They will gradually rise over the first few years, leveling off at some point, for example, the fifth year. This type of financing could be beneficial to those whose expectations of future earnings are higher than average.

Factors affecting an agents marketing efforts.

Factors in the external environment can pose threats to a company's competitive edge, such as a rise in interest rates, an increase in a competitor's marketing programs, a new program the competition launches, or regulatory factors. These can shift a business's position in the market. Remember, your market can be affected by social changes, politics, economics, and demographic shifts, to name a few. Gentrification and urban sprawl can affect the popularity and affordability of the market in which you work.

Gen X (1965-1980)

GEN X: NAR'S 2021 HOME BUYER AND SELLER GENERATIONAL TRENDS • 18% bought a multi-generational home • 24% of recent home buyers • 48% looked online for properties as a first step • 49% bought in a suburb or subdivision Marketing Tips for Gen X You may only get one chance to get your message across, so it should be concise and up to date. GenXers are impatient, so be succinct. • Make your presentation short, direct, and use technology. • Deliver your message via the Internet, email, or text messaging. • Keep in mind that negotiations may get competitive and confrontational.

Gen Z (1995-2010)

GENERATION Z As of 2021, the oldest Gen Z member is twenty-two years old. A valuable way to represent them in real estate is as an apartment locator; however, NAR's 2021 Home Buyer and Seller Generational Trends reports that 2% of home buyers were Gen Zers. In a few years, more members of this group will be purchasing their first homes and will consider home buying seminars about the process of purchasing a home to be beneficial. The Gen Z generation is very technical. They have an app for everything. Surprisingly, according to Forbes magazine, "Generation Z likes to talk face to face. 53% of Generation Z said they prefer in person discussions over instant messaging or email."

Generation Characteristics

GENERATIONS DEFINED: Greatest Generation or GI Generation - Before 1925 Silent Generation - 1925 - 1945 Older Boomers - 1946 - 1954 Younger Boomers - 1955 - 1964 Generation X - 1965 - 1979 Older Gen Y/Millennials - 1980 - 1989 Younger Gen Y/Millennials - 1990 - 1998 Generation Z - 1999 to the present

Market Research

Gathering data, analyzing it and drawing conclusions based on what it describes, like CMA. Become familiar with office inventory, learn about specific geographic areas, and read reports published by NAR and their local real estate associations. Market research can indicate the: • sex • marital status • lifestyle • education level • income level of consumers in target market.

The demand for real estate is affected by:

Growth in employment - Employment is the primary driver of demand. As job opportunities expand, raw land is developed into residential subdivisions. As these subdivisions grow, commercial development follows. Transportation systems - Good transportation has a direct effect on value. The expansion of a freeway or light rail system makes the residential development of raw land feasible. Commuters have traditionally moved farther out to the suburbs of a major job center to purchase "more home for less money." The tradeoff is a longer commute. As transportation costs rise, the cost benefit of living farther from job centers decreases. Personal preference - Preference for an area is important but falls far behind jobs and transportation in priority. It is the least important factor affecting demand. The availability of credit - Credit has a direct impact on demand. The pool of available buyers expands in times of "easy credit" and contracts when credit standards are tightened. Likewise, buyers are drawn into the market when mortgage rates are low. Federal government policy - Federal policy affects demand in several ways. Federal income tax policy favors homeownership by allowing the deduction of home mortgage interest and property taxes. The Federal Reserve's monetary policies can expand or constrict the nationwide supply of mortgage funds. Supply and demand are perhaps the primary determinants of real estate values. When the demand for real estate is high and the supply low, prices in the marketplace go up. Likewise, prices decline when the supply is high and demand is low. The real estate market does not respond as quickly to changes in supply and demand as other products because of the "lag time" involved in real estate development and the relatively long time it takes to complete a transaction.

Deceptive

Inaccurate in any material fact or representation.

Canons of Professional Ethics

Included for real estate license holders in the Rules of the Commission. ARTICLE 1. FIDELITY - A real estate broker or salesperson, while acting as an agent for another, is a fiduciary. Special obligations are imposed when such fiduciary relationships are created. They demand: (1) that the primary duty of the real estate agent is to represent the interests of the agent's client, and the agent's position, in this respect, should be clear to all parties concerned in a real estate transaction; that, however, the agent, in performing duties to the client, shall treat other parties to a transaction fairly; (2) that the real estate agent be faithful and observant to trust placed in the agent, and be scrupulous and meticulous in performing the agent's functions; and (3) that the real estate agent place no personal interest above that of the agent's client. INTEGRITY - A real estate broker or salesperson has a special obligation to exercise integrity in the discharge of the license holder's responsibilities, including employment of prudence and caution so as to avoid misrepresentation, in any wise, by acts of commission or omission. COMPETENCY - It is the obligation of a license holder to be knowledgeable and competent as a real estate brokerage practitioner. The license holder must: Be informed on local market issues and conditions affecting real estate in the geographic area where a license holder provides services to a client; Be informed on national, state, and local issues and developments in the real estate industry; exercise judgment and skill in the performance of brokerage activities; and Be educated in the characteristics involved in the specific type of real estate being brokered for others.

Social Media Sites

Internet-based platforms used to broadcast messages, share ideas, market, communicate, and hold conversations. ActiveRain.com is a similar social network just for real estate professionals. Pinterest TikTok LinkedIn YouTube Facebook Instagram Twitter

Inferential Data Analysis

Involves making predictions or inferences about a population from observations and analyses of a sample. Using statistics to make inferences about the population based on a sample size. Using the sample to make generalizations about the whole.

Negotiation

Making two disparate sides of a sale come together to reach an agreement.

Factors used to determine Broker's Fees?

Marketing materials - These materials typically include entry into the MLS, a CMA, yard signs, open houses, ads, and more. Time - Calculate how much the agent's time is worth and how much time it will take to complete the tasks to sell the property. Brokers often factor in how long a home typically sits on the market before selling. Overhead costs - These are the costs associated with running a brokerage, including personnel, Internet, phones, rent, insurance, transportation, and mileage. Competition's fees - Fees are often commensurate with what the market will bear. If the broker sets the fees too high, then potential clients will go with the competition. If the broker sets the fees too low, he or she may not be taking marketing, advertising, and overhead into account, thereby losing out on profit.

Marketing

Matching human needs with goods or services.

Terminology in Offering Process

Offerer - Person making Offer. Offeree - Person accepting/rejecting Offer. Do nothing. An offeree is under no legal obligation to respond to any offer. Inaction is a less than desirable response, but it is nonetheless an option. Reject. An offeree may reject an offer without explanation or comment. Accept. Acceptance of a contract must include full acceptance of the entire offer without change. Any change, no matter how minor, becomes a counteroffer. Counter Offer - A counteroffer occurs when a party changes an offer in some way and then communicates that change to the other party. Rejection of the original offer - In most cases, a counteroffer is a rejection of the original offer. New offer - A counteroffer communicated to the other party becomes a new offer. Multiple Offers - If a broker receives more than one offer, all offers must be presented to the seller unless instructed otherwise. TERMINATION OF OFFERS If an offer has been made, it can be terminated prior to acceptance by the offeree due to: • The acts of the parties • Operation of law

Boomers (1946-1964)

Older Boomers • Ten is the median number of weeks spent home searching • Older Boomers make up 14% of recent home buyers • 33% consider heating and cooling costs to be very important • 7% have credit card debt, which delayed saving for a downpayment Younger Boomers • Younger Boomers make up 18% of recent home buyers • 46% bought in a suburb or subdivision • Twenty-two was the median miles between new and previous home • 13% buy due to retirement Marketing Tips for Boomers • Present your credentials. • Show vitality for active people with active lives. • Use words like now, begin, and first. • Use phrases like "just do it," "go for it," and "I will wish I did if I don't." • Emphasize the lifestyle and quality of life • Accentuate built-in security and the safety features of gated communities • Point out health clubs and recreational amenities Many Boomers are looking to spend on luxury residences to live out their retirement years.

Millennials (1980-2000)

Older Millennials • 23% of recent home buyers • 36% consider commuting cost very important • 63% say convenience to job influenced neighborhood choice • 83% found their home with a mobile app Younger Millennials • 14% of recent home buyers • 43% have student loan debt • 82% were first-time home buyers • 87% used a mobile device during home search To market to millennials: • use social media to get your message across • add a millennial to your sales team in order to better understand and reach new markets In 2021, millennials fall between the ages of 25 and 40 and are the largest adult generation of consumers on the planet. In this country alone, there are over 70 million millennials. That is a staggering amount of spending power for a generation to possess, and all companies need to be aware of how best to attract millennials to their products and services. *The key is to interact with the millennial market is through social media.*

Reasons a home does not sell well.

Price Location Condition Marketing Plan

Primary Research

Primary research is customer-focused, consisting of collected data based on current sales and marketing practices, including data about the competition. It can be complicated and involve a multi-channel approach, or it can be more simplified, such as a yes/no sampling of several hundred people. Research done first hand for the first time. Primary research can include: • Closed transactions • Mailed questionnaires • Observational studies • Email surveys • Telephone surveys • Focus groups

Roles of Agent

Problem solving is the biggest role of the agent.

Four P's of Marketing

Product, Price, Promotion, Place

Hotsheet

Pull a "hotsheet" - a recent activity report - from the MLS at least once a week. Contact at least 25 potential clients; you can advertise solds in your farm even if someone else sold the property. However, do not say that YOU sold it.

Quantitative vs. Qualitative Research

Qualitative Research • Quality (the character or nature, the "why") • Thoughts, feelings, motivations • Why a customer/client does something • Researcher's interpretation of results • Questionnaires/surveys with closed-ended questions Quantitative Research • Quantity (the numbers) • Statistical, numerical data • How many customers/clients do something • Charts, tables, averages • Questionnaires/surveys with open-ended questions

Qualitative Research

Qualitative research explores people's thoughts, feelings, and actions, searching for why people behave or think a certain way (qualitative = qualify [answers why]).

Quantitative Research

Quantitative research employs statistical analysis by measuring values (quantitative = quantity) to determine the results. If an agent wants to know how many past clients plan to sell their homes and purchase new ones in the next three years, she could use quantitative market research.

Silent Generation (1925-1945)

SILENT GENERATION: NAR'S 2021 HOME BUYER AND SELLER GENERATIONAL TRENDS • 5% of recent home buyers • 31% buy to be closer to family, friends, or relatives • 27% purchased senior-related housing • 31% will never move; they are in their forever homes Marketing Tips for the Silent Generation • Emphasize expert opinions. Present your credentials and awards. Use testimonials. Keep your message short and to the point. Make them part of the solution with a win-win conclusion. Emphasize benefits, not features: the cultural, sports, educational, dining, health club, trails, and biking paths.

SWOT Analysis

SWOT - Strengths, Weaknesses, Opportunities & Threats

Uses of SEO's

Search Engine Optimization - SEO's promote your website up the ranks of a search results page, making you more visible to clients.

Secondary Research

Secondary research is in-depth, complicated, costly, and time-consuming. Hands-on secondary research usually falls outside the scope of most busy real estate agents. The good news is that large companies spend vast amounts of money conducting market research, usually available at no charge to the real estate entrepreneur. Analyzing information from previously conducted research projects. The best places to start searching for secondary sources are the Internet and public libraries. Secondary research comes from sources such as: National Association of REALTORS® (NAR) State REALTOR® associations Trade journals Area MLS boards Homebuilders associations Government studies • Utility companies • Chamber of commerce studies • Title companies • Economic development councils or centers • Studies conducted by large businesses moving into the area • University research publications

WHAT MOTIVATES BUYERS AND SELLERS?

Security - A feeling of security comes with owning a home - and the knowledge that your home is a safeguard against inflation. Generally, as prices go up, so does the value of your property. Investment - Payments on your mortgage mean you are acquiring a major possession; instead of rent, you own more and more. Tax Advantage - Your real estate taxes and the interest on your mortgage or land contract are deductible from your income tax. Financial Independence - Many people start on the road to financial independence through homeownership. Your principal and interest payments remain the same for the entire term of your mortgage, while rents usually go up. Standing and Credit - Homeownership solidifies your role in the community and establishes your credit rating. Such responsibility also develops self-reliance, business acumen, and an appreciation for financial independence. Environment - Your children grow up in the neighborhood of your choice. You establish roots. Cash Equity - Better than a savings account, your home can appreciate keeping pace with inflation. Should your hobby be carpentry, decorating, etc., you have opportunities to enhance your home's value. Satisfaction - Homeownership offers advantages that make life more enjoyable, like backyard barbecues and a chance to enjoy your family in the privacy of your own home.

What motivates Buyers/Sellers?

Security - A feeling of security comes with owning a home and the knowledge that your home is a safeguard against inflation. Generally, as prices go up, so does the value of your property. Investment - Payments on your mortgage mean you are acquiring a major possession; instead of rent, you own more and more. Tax Advantage - Your real estate taxes and the interest on your mortgage or land contract are deductible from your income tax. Financial Independence - Many people start on the road to financial independence through homeownership. Your principal and interest payments remain the same for the entire term of your mortgage, while rents usually go up. Standing and Credit - Homeownership solidifies your role in the community and establishes your credit rating. Such responsibility also develops self reliance, business acumen, and an appreciation for financial independence. Environment - Your children grow up in the neighborhood of your choice. You establish roots. Cash Equity - Better than a savings account, your home can appreciate keeping pace with inflation. Should your hobby be carpentry, decorating, etc., you have opportunities to enhance your home's value. Satisfaction - Homeownership offers advantages that make life more enjoyable, like backyard barbecues and a chance to enjoy your family in the privacy of your own home.

Channeling

Steering, also known as channeling, involves taking buyers or renters to, or away from, a particular area based on race, religion, etc., of the buyer or renter. Steering the most common cause for complaint under the law. Steering can be blatant or quite subtle. Directing buyers or renters to a particular neighborhood or building within an apartment complex based upon a protected class would be an example of steering. Grouping families with children in one building in an apartment complex would also constitute steering and could subject the landlord and property manager to liability under fair housing laws.

Novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Complaints Against License Holders

TREC Complaints A person may file a complaint with TREC against a real estate license holder if the person believes the license holder violated the Texas Real Estate License Act (TRELA). If TREC has jurisdiction over the complaint, it will typically investigate the allegations by interviewing the parties and witnesses and gathering relevant information. After review, TREC's enforcement division will notify the license holder if it intends to initiate disciplinary proceedings. After a hearing or other settlement procedure, it will render a decision. If the evidence establishes a violation, TREC may impose a reprimand, suspension of the license, revocation of the license, a fine, probation, or any combination.

Size of Broker's Name in Advertising.

TREC Rule §535.155 states that advertisements on behalf of license holders must contain the broker's name in at least half the size of the largest contact information for any sales agent, associated broker, or team name in the advertisement.

Size of broker name in advertising.

TREC Rule §535.155 states that advertisements on behalf of license holders must contain the broker's name in at least half the size of the largest contact information for any sales agent, associated broker, or team name in the advertisement.

Micro Marketing

Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing. EX: Niche

Steering

Taking buyers to or away from a neighborhood based on any protected group.

Americans with Disabilities Act

The Americans With Disabilities Act (ADA) prohibits discrimination against those with disabilities by denying them the full and equal enjoyment of goods, facilities, accommodations, services and privileges. The ADA is an expansive law that affects almost all public accommodations, including retail stores, real estate offices, concert venues, government buildings, professional offices, restaurants, bars, and hotels, to name a few. Both a tenant in a commercial space and the landlord are potentially liable for violations of the ADA. When readily achievable, the ADA requires the removal of architectural and communication barriers. Ramp installations, curb cuts in sidewalks, repositioned shelves and telephones, flashing alarm lights, marked elevator control buttons, wider doors, elimination of turnstiles, alternate paths for travel, and levered door handles for easy access are also required. Single-family homes, private clubs, historic buildings, and religious organizations are exempt from the ADA.

Independent Contractor

The IRS published the following guidelines in 1976 to determine independent contractor status: Commissions must compensate sales agents. There are to be no advances against their commissions. There may be a Policies and Procedures Manual provided, but there may not be mandatory compliance with the policies. It is only a suggested procedure manual. The sales agent shall pay their own business expenses. The sales agent cannot be made to attend training seminars. The sales agent cannot be made to work set hours. A broker can require that the agent be "full time" but cannot dictate set work hours. Sales agents should not be offered participation in the broker's insurance or retirement program.

Powers of Offeree

The Offeree can accept the offer. This ability is known as the "power of acceptance."

DO-NOT-CALL IMPLEMENTATION ACT OF 2003

The United States Congress passed the Do Not Call Implementation Act in 2003 to protect consumers from unwanted phone calls from telemarketers. The passage of the Do-Not-Call Implementation Act ensured that the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) would create and maintain the Do Not Call Registry.

Slander

The act or crime of making a false spoken statement damaging to a person's reputation.

Defamation

The act or crime of making a false written statement damaging to a person's reputation. California Supreme Court that held that the owners of online sites are not responsible for defamatory statements posted by others. The court did say that the original sources of those statements could be held liable.