5527 5 Steps to RE(fin).

qx 4/5/05 11:50 AM Page i

5 STEPS TO
REAL ESTATE
SUCCESS
WHAT EVERY SUCCESSFUL
REAL ESTATE AGENT
NEEDS TO KNOW
TO BEAT THE COMPETITION

LAUREN STARKEY

NEW YORK
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Copyright 2005 LearningExpress, LLC.

All rights reserved under International and Pan-American Copyright Conventions.

Published in the United States by LearningExpress, LLC, New York.

Library of Congress Cataloging-in-Publication Data

Starkey, Lauren B., 1962
5 steps to real estate success : what every successful real estate
agent needs to know to beat the competition / Lauren Starkey.
p. cm.
ISBN 1-57685-480-9
1. Real estate business. 2. Success in business. I. Title: Five
steps to real estate success. II. Title.
HD1375.S72 2005
333.33'023'73dc22
2004027790

Printed in the United States of America

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5527 5 Steps to RE(fin).qx 4/5/05 11:50 AM Page iii

CONTENTS
INTRODUCTION 1

STEP 1 UNDERSTAND THE BASICS 3

YOUR FIRST JOB: CONSIDER THIS 4
REALITY CHECK FOR NEW AGENTS 12
STEP 2 DEVELOP SKILLS FOR SUCCESS 21
PERSONAL SKILLS 22
PUBLIC INTERACTION SKILLS 25
TIME MANAGEMENT SKILLS 27
MARKETING SKILLS 30
NETWORKING SKILLS 36
STEP 3 USE YOUR COMPUTER LIKE A PRO 43
ACCESS AND MARKET LISTINGS 44
ORGANIZE WITH SOFTWARE 45
BUILD A SUCCESSFUL WEBSITE 47
MARKET YOUR WEBSITE 53
KEEP IN TOUCH: THE IMPORTANCE
OF E-MAIL 55
USE E-MAIL FOR MARKETING 58
STAY INFORMED: RESEARCH
AND EDUCATION 60
STEP 4 MEET THE NEEDS OF BUYERS AND SELLERS 67
DEALING WITH BUYERS 68
ALL ABOUT SELLERS 76
STEP 5 NAIL THE SALE 91
PREPARING SELLERS FOR AN OFFER 92
HELPING BUYERS MAKE AN OFFER 93
PRESENTING OFFERS 95
NEGOTIATING STRATEGIES 99
GETTING TO THE CLOSING 103
THE DAY OF THE CLOSING 108
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APPENDIX A Power Words and Phrases 115

APPENDIX B Real Estate Glossary 119
APPENDIX C Resources 161
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ABOUT THE AUTHOR

L auren Starkey is a writer and editor who specializes in educational

and reference works. Her twelve years of experience include eight years
on the editorial staff of the Oxford English Dictionary. The author of more
than ten volumes, Lauren lives in Essex, Vermont with her husband and
three children. She would like to thank the many agents from across the
country who shared their insights with me. Their experiences and expert-
ise shaped this book. Every reader of 5 Steps to Real Estate Sales Success will ben-
efit from the wisdom of agents from California to Maine, Florida to
Michigan, whose combined experience totals more than two centuries.
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INTRODUCTION

T his book is intended to help real estate agents in two ways. First, sell-
ing real estate can seem like an overwhelming and complicated
process. However, by breaking down that process into five distinct steps
that directly follow one another, it becomes more manageable. Learning
new information piece by piece, in an organized way, makes it easier to
understand and master.
Second, while every agent can benefit from being better educated about
the selling process, education takes time. And every broker will tell you that,
even if youve just gotten your license and arent sure how to proceed, its
important to simply get out there and start selling. That is why this book is
packed with tips from highly successful real estate professionals. These tips
can be acted upon immediately, giving the reader dozens of ways to improve
his or her business today.
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2 5 S T E P S T O R E A L E S TAT E S U C C E S S

5 Steps to Real Estate Sales Success will guide you from your first days and
weeks on the job to the closing table. Along the way, you will gain the advice
of over two centuries of combined sales experience.
In Step 1, the different types of real estate offices are compared and con-
trasted to help you make an informed decision about where to work. In addi-
tion, issues such as dealing with personal finances and your support system
are examined.
In Step 2, you will learn the skills every REALTOR needs to be suc-
cessful. Since you have already chosen this exciting field, you probably have
many of these skills. But looking closely at how they work to your advantage,
and how to improve upon them, helps to take those skills to the next level.
Step 3 is about what has been called the number one tool for agents, the
computer. There is no excuse for being left behind as technology evolves and
changes the way real estate business is conducted. More and more buyers
look to the Internet to find homes, and the agents who will show them those
homes. There is no easier way to keep in touch with your growing client list
than by e-mail. By maximizing your knowledge of computers and their
application to real estate sales, your marketing of both yourself and your list-
ings will improve, youll be better organized, and youll keep up with the lat-
est research and market trends.
Step 4 examines the issues facing buyers and sellers agents. Learn how to
deal with first-time buyers, and what a seller wants to hear in a listing pres-
entation. When you understand the needs of buyers and sellers, and how best
to meet them, you end up with satisfied customers. Satisfied customers can
bring you more business, either through their own next buy or sale or
through referrals.
In Step 5, the sale moves from contract to closing. Along the way, you will
learn how to present offers, get great negotiating tips from the pros, and find
out options for dealing with low appraisals. You will also hear about the clos-
ing itself, and how to ensure that the transaction goes smoothly.
As one of the most successful agents in New England for over 25 years
notes,You can never have all the answers, so you need to know where to find
them. Take Nancy Langs advice, and turn the page. The keys to your sales
success are in this book.
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S T E P 1

UNDERSTAND
THE BASICS
R eal estate success begins with finding the
right place from which to begin your career.
Should you work for an office in your commu-
nity, or relocate? Which type of real estate
office should you choose? Once you begin selling,
experienced agents agree that, other than hard
work, the most important factor in your success
is maintaining a realistic vision of what you can
accomplish. When you know what to expect,
both of the field and of your efforts, you wont
be disappointed. The realities of beginning a
career in real estate can be daunting, but they
can be challenging and rewarding, too.

B efore you get your first listing, or show your first property, you can make
decisions that will set you on the path to success. The first is deciding
where to work. Just because there are dozens of real estate offices hiring new
agents doesnt mean it will be easy to find a job. Thats because you dont just
want a jobyou want a great job at an office where you fit in and enjoy a
good rapport with the other agents. There are many factors to consider
before you make a choice.
The second decision is about if and how you will prepare for your new
career. Many agents dont bother to think about the financial constraints of
beginning work on commission. They dont plan for long, irregular hours,
either. A lack of planning can quickly result in those agents resigning before
they can even see their first commission check. Start work in real estate sales
with your eyes wide open. Know the realities you will face, and plan for
them. In doing so, youll start your career positioned for success.
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4 5 S T E P S T O R E A L E S TAT E S U C C E S S

YOUR FIRST JOB: CONSIDER THIS

The good news is that it probably wont be difficult to land your first job.
Most real estate offices continually recruit new sales agents to join their
ranks. Its relatively inexpensive for them to do so, since salespeople are
independent contractors (and thus considered self-employed) who usually
receive no benefits. Offices get a percentage of all agents commissions, so the
larger their workforce, the greater their profit. In addition, the turnover of
sales agents is high in many real estate offices, so desk space becomes avail-
able on a regular basis.
But just because it might be easy to find a job, doesnt mean it is the
right one for you. There are many employment options to consider. By
doing your homework, and exploring each option, you will be more likely
to find the situation that is most comfortable for you, and from which you
can do your best work.

L OC ATION , L OC ATION , L OC ATION

Most experts agree that you should capitalize on knowledge of your local
area by joining a company close to where you live. If youve lived there for
at least a year, you probably know about the neighborhoods, schools, and
other selling points, which you can then pass on to prospective buyers. You
have also developed a sphere of influencefriends, relatives, and acquain-
tances who make up your initial group of contacts. They are the people who
will help you get the word out that you have entered the real estate field.
Your sphere will increase as your, and your initial groups, efforts let even
more people know about your business.
However, your current location may not provide you with the oppor-
tunity for growth and income that you desire. If this is the case, or you are
planning to relocate for some other reason, investigate areas that could
afford more favorable conditions. For instance, take a look at the areas of
the country that are growing fastest. These are the cities and towns
experiencing economic booms. New housing is being built and sold, and
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U N D E R S TA N D T H E B A S I C S 5

existing homes are turning over as people move to these areas for employ-
ment in large numbers. Below is the U.S. Census Bureaus most recent list
of the ten fastest-growing areas with their population percent change
from 1990.

POPULATION
CITY OR TOWN GROWTH RATE
Las Vegas, Nevada 83.3%
Naples, Florida 65.3%
Yuma, Arizona 49.7%
McAllen, Edinburg, or Mission, Texas 48.5%
Austin or San Marcos, Texas 47.7%
Fayetteville, Springdale, or Rogers, Arkansas 47.5%
Boise City, Idaho 46.1%
Phoenix or Mesa, Arizona 45.3%
Laredo, Texas 44.9%
Provo, Utah 39.8%

If you are considering relocation, you might also want to look at the
areas of the United States in which housing prices are highest. Because
your commission is a percentage of the sale price, higher sale prices mean
more money in your pocket for each transaction. These areas may also be rec-
ommended because they are consistently desirable places to live; the hous-
ing markets are thriving, and prices are soaring because large numbers of
people move there. Below are listed the five cities or towns with the highest
median home values, according to the 2000 Census Report. (In comparison,
consider that the national average is $119,600.)

CITY OR TOWN AVERAGE COST

Sunnyvale, California $495,200
Cambridge, Massachusetts $398,500
Santa Clara, California $396,500
San Francisco, California $396,400
San Jose, California $394,000
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6 5 S T E P S T O R E A L E S TAT E S U C C E S S

T YPES OF R EAL E STATE O FFICES

Even if you narrow down your list to the real estate offices in your own neigh-
borhood, you will still most likely have several to choose from. What dis-
tinguishes them from each other? On the most basic level, there are several
types of real estate companies. The most common are national franchises,
large independent firms, and small independent firms. Each has potential
positive and negative factors to consider.

National Franchises
You have probably heard and seen a lot of advertising for national real
estate franchises. They focus on building brand-name loyalty and national
(or even international) recognition among the buying and selling public,
and then pass along that name recognition to each independently owned
and operated real estate franchise that uses their national name. The
franchise company licenses their name to the franchisee in return for a
percentage of that firms profits. Franchises are currently buying up inde-
pendent firms at a brisk rate all around the country, reducing the total
number of real estate offices.
One of the benefits of joining a national franchise real estate company is
the training they offer. These companies normally sponsor educational pro-
grams to help new sales agents become successful, and to give experienced
agents more advanced selling tips and techniques. They also provide state-
required continuing education classes free to their agents and brokers, at loca-
tions that are convenient to, or even in, their offices. A broker/owner from
Fort Wayne, Indiana says he decided to go with a franchise because of the
training and national recognition they offer:

Ive been in this business a long time, and Ive seen many
independent companies giving up their independence to
join one of the several successful national franchises. I guess
that was always in the back of my mind as I gathered
information about my options. I know I made the right
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U N D E R S TA N D T H E B A S I C S 7

choice because we are doing great financially and my agents

are among the most professional in the business. We take
full advantage of all the training opportunities, and I do
believe that the training has played a major role in helping
our new agents to succeed.

Advertising is another primary benefit of working for a franchise. The

parent company has millions of dollars available to promote its name in many
ways. Beyond the typical print, radio, and television ads, advertising may
include sponsorship of sporting events, and a large presence on the Internet,
both of which can increase name recognition and revenue. Franchise websites
allow searches of their nationwide listings. Prospective buyers find proper-
ties that interest them on these sites, and then get directed to a local fran-
chise. Some large companies claim to provide hundreds of thousands of leads
to their franchisees in this way.
Franchised offices tend to be more structured than independent offices.
This means agents may be required to attend regular sales meetings, remain
in the office for scheduled floor time, and be on hand for other organized
events. Working with such a schedule may impede the flexibility of your
workday, so consider this factor before applying. The benefit to participat-
ing in these meetings and other events is that you can gain valuable infor-
mation and motivational help.
Another benefit to working for a national franchise is that the cost of
doing business is decreased. Many of your office supplies will either be
supplied free of charge, or at greatly reduced rates. The parent company can
buy in bulk, thereby greatly reducing the price on popular items such as busi-
ness cards, magnets, signs, and real estate giveaways.
However, there is a price for all of the support given by the parent com-
pany. Agents typically receive lower commissions than they would at other
types of real estate offices, and there are additional franchise/royalty fees and
marketing costs that can be passed on to the individual agent as well. Get spe-
cific information about commissions and fees when evaluating a job offer in
order to make the most informed decision.
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8 5 S T E P S T O R E A L E S TAT E S U C C E S S

THE BIG FIVE

Below are listed the five largest real estate franchises in the
country. Together, they employ over 355,000 sales agents.
Three of the five largest companies, Century 21, Coldwell
Banker, and ERA, are subsidiaries of the Cendant
Corporation.

Century 21 (www.century21.com) bills itself as the worlds

largest residential sales organization. It has over 6,600
independently owned and operated broker offices in over
30 countries.
Coldwell Banker (www.coldwellbanker.com) has over
3,500 offices in North America, the Caribbean, Singapore,
and Central America.
ERA (www.era.com) is made up of 2,600 brokerages across
the United States and in 31 other countries and territories.
RE/MAX (www.remax.com) is the only real estate fran-
chise still owned and operated by its founders. It has
4,700 offices in over 50 countries.
Prudential Real Estate (www.prudential.com/realestate) is
owned by the insurance company of the same name, and
employs over 40,000 sales associates in 1,500 offices across
the country and in Canada.

Large Independent Firms

Independent firms may have many branch offices in one state, region, or city.
They are not affiliated with a national franchise, but rather are owned by an
independent party. These firms are similar to national franchises in their
organized structure and advanced training programs. However, a major dif-
ference is that each real estate office that is owned by a large independent firm
is most likely headed by an office manager/broker who is not the owner. By
comparison, franchised offices are usually managed by the owner/broker of
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U N D E R S TA N D T H E B A S I C S 9

that office. Therefore, with large independent firms, you face a greater like-
lihood of an office manager relocating to run a different office or to open his
or her own office.
That can be an advantage, as working for such a firm offers more manage-
ment opportunities. The relatively higher turnover in management means
more positions become available with some frequency.Therefore, if you think
advancement to an office manager position would suit you, large independent
firms could be a better fit than national franchises. Another advantage is that
you can get many of the same perks of a national franchise, without having to
pay the franchise royalty out of your commissions, such as the benefit of a
name that has built up a significant amount of local recognition in your com-
munity. For independent companies that have several branch offices, the name
recognition factor can prove crucial in a local region.

Small Independent Firms

Small independent firms have one or two branch offices. Most often, they are
run by an owner/broker who employs a handful of sales agents. Other inde-
pendent firms may instead have one large office, where dozens of agents
work. Some independent firms specialize in a particular type of real estate,
such as waterfront homes, commercial real estate, or upscale condominiums.
They may have become experts in their area of specialization and have built
up a name for themselves in their community. These can be good firms to
work for if you want to learn their area of specialization or if you want to get
into their niche market in a local area.
You may have more flexibility in a small independent firm since it prob-
ably wont require as many formal sales meetings or other training sessions
for its agents. Often, training will be informal and may consist of a conver-
sation with the broker over a cup of coffee instead of a formal classroom
atmosphere. This type of office can be a good fit for someone who wants to
work part time or who needs extensive flexibility in his hours and in the
demands placed on him by the office. Indeed, independent firms are increas-
ingly encouraging part-time sales agents, as the franchise offices are dis-
couraging them or forcing them out. In addition, smaller firms typically
attract agents by offering higher commissions than other types of real estate
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10 5 S T E P S T O R E A L E S TAT E S U C C E S S

offices, offsetting the lack of support and marketing by maximizing the

profit on each transaction.

H OW TO E VALUATE A R EAL E STATE O FFICE

Your future success depends not only on your professional abilities, but
also on the company that you work for. In other words, where you work may
be almost as important as how you work. Keeping this in mind, there are a
number of things to consider as you investigate the real estate companies you
regard as possible places of employment.

Location
Where is the company located? If you arent willing to add a long commute
into your daily schedule, begin by looking at real estate offices located near
where you live. Evaluate each office based on the amount of public contact
it encourages. Is the location in a busy place? Does it have a large sign that
is easily seen by people driving by? Are there other stores and offices nearby
that may encourage foot traffic to the office? Does the building look attrac-
tive, and is it easily spotted from the street?

Inside the Office

As you walk up the sidewalk to the door, how does the landscaping look? Is
there any? Can you see through the windows? Is there good lighting on the
sidewalk and in the parking lot for evening appointments? As you open the
door and walk inside the building, try to view the area immediately inside the
doorway as a prospective client would see it. Is there a friendly atmosphere?
Does the office project a professional image? You want to find an office that
appeals to prospective clients and customers as well as to yourself.
Consider desk space, if you will need to use it at the office. How many
desks are there, and how are they organized? Will you have any privacy? Are
there shared offices or conference rooms that you can use when customers
want to speak to you privately? Some people may not feel comfortable dis-
cussing their credit histories or income levels with you in the middle of a
large room surrounded by hordes of other agents and customers.
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U N D E R S TA N D T H E B A S I C S 11

Teamwork
Nancy Lang, one of New Englands top-selling agents for over 30 years,
stresses the importance of finding an agency that encourages and rewards
teamwork. Interview at a number of different agencies. Speak with the
agents who work there and gauge their willingness to be part of the team. Are
there a number of primadonnas whove become ostracized from the other
realtors? Ask questions and listen carefully to the answers.
Brenda Eager of the Gold Group in Southgate, Michigan, agrees. You
need to get along with the other agents in your office. When you do, you
become part of a group that can help you improve the way you do business.
You can bounce ideas off each other, and give kudos for new listings and clos-
ings. Yes, it is a competitive atmosphere, but competition can be fun.

What About Advertising?

This could well be the single most important factor in your decision-making.
Effective advertising leads to name recognition, making a companys image
common to the general population. If you work for a company that has such
recognition, your job is made easier because people will associate you with
the quality and success of your company before you even say a word. Today,
marketing takes many forms beyond the traditional print, radio, and televi-
sion ads. Companies sponsor sporting events, music concerts, and stadiums,
for example. Your examination of a prospective employers marketing cam-
paign(s) should include all of these.
Compare the printed advertising from several different real estate compa-
nies. What is the overall quality of each ad? Note the type of paper, wording,
overall appearance, and approach. Look also at other types of advertising, such
as billboards, radio and television advertisements, or a telephone hotline.
Investigate each of these areas to see how much of a presence each real estate
company has. Advertising can directly impact your business if it is done
well, by providing you with leads to both buyers and sellers.
Finally, and probably most importantly, evaluate the quality of each
companys website. According to the 2003 National Association of
REALTORs Profile of Home Buyers and Sellers, 71% of home buyers
reported using the Internet during the first quarter of 2003, compared with
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12 5 S T E P S T O R E A L E S TAT E S U C C E S S

41% in 2002. Therefore, a strong, professional website isnt just good

advertisingit is an integral part of success in the business. National fran-
chise sites are a good place to start. They include property listings, mortgage
information, neighborhood searches, and even job listings (see the box on
page 8 for their addresses). But even small independent firms can and should
have similar sites.
To get an idea of the business a great website can generate, consider that
Coldwell Banker reports that its site gets over eight million hits and gener-
ates over 180,000 leads each year. When a potential client asks for informa-
tion, he or she is directed to a local office, which can translate into a listing,
a sale, or both for that office.

REALITY CHECK FOR NEW AGENTS

Beginning a career in a commission-based field that involves irregular

hours is more complicated than taking a salaried 9-to-5 position. You cant
count on a regular paycheck, or on being home for dinner every night. If
you enter the field with eyes wide open, knowing what to expect and
planning for those realities accordingly, your chances for success will be
much greater.

F INANCES

The agents we surveyed agreed that becoming a REALTOR is expensive.

Before you start your real estate career, you should have enough income saved
to cover your basic living expenses for six months. Even if you are able to sell
properties right away, it could take a couple of months from the time you put
a buyer and seller together to the time you receive your first commission
check. In addition to basic living costs, consider these expenses that should
be included in your planning:

New ClothesEveryone you meet is a potential new client, so

you should think of yourself as on the job at all times. That means
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U N D E R S TA N D T H E B A S I C S 13

developing a casual dress look for life. You probably dont need suits
or other dressy business attire unless you work in a major metro-
politan area, but check to see what other agents are wearing, and fol-
low their lead.
Errors and Omissions InsuranceSome agencies cover this
expense for their agents, while others do not. If this responsibility is
yours, find out the cost and include it in your financial planning.
Car ExpensesYour car payment, if you have one, wont change,
but your car usage will increase dramatically. Think of your car as an
extension of your office. It will be used to transport clients, and can
be a base from which you make calls and keep paperwork in order.
It must not only be spotless but also be in perfect running order.
Expect maintenance costs to rise substantially, and budget for the
extra gas you will use each month.

ACT NOW

Consider signing up for roadside service, such as AAA. Many

agents consider it a necessity, because any minor breakdown that ties
you up for hours could cost you a deal.

Marketing CostsYou will be printing flyers and other handouts

to give people as you seed neighborhoods or use other techniques to
build your client base. This will probably cost at least $1,000, and
most likely, more. For more information on promotion costs and
ideas, see Step 3.
Fees and MembershipsSocializing is part of your marketing
plan. Many local organizations and clubs charge dues and mem-
berships fees, so do some research and plan accordingly.
ChildcareIf you have children, you cant take them with you
when you show houses, even if you work from home. You need reli-
able childcare that is available at a moments notice.
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14 5 S T E P S T O R E A L E S TAT E S U C C E S S

Tools of the TradeMany agencies provide routine office supplies,

but you will need to purchase your own personal computer, Palm
Pilot or Day Timer, and a cell phone. If you already have a cell
phone, expect the number of calls you make and receive to grow, and
plan for the new usage level. See Step 3 for more information on
technology and what successful agents agree are necessary tools of
the trade.
Eating OutBeing on the road means many meals will be pur-
chased. In addition, the closing of a deal is sometimes celebrated by
entertaining clients. No matter your financial situation, you want to
appear successful, and that means having the ability to cover costs.
You never want to be out with a client and have your credit card
refused, or be out of cash.
Things You No Longer Have Time to DoMore time on the job
means less time to accomplish routine tasks. Make a list of the
things you do around the house, such as mowing the lawn, cleaning,
changing the oil on the car, and doing laundry. What can you rea-
sonably expect to accomplish before or after work? How much
would these things cost to have someone else do them?
Continuing EducationThis wont affect you immediately, but
each state has requirements for maintaining your real estate license.
Some agencies pay for, and even provide, continuing education
opportunities, while others leave it up to you. Find out the cost and
location of classes if the financial obligation for continuing educa-
tion will fall upon you.

NANCY LANG ON WHY AGENTS FAIL

I hired many agents during the 25 years I had my own

firm. They all made it through the interview process and
initial training, and I always had high expectations for each
one. But after a few weeks of work, I could distinguish
between the agents who would succeed, and those who
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U N D E R S TA N D T H E B A S I C S 15

would fail. Inevitably, the ones who didnt make it got too
caught up in the problems of their clients. They would
make great social workers, but not great REALTORs.
These agents tried to solve buyers and sellers personal
problems, and didnt help them make decisions. They for-
got that the one problem they were trained to solvefind-
ing the right propertywas the one they were hired for in
the first place. Empathy and good listening skills are criti-
cal for good agents, but you cant lose sight of the real serv-
ice you can provide your clients.

S UPPORT N ETWORK

Its important to have the support of family and friends when you begin
selling real estate. These are the people you can turn to when times are
tough, and who expect that you will be there for them as well. But real
estate sales success requires a big commitment of both time and energy
including some of the time and energy that your family and friends may
have been getting. If the people who are important in your life arent pre-
pared for what the first months of your real estate career will bring, it can
lead to problems.
Brenda Eager, a veteran REALTOR and top seller from Michigan cau-
tions, Real estate can be hard on new agents. Anyone starting out in this
business needs a backup system, especially if they have young children. You
dont really make your own hoursyour customers do. If a buyer wants to
look at houses after work, your hours start at 5:00 P.M. If a seller has three
showings on a Saturday, you work weekends. Have a network in place that
helps you keep your life in order. Acknowledge the fact that you will, in the
beginning, need a lot of support.
Planning ahead can alleviate many of these problems. The following four
suggestions will help you to focus on your new career, rather than on crises
at home. They will also keep the important people in your life cheering for
your success.
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16 5 S T E P S T O R E A L E S TAT E S U C C E S S

1. Enlist the support of your friends and family in advance. Let

them know what to expect. If there is anything specific you need
help with, ask ahead of time. The more your friends and family
feel like theyre part of a team helping you to succeed, the more
theyll be willing to do. People who care about you will be happy
to help as long as they dont feel taken advantage of. Without this
advance notice, they may feel ignored, or that you no longer care
about them.
2. Provide a timeline. Family and friends will be willing to make
accommodations for you if they know it is not permanent. If it will
be difficult for you to attend traditional family events for the next
year, be open about it, stressing the fact that it is not a permanent sit-
uation, and that it has nothing to do with your feelings for them.
When explaining your time constraints, remember that your com-
mitments go beyond the time spent at the office or showing prop-
erties. Real estate success also involves reading and researching,
traveling around neighborhoods, taking courses, and participating
in networking activities.
3. Keep in touch. If you cant attend weekly get-togethers with your
friends any more, make time to call them and let them know you still
care. An unexpected phone call to your spouse in the middle of the
day can let him or her know they are in your thoughts. Make the
effort to maintain relationships, no matter how busy you are.
4. Make time for yourself. The most successful agents dont work
around the clock. They know that down time helps them to
recharge. Your indulgences will pay off at work, too, where you will
have a better attitude, renewed energy, and more focus. Vermont
agent Lydia Wisloski points out,real estate can eat up all of your
time if you dont manage it well. Take some time for yourself. Its
important to have balance in your life. Jill Birdsall, a REALTOR
in Albany County, New York, goes further:The only way to have
some down time is to schedule appointments with yourself just as
you would for your clients.
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U N D E R S TA N D T H E B A S I C S 17

T HE B IG P ICTURE

The first few months on the job will be challenging. You may find it
difficult to get used to the untraditional work schedule and lack of a
steady paycheck. It is critical that you stay focused on why you chose the
field of real estate, and remember that the fast-paced, no-two-days-the-
same job will eventually result in commission checks. Successful agents
agree on this: The more you put into it, the more your job will reward
you financially.
But how do you manage expectations and stay positive and upbeat when
you put in long hours and get nothing in return? Instead of dismissing neg-
ative thoughts, acknowledge them, and then rethink them. For example:

Negative Thought: Im spending more time at work than

with family and friends.
Rethink As: My real estate career will bring me into
contact with thousands of new people,
some of whom may become friends.

Negative Thought: Im working so hard, and havent gotten

one listing or sale yet.
Rethink as: I know that making good money in the
first months as an agent is rare. But I have
the motivation and drive that will
eventually lead to commissions.

Another technique for dealing with negative thoughts and unrealistic

expectations is to focus on the big picture. Why did you decide to enter the
field of real estate? Probably because of many or all of the following reasons:

ExcitementWhen you are stressed by long hours that dont seem

to be paying off, remember that tomorrow will be another experi-
ence. The job changes from day-to-day and moment-to-moment.
Real estate is challenging and fast-paced. Not only will your tasks
vary, but that way you approach them can, too.
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18 5 S T E P S T O R E A L E S TAT E S U C C E S S

PeopleReal estate will bring you into contact with many differ-
ent kinds of people, and youll be meeting new faces constantly. If
you like to interact with people, real estate is a terrific field.
SatisfactionUnlike most sales jobs, youre helping people do
something they want to do and, in many cases, helping people to
dramatically improve their lives. Enjoy the satisfaction that comes
from helping buyers to find and purchase their dream house, or
helping sellers to financially better themselves.
MoneyOnce youre established, real estate can be a lucrative
field. Even a hardworking newcomer can make reasonably good
money. According to a recent survey by REALTOR Magazine,
agents with five or fewer years experience made an average of
$27,214. With six to ten years, income jumped to an average of
$69,899. The median salary for those with more than 25 years of
experience was $82,501. However, regardless of time spent in the
field, those with at least one personal assistant earned an average of
$123,006. REALTORs reported that their personal assistants,
whether full- or part-time, earned an average of $23,565 a year.

T O R EVIEW

Decide where to sell from. Your town or area of residence makes

sense because of the knowledge you already have but, for some
people, relocation is a good idea. Make an informed choice about the
location of your business.
Working for a large national franchise has many advantages, includ-
ing training, marketing, and support. Downsides include lower
commissions and a more structured work environment.
Large independent agencies offer greater chances for upward mobil-
ity. If you think you would eventually like to move into real estate
management, while enjoying the marketing and name recognition of
a larger firm, this could be a good fit.
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U N D E R S TA N D T H E B A S I C S 19

Small independent firms offer the greatest flexibility, including

part-time work. They also typically pay higher commissions to
their agents. However, the costs of doing business, including mar-
keting, supplies, and office spaces, may fall upon you.
You will probably have a choice of firms to decide among. Evaluate
them carefully before making a decision, by comparing location, aes-
thetics and workability of office space, and advertising.
Maximize your chances for success by retaining a realistic picture of
beginning real estate sales.
Prepare for the financial realities of the first months on the job, and
plan accordingly. You wont see a regular paycheck, and might not
receive a commission for many months. You must know the
expenses youll need to cover, and how youll cover them.
Keep your support network of family and friends vested in your suc-
cess. As your work keeps you away from home and preoccupied,
make an extra effort to maintain meaningful contact with the peo-
ple who mean the most to you. You will need their support, and they
will need you, too.
When the long hours and possible lack of financial compensation
get you down, keep your eye on the big picture. Most agents dont
make much money during their first few months in sales.
Remember why you chose the field, and what your future success
will look like.
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5527 5 Steps to RE(fin).qx 4/5/05 11:50 AM Page 21

S T E P 2

DEVELOP SKILLS
FOR SUCCESS
While the training you received before licensing is
vitally important to your career, it probably didnt
teach you about some of the most important ele-
ments of real estate sales success. Training con-
cerns itself primarily with the legal and ethical
aspects of your chosen field, rather than the skills
you will need on your first day,and every day,to suc-
ceed as a real estate agent. Dozens of top-selling
agents from around the country have been surveyed
about those skills that are most important in
determining real estate success. While approaches
may vary, they all agree that their careers are built
on the five skills detailed in this Step.

T he easiest way to develop success skills is by first learning what they are,
and then breaking them down into manageable parts. When you
increase your awareness of what is needed from you, you can work on weak
areas, and play up strengths. If shyness is keeping you from cold calling, you
could benefit from a class in public speaking, and perhaps also from a new
focus on other marketing strategies. If youve always thought of networking
as insincere small talk and handshaking, you will benefit from a better
understanding of this vital tool for building a client base and developing a
professional reputation that will bring you business.
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22 5 S T E P S T O R E A L E S TAT E S U C C E S S

PERSONAL SKILLS

All REALTORs can get a good educational foundation, and thoroughly

understand the fundamentals of real estate. But those basics can take you
only so far on the road to success. What separates top-selling realtors from
those who work hard without seeing much of a financial return? There are
six qualities that count the most, according to the experts.

H ONESTY

Being honest in your dealings with other salespeople, your office manager,
your clients, and your customers is of the utmost importance. If you arent,
not only will your professional reputation suffer, but there could be legal con-
sequences that could potentially end with your license being revoked. As
Don Marcy, a REALTOR for over twenty years, notes,

There is a lingering perception among homebuyers that

ours is a cutthroat field where you have to be a real shark
to survive. Maybe this was true a long time ago, but today
the image of the hot-shot salesman who will say any-
thing and do anything to get the sale is as outmoded as the
buggy-whip.

F LE XIBILITY

Remain adaptable in both the scheduling of your time, and in your career
plans and goals. What if you are determined to sell only houses and condos,
but find the market is weak? Should you give up, or learn all you can about
selling land and investment properties? Listings and sales dont come at
predetermined times. You might have a month in which almost nothing hap-
pens, and then one in which you are inundated with business. Use slower
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DEVELOP SKILLS FOR SUCCESS 23

times to review your marketing plan, perform market research, and keep up
with local and national trends. If you expect twists and turns, you will be able
to flex with them, rather than let them break you.

S ELF -M OTIVATION

Since your success depends on your own efforts, you need to be highly
motivated. Your motivation to succeed will give you the energy you need
to place cold calls and drum up new business when things are slow.
Some agents use motivational tools such as books, tapes, and workshops
to keep them energized, while others find interaction with peers, such
as through real estate organizations, keeps them on top of their game.
Find what works for you, and recognize those times when you need a
boost in motivation.

L ISTENING S KILLS

Real estate agents need to listen carefully to the needs and desires of their
customers, so they can serve those needs and close the sale. Sometimes
your clients may not be able to tell you exactly what they are looking for,
so youll need to ask the right kinds of questions to determine their wants
and needs.
Nancy Lang, the first REALTOR in New England to sell over
$1,000,000 in properties explains, come up with open-ended questions.
Dont ask a string of questions that require a `yes or `no answer. For
instance, instead of asking if they require a master bath, ask about how
they see themselves using it. Do they want a relaxing spa area, or are they
people who take quick showers and get on with it? If your listening skills
are good, you will come up with more questions and answers. Eventually,
you will have a much more detailed vision of what your buyer is looking
for. They in turn will be pleased that you took the time to listen and
understand them. Nancy sums it up,I became successful when I learned
how to listen.
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24 5 S T E P S T O R E A L E S TAT E S U C C E S S

YOU KNOW YOURE NOT

A GOOD LISTENER WHEN . . .

. . . your listing presentations take more than a half hour.

. . . you start showing properties with just a price; location;
and bed and bath count.
. . . you cant get through your prospecting script in less
than three minutes.
. . . you spend more time talking about you than you do
finding out about your buyer or seller.
. . . youve offended someone at a closing through an
offhand remark.

A BILITY TO L EARN FROM M ISTAKES

Face up to your mistakes and use them to learn how better to deal with sim-
ilar future situations. For example, after a meeting with a seller that didnt
result in a listing, make note of what went wrong and why to help you over-
come that obstacle in your next listing meeting. If your seller finds a mistake
in their listing, apologize and fix the error quickly. Then, take a moment to
think about how the error occurred. Did you rush to get the listing onto the
Multiple Listing Service (MLS)? Were the notes you made while measuring
and examining the property too sloppy to read? If you learn from your mis-
takes, you will perform better in the future.

T OLERANCE

You never know who your next client might be. A genuine respect for peo-
ple of all ethnic backgrounds, races, religions, and lifestyles is needed to be
able to build rapport with anyone and everyone seeking your services.
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DEVELOP SKILLS FOR SUCCESS 25

PUBLIC INTERACTION SKILLS

An agents work revolves around peoplesellers, buyers, tenants, mort-

gage bankers, lawyers, and brokers. In order to get the job done, and gain
the trust and respect of those you work with, you need to behave in a way
that others will respond positively to. That means being friendly, open,
and kind. Keep that mind while interacting with everyone in your pro-
fessional life.

L IKEABILITY

Buying a home is not only an enormous financial transaction, but it is a

highly personal decision. Buyers and sellers wont want to do business with
you if, first and foremost, they dont like you.

THE NUMBER ONE RULE OF BUSINESS

People do business with people they like.

Not only will they do business with you, but they may do repeat business
with you, or refer other business to you! When clients like you and your serv-
ices, there is no end in sight to the income they can bring you.
That doesnt mean you wont run into some seriously unpleasant
people along the way. Every REALTOR has a story or two about an
impossible client. But what counts in the long run is that you treat even
the most difficult people with respect. Try not to second guess some-
ones motivations, especially when they create negative consequences for
you; most of the time, their rudeness or change of heart has nothing to do
with you.
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26 5 S T E P S T O R E A L E S TAT E S U C C E S S

C ONFIDENCE

A strong sense of self inspires others to perceive you positively. Confidence

adds to your likeability, and it also helps you to stay motivated when you face
the inevitable rejections that come with your job. Perhaps youve spent hours
with a client, showing her every property in the county that meets her cri-
teria. A week later, you discover that she signed a contract with someone else.
Confidence will help you get back in the car and do it all over again with
another client.

ACT NOW

Need a confidence boost? Schedule at least five property

previews for the next few days, and five more for next
week. Then, make it a habit to regularly preview as many
homes as possible. Previewing gives you first-hand knowl-
edge of your inventory, and when youre knowledgeable,
you gain confidence!

P EER R EL ATIONSHIPS

Because of the number of other agents working in your area, chances are that
your listing will be sold by someone else. Therefore, the number of agents in
your area who know and respect you, and the way in which you market your
properties to them, can make a big difference in how successful you become.
One of the best ways to develop positive peer relationships is to attend
every meeting you can. Office, board, and MLS meetings can be time con-
suming, but you will get a chance to meet many other agents, and get a great
understanding of local real estate issues.
On the other hand, these agents are also your competition. They want the
same clients, listings, and sales you do. How do you balance the need to be
likeable with the need to win?
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DEVELOP SKILLS FOR SUCCESS 27

Lisa Marie Brown, a top-selling agent in Maine, has this advice:

It can be very difficult to work with other agents. Some of

us are professionals, and some of us arent. Its important to
be very professional, ethical, and courteous at all times.
But, its also important to keep an eye on every part of the
transaction. Remember that your license is on the line not
only for what you do, but for the actions of other agents
youre working a sale with.

TIME MANAGEMENT SKILLS

As an independent contractor with little supervision from superiors, you will

need discipline to work on a regular schedule. Just because you can come in
late and leave early doesnt mean you should. No one will check to see if you
prepared the market analysis you promised for tomorrow, but that doesnt
mean your client wont notice.
Planning is the best way to assure that you will use your time wisely, and
get everything on your to-do list taken care of. Decide which tasks need to
be accomplished every month, and approximately how long it will take to
complete each one (if they are ongoing, estimate how many times a month
they should be attended to, and for what period of time). Many agents find
it useful to schedule time for paperwork and marketing tasks as though they
were important meetings. You might put on your calendar a meeting with
yourself every Tuesday from 10 a.m. to 11 a.m., when you sit at your desk
and work on copy for your next newsletter. Or, on Friday afternoons you reg-
ularly contact any new additions to the list of owners who are trying to sell
their own properties.
In order to stick to your plan, remember two important points. One,
you should first leave plenty of room on your schedule for time with
clients. If youre overbooked with yourself, you will find that the plan gets
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28 5 S T E P S T O R E A L E S TAT E S U C C E S S

tossed aside too frequently. And two, be able to distinguish between what
is urgent and what can wait. While your availability to clients is critical, it
doesnt mean you need to drop everything every time someone needs
something. Get in the habit of returning phone calls and e-mails within
24 hours. There are a few legitimate emergencies you will encounter, but
many clients behave as if their every need is an emergency. By prioritizing,
you will make enough time to get everything done when it really needs to
get done.
Good time management skills also means spending most of your work-
ing hours on those activities that earn you money. Successful agents recom-
mend that about 30% of your time should be spent on marketing both you
and your listings. If you find you are spending most of your time showing
buyers current listings, you arent doing enough to generate a steady stream
of future business.
Because you have so many different tasks to complete (showing proper-
ties, preparing comparative market analyses, attending closings, negotiating,
preparing listings, marketing, presenting listings and offers, etc), you cant
afford to waste time. That means if you find yourself chatting too much in
the office instead of uploading your listings onto your website, you might
think about using your home computer instead. One of the biggest time
wasters in real estate sales is working with clients who arent sure theyre buy-
ing, or who cant afford the homes they want to see. Weeding out the
browsers from the buyers, therefore, is an essential skill.
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DEVELOP SKILLS FOR SUCCESS 29

ACT NOW

Dont waste another minute with browsers posing as buy-

ers. The next time you are on the phone with a prospective
buyer, use this script from Lisa Marie Brown, a top-selling
agent from Maine:
Lisa Marie (LM): Have you been to the bank yet?
Prospective Buyer (PB): No.
LM: The most important step in buying
a home is getting a pre-qualifying
letter from your lender. Sellers wont
even look at an offer if youre not
pre-qualified. I can give you the
names of three wonderful loan [insider tip: if its not in person,
originators who can help you and easy to do, theyll do it]
with this right over the phone. [insider tip: make it their decision;
Then you can decide which you dont want to lead them to
one, if any, you want to use. one or another]
PB: When can we start looking
at houses? I drove by one
today that I really want to see.
LM: As soon as we find out what you
are qualified for, well start [insider tip: use the word we
searching for your new home. often, to convey your
Some of our sellers dont even willingness to be part of
want showings to take place if their team]
the buyer isnt pre-qualified. So
thats our first step. Give me a
call back as soon as you have
your letter. I know we can find
your new home together!
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30 5 S T E P S T O R E A L E S TAT E S U C C E S S

MARKETING SKILLS

Marketing, or reaching your target audience of potential buyers and sellers,

is a science (in addition to being expensive and time-consuming). If you dont
understand how it works, you probably wont succeed. Before you spend any
time or money, read this segment carefully. Marketing success comes from
planning and then following through with incremental steps, not by jump-
ing in with haphazard mailings and advertisements.

T H E F O U R M O S T C O M M O N M A R K E T I N G M I S TA K E S

1. Seeing yourself as a real estate entrepreneur first, and

a marketer second (or third, or fourth). You will not
make money in real estate sales if you dont market your-
self.The only way to earn a living is to create (not hope for)
a steady stream of motivated buyers and sellers. By seeing
yourself as a marketer first, you will prioritize your time
accordingly, spending the hours needed to implement a
well-thought-out marketing plan.
2. Jumping in without a plan. Dont waste hundreds or
thousands of dollars during your first months on the
job trying various marketing gimmicks. Just because
your broker recommends two hours of cold calling a
day doesnt mean it is the right marketing tool for
you. Develop a plan before spending any time or
money on marketing.
3. Focusing on one-shot deals rather than a process.
Successful marketing is a plan with many steps, which
is executed continuously. Youre never done with mar-
keting. So spending time on an elaborate give-away or
limited-time offer, unless its part of an overall plan, is a
waste of time. You dont build a loyal client base by giv-
ing away televisions.
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DEVELOP SKILLS FOR SUCCESS 31

4. Not giving your marketing a chance to work. Few

people respond to an ad the first time they see it. In fact,
it usually takes more than five times before there is a
positive response. If your marketing plan is sound, stick
with it. Its not realistic to expect incredible results in a
short period of time, because marketing is a process.You
need to reach your potential client base many times,
convincing them consistently over time that you deserve
their business.

S TEP O NE : D EVELOP A U NIQUE M ARKETING I DENTITY

You know how much competition you facenot only are there many other
agents in your area, but most of them have plenty of experience, too. Your
primary goal in marketing is to stand out from the competition. But how can
you do that when your experience doesnt come close to theirs?
Instead of focusing on what you cant offer, turn your attention to what you
can. Lead people to perceive you as someone with whom they will want to work
by giving them a positive impression.Present them with an identity that they will
remember and turn to. This identity incorporates both who you are and what
you do (what types of services you provide). Once youve developed it, you will
use it consistently, no matter what type of marketing strategy you choose.Your
identity should be unique, clearly describing how you differ from, and are bet-
ter than, your competition.Take time to think it through.What personal qual-
ities are your best and strongest? Do you always follow through on every detail?
Are you punctual? Are you trustworthy? Ask friends and family for ideas, and
then chose the quality that works best with your position in sales.
Next, focus on what services you can offer that are both different from and
superior to the competition. Dont choose specifics such as how much youll
spend on marketing, or how quickly you will sell a house. Your marketing
identity is about eliciting a feeling from your targeted audience. In other
words, instead of telling them about how many houses you can show them in
a weekend, tell them how you will find them a home in which they can
create the family of their dreams, or showcase their wonderful taste, or feel safe
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32 5 S T E P S T O R E A L E S TAT E S U C C E S S

and secure at night. Note that you are describing how your services will ben-
efit them, rather than on detailing the specifics of your services.

TOP - S E L L I N G R E A LTOR B R E N D A E A G E R

SHARES HER ADVICE

If you dont already have a name tag, get one made. It

should be good-looking, and preferably magnetic, since it is
easier to move from outfit to outfit, and doesnt make holes.
It is essential that you wear the nametag unless you are at
home, or out with family or friends. Nametags are an ice-
breaker, and an important part of marketing yourself.

Your identity might be a particularly good fit with a specific group. For
instance, perhaps you once worked at a local college. You decide your mar-
keting identity is that connectionyou have a unique ability to understand
the needs of other college employees looking for housing. In an area with many
colleges and universities, you will have a huge potential client base to target.
Or, your identity might be cost effectiveness. You might offer a lower com-
mission, or explain all of the additional services you provide for the same fee
as others. In all of your marketing efforts, you stress the value of your serv-
ices. Another approach to creating an identity is to focus on your unique
approach to real estate sales. If youve bought and renovated four homes,
focus on your ability to see the potential that lies behind neglect or bad taste.
Your client base could be young families who want a home, but dont have a
lot of money to spend. What they have plenty of, though, is energy to paint,
scrape, and landscape.

S TEP T WO : G ET Y OUR I DENTITY O UT T HERE

Once youve established your marketing identity, you need to share it with your
market regularly. That doesnt mean putting all of your energy into one news-
paper ad.You want your identity in front of your prospects as often as possible.
Consider periodically sending out letters or postcards, either through the
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DEVELOP SKILLS FOR SUCCESS 33

postal service or via e-mail (see Step 3, page 43, for more information about
using electronic newsletters). Be consistent in whichever medium you chose,
whether print advertisement, brochure, or letter. Your identity should be rec-
ognizable as uniquely yours after a few rounds of marketing.

ACT NOW

Is that stack of expensive brochures still sitting in your

office? Call local and regional papers to find out how much
it would cost to insert one in the real estate section next
Sunday. Some larger newspapers even pinpoint certain
neighborhoods for their advertisers. For a reasonable cost,
you can get your name, and your marketing identity, in
front of thousands of prospective clients this week!

Stick with your approach no matter how little response it seems to

elicit. General rules of marketing indicate that a prospect needs to see your
identity at least six times before it will resonate with him or her. By mar-
keting yourself consistently, you should begin to make an impact in about
six months.
In addition to using print materials, these six marketing methods have
been used with success by many realtors. As you consider them, think about
ways in which your unique marketing identity would fit each one.

1. Cold callingmake random phone calls to try to find those who

are about to buy or sell a home.
2. Farming a neighborhoodblanket an area with information about
yourself so that people interested in selling houses remember your
name and have a positive image of you.
3. Open housesoffer to run an open house for a more experienced,
busy REALTOR. Many people who attend them are about to
put their house on the market, and are interested in the competition.
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34 5 S T E P S T O R E A L E S TAT E S U C C E S S

4. Organizationsget involved in activities and community organi-

zations that bring you into contact with many people who share
your interests; some of them will be selling houses or will know peo-
ple who are.
5. Expired listingsapproach the owner of a property that another
agent failed to sell.
6. Referralsfind sellers among the people you know, and/or the
people they know.

IN THE NEWS: A NOTE ON COLD-CALLING

Long considered a staple of real estate marketing tech-

niques, cold calling may become a thing of the past as
agents are required to comply with the provisions of the
National Do-Not-Call Registry. While legal challenges
continue to be brought forth, and fine-tuning of the law
occurs, there are federal rules in place that not only
supercede the less restrictive state Do-Not-Call rules, but
demand a penalty of $11,000 per illegal call. Dont pick up
the phone to make a cold call until you understand current
laws on the topic.

S ECRETS OF M ARKETING A P ROPERTY

While its true that your primary goal in marketing is to sell yourself, you will
also need to market the properties you list. You know about how to place a
newspaper ad, list the property with the MLS, run open houses for agents
and buyersthese are the marketing tools every REALTOR uses. The key
to standing out from the crowd is in how you perform those basic market-
ing functions. Each has particular pitfalls to avoid, and ways in which to use
them to full advantage. Understand each one, and fine tune your property
marketing efforts to sell more, faster.
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DEVELOP SKILLS FOR SUCCESS 35

Write a great listing. This seems straightforwardyou simply

measure the house and all of its rooms, take note of special fea-
tures, and plug the information into the computer. You might be
surprised to learn how many listings are either incomplete or
incorrect. Take your time, says agent Joyce Kirchner of Florida.
Use a simple form to be certain you dont leave anything out. Fill
it out with the help of the homeowner, and ask him or her ques-
tions about their property. What is the best feature? Worst? The
more information you have, the more accurate and complete a
listing you can write.
Take a great picture. Prospective buyers first impression of the
property will most likely be a picture. Some agents will even let
the buyer scratch a home off their list if they dont like the pic-
ture. Know how to use your camera. If possible, take the picture
when sunlight shows off the property to full advantage, and be
certain it shows the house from the best angle. If youre not sure
how to do this, gather listings from some of the top selling agents
in your area. Drive by each property, checking the house against
its photograph. What works? What doesnt? It is always helpful to
take many pictures from different angles. When you get back to
your office, youll have a choice.
Invest in good signs if your company doesnt provide them. It is
a great way to get your marketing identity out to the public, so
you want to be consistent. Joyce Kirchner says, yard signs lure
buyers. But the signs of most independent agents are too small,
and they often look cheap. It would behoove a new independent,
therefore, to invest in really good design to get a sign with clout.
Youll have to pay more for a great sign, but its worth the
expense.
Target the top-selling agents in your area. Theyre the ones
selling most of the properties. Make sure they know about your
listing directly from you. Put together a flyer, or send an e-mail
with pictures.
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36 5 S T E P S T O R E A L E S TAT E S U C C E S S

Run a well-attended open house. Open houses for other agents

are often scheduled during weekday mornings. Are top-selling
agents offering breakfast at their open houses? This is a trend in
some areas of the country. Some agents report that open houses
with food from certain caterers are better attended than others.
Do what works to get the most traffic through the house. Open
houses for buyers require a high level of visibility. Dont assume
an address is enough to get them to your listing. Use at least three
road signs with arrows pointing the way from a major intersec-
tion. Balloons are also helpful, as is a large sign on the lawn. The
more buyers and agents who see your property when it is listed,
the better your chances of selling quickly. For more information
on open houses, check out Step 4, page 67.

NETWORKING SKILLS

Networking has a bad reputation. Many people think of it as the height of

insincerity: shaking hands and making small talk with people you dont care
about in the hopes that they will help you. If you believe that reputation,
you will miss out on one of the best ways to meet, and even exceed, your
sales goals.
In order to be a success in real estate, you need buyers and sellers. How do
you find them, and get yourself out where they can find you? By networking.
But the value of this tool doesnt stop there. Networking is also a great way
to keep up with local, regional, and national real estate trends. It helps
develop peer relationships. And it helps establish your reputation as a pro-
fessional in the field.
The previous section on marketing mentioned referrals as a marketing
tool. Think of networking as the active way get them. By networking, you
dont simply hope that a family member or satisfied client will tell someone
about you. You work with that family member or client to help them send
business your way.
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DEVELOP SKILLS FOR SUCCESS 37

A SK FOR W HAT Y OU W ANT

Use a direct approach. Have you talked to your family about what you are
doing? Do all your family members know that you are a real estate sales
agent looking for clients? Have you asked family members if they know
anyone looking to buy or sell a house in your area? Do their friends?
Expand your sphere of influence by requesting that family members ask
their friends.
Do your friends know that you can help them buy or sell a home? Ask
them to expand your client base by keeping an eye out for potential clients
and actively referring them to you. If your friends ask their friends and fam-
ily if they know of anyone planning on buying or selling a house in your area,
you will have created a circle of hundreds of people who know you and are
looking for clients for you.
In addition to family and friends, consider the following people as lead
generators:

former teachers
current or past coworkers or fellow students
former employers
car repair people
your childrens friends parents
lawn mowers/landscapers
mail and newspaper carriers

The idea is to get the word out to as many people as possible that you are
a real estate agent. Think of everyone as not only a potential client, but a
potential source of clients, as well.
If you are using networking to get information from other agents, it is also
best to be direct. Perhaps your current marketing strategy is slumping.
You want to find out where successful agents are advertising their homes.You
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38 5 S T E P S T O R E A L E S TAT E S U C C E S S

could check all of the local and regional papers, or you could ask. By
approaching them first with an acknowledgment of their expertise, you will
probably get a straightforward answer.

J OIN L OC AL C LUBS AND O RGANIZATIONS

Participation in local groups, such as the Chamber of Commerce, Junior

League, or Lions Club, is a great way to network. Meetings and other activ-
ities will bring you into direct contact with the business people in your
town or city. Joining a golf or tennis club, garden club, the local school
board, or any other group that interests you, will also widen your circle and
help you get the word out about your career.

J OIN O NLINE D ISCUSSION G ROUPS

If you need help from other agents, but arent comfortable asking for it in
person, there are a number of online communities that can help. For in-
stance, www.groups.msn.com has a Real Estate Networking Group and
www.yahoo.com has over 1,000 different groups for real estate professionals.
www.agentsonline.net has a dozen different discussion forums. These groups
offer a level of anonymity, and the chance to get advice or information from
hundreds of other agents.

P ROFESSIONAL O RGANIZATIONS :
T HE N ATIONAL A SSOCIATION OF REALTOR S

Another way to network is to join a group of real estate professionals. Not only
can you get information to help you with the first months in your new job, but
your affiliation with such a group can also help you throughout your career in
a number of ways. The National Association of REALTORs (NAR) is the
nations largest organization of real estate professionals (as well as the largest
trade and professional association of any kind). It was founded in 1908, and
currently has over one million members. Members are known as REAL-
TORs, and include brokers, salespeople, property managers, appraisers, coun-
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DEVELOP SKILLS FOR SUCCESS 39

selors, and others involved in the real estate industry. They first join one of
1,700 local associations/boards, and membership is then extended to the state
and national associations. Members are pledged to a strict Code of Ethics and
Standards of Practice (to read it log onto www.realtor.com).
The NAR is active politically, both by financing lobbyists who work to
protect its members interests, and by encouraging the involvement of its
members in the campaigns of candidates backed by the NAR. Members have
access to industry information and each other through a website (www.one
realtorplace.com), a magazine, meetings, and conventions. They can network,
find news about changing legislation that may affect their business, and do
research at an online real estate library. Roberta Dinerstein, an agent in
Boca Raton, Florida, notes that

The NAR does good work for REALTORs, especially by

lobbying for our causes nationwide. This does seep down to
the state and local levels. For so many years, REALTORs
had a public relations problem, and I believe that has really
improved, in large part due to efforts of the NAR and its
individual members.

Membership in the National Association of REALTORs has other

networking benefits that can add to your sales success. The NAR maintains
www.realtor.com, the largest online source of real estate listings. As a mem-
ber, you will be listed on the site, so prospective clients may find you. All of
your listings and open houses can also be uploaded for viewing by anyone
around the world. The NARs website also allows you to conduct real-time
conversations with those who view your listings. By using these resources,
you can potentially see a great increase in your business.

O RGANIZE N ETWORKING E FFORTS

Whether you are prospecting for new clients, marketing a property, or

interested in learning more about a special type of property from other
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40 5 S T E P S T O R E A L E S TAT E S U C C E S S

area agents, it is important to organize your efforts. You will meet many
people, and while you might never forget a face, chances are you wont
remember enough about each person to be able to successfully initiate
another contact. Each part of the three-part networking system described
below should be continuous. In other words, you never stop looking for
potential contacts, trying to turn potential contacts into active ones, or
maintaining your contacts.

Make a list of potential contacts. Brainstorm without editing your

list, including anyone and everyone mentioned on page 37 in the Ask
for What You Want section. Then, begin contacting those on your list.
Call, or visit their offices or homes and try to meet them in person.
Or, you might send a letter of introduction to everyone on your list.
Tell them you are now selling real estate, and be certain your mar-
keting identity comes through loud and clear. Dont forget to include
a business card.
Create an active contacts database. Whenever you get a response
to a phone call, visit, or letter, the person who responded becomes
an active contact. The difference between potential and active con-
tacts is that you dont know if the potential ones can help you,
while active contacts have indicated they may want to buy, sell,
refer someone to you, or work with you in some other beneficial way.
To create an active contacts database, begin gathering information
about the person who responded. Some agents use software devel-
oped specifically for this purpose (see more on technology in
Step 3). Others use index cards or pages in a notebook. No matter
the method, you will want to be as thorough as possible.
For each contact, note:
name
address
e-mail address
phone number (work, pager, cell phone, residence)
fax number
company name
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DEVELOP SKILLS FOR SUCCESS 41

job title
first meetingwhere, when, the topics you discussed
last contactwhen, why, and how

Maintain Your Contacts. Try to reach people again within a couple

of weeks of meeting them. You can send a note of thanks, e-mail a
question, or forward a piece of information related to your conversa-
tion. This contact cements your meeting in their mind, so they will
remember you more readily when you call them again in the future.
If you havent communicated with your contacts for a few months,you
might send them a note or e-mail about an article you read, or relevant
new technology or law to keep your name fresh in their minds.

T O R EVIEW

The skills you need to succeed often are not taught in pre-licensing
training. Be open to the fact that you still have much to learnand
the better your skills, the better your chances of meeting, and
exceeding, your sales goals.
REALTORs who are consistently singled out as top producers
agree: there are six personal skills you cant do without. Learn them,
and honestly acknowledge which ones you need to work on. Actively
pursue improvement in any areas of weakness.
Whats the number one Rule of Sales? Its not having the best prod-
uct, or the best customer service. Its likeability. If your clients dont
like you, they wont do business with you. Public interaction skills,
therefore, cant be underestimated. Maintain your image as a likeable
professional, to buyers, sellers, and other agents at all times.
Marketing yourself is a two-step process. You must first develop a
unique marketing identity (some marketing experts refer to this as
a branding), and then get that identity in front of potential clients
consistently and frequently.
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42 5 S T E P S T O R E A L E S TAT E S U C C E S S

The standard tools for marketing a propertyadvertisements,

signs, listings, open housesarent always used to full advantage.
Understand and avoid the pitfalls of each to improve results.
The old phrase time is money is a reality for agents. You must jug-
gle showing properties; attending previews, closings, office meetings,
and listing presentations; working on your own marketing plan;
handling paperwork; and many other tasks. Successful agents stay
on top of details, and manage their time well. They avoid time
wasters such as working with clients who havent been approved for
a mortgage.
Networking is how the top sellers expand their client base; stay on
the inside track regarding knowledge of your market; and maintain
positive relationships with other agents, lenders, home inspectors,
and other professionals they work with. Improve your networking
skills, and your business will improve, too.
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S T E P 3

USE YOUR COMPUTER

LIKE A PRO
While real estate is primarily known as a people
business, much of what agents do today involves
computers. Of course, machines arent substi-
tutes for meetings with buyers or sellers, but
they can lead those clients to you. They can
put your listings in front of millions of people.
Computers make it easy for you to keep in touch
with your client base, and expand it. They are
also invaluable for doing research and fur-
thering your education. In fact, your success in
real estate sales depends upon how well you use
this vital tool.

T he use of computers has changed the way realtors do business. While

you dont have to become an expert, you will need to be comfortable
using the basics. Agents we polled noted that just a few years ago, they car-
ried a heavy MLS book, paper documents, and a key chain. Today, they typ-
ically carry a laptop, electronic keys, digital cameras, pagers, and cell phones.
They also use the Internet to market themselves and their properties and
exchange information with clients and their peers. Don Marcy, an award-
winning real estate veteran with over twenty years of sales experience says:

If youre not comfortable with technology today, you might

as well find another field. There is no part of this business
that lacks some technological aids, and the array of available
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44 5 S T E P S T O R E A L E S TAT E S U C C E S S

real estate-related software is mind-boggling. The only real

problem is that now, if you take advantage of every possible
technological tool and device, youll need a wheelbarrow to
carry them!

ACCESS AND MARKET LISTINGS

The most important reason real estate professionals need a computer is to get
their listings noticed, and to view the listings of others. Listings are your
inventory, and the computer provides the only access to the Multiple Listing
Service (MLS). While the MLS was once a thick book put out every few
weeks, it is now an up-to-the-minute resource that includes prices, length of
time on the market, pictures, and most of the other details you need to know
about a property.
Computers can give hundreds of people access to your listings, even if you
dont have a website. There are many local, state, and national websites
where you can publicize your properties. Many towns, cities, and counties
maintain informational websites that contain real estate listings. They know
that new and potential residents look to such sites to learn more about a par-
ticular area. Many newspapers will put your listing on their website if you
advertise it in print. Hundreds of national sites, such as www.realtor.com and
www.realestate.yahoo.com, include listings that are searchable by state, price,
and amenities. For more ideas about getting your listings online, use the term
real estate on any search engine. Youll get links to dozens of sites that can
help you promote your properties.When posting your listings online, offer
as much information as possible. Home buyers who turn to the Internet to
begin their home buying research want details, including the property
address, pictures, room sizes, amenities, and landscaping features. If you pro-
vide them with the information they want and need, they will be more
likely to view the property.
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USE YOUR COMPUTER LIKE A PRO 45

ORGANIZE WITH SOFTWARE

Many companies have developed computer software specifically targeted to

real estate professionals. Your employer is probably already using software to
manage his or her business, and may expect you to become familiar with your
offices system. But if your brokerage offers limited or no access to computer
software, you may want to consider purchasing some for yourself. Virtually
every aspect of your business can be computerized, from designing a listing
presentation to receiving voice mail.

C ONTACT M ANAGEMENT

Top-selling REALTORs have contact lists ranging from hundreds

to thousands of people. Keeping track of all of them used to be over-
whelming, when agents wrote applicable information on index cards and
stored them in a box in their desk. Now, however, you have a wide choice
of computer software that you can use to create, update, and manage your
list of contacts.
Many contact software programs are called PIMs, or Personal Informa-
tion Managers. They can be used to organize your time as well as your con-
tacts. Databases that are typically included in professional software packages
such as Star Office, Microsoft Office, and WordPerfect Office, can also
help you manage your contact list. Word processing programs with mail
merge features can create the letters, newsletters, postcards, and brochures
you regularly send to your contacts, and then address them all. Many of these
programs are free on real estate websites, so make a point of doing some
research before making any purchases.
Whatever method you choose, it is to your advantage to manage your list
of contacts by using your computer. As you grow in the field, so will your
contact list, and your need to keep it organized.
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46 5 S T E P S T O R E A L E S TAT E S U C C E S S

Other types of software programs, all designed to help the real estate pro-
fessional improve business, include:

real estate forms (print blank or completed forms)

ad writing
calendars and calculators
spell-checkers
contact list managers
lead managers
buyer assistance
website design
direct mailing/marketing/promotional
desktop publishing
financial analysis (qualify buyers)
telemarketing
showings management
prospecting
scheduling
virtual property tours
property management
checkbooks

T E C H N O L O G Y U P D AT E

For its first computerized decade, the MLS was added to

and accessed by a few different computer programs. In
1999, the National Association of REALTORs approved
RETS, or Real Estate Transactions Standards. RETS is a
software platform designed to make it easier to exchange of
electronic data between different applications. It allows
real estate professionals to access and update MLS listings
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USE YOUR COMPUTER LIKE A PRO 47

(adding pictures and interactive components) faster and

easier than before, no matter what kind of computer they
work from.
In addition, many software manufacturers are producing
RETS-compliant tools, including a marketing program
that allows agents to generate brochures and other promo-
tionals directly from their MLS listings. Other programs
schedule property showings live on the Internet, and gen-
erate personalized buyer reports that include everything
from property information to loan scenarios and school dis-
trict facts.

BUILD A SUCCESSFUL WEBSITE

More than 68% of all real estate professionals in 2003 had a website, accord-
ing to a survey conducted by the NAR. Why? Because it is good for business.
More than half of all home buyers use the Internet as a source of informa-
tion, and their numbers are growing. Successful agents are not waiting
before they go online to reach themtheyre already there.
The good news is that you dont need to be a computer programmer to
have your own website. There are hundreds of website creation tools that
make the process easy, even for the computer novice. If you use a hosting serv-
ice, you will probably get a free template you can use to get a simple page or
site on the Internet quickly. However, many real estate professionals choose
instead to hire someone else to do the job. Why? They cite superior visuals,
marketing, and ease of use. They might pay anywhere from a few hundred to
a few thousand dollars to designers who often specialize in real estate web-
sites. But when you consider the power of the Internet as a marketing tool,
one that you can update as frequently as you like, the cost seems reasonable.
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48 5 S T E P S T O R E A L E S TAT E S U C C E S S

F IND A H OME , C OMPLETE WITH A DDRESS

If you are building your own site, you will first need to secure a domain
name, which is your address on the Internet. Most agents choose their own
name, or a variation on it (perhaps www.jjsmith.com instead of www.john
jaysmith.com). However, you are also free to choose a domain name that rep-
resents the marketing identity you established in Step 2. Two examples are
www.homesforthemilitary.com or www.propertiesofessex.

HOT TIP

If you have a name that is frequently misspelled, dont buy

just one domain name. Purchase the misspellings as well.
For example, if your name is Debbie Lang, you should also
buy Debby Lang, Debbie Lange, and other misspellings.
You dont want a client to miss your site because they have
trouble spelling your name. If you own the misspellings, an
incorrect typing of your name will still direct the client to
your site. Another bonus of purchasing misspellings is that
it prevents others from buying them. You dont want to
spend time and money on your website only to find out that
a site with a name very similar to yours is being visited by
your clients, or may be promoting a product or service that
you find offensive.

In addition to purchasing a domain name, you will have to pay for a

hosting site if your employer doesnt provide this benefit. Most Internet serv-
ice providers (ISPs) offer this service to their customers. If neither of those
options works, you can find an independent web host. Typically, such hosts
can also secure domain names, design and maintain your site, promote your
site, and provide you with e-mail addresses. Check a search engine such as
Google using the term web hosting to get an idea of available services.Once
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USE YOUR COMPUTER LIKE A PRO 49

you have a host and a domain name, you can begin thinking about the var-
ious components of your site. What would you like visitors to your site to
see? How can you turn them from browsers into buyers? A quick search of
other agents sites will give you some ideas, but here are the most important
factors to consider, according to the pros we surveyed.

I NCLUDE VALUABLE C ONTENT

If the information on your site isnt important to its visitors, they wont
come back. Potential home buyers will be interested in information about
your town or city, including its school system(s). Mortgage rates, and the
importance of and steps toward pre-qualification are also important. But
spend the most time and effort on your listings. Complete, accurate facts
and figures, plenty of good pictures, and even virtual tours are the reasons
people are coming to your site. Keep them there with great visuals and use-
ful information.
If you have a number of different kinds of listings, or want to attract con-
sumers in various markets, consider creating different sections of your web-
site to appeal to different types of buyers. For example, a page devoted to
first-time buyers could include basic information on the buying process,
determining how much house they can afford, and addressing their will-
ingness to overlook minor flaws or easily remedied situations (such as dirt
and overgrown shrubs). A page for those looking to buy a second home
might explain the tax advantages of owning another property, as well as a
guide to desirable locations in your area (waterfront, ski resort, mountains,
etc.) where these buyers might want to look.
Of course you dont need to stop with your own listings. If you dont have
many, or you want to get into another market (investment properties, for
example), you can display the listings of other agents. Choose carefully,
however. Potential buyers can go to www.realtor.com and other sites if they
want to search through thousands of listings. A select group helps you
establish your brand, or expand into a new market, without trying to be all
things to all people.
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50 5 S T E P S T O R E A L E S TAT E S U C C E S S

ACT NOW

You know that most of the For Sale by Owner (FSBO)s

end up listed by a realtor. Why not give those statistics to
the visitors to your website? Explain how you can save
them time and money by handling the sale from the start.
But dont stop there. List all of the advantages of working
with you, including:

I will develop a marketing plan, and cover its costs.

Your home will be seen by thousands of potential
buyers through the Multiple Listing Service, and will
be advertised in newspapers and other media, and
through least one open house.
I am experienced, and will support and guide you
through each step of the selling or buying process.
I will give you the information you need to com-
pletely understand the buying or selling process, so
you will have realistic expectations, and not be
caught off guard.
The selling price of your home will reflect current
sales of comparable properties in your area, and will
be established with your input.
I know how to show off your home to its greatest
advantage. I can help you enhance curb appeal, resolve
storage issues, highlight special features, and other-
wise make it more buyer-friendly.
Only pre-screened buyers will see your property. This
will eliminate showing to browsers who dont have the
true interest or financial ability to purchase your home.
I have excellent negotiation skills. Acting on your
behalf, I can reach an agreement with the buyers (or
sellers) in accordance with your directions.
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USE YOUR COMPUTER LIKE A PRO 51

B RAND Y OUR W EBSITE

With thousands of real estate websites on the Internet, it is essential that

you clearly define and communicate the benefits you offer and how your
services are different from the competition. The branding of your website
should be consistent with all of your other marketing materials, as explained
in Step 2. By branding, or emphasizing your uniqueness, you not only dif-
ferentiate yourself, but provide a comfort level for visitors to your site.
Branding can also be accomplished through use of testimonials. Ask
some of your clients to provide a short description of their purchase or sale,
as well as their thoughts on the service you provided. Include those testi-
monials that speak to the qualities that reinforce your brand. For example,
if you are emphasizing teamwork as part of your brand, be certain that the
quotes you use include that word or speak to that concept. When potential
clients read your testimonials, they will get your message through someone
elses words and experiences.

C ONSIDER A PARTNERSHIP

Maintaining a website is time consuming if you do it yourself, and expensive

if you pay someone else to do it for you. Some agents resolve this problem by
partnering with another business person who has content pertinent to their
sites. For example, you might decide to partner with a lender who could pro-
vide a guide to getting a mortgage, a calculator to determine how much house
a buyer can afford, current interest rates, and an explanation of the different
types of loans available. In return for providing current content, your part-
ner would receive free advertising on your site.

I NCLUDE U SEFUL T OOLS

The number one reason home buyers search the Internet is to look at homes
for sale. That means a quality photo of every one of your listings should be
on your website, and listings should be easily searchable. By including a photo
along with standard listing information, you help buyers narrow their search,
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52 5 S T E P S T O R E A L E S TAT E S U C C E S S

and eliminate the time you might have spent showing them homes that were
never to their liking.
Interactive features are also a must for your website. Why allow hundreds,
if not thousands, of potential clients to view your site, and then move on? Ask
for their name, address, e-mail address, and telephone number. This infor-
mation allows you to contact them, instead of hoping that they contact
you.You might link the information page to a button on your home page that
reads I want to buy/sell now.After visitors click the button, and input their
contact information, it can automatically be sent to you as a message to your
cell phone or digital device, or as an e-mail.
Another way to improve usefulness is to connect your sites visitors with
needed services. For example, a lender could take online applications for
mortgages or pre-qualifying letters, or a home inspector could schedule
inspections. Any way to ease or eliminate a step in the process of buying or
selling is a win for both you and your clients.

HOT TIP

A webmaster who builds sites for agents urges,dont cram

your website full of useless information and links. You
want your website to lead to direct contact with you, so you
need to create a need for your site visitors to do so. If you
give them free reports, tips on buying and selling, or access
to the MLS, why should they bother to contact you? There
are already websites, such as www.realtor.com, that do all of
that and more. Your website should tell every visitor that
you are likeable and accessible, creating an emotional con-
nection that leads to a direct contact.

U PDATE AND I MPROVE Y OUR W EBSITE

Websites become obsolete quickly. Properties sell, prices change, interest

rates go up and down. If your site isnt updated frequently, it wont be cur-
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USE YOUR COMPUTER LIKE A PRO 53

rent, and therefore wont be a worthwhile destination for potential buyers

and sellers. Whether you designed your site, or paid someone else to, be
certain you can make changes from your own computer as often as you
need to.
If your site is not getting many visitors, or it gets plenty but no one reg-
isters interest, you may need to improve your site. If you are currently online
through the use of inexpensive software that created a cookie cutter site, it
could be time for an upgrade. If you paid thousands of dollars for a truly
unique website, you may simply need to reorganize and beef up your content.
Is the site easily searchable, or do you lose clients because its difficult to nav-
igate? Do you have only a handful of listings on your site because you chose
to market only your own? Consider adding carefully chosen properties listed
by other realtors.

MARKET YOUR WEBSITE

Once you develop, or pay someone else to develop your website, you need to
market it. If no one can find your site, it wont generate any business for you.
Marketing your website is a two-step process; the first centers on your own
efforts, and the second involves the Internet.
Your website should always be marketed through all of the standard
marketing strategies you already employ. That means adding your Internet
address (URL) and e-mail address to the contact information on your busi-
ness cards, stationery, gifts, advertising, client communications, yard signs,
direct mail, e-mail signatures, and print ads. Even your listings can adver-
tise your website. Put a box on each one that reads as featured on
www. .com (your URL) and for further information or to
schedule a showing, e-mail me at (your e-mail address).
But what about potential clients who are surfing the Internet without
your URL in hand? For those who dont already know you, you must make
it easy find your site. One way to do that is by linking your site to other sites.
What types of sites should you consider linking to? Think about where con-
sumers might look for agents on the Internet.
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54 5 S T E P S T O R E A L E S TAT E S U C C E S S

Dont bother with huge sites that list thousands of agents. A recent
search of www.realtor.com came up with fifty pages just in Chicago! There
is no way to differentiate yourself in a group that large. However, a Chicago
mortgage company offers a list of agents on its website, and it contains just
five. A Chicago news site also links to a handful of area agents. Choose links
that provide a reasonable chance of success.

S EARCH E NGINES

Perhaps the best way to market your site on the Internet is with search
engines. You can submit your site to a variety of search engines, such as
AltaVista, Google, Yahoo, and Lycos. If they decide to include it in their
index, it will be searchable by keywords, titles, and meta tags. The process
sounds complicated, but its really relatively simple. If you are using website
software to produce your own site, the software will guide you as to how to add
these words. If someone else is designing your site, they will take care of this
step for you. But to be certain you get the best results, brainstorm keywords
carefully. Keeping your brand, or marketing identity in mind, think of words
and phrases that describe your business. If they are strategically placed on your
site, a potential customer will be able to find you more easily.
You can also pay a search engine placement specialist to work on your site.
This person will not only work on keywords, titles, and meta tags, but will
also monitor your site and ensure that it gets top rankings on the search
engines you are indexed on. Rankings are vitally important to the visibility
of your site. Think of it this way: If a potential buyer is searching with
Yahoo, their results might list thousands of realtor websites. Chances are,
they will only visit sites in the first few pages of those results. Therefore, the
higher your ranking (meaning the closer you are to being on the first page),
the more likely your site will get a visit.
Consider a relatively new way to improve rankings: purchasing them.
Over a dozen search engines now offer a service, called pay per click, (or pay
per placement), which gives you a top position on the results pages, and then
charges you every time someone clicks to your site from that search engine.
This practice is growing in popularity, evidenced by the number of websites
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USE YOUR COMPUTER LIKE A PRO 55

devoted to the practice, and the number of web masters who offer to man-
age your pay per click (PPC) marketing. You can learn more about PPC on
sites such as www.payperclickguide.com and www.payperclickanalyst.com.

MEASURE YOUR SUCCESS

There are a number of ways to measure your marketing

success. Most websites can track a variety of numbers that
can help determine whether your efforts are being
rewarded. The statistics you need to know are:

How many hits come from unique first time visitors?

How many hits are return visits?
Which pages are most popular?
If you are linked to other sites, which links refer the
most visitors to your site?
What is your response rate relative to the number of
visitors to your site?
How many face-to-face appointments were set
through your site?
What percentage of customer feedback is positive?

KEEP IN TOUCH:
THE IMPORTANCE OF E-MAIL

One of the best, and easiest, ways to stay in contact with your client base and
form ties with potential clients is with e-mail. Many of your customers and
prospects already rely on e-mail, and check their messages several times each
day. Using this tool to answer their questions, confirm meetings, and initiate
face-to-face meetings is convenient and time-saving. Unlike the telephone,
which requires that both parties be available at the same time to have a con-
versation, e-mail allows you to converse with a client when he or she might
be busy. In return, they can respond when you are otherwise unavailable.
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56 5 S T E P S T O R E A L E S TAT E S U C C E S S

E-mail is a fast and easy way to develop and deliver documents such as
contracts and listings. They can be attached easily to your message, and then
downloaded and printed by the recipient. You can also send electronic
newsletters, complete with pictures, that keeps your name fresh in the minds
of your contact list. You might send market updates to those whove done
business with you in the past, send new listings to clients who are thinking
of buying, or introduce yourself and offer your services to a group of poten-
tial buyers or sellers.
However, the convenience of e-mailing can also be its downside. Because
its quick and easy, and often used to send messages to family and friends,
it doesnt always feel like business. Professional e-mailing has rules, which,
if not followed, can lead to a casual trap that diminishes the effectiveness
of this communication tool. In other words, treat e-mail the way you
would any other business correspondence. Follow these guidelines to
ensure successful e-mailing:

1. Practice netiquette. Online etiquette doesnt differ from other

business protocol. Manners count! Thank every customer who
e-mails you. Maintain a courteous and professional tone. If a
prospect has initiated contact online, respond in kind. They expect
an e-mail, not a phone call or a letter.
2. Make use of your mail programs capabilities. Grammar and
spelling count, so proofread and use spell check before sending any
e-mail. Use only the regular font style (avoid bold, italics, and all
caps); other styles can look unprofessional, and are not readable by
all mail programs. Set up a signature file that will automatically
attach itself to the end of every e-mail you send. It should include all
of your contact information, including URL, and, if you have one,
a marketing identity phrase.
3. Respond promptly. Check and respond to your e-mail at least three
times a day.Your clients and prospects expect prompt attention,and this
is typically how often they check their e-mail. If you are away from
your computer, you can use an autoresponder to send a generic reply
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USE YOUR COMPUTER LIKE A PRO 57

immediately (see the discussion below for more ideas about how to
use autoresponders). Another way to keep up with e-mail while away
from your computer is to invest in a wireless e-mail system. For an ini-
tial charge and monthly fee, you can access e-mail through a cell-
phone-type device with a small keyboard no matter where you are.

T E C H N O L O G Y U P D AT E

Autoresponders are great for getting to clients and

prospects immediately, promising them that they will
receive a personal response within a specified period of
time. But autoresponders can do even more for your busi-
ness. If you are frustrated by the low number of face-to-face
meetings you schedule with the hundreds of people who
visit your website, an autoresponder can help.
The key to getting leads from e-mails and website visi-
tors is to offer specific, useful information that addresses a
need they specified when writing to you or visiting your
site. Did they say they are thinking of buying? Send an
e-mail offering a mini course on how to get through the
process. If they indicated they want to buy, send an e-mail
with information on a small group of local lenders who can
help them get a pre-qualifying letter. By tailoring your
response to their needs, you begin to form a relationship
without lifting a finger, or your phone receiver.
The contact process can consist of one exchange, or many.
Smart autoresponders can be programmed to send suc-
cessive e-mails at intervals you specify. For example, a visitor
to your website indicated that he or she is relocating to
your area. Your autoresponder can immediately send an
e-mail with valuable information about relocating. Then, it
can send another e-mail asking if they received the infor-
mation, and letting them know you are available to help
them. If you dont hear from them, the autoresponder can
send a third e-mail later that day, or the next day, with even
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58 5 S T E P S T O R E A L E S TAT E S U C C E S S

more relocation information.You have just made three per-

sonal contacts with this prospect without any effort! When
you call them for the first time, a connection already exists,
making your job easier.

USE E-MAIL FOR MARKETING

Compare the traditional mailing of a postcard or letter with sending an

e-mail. The traditional mailing costs hundreds of dollars in materials and
postage, while the e-mail is virtually free. Traditional mailings take time to
organize and disburse, while any number of e-mails are prepared just once,
and sent with the click of button. It is no wonder successful real estate
agents are turning to their computers to do their marketing.

D EVELOP A D ATABASE

The first step in marketing with e-mail is developing a database of e-mail

addresses. While before you collected street addresses for mailings, now
concentrate on collecting e-mail addresses. Ask for the e-mail address of
every buyer or seller you worked with in the past. When someone sends you
an e-mail, add his or her name to your address book. To keep that contact
information up to date, dedicate two hours a month to going through the
database, updating the information on the existing entries, and adding any
new ones.

HOT TIP

Just as there are companies that sell lists of telephone num-

bers and street addresses, there are ones that sell lists of
e-mail addresses. First thought? An easy way to fill up your
database. However, the agents we polled insist,dont waste
your money! Mass mailing, whether of e-mails or print
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USE YOUR COMPUTER LIKE A PRO 59

material, typically get a positive response rate of less than

1%. While people are used to junk mail, and are willing to
toss whatever they dont find to be of immediate use, they
are less forgiving of unwanted e-mails, especially if that
e-mail was generated by someone in their community.
There is no point in alienating thousands of people in the
hopes of making a handful of sales.

TARGET Y OUR M AILINGS

You can set up e-mail groups by category to target mailings. For example, cre-
ate one group for first-time home buyers and another for second-home can-
didates. Or, add groups of real estate agents, previous clients, and traditional
geographic farm-out areas. Another group could be formed of those who
have visited your website. The more specific your group, the better you can
tailor your marketing content to each.

V IRTUAL T OURS

After you acquire a listing, create a virtual tour of the property. Put the tour
on your website, and send an e-mail to all of the agents in your database. The
e-mail should include a link to the tour page of your website. You could also
simply e-mail the tour, however getting agents to visit your site means they
might find another listing that could be of interest to one of their buyers.
This technique has worked well for hundreds of agents, who report that they
often get a sale before the property makes it into the MLS.

N EWSLETTERS

Many agents develop newsletters that are e-mailed regularly to everyone in

their database.You could also post the newsletter on your website, and e-mail
a link to it. Include anything that might be of interest, but avoid filling it with
useless information. The newsletter should serve as a way of keeping in
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60 5 S T E P S T O R E A L E S TAT E S U C C E S S

touch. Because you are sending the newsletter to a varied audience

(prospects, previous clients, agents, etc.) do not use specifically targeted
information. However, even the general nature of the content should convey
your personality or brand.

S PECIFIC M AILINGS

When using targeted groups, include content that they can use. Marketing
statistics, listing activities, and neighborhood or community information are
all good content. Make the e-mail look personal, rather than like a form let-
ter.Your database software should allow you to include the name of the recip-
ient, rather than the entire list of recipients, on each e-mail. Be sure to give
every recipient the opportunity to opt out if they dont want to receive fur-
ther e-mails. Add a link at the bottom of your message that contacts you so
that you can remove their name from your list.
A great advantage to specific e-mailings is that they can be forwarded eas-
ily, spreading your message to even more people. Can you imagine a client
saving a postcard and passing it on to a friend? Probably not. But an e-mail
with good information can be forwarded with a few mouse clicks.

STAY INFORMED:
RESEARCH AND EDUCATION

Technological advances, especially those pertaining to the Internet, have

made it easier than ever before to keep your skills sharp, and keep up with
market changes and trends. When you know where to find the research and
education sites you need, you can take advantage of them, and increase your
sales success on your own time, in your own home.

K NOW THE C OMPETITION

On the Internet, you can browse through thousands of real estate sites,
such as those set up by national agencies, local brokerages, and individual
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USE YOUR COMPUTER LIKE A PRO 61

agents. You can see listings, and get marketing ideas from other agents. As
a visitor to someone elses site, you get a unique vantage point that can help
you make positive changes to your own site. What is effective in the sites
you visit? What bores you, or causes you to click away to another site? Use
your browsing as an opportunity to learn from others achievements
and mistakes.
In addition, you can visit or join groups of agents who gather on the Inter-
net to share helpful tips and techniques for success. Ask a question, or sim-
ply search and read through the message archives to find useful information.
To find such groups, review the section in Step 2 regarding Online Discus-
sion Groups, found on page 38.

F URTHER Y OUR E DUC ATION

You can get information, brush up on your facts, and even take classes, on
many subjects pertinent to the field of real estate on the Internet. Here is a
sampling of categories of interest:

News and Trends

Many real estate sites offer news, market analysis, and reports on cur-
rent trends. This type of information is vital to your business, and
you will want to visit the sites often for updates. There wont be time
to look at all of the hundreds of sites regularly, but before narrowing
down, check out as many of them as you can. Use the suggestions
below, or conduct a search using the terms real estate,news, and
trends. Depending on the area in which you live and work, you may
find sites that are specifically geared toward your market.
After youve found a few sites that provide the news and infor-
mation you can use, bookmark them on your Internet browser, and
build time into your schedule to perform this kind of research at
least once a week. You can use the information you gather in elec-
tronic newsletters, mailings to your client list, and even in listing pre-
sentations. Your image as a professional will be enhanced as you
impart timely, relevant facts and figures.
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62 5 S T E P S T O R E A L E S TAT E S U C C E S S

W E B S I T E S W I T H R E A L E S TAT E

NEWS AND ANALYSIS

www.reis.com This free site has real estate

news and analysis, but Reis also
offers a subscriber edition (Reis
SE) with more market informa-
tion and analytical tools.
www.realestatejournal.com Published by the Wall Street
Journal, this site contains news,
mortgage rate information, and
loan calculators.
www.realtor.org The website of the National
Association of REALTORs has
news, education, business tools
(such as a marketing guide), sur-
vey results, and an online univer-
sity. Full site access requires
membership and registration.
www.realtytimes.com Offers a daily market conditions
report, marketing and technol-
ogy advice, a monthly newsletter,
and a custom newsfeed which
can be purchased for inclusion
on your website or printed mar-
keting materials.
www.inman.com Inman News bills itself as the
nations leading independent real
estate news service and content
provider to the real estate indus-
try. News is presented by cate-
gory, including technology,
mortgage, and brokerage. Unique
features include its rookie real-
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USE YOUR COMPUTER LIKE A PRO 63

tor and blog sections. It costs

$149.95/year for complete
access.
www.ired.com International Real Estate Digest
has an Agents Toolkit that
includes information on market-
ing, calculators, agent support
services, and a shop where you
can order books, signs, and
software.
www.hud.gov The federal governments
Department of Housing and
Urban Development offer statis-
tics and reports on homeowner-
ship, policy and legislation, and
fair housing issues.

Home Styles and Construction Terms

When showing properties, you know the importance of being
knowledgeable about architecture and home construction. While
some of this information was probably covered in your pre-licensing
training, you may find that you are confronting styles and equipment
about which you know very little. For instance, do you know the dif-
ference between a gambrel roof and a hip roof? Can you explain the
benefits of a high R-value to your clients?
The easiest way to brush up on this knowledge is to first create a list
of the problems you have encountered in this area. Were many of the
listings in your market built in the Victorian period? Are homes in your
area affected by radon, lead paint, or mold? Research the information
you need by being as specific as possible. Sites such as http://
faculty.ccc.edu/khope/hum202architlex.html offer glossaries of terms,
while others present pictures and descriptions. On www.usinspect
.coms glossary of terms is linked to a picture of a house. You simply
click on the area of the house to get a definition. Its House Facts
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64 5 S T E P S T O R E A L E S TAT E S U C C E S S

section has information on components and systems ranging from air

conditioning to woodstoves; household pests; and environmental con-
cerns. With websites such as these available, there is no excuse for not
knowing, for example, the difference between a casement and a double-
hung window.
Courses and Educational Software
There are online courses offered in every subject imaginable. Many
states accept continuing education credits earned online, and there
are numerous designations and certifications offered through dis-
tance education. The National Association of REALTORs has its
own online university, with classes in subjects such as International
Real Estate; Mold, Lead, and Radon; and Negotiating.
General online education sites also offer courses in real
estate-related topics, and more universal business subjects that
could be of interest to agents. On www.WorldWideLearn.com,
a directory of programs from dozens of distance learning cen-
ters, there are courses in continuing education topics such as
sales, marketing, and time management. For more ideas about
online education, search the Internet with the terms real estate
and online education.
Educational software can perform the same function as online
courses. You can proceed through and absorb information at your
own pace, at home or in the office. However, the cost is typically
lower, and, since you own the software, you can review the material
covered at any time. In addition to licensing exam preparation, you
can find software that helps develop specific business skills, as well
as software that helps run your business more smoothly. Sites offer-
ing real estate software include:

Realty Guide www.xmission.com/~realtor1/software.htm

#SOFT
Realty Star www.realtystar.com/index.html
Real Estate Center recenter.tamu.edu/soft/
Z-law www.z-law.com/
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USE YOUR COMPUTER LIKE A PRO 65

T O R EVIEW

Your computer is the most powerful tool you can use to achieve sales
success. The more adept you are with it, the better it will serve you.
Access the Multiple Listing Service (MLS) online for the most
current listing information.
Get your listings online even if you dont have a website and offer them
to local, regional, and state sites, as well as real estate-related sites.
Use software to organize your business. It will save you time, and
make it easy to contact your client list, prospect, prepare listing
presentations, keep track of visitors to your website, and more.
Whether you design it yourself, or pay a professional to do it for you,
go online with your own website.
Include content that will be valuable to your sites visitors, and
update it often.
Brand your website to stand out from the crowd and introduce
yourself positively to hundreds of prospective buyers and sellers.
Make your website interactive. Ask for visitors contact information,
and ask them to identify themselves as a buyer, seller, or browser.
Offer online help in the form of pre-qualifying, scheduling a home
inspection, or requesting a market analysis.
Market your website by including your URL (Internet address)
on business cards, brochures, signs, and every other printed mar-
keting piece you distribute. Create a signature line for e-mails that
also includes your URL.
Get your website indexed on search engines for maximum visibility.
Consider hiring a professional to improve your rankings, and inves-
tigate the pay per click services offered on many search engines.
Use e-mail to keep in touch with your contact list. Remember to
treat e-mail as you would any other business correspondence.
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66 5 S T E P S T O R E A L E S TAT E S U C C E S S

Consider using an autoresponder to help with e-mailing.

To market yourself with e-mails, first develop a database of contacts
e-mail addresses. You can send targeted mailings to specific groups
within your database, and send more general newsletters regularly
to everyone else in your database.
Use the Internet to stay informed. Investigate competitors websites
to see what works, and what doesnt. Keep abreast of news and
trends by frequently visiting real estate news sites. Research topics
you need to learn more about, such as construction terms and
architectural styles.
Online courses and educational software can save you time and
money. Some states recognize continuing education credits earned
online, and many designations and certificates can be acquired
online, too. More general skills such as sales and marketing can be
improved through courses and educational software.
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S T E P 4

MEET THE NEEDS OF

BUYERS AND SELLERS
There are two sides to every real estate trans-
action, and you will be on each one hundreds of
times during your career. Many of the skills
needed to work effectively with buyers and
sellers are the same; however, there are also
specific approaches that can help you best
work a deal for one side or the other. Under-
standing the differences between represent-
ing a buyer and seller is a hallmark of the
successful agent.

M ost real estate buyers have been sellers before, and obviously sellers
have previously purchased properties. So you might think they
understand both sides of the transaction. Wrong! Prior experience probably
wont translate into working knowledge. In other words, dont assume that
a buyer or seller will know how a sale will proceed. It is your job to educate
them. Each side will require different approaches and information. Tell
them everything they need to know about the real estate process. Education
not only creates great agents; it creates great buyers and sellers, too.

DEALING WITH BUYERS

Buyers are considered by some successful agents to be easier to work for than
sellers. To begin with, they come to you asking for your services. As soon as
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68 5 S T E P S T O R E A L E S TAT E S U C C E S S

they are pre-qualified for a mortgage, and explain what they are looking for,
you can begin showing them homes. Consider, on the other hand, that you
will probably need to work to find sellers. When you find them, there is a
multiple-step process which must take place before you can list their prop-
erties. Developing listing presentations, taking and uploading digital pictures
and virtual tours, and creating a marketing plan take time.
In addition to the fact that buyers bring commission checks with less work
for you, there is great satisfaction to be found in helping someone find the
right property. Don and Bert Marcy, agents from New Jersey who have
made the list of the states top salespeople for over 20 years, note that they
enjoy playing matchmaker. The real thrill is finding the right fit. You need
to have the ability to understand what people are really looking for. Then, you
go out and work like crazy to help them find it.

H ANDLING F IRST -T IME B UYERS

Some first-time buyers act like old pros. They know what they want, under-
stand what they can afford, and keep an open mind when youre showing
them properties. Most, however, are more challenging. Buying a home is an
enormous investment, and with the large price tag can come a large amount
of nervousness.
When dealing with jittery buyers, keep in mind that nerves are related to
a fear of the unknown, which is best mitigated with information. The more
information you give them, the less theyll worry. By keeping such buyers in
the loop, you will minimize their jitters, which will in turn minimize the
number of anxious phone calls they make to you!
Throughout the buying process, explain each step thoroughly. In partic-
ular, it is critical for the buyers to understand:

1. why they need to be pre-qualified

2. what purchase documents look like (give them samples that they
can take to their attorney or review on their own)
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MEET THE NEEDS OF BUYERS AND SELLERS 69

3. how the offer process works (e.g., when their offer is accepted, they
are obligated to purchase)
4. what happens if there is already an offer on a property they want to
buy, or if another buyer makes an offer after they have made one
5. how you handle their earnest money deposit (the procedure varies
by state, and deposits are not always returned if the deal falls
through)

ACT NOW

Even if you dont have a buyer yet, make up a calendar

form that you can use to help them through the process.
The form should reflect your market identity or brand,
and contain all of your contact information, including
URL. List all of the steps in the buying process, personal-
ized information (you can add the buyers names at the
top with a heading such as The Smiths Home Purchase
Calendar), and the dates on which contingencies expire.

W ORKING WITH I NTERNET -S AVVY B UYERS

More than half of all buyers use the Internet to search for homes before they
contact an agent. California REALTOR Donna Dawson says there are real
advantages to working with these buyers.They have a better sense of what
the market is like; there are fewer surprises and cases of `sticker shock. Since
theyre constantly surfing the Internet for listings, they expect me to also, and
that keeps me on my toes.
There are downsides of working with such active buyers, though. Many
of the commercial listing sites arent updated frequently. Eager buyers will
find homes that interest them, and contact you with addresses or MLS
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70 5 S T E P S T O R E A L E S TAT E S U C C E S S

numbers to arrange showings, only to find out that the properties have
already been sold. But this downside gives you an opportunity to explain
a benefit of using your services: you have the most current listing infor-
mation, and can therefore more easily find the type of home they are look-
ing for.
Another potential downside is the tendency for Internet-savvy buyers
to question your commission. They might not directly ask you to lower it,
but they could ask you to justify it. Be prepared to explain why the serv-
ices you offer are worth the price. Let them know you are an experienced
professional; you have been through the process many times, and know
how to deal with sellers, other agents, lenders, appraisers, and inspectors.
Your expertise will make the sale go more smoothly, with an outcome they
will appreciate.
Come up with a specific plan to deal with the commission-cutting ques-
tion. Veteran agent Nancy Lang cautions,it might make sense to cut your
commission if a deal is close, and everyone else is giving a little. But dont
make it a habit. It can undermine your standing as a professional. If you dont
respect your profession, why should anyone else?Whatever you decide, dont
waffle, and dont get emotional. Its nothing personal.
Once youve closed with Internet-savvy clients, maintain contact
through e-mail. Share useful information, such as details of cost-effective
home improvements, updates on local zoning laws, and tips on how to
maximize the value of their property. These buyers will forward e-mails
when they contain something of value. When they pass on one of your
messages, theyve helped you expand your sphere of influence with no
effort on your part.

S HOULD Y OU B ECOME A B UYER S R EPRESENTATIVE ?

Until recently, all agents worked for the seller. The listing agent had the most
direct involvement, but everyone who showed the property, and the agent
who sold it, were known as sub-agents. Instead of holding the buyers inter-
ests above those of the seller, the sub-agent would, in fact, favor the seller.
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MEET THE NEEDS OF BUYERS AND SELLERS 71

Many buyers are asked to sign a statement acknowledging that they under-
stand this practice.
Understandably, consumers put pressure on the real estate industry to
change the practice of sub-agency. The industry responded with educa-
tion, designations, and a change of climate to help agents more fairly rep-
resent the buyer in real estate transactions. In 1988, The Real Estate
Buyers Agent Council (REBAC) was founded to promote the skills and
services of buyers agents. REBAC now has over 40,000 members, and
awards a professional designation to those who meet course requirements
and have the requisite professional experience. The Accredited Buyer
Representative (ABR) designation is the only one of its type recognized
by NAR.
According to REBAC, buyers who use an ABR find homes sooner and
on average are shown three more properties than those who work with
traditional agents. That explains why over half of all buyers choose an
ABR. Why should you consider attaining this designation and becoming
a buyers agent? To begin with, it can help you carve out a niche within a
very competitive market. Its a numbers game: the 63% of buyers who use
an ABR dont have many to choose from. Of the more than 2.1 million
people licensed to sell real estate in the United States, less than 5% are
designated buyers agents.
When you represent the buyer, you focus on just one side of the transac-
tion. That means you can save time and money by being able to market your
services to one specific group. Buyers agents target their promotions, includ-
ing print materials, website and other Internet presence, and business cards
and stationary, to appeal only to buyers. You can also offer more to your
clients. Beyond the traditional MLS, you can present to your buyers FSBOs,
foreclosures, and other properties not listed by your fellow agents.
ABRs are not directly competing with listing agents, who need their
services to help sell homes. Listing agents therefore frequently give refer-
rals to ABRs. Working as a buyers agent can get you on the inside
track with these agents more quickly than if you worked with both buyers
and sellers.
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72 5 S T E P S T O R E A L E S TAT E S U C C E S S

If you are considering becoming a buyers agent, research the subject of

dual agency and the laws of your state. Current legislation in many areas of
the country is challenging the practice of one brokerage using two agents to
represent the two sides of a transaction. If the practice of dual agency
becomes illegal in your state, as an ABR you will be poised to grab a good
share of the buyers market.

C H E C K I N G N E G AT I V I T Y

What is the biggest misstep you can make with a buyer?

Allowing negativity to creep into your conversations. Any
type of criticism, whether it be directed at a property, a
neighborhood, or another agent, can erode buyer confi-
dence. Dont assume that you know enough about your
buyer to be able to read his or her mind. Buyers hire you to
show them the possibilities, not to weed out certain types
of homes or streets for them.
If you are working with a buyer who cant make a decision,
your negativity, however well you think you guard it, could
be to blame. Instead of disapproval, show each property
with an eye toward its possibilities. Every home has them,
whether they be price, condition and/or location. When
you check your negativity at the door, you are more likely to
help the buyer find the home theyve been looking for.

I NTERVIEWING THE B UYER

Before you begin showing properties, there are two critical actions you must
take with any buyer. Prequalification is first. To refresh your memory, refer
back to page 29 in Step 2 for a script that can be used to lead buyers toward
pre-qualification. The second action is the interview. Dont assume that you
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MEET THE NEEDS OF BUYERS AND SELLERS 73

can read your buyers mind, or even that what he or she first tells you they
want in a home is what theyll end up buying. Conducting a thorough inter-
view, in which you listen far more than you speak, is the key to helping buy-
ers find the right properties.
Begin your interview with a discussion about price. Using the pre-
qualification letter, help the buyer determine what can be afforded. There
may be some room to negotiate, so listen carefully to what is being said. Is
there an indication that the perfect home could bring the buyer to spend a
little more? Or is strict adherence to a budget very important?
Next, ask questions, pausing to listen carefully to the answers. Take good
notes. Many agents put these questions on a form, with space for each one
to be rated as a need or want, or ranked in importance from one (most
important) to five (least important). Dont give the form to your buyer(s), but
instead use it to make notes during the interview.
Typical buyers interview questions include:

How many bathrooms and bedrooms do you need?

Is there a particular style home you prefer/dislike?
What amount of square footage do you like or need?
Are you willing to look at homes that need some renovating?
Describe your dream bathroom/kitchen.
Are there any access issues, such as members of the family who cant
negotiate stairs?
How important is the quality of the school system?
What else would you like: fireplace, garage, basement (finished?),
family room?

During the interview, explain the importance of flexibility. Many homes

in the MLS are overpriced, not well maintained, in a poor location, or have
some other defect. If buyers expectations are realistic, and they understand
that perfection is a rarity, the process will go more smoothly. Remind buy-
ers that if you help them find a great deal, they can always add those items
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74 5 S T E P S T O R E A L E S TAT E S U C C E S S

that are missing from their need list, or make updates or improvements to
turn an average home into a dream home. Managing their expectations
before you start showing them properties is essential.

S HOWING P ROPERTIES

Top-seller Brenda Eager points out the importance of selecting properties

carefully, using the notes you took during the buyer interview.Dont send
them out with 100 listings. Its overwhelming, and doesnt look like you put
much thought into it. Select just three properties at a time, and encourage
your buyers to take notes during the viewing.
Its also important to continue the interview process as you look at prop-
erties together. To get the best feedback, ask open-ended questions, and keep
your opinions to yourself. It is your job to bring the inventory to the cus-
tomer, not to decide for him or her what best suits them. You might want to
encourage them to rate each property by using plus and minus columns.
For some buyers, seeing the home in black and white terms can help when
its time to make a decision. If the price, location, and total square footage are
in the plus column, and lack of a wood-burning fireplace is in the minus col-
umn, you could point out how close the property is to what they want.

ACT NOW

Take the advice of Michigan agent Brenda Eager. Order

dozens of plastic clipboards and pens imprinted with your
name and contact information. When showing properties,
give them to your buyer with the listing printouts attached.
Encourage them to take notes directly on the listings, and
to bring the whole clipboard home. Instead of getting con-
fused hours later about which house had the pool and
which one needed a new bathroom, they can refer directly
to their notes. Plus, your name and number are on every
sheet of paper, the pen, and the clipboard!
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MEET THE NEEDS OF BUYERS AND SELLERS 75

D EALING WITH A B UYER S S PECIAL N EEDS

Some of your buyers may be facing difficult situations that necessitate their
move. You need to treat them differently from other buyers, while keeping in
mind that they still want the same outcome: to purchase a home. If a buyer
is going through a divorce, facing foreclosure, or being relocated reluctantly,
their needs will vary from those of the typical buyer. Helping them to
understand whats available while not rushing them to make a decision, is
critical for success with this type of buyer.
During the interview, listen carefully without judging. You dont need to
offer an opinion about the lousy company, husband, wife, bank, lawyer, etc.
Determine what will make this buyer feel that his or her needs are met. Are
they worried about security? Did they love their old neighborhood and
now hope to find that same sense of camaraderie in a new one? Do they have
worries about money? Each situation calls for a different approach. Its your
job to give or lead them to not only the right property, but to the right infor-
mation that can help meet their needs.
For example, if your buyers are worried about safety, first find out as much
as you can about the area they are moving from. Use this information to
favorably compare and contrast your area with the old location. Gather
crime statistics for your area to show that the crime rate is low. Find prop-
erties with strong neighborhood associations and neighborhood watch pro-
grams. If you are working with a buyer who has financial concerns, you need
to show them that they can afford the properties you are showing them.
Cost-of-living and mortgage calculators give accurate pictures of what can be
expected. If the buyer knows they can meet the new payments, their concerns
will be alleviated.When dealing with buyers with special needs, it is impor-
tant to remember that you are a REALTOR. That might seem simple, but
people going through difficult times are apt to share more sensitive emotional
information than they would at other times. You are not a social worker or
a psychologist. Listen, show empathy, but remember why you were hired. If
you can help them find the right property, you will have taken one of their
problems off the list.
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76 5 S T E P S T O R E A L E S TAT E S U C C E S S

ALL ABOUT SELLERS

Sellers keep everyone in the field of real estate solvent. They pay the com-
mission that is split between their agent and the buyers agent. Therefore,
even if you are a buyers agent, the seller indirectly controls your income.
However, the seller doesnt always make it that simple. Most homeowners
feel a sense of attachment to their homes; perhaps their child was married in
the backyard, or they renovated the kitchen together. Life happens at home,
and for some sellers, its not easy parting. Understanding what motivates the
seller, and how best to work with him or her, will make the process easier, as
well as rewarding, both financially and personally.

P RESENTING AND P REPARING A L ISTING

Working with a seller starts with an initial meeting. Whether it takes place
in person or over the phone, this meeting is when you will gather as much
information about the seller and the property as possible. The seller may be
interviewing a number of other agents, which means you will have to com-
pete for the listing. If this is the case, the presentation you put together based
on the information you gathered in the initial meeting will either win or lose
the business for you.
Jill Birdsall, an agent in Albany County, New York, urges find out what
the seller wants. Dont assume it is getting top dollar for their property. If you
ask open-ended questions, and really listen to the answers, you can get them
talking. Since sellers arent typically as open as buyers, thats important. For
some sellers, a quick closing is what theyre after, and others are willing to
wait for the right offer.
The easiest way to assure that you ask all the right questions, and dont
leave anything out, is to prepare a form for interviewing sellers. Type it and
print out multiple copies. Every time you speak with or meet with a new
seller, fill it out. You will have an accurate record of your discussion, and a
document that will make it easy for you prepare a listing presentation. A
seller meeting form might look like this:
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MEET THE NEEDS OF BUYERS AND SELLERS 77

Property Date

Sellers Name and Address

Phone (home/cell) Fax

E-mail address

Why are you selling your property?

When do you need to sell?

At what price would you like to list your home?

Tell me about your home: type

square footage

# bedrooms

bathrooms

other amenities

How did you hear about me/my agency?

Are you interviewing other agents? If yes, who are they, and when are

they making their presentations?

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78 5 S T E P S T O R E A L E S TAT E S U C C E S S

What criteria are you using to select an agent?

Would you prefer to meet in your home, or at my office?

When I make my listing presentation, can all the sellers be present?

Would you be willing to wait to make a decision as to who will be your

agent until I can meet with you?

After you conduct the initial interview, you need to gather even more
information. Research the neighborhood if youre not familiar with it. What
have similar homes in that area sold for? You will need this data to perform
a Comparable Market Analysis (CMA). But dont stop your research with
comparables that have been sold. Also look at market activity for compara-
bles in actives, under contract, pending, withdrawn, and expireds. In addition,
find out when the sellers bought the property, and for what price.
Drive by the home, and all of the comparable properties you researched,
and take digital photos. Assess the positives and negatives of the property in
writing. Rate the curb appeal, location, quality compared to other homes on
the street, paint job, and landscaping.
At the listing presentation, this thorough preparation will show, and thus
enhance your professional image.You want the seller to begin to trust and have
confidence in you from the start, so begin by showing them that you took the
time to know everything you could about their home and its location.
During the actual presentation, use body language to your advantage.
Firm handshakes, eye contact, and an open posture (no crossed arms or
slouching) all inspire confidence. If you are using presentation software, be
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MEET THE NEEDS OF BUYERS AND SELLERS 79

sure that you can control the speed at which the presentation unfolds. Break
often from the computer to speak directly to the seller. The focus should be
on you, and not your laptop.

KEEP IN MIND

Presentation software and a computer to run it on are

expensive. But so is giving away all of your research and mar-
keting ideas. If you leave printed material with the seller, and
he or she chooses not to list with you, youve given them
hours of work that they, and their agent, can use free of
charge. Consider computer or Internet presentations not
only because they are state-of-the-art and attention-
grabbing, but also because they protect your work.

If you do work from print, make it stand out. Use color pages, and bind
the presentation. The cover should be personalized (Especially Prepared
for . . .) and include a photo of the home. Customize the picture with an
effect such as soft crop, custom frame, and/or drop shadow.You may use soft-
ware specifically designed to generate listing presentation materials, such as
IMPREV or Hewlett Packard Real Estate, or use a word processing pro-
gram such as Microsoft Word or Publisher.
Whether working from a computer or print material, there is set ground
that needs to be covered. Each element of your presentation works toward
the same goal: getting the seller to have confidence that your services will sell
his or her home not only better that he or she could themselves, but better
than any other agent. These elements include:

a cover letter that introduces you and describes your experience.

Include statistics from your website, such as number of hits and site
placement, as well as your sales history.
your resume, which lists all designations, awards, and achievements.
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80 5 S T E P S T O R E A L E S TAT E S U C C E S S

an overview of your company, including all sellers benefits.

a description of the property including taxes, sales history, and cur-
rent mortgage.
a personalized CMA with photos and descriptions (including days
on the market) of competing active, under contract, withdrawn,
and expired homes.
a pricing chart that offers a range of prices (never specify an exact
price), and which is clearly based on the CMA.
testimonials from former clients.
a comprehensive marketing plan to sell the home including print
(flyers, brochures, postcards) media (newspaper, TV, and/or radio),
virtual tours, and the Internet (your website, the MLS, and any
other sites you plan to use).
all listing forms, completed to the degree possible, including a list-
ing agreement.
tips on preparing the property for sale, including staging advice.

As you go through your presentation, the seller will be listening for a short
list of things: price, commission, marketing strategy, and expected time-
frame for a sale. The agents we surveyed offered some great advice for deal-
ing with both price and commission issues. Before giving the seller a price
range, and after youve presented the CMA, ask them what they think their
home should sell for. If they cant come up with a number, give them your
price range, explaining how it was determined. Then, complete a net sheet
that already includes the property information and your commission. If
working from a range, use an average of the highest and lowest prices.
By not addressing the commission directly, you lead the discussion in your
favor. Talk about it in terms of their net proceeds. Its simply one line item in
a list of costs associated with selling a home. If the seller turns the discussion
to commission cutting, be prepared with a rehearsed answer (refer back to
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MEET THE NEEDS OF BUYERS AND SELLERS 81

the section on the Internet-Savvy Buyers on page 69). Include the strength
of your marketing plan as part of your answer. Emphasize that the plan
youve come up with is not only unique, but the product of experience and
training. Susan Sommers, a consistent multi-million-dollar producer who
specializes in first-time sellers emphasizes: educate the seller up front.
Explain the many complicated steps it takes to sell a home, and how you will
guide them through every one. If they understand what your services are,
they will understand the commission.

HOT TIP

Consider putting a virtual tour online a week before the

property will be listed. You can generate many calls from
interested buyers, who will be directed to an open house the
next week. The open house will be well-attended, and you
will have created an environment similar to an auction.
The buyers will already be familiar with, and interested in,
the home. Theyll know they are in competition with one
another if they choose to make an offer.

When you give a well-prepared listing presentation, you exude confi-

dence. All of your research puts you in a position in which there is no ques-
tion you cant answer. Every number and statistic you cite is accurate and
defendable. With this confidence, address the seller who is interviewing
other agents by asking if you can come back after all the other presentations
have been given.

S H O U L D YO U TA K E T H E L I S T I N G ?

New agents are hungry for business, and often take what-
ever they can get. But is every listing worth your time,
money, and energy? Here are a few situations in which it
could be best to walk away:
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82 5 S T E P S T O R E A L E S TAT E S U C C E S S

You would never consider buying the property, or

showing it to friends and relatives.
The home shows poorly, and the seller doesnt want to
spend any money improving it.
The sellers price and/or timeframe expectations are
unreasonable.
The home has structural problems, which the seller
will not address prior to listing.
The seller wont agree to your commission rate
and terms.

Congratulations! The seller has agreed to list with you. At this time,
take out the prepared listing agreement, and fill in the price. Refer to this
number as the amount you all agree on. Wait for an affirmative response
before moving on. Then, explain that in order to write a listing that will
motivate buyers to take a look, you will need more information. Take
accurate measurements and interior digital photos. Find out what appli-
ances and fixtures stay with the house, and what the seller plans to
remove. This is a detail often overlooked by anxious agents, which can
cause problems later. Ask any other questions which will help you write a
great listing.

P RICING S TRATEGIES

Your goal in listing a home is to get the right buyer through the door,
quickly. Price every property with that goal in mind. If the figure is too high,
you severely limit the number of buyers who will even consider the home.
Too low, and you find yourself in the position of dealing with an angry
seller who cant net the amount they need.
If you havent worked with many buyers, enlist the help of a more expe-
rienced agent to determine the price cut-offs for your area. Typical buyers
might ask to see homes in the $100,000 to $150,000 range in one city, and
$99,000 to $149,000 in another. Whatever upper limit your price is higher
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MEET THE NEEDS OF BUYERS AND SELLERS 83

than, consider dropping it to fall within that lower range. For example, if you
are thinking of listing at $155,000, and a typical search is for homes in the
$125,000 to $150,000 range, remember that just $5,000 less will make your
listing appear in the searches of many more buyers.
To emphasize this point with sellers, perform a number of MLS
searches on your laptop in front of them. Show them how many homes
fall into each search category. If they see for themselves that pricing a few
thousand dollars less will place them in the search results of many more
buyers, they are more likely to understand your pricing strategy. But
remember that they must ultimately set the price. You are there to educate
and guide, not to coerce.
Jill Birdsall, an agent from Albany County, New York, notes:pricing is
not an exact science. Do your homework, know the neighborhood, the
comparables, and the property for sale. But the seller has the ultimate
authority. How should you deal with a seller who insists on an unrealisti-
cally high price? Calmly explain the advantages of setting one thats more
competitive:

1. More buyers will be introduced to your home.

2. The right price often means less negotiation.
3. Agents prefer to show well-priced homes.
4. You are more likely to get offers, and a sale, in a shorter period
of time.

What if a seller mentions another agent who cited a higher listing price?
First, remind them of your marketing and pricing goal: to get the most
qualified buyers to see the property. Overpricing wont do that. If the higher
price is justified as negotiating room, ask who will be doing the negotiating?
Not a group of buyers pitted against one another, but typically a lone buyer
who will expect you to move down to a price such as the one you suggested
in the first place. And that lone buyer will probably come along months, not
days or weeks, from now.
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84 5 S T E P S T O R E A L E S TAT E S U C C E S S

Explain that length of time on the market can greatly influence sale price.
The first few weeks of a listing are typically the most active. After that,
showings drop off. When a home sits on the market for a few months, buy-
ers begin to wonder what is wrong with it. Buyers agents respond by sug-
gesting lower offers. If a property is priced right initially, they can take
advantage of the volume of showings, and sell faster at a higher price.
Pricing strategies must also take into account the condition of the
house. Some agents are squeamish about bringing up overgrown plant-
ings, odors, and other maintenance issues, but they are doing themselves,
and their sellers a disservice if they dont address these problems early in
the process. There are two reasons to tactfully discuss the propertys obvi-
ous negatives. First, there are many easily remedied issues that could cause
the house to sit on the market. If the homeowner understands the impor-
tance of painting, cleaning, or planting, he or she can take care of these
problems prior to listing.
Second, it is a good idea to prepare the seller for the inspection. Dont wait
until there is an offer on the house to tell your client you noticed the worn
roof a month ago, but thought the inspector might not make an issue of it.
Point out every possible problem that an inspector could flag. Give advice on
dealing with them, explaining the pros and cons of acting now instead of
later. If the seller decides not to make repairs, and they understand that it will
affect the sale price, dont be alarmed. Susan Sommers notes that she has sold
properties in every kind of condition.Its not my job to get my sellers to fix
up their homes before listing them. Its my job to be professional and knowl-
edgeable. There is no one size fits all approach, no one right or wrong way
to sell property.
If the seller is unrealistic about pricing (demanding a high price and
expecting a quick sale at that price), suggest an appraisal. It costs money, but
shows that you are serious about helping them market their home properly.
Educate your sellers about your pricing strategy, and anticipate their every
question. Your answers will establish the trust and confidence needed to get
through the sale as smoothly as possible.
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MEET THE NEEDS OF BUYERS AND SELLERS 85

D ISCLOSURE S TATEMENTS

What if your seller lets you know that her house has what she believes to be
lead paint on the interior windows? Or that there is an old underground oil
tank in the backyard? Caveat emptor (let the buyer beware) used to be the
law for real estate transactions. Unless a buyer specifically asked the seller
about potential problems with the property, the seller was under no legal
obligation to disclose those problems. Now, however, every state has laws
concerning seller disclosure.
In addition to state law, local custom also dictates how to deal with dis-
closure. This is the kind of information best sought from the more experi-
enced agents in your office. Carol Shapiro, GRI, has been in real estate
since 1997, when she earned her brokers license. She now serves as Chief
Executive Officer of the Eastern Middlesex (Massachusetts) Association of
REALTORs, and stresses, making mistakes in this business can be very
costly. Understand all of the disclosure laws, and follow them carefully.
Liz Hallford Ward, an agent in Ft. Lauderdale, Florida, explains, my
company provides disclosure forms. They are a part of our standard listing
package and are given to the seller at that time. If the seller prefers, I will give
them 24 hours to complete the form and I then pick it up. It is not an
option. If a seller will not complete a property disclosure form, I will not list
the property. I fax or give the completed sellers property disclosure to a
buyer, or buyers agent, at the point they are seriously considering making
an offer. If a buyer, or buyers agent, asks for it sooner I promptly provide it.
If your firm doesnt have its own disclosure statements, you can order
them from many Internet sources, such as www.uslegalforms.com/real-
estate-disclosure-forms. When you are clear about what is legally required,
go over each item with your seller. You may even suggest that the seller show
the form to his or her attorney for review. In most states, failure to present
a disclosure statement to the buyer allows the buyer to terminate a contract.
It is critical that you and your seller are educated about how best to deal with
legally required disclosures.
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86 5 S T E P S T O R E A L E S TAT E S U C C E S S

R EADYING A P ROPERTY FOR S ALE

If a property has obvious structural or other serious concerns, bring them up

to the seller before the house is shown. Your goal is not to put down their
home, but rather prepare them for the realties of showing it if it has such
problems. For instance, a damp basement can either turn a buyer off com-
pletely, or give him or her reason to offer considerably less than the listing
price. Dampness can be caused by leaks, which are often expensive to repair.
But in many cases, cleaning gutters and redirecting downspouts can reduce
dampness and doesnt cost the seller any money.
Other obvious concerns include the presence of bugs and rodents. They
should be completely eliminated before the house is listed, and this often can
only be accomplished by hiring a professional. Get estimates, and get the job
done. There are very few buyers who will overlook this problem. A leaky roof
is also a big turn-off, as it can be very expensive to repair or redo. If your seller
wont remedy the situation, explain that they will have to lower their price
accordingly, and be up front with buyers. Consider offering a specific dollar
amount (derived from an estimate) to credit the buyer at closing.
In addition to any obvious, serious concerns, the seller should focus on
more minor, but still critical, maintenance issues. To keep it simple for
them, come up with a list of tips, which are part of your listing presentation
materials. The list must include, but is not limited to:

1. Clean the house, including windows.

2. Sweep the front walkway and steps.
3. Control clutter (remove unneeded items, and use baskets or boxes
if necessary).
4. Remove sources of unpleasant odors (also suggest simmering a cup
of orange juice and drop of vanilla with spices such as cinnamon,
cloves, and allspice for a few minutes each morning).
5. Maintain the lawn and gardens.
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MEET THE NEEDS OF BUYERS AND SELLERS 87

6. Fix any peeling paint.

7. Devise a plan to control pets during showings.
8. Display fresh flowers or a few great houseplants.
9. Fix the doorbell if its not functioning.
10. Pack up small valuables.

With the homeowner addressing these issues, the property is ready to be

staged. Staging involves more specific changes designed to improve the look
and feel of the property. Some agents perform this service for their sellers, or
create a list of suggestions for their sellers to act on. Others hire a professional
to do the job, and either pass the cost of staging on to the seller, or absorb it
as part of their service. Whether doing it yourself or hiring a professional,
remember that there are three areas to concentrate on.
The first area is the entrance to the home. The entrance is the first
impression, so it is particularly important to pay attention to detail. The
doormat should be new. Add color to the entrance by adding a pot of flow-
ers or a seasonal decoration if its winter (plastic flowers are out, but tasteful
faux greenery can work).
The second area is lighting. The home should be bright. Begin with the
exterior, and have any branches removed if they block windows. On the inte-
rior, suggest removing dark, busy wallpaper and dark paint or paneling with
a fresh coat of white paint. Exchange dim light bulbs for higher wattages.
Clean light fixtures to allow more light to shine. Add light fixtures to dark
rooms. Remove heavy drapes if they block light.
The third is spaciousness. Rearrange furniture to improve traffic flow and
create the illusion of more space. But that doesnt mean pushing it all against
the walls. Create conversation areas, and consider placing at least one piece
of furniture at an angle. If there is too much furniture, move some pieces to
other areas of the home, or put them in storage. Remove clutter, such as
stacks of old magazines, excess books in bookshelves, small appliances, etc.
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88 5 S T E P S T O R E A L E S TAT E S U C C E S S

ACT NOW

During your first year in real estate, write up a listing agree-

ment and a purchase-and-sale agreement each week
whether or not you have any real business. Using fictitious
information, you will gain confidence and experience deal-
ing with the forms, and not be intimidated by them when
you write them up for real.

R EADYING THE S ELLER FOR S HOWINGS

When the home is ready, get the sellers prepared for the realities of living in
a home that is on the market. Many sellers wish to be present for showings.
They are eager to hear feedback, and like to share knowledge of their home
with the potential buyers and their agents. If that is the case with your
seller, show respect for his or her opinions by eliciting their thoughts on their
propertys highlights. Create a flyer to leave on the hall or kitchen table for
prospective buyers that draws attention to those highlights.
Gain your sellers cooperation by emphasizing that showings work better
without them, because they can inhibit buyers from lingering for a better
look. Any offhand remark has the potential to turn off a buyer. Tell them to
play it safe and stay out longer than they think is necessary. If they must be
in the home, advise them to stay in one place, rather than following the buyer
and his or her agent.
Some sellers request a stipulation requiring 24-hour notice to show their
property. Make them aware that last-minute and same-day requests are
common, and if they dont allow them, they could keep the right buyer
from ever seeing their home. It is to their advantage to make it as easy to
show as possible.
If your seller asks you to be present for all showings, explain how this prac-
tice limits showings. You and the buyers agent have busy schedules. Trying
to coordinate them could put a showing off for daysdays in which the
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MEET THE NEEDS OF BUYERS AND SELLERS 89

buyer could find another house. In addition, buyers agents often dont feel
comfortable with the selling agent present. Again, you dont want to do any-
thing that makes the house hard to show. When you have the cooperation
of the seller, the listing not only looks better, but gets a reputation with area
agents as easier to show. Properties that show well, and are priced right, are
the quickest to move from listing to under contract.

T O R EVIEW

First-time buyers need as much information as you can give them.

Educate them about the home-buying process, and if they dont
already have a pre-qualification letter, offer to help them get one.
Internet-savvy buyers know the market, so you need to stress the
services you provide in addition to finding them listings. Once
youve helped these buyers close on a property, keep them in your
database. If they forward your e-mails, theyve helped you with a
possible referral.
Consider becoming a Certified Buyer Representative (CBR). Many
buyers prefer working with these agents, and those new to real
estate often work exclusively with buyers for their first months or
year on the job.
Before you take a buyer out to look at listings, take the time to find
out what they want. Interview them, and let them do most of the
talking. Ask open-ended questions that make them think and
respond with more than a yes or no answer.
Dont overwhelm buyers with a stack of listings. Show them a few
at a time, and encourage them to take notes. Give them the listings
on a clipboard with a pen, all with your name embossed on them.
Some buyers are facing difficult personal crises. Be prepared to lis-
ten, but dont take on the role of psychiatrist or best friend. They
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90 5 S T E P S T O R E A L E S TAT E S U C C E S S

need to find a new home just like other buyers. It may take a little
longer, but the goal is still the same.
The more prepared you are for a listing presentation, the more
confident you will be. Do your homework, and package the pres-
entation attractively.
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S T E P 5

NAIL THE SALE

Getting a property under contract, and then

moving the deal to the closing table means
working your way through a long to-do list.
Dont get overwhelmed either by what lies
ahead, or by the demands of your clients. The
more information you have, and the more you
convey to your buyer or seller, the easier it is to
get the to-dos moved to the done list. And
once theyre all moved, your hard work is
rewarded with a commission check.

R EALTORs are problem solvers, says Liz Hallford Ward. In the

industry just three years, Ward is already a top-selling agent. She adds,
It is my responsibility to make my client aware of all options at every step
along the way.These thoughts are echoed by other successful agents across
the country. Nailing the sale is about educating your buyer or seller, guiding
them through the selling process, and helping solve their problems. By keep-
ing their interest in mind at all times, you can move them from offer to con-
tract to closing with minimum hassles, and better commission checks.

PREPARING SELLERS FOR AN OFFER

Sellers and their agents should have a discussion about offers before the first
one comes in. When you represent the sellers, educate them about the
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92 5 S T E P S T O R E A L E S TAT E S U C C E S S

process. Explain step-by-step how an offer is presented, the types of con-

tingencies it might contain, how you can counter an offer, and what to do
about low-ball offers. Then, get their feedback.You should be very clear about
the terms under which they will accept, other than price and timeframe.
How long would they be willing to wait for a buyer to be pre-approved for
their loan? Would they want to take the property off the market for a buyer
who isnt approved? What if the buyers must sell their home in order to buy
your sellers home? Would the sellers consider offers contingent upon the suc-
cessful sale of a buyers current home?
How do your sellers anticipate their move-out will go? If they need to take
their time transferring their belongings, or are worried the closing on their
new home might be delayed, you can help by countering the escrow time as
close of escrow plus [number of days]. Your seller can then rent the home
from the new owners by the day until they are moved out.
If you havent already discussed it, as suggested in Step 4, have your sell-
ers make a list of all items not considered part of the purchase price. Any
items the sellers arent attached to, but could be taken, should be listed sep-
arately. You may need such items to bargain with during negotiations. In
addition, explain to your sellers that they should expect the buyers to
request certain items, such as special light fixtures, area rugs, and window
treatments. Liz Hallford Ward, an agent in Ft. Lauderdale, Florida, lists
portable storage sheds and hot tubs as strong bargaining chips for the seller.
That doesnt mean sellers have to include them, but knowing ahead of time
that they may be requested helps the seller maintain composure if negoti-
ations become difficult.

HOT TIP

Liz Hallford Ward has this advice:on occasions when the

buyer wants items that clearly are personal property, for
example furniture, artwork, lawnmowers, and bicycles, I
insist that buyer and seller work this out on their own.
This kind of negotiating should be totally removed from
the real estate transaction.
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NAIL THE SALE 93

HELPING BUYERS MAKE AN OFFER

As soon as buyers show signs that a particular property is the one, or close
enough to the one, suggest writing an offer. If your market is fast-moving,
let them know that if they dont act quickly, someone else could get the home.
However, there is a fine line between making a suggestion and giving a hard
sell. The buyer might even confuse one with the other. Too much pressure,
badly timed pressure, or tactlessness can kill the sale at this point, even
though the buyers have decided on a house and are on the edge of putting
down a deposit.

D ISCUSS THE P ROPERTY

Have a discussion with the buyers that is low-key enough not to be inter-
preted as a hard sell. If you are not acting as a buyers representative, the dis-
cussion will be limited by your obligations to the seller. If you are a buyers
agent, factors that the buyer should be aware of are:

Priced too highWhen a house is overpriced, and hasnt received

any offers, a low offer could get a response. There is a chance that the
sellers wont budge, at which time your buyer can either overpay or
look for another home.
Priced too lowWhen a house is listed below market value, the
sellers are trying to move the house quickly (or they have an incom-
petent agent). An underpriced house is likely to sell at or above the
asking price.
Length of time on marketOwners may be anxious after months
without selling. They may be willing to accept an offer now that they
wouldnt have considered when the house was first listed.
Reduction in priceOne drop probably means the house was
initially overpriced. Several drops probably mean the homeowners
are anxious to sell.
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94 5 S T E P S T O R E A L E S TAT E S U C C E S S

Eagerness of sellersIf the sellers are divorcing, or have fallen into

default on their mortgage, they are likely to accept a lower offer if
your client is in position to close the sale quickly.
Other timing factorsSellers may be willing to take less money if
there are expenses about to come in, such as winter heating bills or
property tax payments (generally due in January and July).
The competitionIs this house likely to receive multiple offers, or
are there unlikely to be other serious buyers? Is the market for this
type of property hot, or is it likely to remain unsold if these partic-
ular buyers fall through?

F ORMUL ATE THE O FFER

Deciding on an offering price means weighing how much the buyer can
afford against the lowest price you think the sellers will accept. The outcome
of the equation should be a number that is easily defendable. You dont
want the buyer to get hooked on a figure that you cant explain to the sellers
and their agent.
For instance, a property is listed for $200,000, has not received another
offer, and needs new windows. After fielding some estimates on the windows,
you determine that the replacement cost would be approximately $25,000.
That means an offer of $175,000 can be explained as bearing the cost of the
windows. Remind the buyer that when making a lower offer, it is best to keep
the contingencies to a minimum. A number that would be accepted on its
own could be rejected by insulted sellers who dont want to throw in the
refrigerator and the drapes, too.
But that doesnt mean you shouldnt include contingencies. They could
seal the deal later on when the seller wants to negotiate. Again, educating
your client is the best way to proceed. Explain that once in the negotiation
stage, the seller might think the offer is low, but be willing to take it if the
buyer is flexible about the time of the closing or inclusion of the pool
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NAIL THE SALE 95

equipment. With an eager seller or a slow market, buyers can ask for many
contingencies without seeming unreasonable. But if the market is hot or the
house has multiple offers, the sellers may not want to be bothered with a lot
of contingencies, and may sell the house to the bidder who presents the least
complicated offer, even if its slightly below the highest offer.
Help your buyer to understand how to weigh the condition of the
house, the market, the listing price, and the sellers frame of mind, to come
up with an offer. Of course, as with setting a listing price, the buyer has
the final say. It is your job to educate and be professional, but the money is
theirs to spend.

PRESENTING OFFERS

After two decades of fielding offers, Brenda Eager explains the most impor-
tant step in the process.Before you ever present an offer to your seller, you
need to understand the financial qualifications of the buyer. Read pre-qual-
ification letters carefully. Buyers can get them from the Internet, or even from
a local lender, without a credit check or income verification. That makes them
worthless. You must be able to interpret these letters to determine which are
valid and which arent. Its always better to go with a buyer who is pre-
approved, rather than pre-qualified.

P RESENTING TO Y OUR S ELLERS

Often how you present an offer is as important as the offer itself. Remem-
ber that it is your job to weed out unqualified buyers from the pack, but other
than that, the seller needs to make the decision. You can help them in a num-
ber of ways. For example:

Provide context. Explain the buyers concerns and financial situa-

tion. Is this their first house? Are they expecting their first child? Are
they old house people who fell in love with the charm of the sellers
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96 5 S T E P S T O R E A L E S TAT E S U C C E S S

antique home? Any information you can share that will encourage
empathy from the seller can help in the process.
Allow them to vent their disappointment or anger at a low offer,
or one with many contingencies. But then help them deal with
those feelings and move on. You might say,I know you are angry
right now. But these buyers are serious. I think we can find a solu-
tion that can work for everyone.
Dont try to convince the seller to take an offer they dont like.
First, you should never pressure them to do anything. Second, they
may become suspicious of your motives. Instead, explain how a
counteroffer could bring them closer to getting what they hoped for.
If youve given them all the information they need to make a deci-
sion, and they still dont want to take it, move on.
Show your expertise as a strategist. Remind the sellers that you
have been through this process many, many times, and you know
what works, and what doesnt. You might say, this offer is unac-
ceptable as written, but that doesnt mean we should walk away from
it. Every offer like this should get a response. I recommend coun-
tering higher than the price youll accept at first, to leave some
room to negotiate. If the buyer counters back, you may have to
come down some more.
Let them know there is a bottom line. You wont counter and
counter back endlessly. Again, stress your experience. If the buyer
wont come close to a reasonable offer, tell your sellers youll move on.
Present the offer in person. You have much greater control over the
situation if you can use not only your words, but body language and
eye contact, too. In person, there is little room for misinterpretation.
The telephone is your next best option, although you should be cer-
tain you have prepared the sellers properly before presenting the
offer. Never present an offer via e-mail.
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NAIL THE SALE 97

D EALING WITH M ULTIPLE O FFERS

Multiple offers can be great for the seller, providing the luxury of being
choosy, and the chance to get what they want with very little negotiating. For
the buyer, its important to have an agent who is an aggressive negotiator.
Offers need to increase or otherwise improve quickly in order to win. How-
ever, buyers who dont like competition and aggressive techniques could
back away if they know other offers are on the table. Other buyers are
turned off of multiple-offer situations because they assume the seller is sim-
ply trying to push up the price by claiming there are other offers when none
actually exist.
Revealing the status of multiple offers is up to the seller. The fact is the
buyer must wait for a response, and has no right to know if there are more
offers. The National Association of REALTORs Code of Ethics does
however instruct its members to reveal them when asked, after seeking
guidance from their clients. A Standard of Practice states that REAL-
TORs, in response to inquiries from buyers or cooperating brokers shall,
with the sellers approval, divulge the existence of offers on the property.
There are several other Standards of Practice which deal with multiple
offers. First, a REALTOR shall submit offers and counteroffers objectively
and as quickly as possible. In fact, all offers must be submitted until the seller
has made a final decision. When acting as listing brokers, REALTORs
shall continue to submit to the seller/landlord all offers and counteroffers
until closing or execution of a lease unless the seller/landlord has waived this
obligation in writing. REALTORs shall not be obligated to continue to
market the property after an offer has been accepted by the seller/landlord.
When all offers have been submitted, meet with your seller to review
them. The seller can accept or begin countering more than one offer at a time,
however, he or she must set an order of precedence, i.e., primary offer, first
backup contract, second backup contract, etc.
Be sure to get released from an offer before finalizing the selected offer, i.e.,
dont sell the house twice.
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98 5 S T E P S T O R E A L E S TAT E S U C C E S S

P RESENTING FOR B UYERS

If you are a buyers representative, you will probably make the offer to the
sellers agent, because most sellers agents wont let you present it directly. As
Jill Birdsall, an agent in Albany County, New York cautions, As a sellers
agent, I would never let the buyers agent present an offer. My seller could
form an emotional connection with their buyer, which could cloud the deci-
sion making process. Get any and all offers on paper. That way, they are black
and white, and its easier to see which offer is best.
But that doesnt mean you cant sell the offer to the sellers agent. If you
simply hand over the contract, you have missed an important opportunity to
present it in its best light. Explain the offer, and give the sellers agent as many
tools and arguments to take back to the sellers as possible. If you convince the
agent that the offer is reasonable, theres a good chance the agent can convince
the sellers. (Of course, the same thing works in reverse for counteroffers,
when the sellers agent needs to sell the offer to the buyers agent.)
Always give a reason for any adjustment in price, so the other party
doesnt feel that youre arbitrarily trying to pay less than what they think is
fair. Instead of saying the property is overpriced, explain that, even though
its reasonable, your clients cant pay it. Some of the tools you can give to a
sellers agent include explanations for:

Major contingencies. For instance, an FHA (Federal Housing

Administration) mortgage might require that the house have a
drilled well instead of a dug well, so the seller will have to pay for a
new well prior to closing. Or the buyers might ask the sellers to
replace the furnace and leave the appliances in the house, because if
they meet the asking price of the house they wont have enough
money left over to buy new appliances.

Major price deductions. If there is a serious structural or other haz-

ardous issue that must be remedied immediately, explain that the
offer had to be a little lower because the buyers need to be able to pay
for the repair. The offer is lower than what might have been expected
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NAIL THE SALE 99

not to haggle for a lower price, but because the buyers are willing to
spend some of their money on repairs that they are not asking the
seller to make. Turn the focus of the discussion from the price to the
money the sellers will save in potential repairs.
The positives in the offer. The seller can lose sight of the fact that
the buyer can pay cash, are pre-approved, are asking for very few
contingencies, or are willing to be flexible on the closing date if
they simply focus on the price. Help the sellers agent to highlight
whats best about the offer that could otherwise be lost sight of if the
seller simply focuses on the price.

NEGOTIATING STRATEGIES

The path toward successful negotiations begins with your first meeting with
your clients. That is when they begin to have confidence and trust in you as a
professional who will look after their interests. It is very difficult to negotiate
without that trust. In addition, you are also negotiating with another realtor.
The more you know about his or her style, and what motivates him or her, the
better you will be able to work the best deal for your client.
Negotiating begins with the offer/counteroffer stage. Buyers present an
offer, and the seller can accept, reject, or counter it. This stage can last many
rounds. Once the property is under contract, there are still many stages at
which negotiations can be reopened. This section explains strategies that
may be used for any stage, including one for closing the deal.

F ORM A R EL ATIONSHIP

Your relationships with buyers and sellers, which should be about trust and
confidence, begin with honesty. Explain early in the process what should be
expected. Turn your client into the most educated buyer or seller. Knowledge
helps them formulate realistic expectations, and when they expect whats rea-
sonable, they are much less likely to be disappointed.
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100 5 S T E P S T O R E A L E S TAT E S U C C E S S

For buyers, cover every item on the list on pages 6869. For sellers, use
your listing presentation to give them all the information they need about
market conditions, necessary repairs, realities of selling for the asking price,
and minimum acceptable price. Buyers and sellers should be aware before
negotiations begin that the timing of offers and counteroffers can be frus-
trating. Buyers sometimes have to wait longer than theyd like after making
an offer, and sellers should be prepared to respond quickly. The more your
client knows about the process and how it works, the easier your job will be.
Many situations can cause buyers and sellers to become anxious. In some
cases, their anxiety can cause deals to fall apart. But if your client trusts you,
and you are appropriately reassuring, their fears can be dispelled. Counsel
them about the value of being patient, and not jumping at an offer, or dis-
missing one quickly, either. If a client panics, they could make a decision
based on fear, rather than fact. Your job is to help them slow down, calm
down, and be objective before deciding anything.
Keep notes on the agents you face across the negotiating table. You might
even ask other agents in your office for information. The more you know
about them, the better you can anticipate their actions and reactions, and
perform against them to get the best results.

ACT NOW

Even if youre not a baseball fan, youve probably heard

how players analyze pitchers before a game. They know
which pitches are their best, and which are their worst.
Past performances are examined carefully to help determine
what they are likely to do in given situations. Award-
winning agent Susan Sommers recommends this approach
when negotiating.Get to know how the other agent thinks.
What is their negotiating style, and how do they operate?
In most markets, there arent that many realtors to learn
[about] because such a small percentage of the total does
most of the business.
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NAIL THE SALE 101

D EVELOP A P L AN

Strategize with your buyer or seller about how best to meet their objectives.
The seller should know ahead of time how you will deal with low offers, not
just understand that they will probably come in. How will you respond if the
property gets no offers in the first few weeks its listed? Involve the seller in
the formulation of the strategy.
Buyers should be aware of current interest rates, and how they translate
into monthly costs. For example, if they make an offer, and a counter offer
raises the price by $5,000, the seller has added approximately $40 a month
to their payment. Do they want to lose a great home over that amount? If
they understand the numbers, they will be better negotiators.

G ET Y OUR F ACTS S TRAIGHT

The more you can keep the discussion objective, that is, about the facts, the
less likely your negotiations will turn emotional. Buyers agents should be able
to defend prices and contingencies with facts, such as the CMA and inspec-
tion report. Know ballpark figures for repairs that should be done. Sellers
agents should also be well-versed with the CMA. If you know how and why
comparable homes sold for what they did, you can defend the sellers posi-
tion more strongly.

GO FOR THE W IN -W IN

The best negotiations are the ones that end with everyone feeling like theyve
gotten what they wanted. It might sound contradictory, but it is in your
clients best interest to keep in mind what will satisfy the other side. They will
be willing to strike a deal when they feel theyve gotten, or are as close as they
can come to getting, their needs met.
For your client, win-win means knowing their bottom line, and never
starting the negotiation process at that point (unless there is an unusual
market situation in which your best offer is requested first). There should
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102 5 S T E P S T O R E A L E S TAT E S U C C E S S

be room to maneuver. Use a concession to make the other side of the table
feel theyre really getting more than what you are offering. And always let the
other side have the final word, because it makes them feel like theyve won.
Win-win negotiating is also about the other agent. Chances are, you
wont work for the buyer or seller again, but you will probably be on oppo-
site sides of the table with the agent again. Let him or her know you are
trustworthy, dependable, and reasonable. Dont lose your cool, or otherwise
show emotion. And dont try to strong arm your way through negotiations
either. The better you behave, the better chances theyll walk away with a pos-
itive impression of you, and the easier it will be to strike a deal next time.

K EEP C LIENTS I NFORMED

As weve said before, the more information your buyer or seller has, the less
anxious they will be. Educate them about how negotiations work, and then
keep them updated. Even if you have no news, call to check in with them at
least once a day, especially if they have the jitters. Sellers are paying for your
service, and so even though it may be difficult to say you havent heard any-
thing, make the call.

GETTING TO THE CLOSING

Once the contract has been negotiated, you can begin the process of moving
toward the closing table. As Susan Sommers, an agent for almost 20 years
from Albany New York, notes,Being under contract is just the beginning.
There are a huge number of steps you must take to get to the closing. And
at many places along the way, the contract can be renegotiated. The most
important thing you can do is be involved with each step, and make sure one
follows the other as quickly as possible.
The negotiated contract typically goes first to the buyers and sellers
attorneys for review. If your client asks for advice, steer him or her to a
lawyer well-versed in real estate law. You dont want the contract picked
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NAIL THE SALE 103

apart by a well-intentioned attorney who doesnt understand the process. If

one or both attorneys want to amend or change the contract, the review
process can be slow. It can even lead to renegotiation. Title searches are
done by attorneys in most states; if yours is one of them, check to be sure its
in the works.

HOT TIP

If you are working for the buyer, suggest that they interview
and select an inspector as soon as a contract is accepted by
both parties. Most contracts specify that the inspection
take place within about a week. Since good inspectors are
heavily scheduled, the sooner the buyer gets to work on this
detail, the better.

The next step is the home inspection. Whether working for the buyer or
seller, its wise to be in attendance. In fact, all of the agents we surveyed men-
tioned this as their number one piece of advice regarding the inspection. If
there is a problem, you can immediately begin dealing with it. For example,
if your sellers find out the roof needs to be replaced or repaired, you can call
a few roofing companies to get estimates quickly. Since the inspection stage
offers both parties the ability to back out of the contract, its important to be
there, and to show both sides that no matter the problem, it can be fixed, even
if you need to renegotiate.
The next step, if you are a buyers representative, is dealing with the
mortgage contingency. In order to get from pre-approved to approved, your
client must gather and submit lots of paperwork. Ask the lender for a list of
all items required for closing, and ask that status reports be sent to you either
via e-mail or fax. If you cant get them to provide you with updates, call the
lender at least once every few days to ensure everything is progressing well.
Help your buyer stay on top of the details, especially if you notice they are
disorganized.
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104 5 S T E P S T O R E A L E S TAT E S U C C E S S

While the mortgage is being secured, the lender will schedule an

appraisal. As with the inspection, it is wise to be in attendance. The
appraiser examines the property to determine if it is worth the selling price.
If the appraisal comes in lower than the selling price, the buyer can get out
of the contract. However, if you are present when this happens, you can sug-
gest that the seller make a concession and renegotiate. By finding solutions
quickly to satisfy both sides, you can prevent a low appraisal from ruining
the deal.

DEALING WITH A LOW APPRAISAL

An appraisal that comes in thousands of dollars below the

selling price doesnt have to mean the end of the deal. If
you know your options, you can still move the sale forward
to closing.

Price Reduction. The buyer cant get a loan unless

the sale price matches or is lower than the appraisal.
Sometimes the seller is willing to reduce the price to
that level in order to keep the deal alive.
Down Payment Increase. Some buyers are willing to
put more money down, effectively making a purchase
with negative equity. However, there are lenders who
still wont approve a loan for such a situation.
Combination. The seller can reduce the price and the
buyer can increase the down payment.
New Appraisal. The lender may agree to hire another
appraiser to examine the property.
Dispute the Appraisal. Some appraisers will reexam-
ine the property, or use different properties as compa-
rables. If you know the comps, you can suggest that
they were not adequate, and ask that they be replaced.
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NAIL THE SALE 105

The last step in the closing process is the closing itself. In some states,
attorneys must be present, while in others, just the agents and their clients
are needed. Once it is scheduled, contact the buyer or seller to explain the
closing. Tell them what to expect, how long it will take, and any other details
you feel they should know. The better they understand the process ahead of
time, the more relaxed they will be.

S ERVICING B UYERS

In addition to the advice above, including attending the inspection and

appraisal, and staying on top of loan details, there are other ways in which
you can provide excellent service to buyers.
Think ahead for them. Theyre probably busy concentrating on the deal,
faxing or delivering documents to their lender, and arranging to move. You
can help by taking care of some of the details for them.
Give the buyers a list of the utility companies, with contact information,
that service the home. On the day of the closing, services should begin in
their name. In addition, provide them with contact information for a num-
ber of insurance companies (if they dont already have one). They should
apply for homeowners insurance before the closing.
Counsel them to plan on moving in a few days after the closing. Some-
times the seller is slow in leaving, or repairs need to take place while the home
is vacant. This time can also be used to thoroughly clean the home. If the
buyer can afford it, suggest they hire a maintenance company. Provide them
with a list of reliable companies that offer many services, such as rug sham-
pooing and window washing. The more advice and information you give your
buyers, the more they will appreciate your services.

G ETTING S ELLERS TO THE TABLE

As the sellers agent, you will need to keep informed as to the progress being
made. That means being on the phone on a regular basis with your client and
with the buyers agent. Make up a checklist of important dates, such as the
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106 5 S T E P S T O R E A L E S TAT E S U C C E S S

appraisal and inspection cut-offs, loan contingency, etc. If any step is late, call
and ask why.
If you havent attended the inspection, find out the results immediately. If
the inspection report lists many problems, and the buyers are asking for
concessions, remind your sellers that the report is not a wish list. Your con-
tract probably specifies which systems should be in good working order at
closing. For instance, if the furnace is older, but still functions, it is in good
working order. If it has a leak, and it is repairable, the furnace will be in good
working order. Just because the buyer is demanding that the seller replace it
doesnt mean they are contractually obligated to do so.
The contract may also state that the seller is not obligated to make any
repairs. However, holding firm to such as position could backfire if the
buyer is making a reasonable request. Rather than let the deal fall through,
it may be worth spending some money on repairs. Remind your clients that
they should arrange to have utilities shut off the night before or morning of
the closing. If they are selling one property and moving to another, they
expect the two closings to happen on the same day, or as close to the same
day as possible. If you are handling both transactions, you will need to make
sure the timing is right. If not, you have two different agents to communi-
cate with.

BEFORE THE CLOSING: A CHECKLIST

Double-check every detail. Be sure that you have all

required paperwork, and that it is filled out properly.
Has every last-minute item, such as working out the
oil adjustment if the house has oil heat, been taken
care of? Is the required insurance in place?
Make sure the property is ready for the walk-
through. Check it yourself, to be certain everything
the sellers promised to do is done.
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NAIL THE SALE 107

Ascertain that the buyers have all the money they

need to close, in an appropriate form. Check their
numbers to see if theyve miscounted, or written an
amount in wrong.
Check with the lender and the lawyer (if there is
one) to make sure that everything is in order, and
nobody has written the wrong time on their sched-
ule. Make sure the lender will be in his or her office
during the closing in case you need to call to fix a last-
minute hitch.
Make certain that the buyer and seller know
where theyre supposed to be, and at what time.
Give people directions if they need them. If either
party has a history of lateness, you may want to
arrange to pick them up and take them to the clos-
ing, or give them a starting time half an hour before
the actual scheduled closing. If they question the
time change, simply tell them that you need to go
over documents with them.
If your clients have children or elderly parents,
make sure they have arranged for care for longer
than the anticipated closing time. If theres a prob-
lem and the closing takes six hours, you want your
client to be able to concentrate on getting the problem
solved, not on whos watching the kids.
Reassure both buyer and seller that everything is
going well, and that this is a fair deal for both sides.
Do what you can to soothe any tensions or calm any
pre-closing jitters.
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108 5 S T E P S T O R E A L E S TAT E S U C C E S S

THE DAY OF THE CLOSING

Before the closing, buyers and their agents conduct one last inspection,
referred to as the walk through. It is intended to assure that the house is as
agreed on, and all conditions have been met. If the sellers want to be present,
speak with their agent and try to discourage them. Tension could be high,
and you dont want any last-minute misunderstandings or sparks flying.
If you represent the buyers, arrange to meet them just before the walk
through. Make sure theyve had coffee or juice and are not grumpy from low
blood sugar. Be upbeat but dont overdo it; this is a serious commitment for
the buyers and theyre likely to be in a serious mood.
If the buyers or sellers are not morning people, avoid chatter. Answer their
questions, but follow their cue about how much to talk. Dont feel the need
to fill pauses or silences in the conversation; many people prefer quiet first
thing in the morning.
If a problem arises, concentrate on fixing it, rather than laying blame or
panicking at the potential consequences. At this point, things are pretty far
along. A major problem might make for a long, frustrating closing. It might
mean all parties (and their agents) have to make some last-minute conces-
sions to get things done. But its unlikely to kill the sale at this point if you
address it promptly rather than trying to lay blame.

AT THE TABLE

You and your clients have made it to the final step. If anything goes wrong
at this point, it is usually a personality issue. Help everyone to focus on get-
ting the deal done, rather than how they feel about one another. To keep the
closing running smoothly:
Make sure all the paperwork is there and no one has forgotten
anything. If possible, stop by the location of the closing a few hours
early to make sure all the details are in place.
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NAIL THE SALE 109

Bring extra pens and notepads for everyone; dont assume every-
one will come to closing with writing supplies. Buyers and sellers will
be able to jot down any last minute details if necessary. And having
a scratch pad to doodle on may help clients ease nervous tension
while talking or waiting for someone else to finish rereading a doc-
ument during closing.
Make sure theres coffee (or whatever each party likes to drink)
and something light to nibble on. It will ease tensions, give people
something to do other than fidget, and remind them that you have
their interests in mind.
Keep everything moving along. Be friendly, but if someone gets
sidetracked or starts telling unrelated stories, gently bring them
back on topic. The faster the closing goes, the less chance there is
that discord will surface.
If the buyer or seller has legitimate questions, make sure theyre
answered. Dont try to railroad people through the sale, or make
them feel stupid for not having thought of the questions earlier. A
person who feels he or she is being coerced may get angry or suspi-
cious enough to call the whole process to a halt.
If the buyer and seller have clashed earlier, make sure that you
take steps to minimize the friction. Make sure your client is not
left alone; if possible you want to be with him or her to lend
encouragement and to keep the focus away from his or her dislike
of the other party. Buyers and sellers who dont get along should be
seated at inconvenient angles to each other (such as on the same
side of the table, with bankers and lawyers in between) so they cant
glare at each other across the table until the tension simmers into
an open fight.
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110 5 S T E P S T O R E A L E S TAT E S U C C E S S

T HE D OCUMENTS

For the buyer, the closing is actually two closings. They not only close on the
purchase of real estate, but also on the mortgage loan they are taking to buy
it. Each transaction involves a stack of paperwork. Especially for first-time
or otherwise jittery buyers, it is a good idea to explain the documents ahead
of time, so nerves are calmed and questions are answered ahead of time. At
the table, help your clients check all figures to be sure there are no typos or
other errors.
Mortgage documents include:

Truth-in-lending statement (or Regulation Z): discloses the inter-

est rate, annual percentage rate, amount financed, and total cost of
the loan over its life.
Itemization of amount financed: summarizes finance costs, includ-
ing points.
Monthly payment letter: breaks down the monthly payment into
principal, interest, taxes, insurance, and any other monthly escrows.
Note: acknowledges the loan, guarantees it will be paid back.
Mortgage: puts a lien on the house as security for the loan (which
means the bank can foreclose if you default on the note).

Real estate documents include:

HUD Form 1 or Disclosure/Settlement Statement: contains the

actual settlement costs and amounts.
Warranty deed: includes the names of the buyer and the seller, and
a description of the property. It may also guarantee that the seller
has the right to sell the property. Upon signing by both parties, it
transfers the title of property.
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NAIL THE SALE 111

Proration agreements: describe how buyer and seller are splitting

the costs of the house for the month in which it is being bought.
Costs may include property taxes, heating oil, and homeowners
association dues.
Tax and utility receipts: determine who will pay for what, and
when.
Acknowledgment of reports: assures that the buyer has seen all of the
reports regarding the property, including surveys and inspections.
Search or Abstract of Title: lists all recorded documents about
the property.

After the closing, its time to get back to work.Your client should be added
to your database, so you can contact him or her in the future. Begin by send-
ing them a short note the day after the closing. Thank them for their business,
and wish them happiness in their new home. Having a small flower arrange-
ment delivered is also a good idea. Make sure your buyer or seller retains a
positive impression of your services.You want them to remember you the next
time they need to buy, sell, or refer a realtor!

T O R EVIEW

Have a discussion with your sellers before the first offer is pre-
sented. Be certain they understand the process, and how you will
represent them, and also make sure you understand them, and what
they are willing to consider.
As soon as buyers show serious interest in a property, suggest, with-
out pressure, writing an offer. Make them aware of all of the infor-
mation you have, and can share, such as time on the market, price
(too high or too low), and eagerness of sellers. Your offer should be
defendable rather than a number seemingly pulled from thin air.
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112 5 S T E P S T O R E A L E S TAT E S U C C E S S

Help your buyers decide on contingencies that make sense for them
and wont alienate the sellers.
When presenting an offer to your sellers, do it in person. Help
them understand the context of the offer, including the ability of the
buyers to complete the sale. Allow them to vent anger or frustration
if the offer is low or complicated, but then come across as a strong
negotiator who can fire back a counteroffer and make the deal work
for them.
If you are presenting to the sellers agent, give him or her tools
they need to sell your offer to their clients. Explain your reasoning
in determining the offer, and as much background about the buy-
ers as possible.
It is important to form a positive relationship with your buyer or
seller. When they like and trust you, they will have confidence in
your skills as you guide them through the negotiation process. Keep
them informed throughout the process.
Formulate a plan with your buyers or sellers ahead of time as to how
you will deal with issues such as low offers, counteroffers, and time
on the market without offers.
Do your homework so that you can negotiate with facts and figures.
Good negotiators let the other side feel they are winning, too. Dont
let the other realtor and her clients walk away feeling like theyve
been taken advantage of.
To get to the closing table, you need to follow up on every detail.
Make sure the inspection is scheduled, and attend it. Get updates on
the loan status, and remind your clients of what they need to be
doing next. Every few days you should be checking to see that
timely progress is being made.
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NAIL THE SALE 113

Try to keep buyers and sellers apart on the day of the closing. Sell-
ers dont need to be present for the walk-through, for example.
Since all of the details of the sale are already worked out, the num-
ber one problem at this stage is personality issues. Distance keeps
those issues from arising.
After the closing, add your buyers or sellers to your database.
Send a thank you note or gift, and keep in touch. Some day, they
will be buyers or sellers again, and you want them to use your
services again.
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A P P E N D I X A

POWER WORDS
AND PHRASES

U se these words to describe houses in your listings, ads, flyers, letters,

and conversations. Be specific. Find the exact word or words that
convey the meaning you intend rather than using an entire sentence that
simply hints at that meaning. Being precise and concise also means avoiding
modifiers such as more and totally, which clutter up your writing without
adding substance.
P ROPERTY -S PECIFIC W ORDS

airy breathtaking charming

amenities bright child-friendly
ample bustling city view
antique (neighborhood) classic
beachfront captivating clean
beautiful cathedral ceilings colonial
brand-new central comfortable
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116 5 S T E P S T O R E A L E S TAT E S U C C E S S

community immaculate restored

conveniences incomparable rich
cozy incredible roomy
craftsmanship lake view rustic
custom large safe
delightful lifestyle scenic
desirable lively secluded
distinguished location security
dramatic luxurious serene
easy magnificent solid
easy financing matchless sophisticated
elegant modern southern exposure
excellent new spacious
exciting open special
exclusive opportunity spectacular
expansive original spotless
exquisite outstanding stable
extraordinary panoramic view storage
features parks strong
federal peaceful stunning
fine perfect sturdy
garden preeminent substantial
gem premier sunny
glamorous prestigious superior
gorgeous pristine terrific
graceful private ultimate
great location quaint unique
handsome quality unmatched
hardwood floors quiet unparalleled
haven rare updated/up-to-date
high ceilings refuge upscale
historic remarkable value
homey remodeled vibrant
ideal renovated victorian
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POWER WORDS AND PHRASES 117

view waterfront well-maintained

vista well-kept workmanship

G ENERAL D ESCRIPTIVE W ORDS

accomplish creative initiate

accountability customer service and marketing
achieve satisfaction negotiate/negotiable
advertising detail-oriented network
advice develop on-time manner
aggressive driven organized
analyze dynamic plan
attain effective prepare
available efficient proactive
care effort proven
careful established reputation
clients best interests expedite respect
client-focused facilitate responsibility
concern focus service
consideration goals track record
contacts identify value
coordinated improve x-year history
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A P P E N D I X B

REAL ESTATE
GLOSSARY

T his glossary contains over 900 key terms that are listed in alphabetical
order for easy reference.

Abstract of Titlea certified summary of the history of a title to a

particular parcel of real estate that includes the original grant and all
subsequent transfers, encumbrances, and releases.
acceleration clausea clause in a note, mortgage, or deed of trust that
permits the lender to declare the entire amount of principal and accrued
interest due and payable immediately in the event of default.
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120 5 S T E P S T O R E A L E S TAT E S U C C E S S

acceptancethe indication by a party receiving an offer that they agree

to the terms of the offer. In most states the offer and acceptance must be
reduced to writing when real property is involved.
accretionthe increase or addition of land resulting from the natural
deposit of sand or soil by streams, lakes, or rivers.
accrued depreciation(1) the amount of depreciation, or loss in value,
that has accumulated since initial construction; (2) the difference between
the current appraised value and the cost to replace the building new.
accrued itemsa list of items of expenses that have been incurred but
have not yet been paid, such as interest on a mortgage loan, that are
included on a closing statement.
acrea measure of land equal to 43,560 square feet or 4,840 square yards.
actual evictionthe result of legal action brought by a landlord against a
defaulted tenant, whereby the tenant is physically removed from rented
or leased property by a court order.
actual noticethe actual knowledge that a person has of a particular fact.
addendumany provision added to a contract. Or, an addition to a
contract that expands, modifies, or enhances the clarity of the agreement.
To be a part of the contract and legally enforceable, an addendum must
be referenced within the contract.
adjacentlying near to but not necessarily in actual contact with.
adjoiningcontiguous or attached; in actual contact with.
Adjustable-Rate Mortgage (ARM)a mortgage in which the interest
changes periodically, according to corresponding fluctuations in an index.
All ARMs are tied to indexes. For example, a seven-year, adjustable-rate
mortgage is a loan where the rate remains fixed for the first seven years,
then fluctuates according to the index to which it is tied.
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R E A L E S TAT E G L O S S A R Y 121

adjusted basisthe original cost of a property plus acquisition

costs, plus the value of added improvements to the property minus
accrued depreciation.
adjustment datethe date the interest rate changes on an adjustable-
rate mortgage.
ad valorem taxtax in proportion to the value of a property.
adverse possessiona method of acquiring title to another persons
property through court action after taking actual, open, hostile, and
continuous possession for a statutory period of time; may require
payment of property taxes during the period of possession.
affidavita written statement made under oath and signed before a
licensed public official, usually a notary public.
agencythe legal relationship between principal and agent that arises out
of a contract wherein an agent is employed to do certain acts on behalf of
the principal who has retained the agent to deal with a third party.
agentone who has been granted the authority to act on behalf
of another.
alienationthe transfer of ownership of a property to another, either
voluntarily or involuntarily.
alienation clausethe clause in a mortgage or deed of trust that permits
the lender to declare all unpaid principal and accrued interest due and
payable if the borrower transfers title to the property.
allodial systemin the United States, a system of land ownership in
which land is held free and clear of any rent or services due to the
government; commonly contrasted with the Feudal system, in which
ownership is held by a monarch.
amenitiesfeatures or benefits of a particular property that enhance the
propertys desirability and value, such as a scenic view or a pool.
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122 5 S T E P S T O R E A L E S TAT E S U C C E S S

amortizationthe method of repaying a loan or debt by making

periodic installment payments composed of both principal and interest.
When all principal has been repaid, it is considered fully amortized.
amortization schedulea table that shows how much of each loan
payment will be applied toward principal and how much will be applied
toward interest over the lifespan of the loan. It also shows the gradual
decrease of the outstanding loan balance until it reaches zero.
amortizeto repay a loan through regular payments that are comprised
of principal and interest.
Annual Percentage Rate (APR)the total or effective amount of
interest charged on a loan, expressed as a percentage, on a yearly basis.
This value is created according to a government formula intended to
reflect the true annual cost of borrowing.
anti-deficiency lawlaws used in some states to limit the claim of a
lender on default on payment of a purchase money mortgage on owner-
occupied residential property to the value of the collateral.
anti-trust lawslaws designed to protect free enterprise and the open
marketplace by prohibiting certain business practices that restrict compe-
tition. In reference to real estate, these laws would prevent such practices
as price-fixing or agreements by brokers to limit their areas of trade.
apportionmentsadjustment of income, expenses, or carrying charges
related to real estate, usually computed to the date of closing so that the
seller pays all expenses to date, then the buyer pays all expenses
beginning on the closing date.
appraisalan estimate or opinion of the value of an adequately
described property, as of a specific date.
appraised valuean opinion of a propertys fair market value, based on
an appraisers knowledge, experience, and analysis of the property based
on comparable sales.
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R E A L E S TAT E G L O S S A R Y 123

appraiseran individual qualified by education, training, and experience

to estimate the value of real property. Appraisers may work directly for
mortgage lenders, or they may be independent contractors.
appreciationan increase in the market value of a property.
appurtenancesomething that transfers with the title to land even if its
not an actual part of the property, such as an easement.
arbitrationthe process of settling a dispute in which the parties submit
their differences to an impartial third party, on whose decision on the
matter is binding.
assessed valuethe value of a property used to calculate real estate taxes.
assessora public official who establishes the value of a property for
taxation purposes.
assessmentthe process of assigning value on property for taxation
purposes.
assetitems of value owned by an individual. Assets that can be quickly
converted into cash are considered liquid assets, such as bank accounts and
stock portfolios. Other assets include real estate, personal property, and
debts owed.
assignmentthe transfer of rights or interest from one person to another.
assumption of mortgagethe act of acquiring the title to a property
that has an existing mortgage and agreeing to be liable for the payment of
any debt still existing on that mortgage. However, The lender must
accept the transfer of liability for the original borrower to be relieved of
the debt.
attachmentthe process whereby a court takes custody of a debtors
property until the creditors debt is satisfied.
attestto bear witness by providing a signature.
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124 5 S T E P S T O R E A L E S TAT E S U C C E S S

attorney-in-facta person who is authorized under a power of attorney

to act on behalf of another.
avulsionthe removal of land from one owner to another when a stream
or other body of water suddenly changes its channel.

balloon mortgagea loan in which the periodic payments do not fully

amortize the loan, so that a final payment (a balloon payment),
substantially larger than the amount of the periodic payments must be
made to satisfy the debt.
balloon paymentthe final, lump-sum payment that is due at the
termination of a balloon mortgage.
bankruptcyan individual or individuals can restructure or relieve
themselves of debts and liabilities by filing in federal bankruptcy court.
There are many types of bankruptcies, and the most common for an
individual is Chapter 7, No Asset, which relieves the borrower of most
types of debts.
base lineone of the imaginary east-west lines used as a reference point
when describing property with the rectangular or government survey
method of property description.
beneficiary(1) one who benefits from the acts of another; (2) the
lender in a deed of trust.
bequestpersonal property given by provision of a will.
bettermentan improvement to property that increases its value.
bill of salea written instrument that transfers ownership of personal
property. A bill of sale cannot be used to transfer ownership of real
property, which is passed by deed.
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R E A L E S TAT E G L O S S A R Y 125

binderan agreement, accompanied by an earnest money deposit for

the purchase of a piece of real estate, to show the purchasers good faith
intent to complete a transaction.
biweekly mortgagea mortgage in which payments are made every two
weeks instead of once a month. Therefore, instead of making twelve
monthly payments during the year, the borrower makes the equivalent of
thirteen monthly payments. The extra payment reduces the principal,
thereby reducing the time it takes to pay off a thirty-year mortgage.
blanket mortgagea mortgage in which more than one parcel of real
estate is pledged to cover a single debt.
bona fidein good faith, honest.
bondevidence of personal debt secured by a mortgage or other lien on
real estate.
bootmoney or property provided to make up a difference in value or
equity between two properties in an exchange.
branch officea place of business secondary to a principal office. The
branch office is a satellite office generally run by a licensed broker, for the
benefit of the broker running the principal office, as well as the associate
brokers convenience.
breach of contractviolation of any conditions or terms in a contract
without legal excuse.
brokerthe term broker can mean many things, but in terms of real estate,
it is the owner-manager of a business that brings together the parties to a
real estate transaction for a fee. The roles of broker and brokers associates
are defined by state law. In the mortgage industry, broker usually refers to a
company or individual that does not lend the money for the loans directly,
but brokers loans to larger lenders or investors.
brokeragethe business of bringing together buyers and sellers or other
participants in a real estate transaction.
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126 5 S T E P S T O R E A L E S TAT E S U C C E S S

building codelocal regulations that control construction, design,

and materials used in construction that are based on health and
safety regulations.
building linethe distance from the front, rear, or sides of a building lot
beyond which no structures may extend.
buydownusually refers to a fixed-rate mortgage where the interest
rate is bought down for a temporary period, usually one to three years.
After that time and for the remainder of the term, the borrowers pay-
ment is calculated at the note rate. In order to buy down the initial rate
for the temporary payment, a lump sum is paid and held in an account
used to supplement the borrowers monthly payment. These funds usu-
ally come from the seller as a financial incentive to induce someone to
buy their property.
buyers brokera real estate broker retained by a prospective buyer; this
buyer becomes the brokers client to whom fiduciary duties are owed.
bylawsrules and regulations adopted by an association, such as a
condominium.

cancellation clausea provision in a lease that confers on one or all

parties to the lease the right to terminate the parties obligations, should
the occurrence of the condition or contingency set forth in the clause
happen.
canvassingthe practice of searching for prospective clients by making
unsolicited phone calls and/or visiting homes door-to-door.
capthe limit on fluctuation rates regarding adjustable rate mortgages.
Limitations, or caps may apply to how much the loan may adjust over a
six-month period, an annual period, and over the life of the loan. There is
also a limit on how much that payment can change each year.
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capitalmoney used to create income, or the net worth of a business as

represented by the amount by which its assets exceed its liabilities.
capital expenditurethe cost of a betterment to a property.
capital gains taxa tax charged on the profit gained from the sale of a
capital asset.
capitalizationthe process of estimating the present value of an
income-producing piece of property by dividing anticipated future
income by a capitalization rate.
capitalization ratethe rate of return a property will generate on an
owners investment.
cash flowthe net income produced by an investment property,
calculated by deducting operating and fixed expenses from gross income.
caveat emptorlet the buyer beware [Latin].
CC&RCovenants, conditions, and restrictions of a cooperative or
condominium development.
certificate of dischargea document used when the security instrument
is a mortgage.
certificate of eligibilitya document issued by the Veterans
Administration that certifies a veterans eligibility for a VA loan.
Certificate of Reasonable Value (CRV)once the appraisal has been
performed on a property being bought with a VA loan, the Veterans
Administration issues a CRV.
certificate of salethe document given to a purchaser of real estate that
is sold at a tax foreclosure sale.
certificate of titlea report stating an opinion on the status of a title,
based on the examination of public records.
chain of titlethe recorded history of conveyances and encumbrances
that affect the title to a parcel of land.
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citya large municipality governed under a charter and granted by

the state.
clear titlea title that is free of liens and legal questions as to ownership
of a property that is a requirement for the sale of real estate; sometimes
referred to as just title, good title, or free and clear.
closingthe point in a real estate transaction when the purchase price is
paid to the seller and the deed to the property is transferred from the
seller to the buyer.
closing coststhere are two kinds: (1) non-recurring closing costs and (2) pre-
paid items. Non-recurring closing costs are any items paid once as a result
of buying the property or obtaining a loan. Pre-paid items are items that
recur over time, such as property taxes and homeowners insurance. A
lender makes an attempt to estimate the amount of non-recurring closing
costs and pre-paid items on the Good Faith Estimate, which is issued to
the borrower within three days of receiving a home loan application.
closing datethe date on which the buyer takes over the property.
closing statementa written accounting of funds received and
disbursed during a real estate transaction. Buyer and seller receive
separate closing statements.
cloud on the titlean outstanding claim or encumbrance that can affect
or impair the owners title.
clusteringthe grouping of home sites within a subdivision on smaller
lots than normal, with the remaining land slated for use as common areas.
codicila supplement or addition to a will that modifies the
original instrument.
coinsurance clausea clause in an insurance policy that requires the
insured to pay a portion of any loss experienced.
collateralsomething of value hypothecated (real property) or pledged
(personal property) by a borrower as security for a debt.
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collectionwhen a borrower falls behind, the lender contacts the bor-

rower in an effort to bring the loan current. The loan goes to collection.
color of titlean instrument that gives evidence of title, but may not be
legally adequate to actually convey title.
commissionthe fee paid to a broker for services rendered in a real
estate transaction.
commitment lettera pledge in writing affirming an agreement.
common lawthe body of law derived from local custom and
judicial precedent.
common areasportions of a building, land, and amenities owned (or
managed) by a planned unit development or condominium projects
homeowners association or a cooperative projects cooperative corporation
that are used by all of the unit owners, who share in the common expenses
of their operation and maintenance. Common areas may include swim-
ming pools, tennis courts, and other recreational facilities, as well as com-
mon corridors of buildings, parking areas, and lobbies.
community propertya system of property ownership in which each
spouse has equal interest in property acquired during the marriage;
recognized in nine states.
comparable salesrecent sales of similar properties in nearby areas that
are used to help estimate the current market value of a property.
competent partiespeople who are legally qualified to enter a contract,
usually meaning that they are of legal age, of sound mind, and not under
the influence of drugs or other mind-altering substances.
Competitive Market Analysis (CMA)an analysis intended to assist a
seller or buyer in determining a propertys range of value.
condominiuma form of ownership in which an individual owns a
specific unit in a multi-unit building and shares ownership of common
areas with other unit owners.
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condominium conversionchanging the ownership of an existing

building (usually a multi-dwelling rental unit) from single ownership to
condominium ownership.
considerationsomething of value that induces parties to enter into a
contract, such as money or services.
construction mortgagea short-term loan used to finance the building
of improvements to real estate.
constructive evictionaction or inaction by a landlord that renders a
property uninhabitable, forcing a tenant to move out with no further
liability for rent.
constructive noticenotice of a fact given by making the fact part of the
public record. All persons are responsible for knowing the information,
whether or not they have actually seen the record.
contingencya condition that must be met before a contract is legally
binding. A satisfactory home inspection report from a qualified home
inspector is an example of a common type of contingency.
contractan agreement between two or more legally competent parties to
do or to refrain from doing some legal act in exchange for a consideration.
contract for deeda contract for the sale of a parcel of real estate in
which the buyer makes periodic payments to the seller and receives title to
the property only after all, or a substantial part, of the purchase price has
been paid, or regular payments have been made for one year or longer.
conventional loana loan that is neither insured nor guaranteed by an
agency of government.
conversion optionan option in an adjustable-rate mortgage convert to
to a fixed-rate mortgage
convertible ARMan adjustable-rate mortgage that allows the
borrower to change the ARM to a fixed-rate mortgage at a specific time.
conveyancethe transfer of title from the grantor to the grantee.
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cooperativea form of property ownership in which a corporation owns

a multi-unit building and stockholders of the corporation may lease and
occupy individual units of the building through a proprietary lease.
corporationa legal entity with potentially perpetual existence that is
created and owned by shareholders who appoint a board of directors to
direct the business affairs of the corporation.
counterofferan offer submitted in response to an offer. It has the effect
of rejecting the original offer.
creditan agreement in which a borrower receives something of value in
exchange for a promise to repay the lender.
credit historya record of an individuals repayment of debt.
cul-de-saca dead-end street that widens at the end, creating a circular
turnaround area.
courtesythe statutory or common law right of a husband to all or part
of real estate owned by his deceased wife, regardless of will provisions not
recognized in community property states.
curtilagearea of land occupied by a building, its outbuildings, and
yard, either actually enclosed or considered inclosed.

damagesthe amount of money recoverable by a person who has been

injured by the actions of another.
datuma specific point used in surveying.
DBAthe abbreviation for doing business as.
debtan amount owed to another.
decedenta person who dies.
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deeda written document that, when properly signed and delivered,

conveys title to real property from the grantor to the grantee.
deed-in-lieua foreclosure instrument used to convey title to the lender
when the borrower is in default and wants to avoid foreclosure.
deed of trusta deed in which the title to property is transferred to a
third party trustee to secure repayment of a loan; a three-party mortgage
arrangement.
deed restrictionan imposed restriction for the purpose of limiting the
use of land, such as the size or type of improvements to be allowed. Also
called a restrictive covenant.
defaultthe failure to perform a contractual duty.
defeasance clausea clause in a mortgage that renders it void where all
obligations have been fulfilled.
deficiency judgmenta personal claim against a borrower when
mortgaged property is foreclosed and sale of the property does not
produce sufficient funds to pay off the mortgage. Deficiency judgments
may be prohibited in some circumstances by anti-deficiency protection.
delinquencyfailure to make mortgage or loan payments when
payments are due.
depreciationa loss in value due to physical deterioration, functional, or
external obsolescence.
descentthe transfer of property to an owners heirs when the owner
dies intestate.
devisethe transfer of title to real estate by will.
deviseeone who receives a bequest of real estate by will.
devisorone who grants real estate by will.
discount rateThe rate that lenders pay for mortgage fundsa higher
rate is passed on to the borrower.
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directional growththe direction toward which certain residential

sections of a city are expected to grow.
discount pointone percent of the loan amount charged by a lender
at closing to increase a loans effective yield and lower the fare rate to
the borrower.
dispossessto remove a tenant from property by legal process.
dominant estate (tenement)property that includes the right to use an
easement on adjoining property.
dowerthe right of a widow in the property of her husband upon his
death in non-community property states.
down paymentthe part of the purchase price that the buyer pays in
cash and is not financed with a mortgage or loan.
dual agencyoccurs when an agent represents both parties in a
transaction.
due-on-sale clausea provision in a mortgage that allows the lender to
demand repayment in full if the borrower sells the property that serves as
security for the mortgage.
duressthe use of unlawful means to force a person to act or to refrain
from an action against his or her will.

earnest moneydown payment made by a buyer of real estate as

evidence of good faith.
easementthe right of one party to use the land of another for a
particular purpose, such as to lay utility lines.
easement by necessityan easement, granted by law and requiring court
action that is deemed necessary for the full enjoyment of a parcel of land.
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An example would be an easement allowing access from land-locked

property to a road.
easement by prescriptiona means of acquiring an easement by
continued, open, and hostile use of someone elses property for a
statuatorily defined period of time.
easement in grossa personal right granted by an owner with no
requirement that the easement holder own adjoining land.
economic lifethe period of time over which an improved property will
generate sufficient income to justify its continued existence.
effective agean appraisers estimate of the physical condition of a build-
ing. The actual age of a building may be different than its effective age.
emblementscultivated crops; generally considered to be personal
property.
eminent domainthe right of a government to take private property for
public use upon payment of its fair market value. Eminent domain is the
basis for condemnation proceedings.
encroachmenta trespass caused when a structure, such as a wall or
fence, invades another persons land or air space.
encumbranceanything that affects or limits the title to a property,
such as easements, leases, mortgages, or restrictions.
equitythe difference between the current market value of a property
and the outstanding indebtedness due on it.
equity of redemptionthe right of a borrower to stop the foreclosure
process.
escalation clausea clause in a lease allowing the lessor to charge more
rent based on an increase in costs; sometimes called a pass-through clause.
escheatthe claim to property by the state when the owner dies
intestate and no heirs can be found.
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escrowthe deposit of funds and/or documents with a disinterested

third party for safekeeping until the terms of the escrow agreement have
been met.
escrow accounta trust account established to hold escrow funds for
safekeeping until disbursement.
escrow analysisannual report to disclose escrow receipts, payments,
and current balances.
escrow disbursementsmoney paid from an escrow account.
estatean interest in real property. The sum total of all the real property
and personal property owned by an individual.
estate for yearsa lease hold estate granting possession for a definite
period of time.
estate taxfederal tax levied on property transferred upon death.
estoppel certificatea document that certifies the outstanding amount
owed on a mortgage loan, as well as the rate of interest.
et alabbreviation for the Latin phrase et alius, meaning and another.
et uxabbreviation for Latin term et uxor, meaning and wife.
et vira Latin term meaning and husband.
evictionthe lawful expulsion of an occupant from real property.
evidence of titlea document that identifies ownership of property.
examination of titlea review of an abstract to determine current
condition of title.
exchangea transaction in which property is traded for another
property, rather than sold for money or other consideration.
exclusive agency listinga contract between a property owner and one
broker that only gives the broker the right to sell the property for a fee
within a specified period of time but does not obligate the owner to pay
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136 5 S T E P S T O R E A L E S TAT E S U C C E S S

the broker a fee if the owner produces his own buyer without the bro-
kers assistance.
executionthe signing of a contract.
executor/executrixa person named in a will to administer an estate.
The court will appoint an administrator if no executor is named.
Executrix is the feminine form.
executory contracta contract in which one or more of the obligations
have yet to be performed.
executed contracta contract in which all obligations have been fully
performed.
express contractan oral or written contract in which the terms are
expressed in words.
extention agreementan agreement between mortgagor and mortgagee
to extend the maturity date of the mortgage after it is due.

fair market valuethe highest price that a buyer, willing but not
compelled to buy, would pay, and the lowest a seller, willing but not
compelled to sell, would accept.
Fannie Maea congressionally chartered, privately owned corporation
that is the nations largest supplier of funds for home mortgages.
Federal Housing Administration (FHA)an agency within the U.S.
Department of Housing and Urban Development (HUD) that insures
mortgage loans by FHA-approved lenders to make loans available to
buyers with limited cash.
fee simplemost complete form of ownership of real estate.
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FHA-insured loana loan insured by the Federal Housing

Administration.
fiduciary relationshipa legal relationship with an obligation of trust,
as that of agent and principal.
finders feea fee or commission paid to a mortgage broker for finding a
mortgage loan for a prospective buyer.
first mortgagea mortgage that has priority to be satisfied over all
other mortgages.
fixed-rate loana loan with an interest rate that does not change during
the entire term of the loan.
fixturean article of personal property that has been permanently
attached to the real estate so as to become an integral part of the real estate.
foreclosurethe legal process by which a borrower in default of a
mortgage is deprived of interest in the mortgaged property. Usually, this
involves a forced sale of the property at public auction, where the
proceeds of the sale are applied to the mortgage debt.
forfeiturethe loss of money, property, rights, or privileges due to a
breach of legal obligation.
franchisein real estate, an organization that lends a standardized
trade name, operating procedures, referral services, and supplies to mem-
ber brokerages.
frauda deliberate misstatement of material fact or an act of omission
made with deliberate intent to deceive (active fraud) or gross disregard
for the truth (constructive fraud).
front foota measurement of property taken by measuring the frontage
of the property along the street line.
future interestownership interest in property that cannot be enjoyed
until the occurrence of some event; sometimes referred to as a household
or equitable interest.
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general agentan agent who is authorized to act for and obligate a

principal in a specific range of matters, as specified by their mutual
agreement.
general liena claim on all property, real and personal, owned by a debtor.
government backed mortgagea mortgage that is insured by the
Federal Housing Administration (FHA) or guaranteed by the
Department of Veterans Affairs (VA) or the Rural Housing Service
(RHS). Mortgages that are not government loans are identified as
conventional loans.
Government National Mortgage Association (Ginnie Mae)a
government-owned corporation within the U.S. Department of Housing
and Urban Development (HUD). Ginnie Mae manages and liquidates
government-backed loans and assists HUD in special lending projects.
government survey systema method of land description in which
meridians (lines of longitude) and base lines (lines of latitude) are used
to divide land into townships and sections.
grantthe transfer of title to real property by deed.
grant deeda deed that includes three warranties: (1) that the owner
has the right to convey title to the property, (2) that there are no
encumbrances other than those noted specifically in the deed, and (3)
that the owner will convey any future interest that he or she may acquire
in the property.
granteeone who receives title to real property.
grantorone who conveys title to real property; the present owner.
gross income multiplierA rough method of estimating the market
value of an income property by multiplying its gross annual rent by a
multiplier discovered by dividing the sales price of comparable properties
by their annual gross rent.
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gross rent multipliersimilar to gross income multiplier, except that it

looks at the relationship between sales price and monthly gross rent.
ground leasea lease of land only on which a tenant already owns a
building or will construct improvements.
guaranteed sale planan agreement between a broker and a seller that
the broker will buy the sellers property if it does not sell within a
specified period of time.

hamleta small village.

heirone who is legally entitled to receive property when the owner
dies intestate.
highest and best usethe legally permitted use of a parcel of land that
will yield the greatest return to the owner in terms of money or amenities.
holdover tenancya tenancy where a lessee retains possession of the
property after the lease has expired, and the landlord, by continuing to
accept rent, agrees to the tenants continued occupancy.
Home Equity Conversion Mortgage (HECM)often called a reverse
annuity mortgage; instead of making payments to a lender, the lender
makes payments to you. It enables older homeowners to convert the
equity they have in their homes into cash, usually in the form of monthly
payments. Unlike traditional home equity loans, a borrower does not
qualify on the basis of income but on the value of his or her home. In
addition, the loan does not have to be repaid until the borrower no longer
occupies the property.
home equity line of credita mortgage loan, that allows the borrower
to obtain cash drawn against the equity of his home, up to a
predetermined amount.
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home inspectiona thorough inspection by a professional that evaluates

the structural and mechanical condition of a property. A satisfactory
home inspection is often included as a contingency by the purchaser.
homesteadthe parcel of land and improvements legally qualifying as
the owners principal residence.

implied contracta contract where the agreement of the parties is

created by their conduct.
improvementa man-made addition to real estate.
income capitalization approacha method of estimating the value of
income-producing property by dividing its expected annual net operating
income of the property by a capitalization rate.
income propertyreal estate developed or improved to produce income.
independent contractorone who is retained by another to perform a
certain task and is not subject to the control and direction of the hiring
person with regard to the end result of the task. Individual contractors
receive a fee for their services, but pay their own expenses and taxes and
receive no employee benefits.
indexa number used to compute the interest rate for an adjustable-rate
mortgage (ARM). The index is a published number or percentage, such
as the average yield on Treasury bills. A margin is added to the index to
determine the interest rate to be charged on the ARM. This interest rate
is subject to any caps that are associated with the mortgage.
inflationan increase in the amount of money or credit available in
relation to the amount of goods or services available, which causes an
increase in the general price level of goods and services.
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initial interest ratethe beginning interest rate of the mortgage at the

time of closing. This rate changes for an adjustable-rate mortgage (ARM).
installmentthe regular, periodic payment that a borrower agrees to
make to a lender, usually related to a loan.
installment loanborrowed money that is repaid in periodic payments,
known as installments.
insurancea contract that provides indemnification from specific
losses in exchange for a periodic payment. The individual contract is
known as an insurance policy, and the periodic payment is known as an
insurance premium.
insurance bindera document that states that temporary insurance is in
effect until a permanent insurance policy is issued.
insured mortgagea mortgage that is protected by the Federal Housing
Administration (FHA) or by private mortgage insurance (PMI). If the
borrower defaults on the loan, the insurer must pay the lender the
insured amount.
installment contractsee contract for deed.
installment salea transaction in which the sales price is paid to the
seller in two or more installments over more than one calendar year.
interesta fee charged by a lender for the use of the money loaned; or a
share of ownership in real estate.
interest accrual ratethe percentage rate at which interest accrues on
the mortgage.
interest ratethe rent or rate charged to use funds belonging to another.
interest rate buydown planan arrangement where the property seller
(or any other party) deposits money to an account so that it can be
released each month to reduce the mortgagors monthly payments during
the early years of a mortgage. During the specified period, the
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mortgagors effective interest rate is bought down below the actual

interest rate.
interest rate ceilingthe maximum interest rate that may be charged for
an adjustable-rate mortgage (ARM), as specified in the mortgage note.
interest rate floorthe minimum interest rate for an adjustable-rate
mortgage (ARM), as specified in the mortgage note.
intestateto die without having authored a valid will.
invalidnot legally binding or enforceable.
investment propertya property not occupied by the owner.

joint venturean agreement between two or more parties to engage in a

specific business enterprise.
joint tenancyco-ownership that gives each tenant equal interest and
equal rights in the property, including the right of survivorship.
judgmenta decision rendered by court determining the rights and
obligations of parties to an action or lawsuit.
judgment liena lien on the property of a debtor resulting from a
court judgment.
judicial foreclosurea proceeding that is handled as a civil lawsuit and
conducted through court, used in some states.
jumbo loana loan that exceeds Fannie Maes mortgage amount limits.
Also called a nonconforming loan.
junior mortgageany mortgage that is inferior to a first lien and that will
be satisfied only after the first mortgage; also called a secondary mortgage.
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lachesa doctrine used by a court to bar the assertion of a legal claim or

right, based on the failure to assert the claim in a timely manner.
landthe earth from its surface to its center of the earth, and the air
space above it.
leasea contract between a landlord and a tenant wherein the landlord
grants the tenant possession and use of the property for a specified
period of time and for a consideration.
leased feethe landlords interest in a parcel of leased property.
lease optiona financing option that allows homebuyers to lease a
home with an option to buy. Each months rent payment may consist of
rent, plus an additional amount that can be applied toward the down
payment on an already specified price.
leaseholda tenants right to occupy a parcel of real estate for the term
of a lease.
lesseethe one who receives that right to use and occupy the property
during the term of the leasehold estate.
lessorthe owner of the property who grants the right of possession to
the lessee.
leveragethe use of borrowed funds to purchase an asset.
levyto assess or collect a tax.
license(1) a revocable authorization to perform a particular act on
anothers property, (2) authorization granted by a state to act as a real
estate broker or salesperson.
liena legal claim against a property to secure payment of a financial
obligation.
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life estatea freehold estate in real property limited in duration to the

lifetime of the holder of the life estate or another specified person.
life tenantone who holds a life estate.
listing agreementa contract between the owner and a licensed real
estate broker where the broker is employed to sell real estate on the
owners terms within a given time, for which service the owner agrees to
pay the broker an agreed-upon fee.
listing brokera broker who contracts with a property owner to sell or
lease the described property; the listing agreement typically may
provide for the broker to make the property available through a multiple
listing system.
littoral rightsa landowners claim to use water in large, navigable lakes
and oceans adjacent to property; ownership rights to land bordering
bodies of water up to the high-water mark.
loana sum of borrowed money, or principal, that is generally repaid
with interest.
loan officeror lender, serves several functions and has various responsi-
bilities, such as soliciting loans; a loan officer both represents the lending
institution and represents the borrower to the lending institution.
lock-inan agreement in which the lender guarantees a specified
interest rate for a certain amount of time.
lock-in periodthe time period during which the lender has guaranteed
an interest rate to a borrower.

marginthe difference between the interest rate and the index on an

adjustable-rate mortgage. The margin remains stable over the life of the
loan, while the index fluctuates.
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market data approacha method of estimating the value of a property

by comparing it to similar properties recently sold and making monetary
adjustments for the differences between the subject property and the
comparable property.
market valuethe amount that a seller may expect to obtain for
merchandise, services, or securities in the open market.
mechanics liena statutory lien created to secure payment for those who
supply labor or materials for the construction of an improvement to land.
metes and boundsa method of describing a parcel of land using
direction and distance.
millone-tenth of one cent; used by some states to express or calculate
property tax rates.
modificationthe act of changing any of the terms of the mortgage.
month-to-month tenancytenancy in which the tenant rents for only
one month at a time.
mortgagea written instrument that pledges property to secure
payment of a debt obligation as evidenced by a promissory note. When
duly recorded in the public record, a mortgage creates a lien against the
title to the property.
mortgage bankeran entity that originates, funds, and services loans to
be sold into the secondary money market.
mortgage brokeran entity that, for a fee, brings borrowers together
with lenders.
mortgage lienan encumbrance created by recording a mortgage.
mortgageethe lender who benefits from the mortgage.
mortgagorthe borrower who pledges the property as collateral.
multidwelling unitsproperties that provide separate housing units for
more than one family that secure only a single mortgage. Apartment
buildings are also considered multidwelling units.
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Multiple Listing Service (MLS)method of marketing a property

listing to all participants in the MLS.

negative amortizationoccurs when an adjustable-rate mortgage is

allowed to fluctuate independently of a required minimum payment. A
gradual increase in mortgage debt happens when the monthly payment is
not large enough to cover the entire principal and interest due. The
amount of the shortfall is added to the remaining balance to create
negative amortization.
net listinga listing in which the brokers fee is established as anything
above a specified amount to be received by the seller from the sale of
the property.
net worththe value of all of a persons assets.
no cash-out refinancea refinance transaction in which the new
mortgage amount is limited to the sum of the remaining balance of the
existing first mortgage.
non-liquid assetan asset that cannot easily be converted into cash.
notea promise to repay an obligation; an IOU that defines how a
loan will be repaid.
note ratethe interest rate on a promissory note.
notice of defaulta formal written notice to a borrower that a default
has occurred on a loan and that legal action may be taken.
non-conforming usea use of land that is permitted to continue, or
grandfathered, even after a zoning ordinance is passed that prohibits
the use.
notarizeto attest or certify by a notary public.
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R E A L E S TAT E G L O S S A R Y 147

novationthe substitution of a new contract for an existing one; the

new contract must reference the first and indicate that the first is being
replaced and no longer has any force and effect.

obligeea person whose favor on which an obligation is entered.

obligora person who is bound to another by an obligation.
obsolescencea loss in the value of a property due to functional or
external factors.
offerto propose as payment; bid on property.
offer and acceptancetwo of the necessary elements for the creation of
a contract.
open-end mortgagea loan containing a clause that allows the borrower
to borrow additional funds from the lender, up to a specified amount,
without rewriting the mortgage.
optionan agreement that gives a prospective buyer the right to
purchase a sellers property within a specified period of time for a
specified price.
optioneeone who receives or holds an option.
optionorone who grants an option; the property owner.
ordinancea municipal regulation.
original principal balancethe total amount of principal owed on a
loan before any payments are made; the amount borrowed.
origination feethe amount charged by a lender to cover the cost of
assembling the loan package and originating the loan.
owner financinga real estate transaction in which the property seller
provides all or part of the financing.
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package mortgagea mortgage that pledges both real and personal

property as collateral to secure repayment of a loan.
parcela lot or specific portion of a large tract of real estate.
participation mortgagea type of mortgage in which the lender receives
a certain percentage of the income or resale proceeds from a property, as
well as interest on the loan.
partnershipan agreement between two parties to conduct business for
profit. In a partnership, property is owned by the partnership, not the
individual partners, so partners cannot sell their interest in the property
without the consent of the other partners.
payeeone who receives payment from another.
payorone who makes payment to another.
percentage leasea lease in which the rental rate is based on a
percentage of the tenants gross sales. This type of lease is most often
used for retail space.
periodic estatetenancy that automatically renews itself until either the
landlord or tenant gives notice to terminate it.
personal property (heraditaments)all items that are not permanently
attached to real estate; also known as chattels.
physical deteriorationa loss in the value of a property due to
impairment of its physical condition.
PITIprincipal, interest, taxes, and insurancecomponents of a
regular mortgage payment.
Planned Unit Development (PUD)a type of zoning that provides for
residential and commercial uses within a specified area.
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R E A L E S TAT E G L O S S A R Y 149

plata map of subdivided land showing the boundaries of individual

parcels or lots.
plat numbera number that identifies a parcel of real estate for which a
plat has been recorded in the public record.
PMIprivate mortgage insurance.
point of beginningthe starting point for a survey using the metes and
bounds method of description.
pointa point is one percent of the loan.
power of attorneya legal document that authorizes someone to act on
anothers behalf. A power of attorney can grant complete authority or can
be limited to certain acts and/or certain periods of time.
pre-approvalcondition where a borrower has completed a loan
application and provided debt, income, and savings documentation that
an underwriter has reviewed and approved. A pre-approval is usually
done at a certain loan amount, making assumptions about what the
interest rate will actually be at the time the loan is actually made, as well
as estimates for the amount that will be paid for property taxes,
insurance, etc.
prepaymentamount paid to reduce the outstanding principal balance
of a loan before the due date.
prepayment penaltya fee charged to a borrower by a lender for paying
off a debt before the term of the loan expires.
pre-qualificationa lenders opinion on the ability of a borrower to
qualify for a loan, based on furnished information regarding debt,
income, and available capital for down payment, closing costs, and pre-
paids. Pre-qualification is less formal than pre-approval.
prescriptiona method of acquiring an easement to property by
prolonged, unauthorized use.
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150 5 S T E P S T O R E A L E S TAT E S U C C E S S

primary mortgage marketthe financial market in which loans are

originated, funded, and serviced.
prime ratethe short-term interest rate that banks charge to their
preferred customers. Changes in prime rate are used as the indexes in
some adjustable-rate mortgages, such as home equity lines of credit.
principal(1) one who authorizes another to act on his or her behalf,
(2) one of the contracting parties to a transaction, (3) the amount of
money borrowed in a loan, separate from the interest charged on it.
principal meridianone of the 36 longitudinal lines used in the
rectangular survey system method of land description.
probatethe judicial procedure of proving the validity of a will.
promissory notedetails the terms of the loan and is the debt
instrument.
property managementthe operating of an income property for another.
property taxa tax levied by the government on property, real or
personal.
prorateto divide ongoing property costs such as taxes or maintenance
fees proportionately between the buyer and seller at closing.
pur autre viea phrase meaning for the life of another. In a life estate pur
autre vie, the term of the estate is measured by the life of a person other
than the person who holds the life estate.
purchase agreementA written contract signed by the buyer and seller
stating the terms and conditions under which a property will be sold.
purchase money mortgageA mortgage given by a buyer to a seller
to secure repayment of any loan used to pay part or all of the purchase
price.
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R E A L E S TAT E G L O S S A R Y 151

qualifying ratioscalculations to determine whether a borrower can

qualify for a mortgage. There are two ratios. The top ratio is a
calculation of the borrowers monthly housing costs (principle, taxes,
insurance, mortgage insurance, homeowners association fees) as a
percentage of monthly income. The bottom ratio includes housing costs
as well as all other monthly debt.
quitclaim deedconveyance where the grantor transfers without
warranty or obligations whatever interest or title he/she may have.

real estateland, the earth below it, the air above it, and anything
permanently attached to it.
real estate agenta real estate broker who has been appointed to market
a property for and represent the property owner (listing agent), or a
broker who has been appointed to represent the interest of the buyer
(buyers agent).
real estate boardorganization whose members are primarily
comprised of real estate sales agents, brokers, and administrators.
real estate brokera licensed person, association, partnership, or
corporation who negotiates real estate transactions for others for a fee.
Real Estate Settlement Procedures Act (RESPA)a consumer
protection law that requires lenders to give borrowers advance notice of
closing costs and prohibits certain abusive practices against buyers using
federally related loans to purchase their homes.
real propertythe rights of ownership to land and its improvements.
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REALTORa registered trademark for use by members of the National

Association of REALTORs and affiliated state and local associations.
recordingentering documents, such as deeds and mortgages, into the
public record to give constructive notice.
rectangular survey systema method of land description based on
principal meridians (lines of longitude) and base lines (lines of latitude).
Also called the government survey system.
redemption periodthe statutory period of time during which an
owner can reclaim foreclosed property by paying the debt owed plus
court costs and other charges established by statute.
refinance transactionthe process of paying off one loan with the
proceeds from a new loan using the same property as security or
collateral.
release clausea clause in a mortgage that releases a portion of the
property upon payment of a portion of the loan.
remainder estatea future interest in an estate that takes effect upon
the termination of a life estate.
remaining balancein a mortgage, the amount of principal that has not
yet been repaid.
remaining termthe original amortization term minus the number of
payments that have been applied to it.
renta periodic payment paid by a lessee to a landlord for the use and
possession of leased property.
replacement costthe current cost of replacing a building.
reproduction costthe cost of building an exact duplicate of a building
at current prices.
restriction or restrictive covenantprovisions that place limitations on
the way a property can be used.
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reversionthe return of interest or title to grantor of a life estate.

reverse annuity mortgagea type of mortgage where a homeowner
receives monthly checks or lump sum with no repayment until the
property is sold; usually an agreement between mortgagor and elderly
homeowners.
revisiona revised or new version, as in a contract.
right of egress or ingressthe right to enter or leave designated premises.
right of first refusalthe right of a person to have the first opportunity
to purchase property before it is offered to anyone else.
right of redemptionthe statutory right to reclaim ownership of
property after a foreclosure sale.
right of survivorshipin joint tenancy, the right of survivors to acquire
the interest of a deceased joint tenant.

safety clausea contract provision that provides a time period following

expiration of a listing agreement during which the agent will be
compensated if there is a transaction with a buyer who was initially
introduced to the property by the agent.
sale-leasebacka transaction where the owner sells improved property,
and, as part of the same transaction, signs a long-term lease to remain in
possession of its premises, thus becoming the tenant of the new owner.
sales contracta contract between a buyer and a seller outlining the
terms of the sale.
salespersonone who is licensed to sell real estate in a given territory,
salvage valuethe value of a property at the end of its economic life.
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satisfactionan instrument acknowledging that a debt has been paid

in full.
second mortgagea mortgage that is in less than the first lien position;
see junior mortgage.
sectionas used in the rectangular survey system, an area of land
measuring one square mile, or 640 acres.
secured loana loan that is backed by property or collateral.
securityProperty that is offered as collateral for a loan.
selling brokerthe broker who secures a buyer for a listed property; the
selling broker may be the listing agent, a subagent, or a buyers agent.
servient tenementa property on which an easement or right-of-way
for an adjacent (dominant) property passes.
setbackthe amount of space between the lot line and the building line,
usually established by a local zoning ordinance or restrictive covenants
(deed restrictions).
settlement statement (HUD-1)the form used to itemize all costs
related to the closing of a residential transaction covered by RESPA
regulations.
severaltythe ownership of a property by only one legal entity.
special assessmenta tax levied against only the specific properties that
will benefit from a public improvement, such as a street or sewer; an
assessment by a homeowners association for a capital improvement to
the common areas for which no budgeted funds are available.
special warranty deeda deed in which the grantor guarantees the title
only against the defects that may have occurred during the grantors
ownership, and not against any defects that occurred prior to that time.
specific liena lien, such as a mortgage, that attaches to one defined
parcel of real estate.
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R E A L E S TAT E G L O S S A R Y 155

standard payment calculationa method used to calculate the monthly

payment required to repay the remaining balance of a mortgage in equal
installments over the remaining term of the mortgage at the current
interest rate.
straight-line depreciationa method of computing depreciation by
decreasing value by an equal amount each year during the useful life of
the property.
statutory liena lien imposed on property by statute, such as a tax lien.
subdivisiona tract of land divided into lots as defined in a publicly
recorded plat that complies with state and local regulations.
subletthe act of a lessee transferring part or all of his or her lease to a
third party while maintaining responsibility for all duties and obligations
of the lease contract.
subordinateby contract, to voluntarily accept a lower priority lien
position than that to which one would normally be entitled.
substitutionthe principle in appraising that a buyer will be willing to
pay no more for the property being appraised than the cost of purchasing
an equally desirable property.
subrogationthe substitution of one party into anothers legal role as
the creditor for a particular debt.
suit for possessiona lawsuit filed by a landlord to evict a tenant who
has violated the terms of the lease or retained possession of the property
after the lease expired.
surveya map that shows the exact legal boundaries of a property, the
location of easements, encroachments, improvements, rights of way, and
other physical features.
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156 5 S T E P S T O R E A L E S TAT E S U C C E S S

tax deedan instrument given to the purchaser at the time of sale in

some states.
tax liena charge against a property created by law or statue; tax liens
take priority over all other types of liens.
tax ratethe rate applied to the assessed value of a property to
determine the property taxes.
tax salethe court-ordered sale of a property after the owner fails to pay
ad valorem taxes owed on the property.
tenancy at sufferancethe tenancy of a party who unlawfully retains
possession of a landlords property after the term of the lease has expired.
tenancy at willan indefinite tenancy that can be terminated by either
the landlord or the tenant at any time by giving notice to the other party
one rental period in advance of the desired termination date.
tenancy by the entiretyownership by a married couple of property
acquired during the marriage with right of survivorship; not recognized
by community property states.
tenancy in commona form of co-ownership in which two or more
persons hold an undivided interest in property without the right of
survivorship.
tenantone who holds or possesses the right of occupancy title.
tenementspace that may be occupied by a tenant under the terms of
a lease.
testateto die having created a valid will directing the testators desires
with regard to the disposition of the estate.
timesharingundivided ownership of real estate for only an allotted
portion of a year.
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R E A L E S TAT E G L O S S A R Y 157

titlea legal document that demonstrates a persons right to or

ownership of a property. Note:
title is not an instrument. The instrument, such as a deed, gives evidence
of title or ownership.
title insurancean insurance policy that protects the holder from
defects in a title, subject to the exceptions noted in the policy.
title searcha check of public records to ensure that the seller is the
legal owner of the property and that there are no liens or other
outstanding claims.
Torrens systema system of establishing clear title and issuing title
certificates to land through a governmental authority.
townshipa division of land, measuring six miles square (36 square
miles), in the government survey system.
transfer taxstate or municipal tax payable when the conveyancing
instrument is recorded.
trustan arrangement in which title to property is transferred from a
grantor to a trustee, who holds title but not the right of possession for a
third party, the beneficiary.
trusteea person who holds title to property for another person
designated as the beneficiary.
Truth-in-Lending Lawalso known as Regulation Z; requires lenders
to make full disclosure regarding the terms of a loan.

underwritingthe process of evaluating a loan application to determine

the risk involved for the lender.
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158 5 S T E P S T O R E A L E S TAT E S U C C E S S

undivided interestthe interest of co-owners to use of an entire

property despite the fractional interest owned.
unilateral contracta one-sided contract in which one party is obligated
to perform a particular act completely, before the other party has any
obligation to perform.
unsecured loana loan that is not backed by collateral or security.
useful lifethe period of time a property is expected to have economic
utility.
usurythe practice of charging interest at a rate higher than that
allowed by law.

VA-guaranteed loana mortgage loan made to a qualified veteran that

is guaranteed by the Department of Veterans Affairs.
valid contractan agreement that is legally enforceable and binding on
all parties.
valuationestimated worth.
variable ratean interest rate that increases or decreases periodically in
relation to an index.
variancepermission obtained from zoning authorities to build a
structure that is not in complete compliance with current zoning laws. A
variance does not permit a non-conforming use of a property.
vendeea buyer.
vendora seller; the property owner.
villagean incorporated minor municipality usually larger than a
hamlet and smaller than a town.
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R E A L E S TAT E G L O S S A R Y 159

void contracta contract that is not legally enforceable; the absence of a

valid contract.
voidable contractcontract that appears to be valid but is subject to
cancellation by one or both of the parties.

waiverthe surrender of a known right or claim.

walk-through inspectiona physical examination of the property which
usually takes place just before the closing to ensure that no changes have
taken place, no fixtures included in the sale have been removed, and no
new damage has been done to the property.
warranty deeda deed in which the grantor fully warrants a good clear
title to the property.
water rightsthe legal right to use water from a water course or body of
water on a property.
willa written document that directs the distribution of a deceased
persons property, real and personal.
wetlandslands restricted for development as a result of their proximity
to bodies of water and the fact that they are occasionally or often
flooded; may also be environmentally sensitive.
wraparound mortgagea mortgage that includes the remaining balance
on an existing first mortgage plus an additional amount. Full payments
on both mortgages are made to the wraparound mortgagee who then
forwards the payments on the first mortgage to the first mortgagee.
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160 5 S T E P S T O R E A L E S TAT E S U C C E S S

X-Y-Z

yieldthe interest earned by an investor on his investment (also known

as the return).
zero lot linea zoning regulation that allows the positioning of a
structure on a lot so that one side rests directly on the lots boundary line
(no set back).
zonean area reserved by authorities for specific use that is subject to
certain restrictions.
zoning ordinancethe exercise of regulating and controlling the use of a
property in a municipality.
5527 5 Steps to RE(fin).qx 4/5/05 11:50 AM Page 161

A P P E N D I X C

RESOURCES

T his listing of books, periodicals, and industry associations was complied

using suggestions from the realtors interviewed for this book. It is not
meant to be exhaustive, but rather is a selection of favorites used by top-
selling agents around the country.

BOOKS

G ENERAL

Dictionary of Real Estate Terms, Jack P. Friedman, et al. (Barrons Educa-

tional Series; 6th ed., 2004).
The Millionaire Real Estate Agent, Gary Keller, et al. (McGraw-Hill, 2004).
The 90 Second Lawyer Guide to Buying Real Estate, Robert Irwin (Wiley,
1997).
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162 5 S T E P S T O R E A L E S TAT E S U C C E S S

Real Estate Agents Business Planning Guide, Carla Cross (Real Estate Educa-
tors Assn. 1994).
Real Estate Essentials: A Glossary and Study Guide, Ralph Tamper, et al.
(LearningExpress, 2002).
Real Estate Market Analysis: A Case Study Approach, Adrienne Schmitz
(Urban Land Institute, 2001).
Real Estate Handbook, Jack C. Harris (Barrons Educational Series; 5th ed.,
2001).

I NTERNET

One Day Course: Real Estate Internet Skills, Curt Robbins (DDC Publishing,
Inc., 1999).
Virtual Reality: A Guide to the Internet for Real Estate and Ancillary
Professionals, Lori Robertson, Brian C. Wadell (Hollis Publishing
Co., 1996).
The Essential Internet Guide for the Real Estate Professional, Neal Otto ( Jump-
Start Computer Services, 1996).

N EGOTIATING

Closing the Deal, Edward Farthing, Leigh Ronald Grossman (Learning

Express, 2001).
Negotiating & Drafting Real Estate Documents: Converting the Deal Into a Con-
tract, Suzanne L. King (Massachusetts Continuing Legal Educa-
tion, Inc., 1999).
Tips and Traps When Negotiating Real Estate, Robert Irwin (McGraw-Hill,
1995).

M ARKETING

The Managers Guide to Real Estate Marketing, Hal Kahn (Real Estate Bro-
kerage, 1989).
5527 5 Steps to RE(fin).qx 4/5/05 11:50 AM Page 163

RESOURCES 163

Real Estate Rainmaker : Successful Strategies for Real Estate Marketing, Dan
Gooder Richard (Wiley, 1999).
Web Marketing for the Real Estate Professional, Bill Koelzer, et al. (Prentice
Hall, 2001).

PERIODICALS, PRINT AND ONLINE

Broker Agent Magazine: www.gotobam.com

Journal of Real Estate Practice and Education: www.aresnet.org/
ARES/pubs/jrepe/JREPE.html
Journal of Real Estate Research: http://137.151.62.168/finance/
journal/
National Mortgage News: www.nationalmortgagenews.com/
Real Estate Professional: www.therealestatepro.com
Realtor Magazine: www.realtor.org/RealtorMag/

ASSOCIATIONS

ACCOLADE NETWORK, INC. (REAL ESTATE APPRAISER NETWORK)

National Assignment Center
415 G Street
Modesto, CA 95351
Phone: 209-522-9981
www.appraise.com
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AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

700 S. Flower, Suite 600
Los Angeles, CA 90017
Phone: 213-687-8777
www.airea.com

AMERICAN LAND TITLE ASSOCIATION

1828 L Street N.W., Suite 705
Washington, DC 20036
Phone: 202-296-3671
www.alta.org

AMERICAN PLANNING ASSOCIATION

122 S. Michigan Avenue Suite 1600
Chicago, IL 60603-6107
Phone: 312-431-9100
www.planning.org

THE AMERICAN REAL ESTATE SOCIETY (ARES)

College of Business and Public Administration
Gamble Hall, Room 160A
University of North Dakota
P.O. Box 7120
Grand Forks, ND 58202-7120
Phone: 701-777-3670
www.aresnet.org

AMERICAN SOCIETY OF APPRAISERS

555 Herndon Parkway Suite 125
Herndon, VA 20170
Phone: 703-478-2228
www.appraisers.org
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RESOURCES 165

AMERICAN SOCIETY OF FARM MANAGERS AND RURAL APPRAISERS

950 S. Cherry Street, Suite 508
Denver, CO 80246
Phone: 303-758-3513
www.agri-associations.org/asfmra

AMERICAN SOCIETY OF HOME INSPECTORS

932 Lee Street, Suite 101
Des Plaines, IL 60016-6546
Phone: 800-743-ASHI
www.ashi.com

THE APPRAISAL FOUNDATION

1029 Vermont Avenue, N.W. Suite 900
Washington, DC 20005-3517
Phone: 202-347-7722
www.appraisalfoundation.org

APPRAISAL INSTITUTE
875 N. Michigan Avenue, Suite 2400
Chicago, IL 60611-1980
Phone: 312-335-4100
www.appraisalinstitute.org
E-mail: [email protected]

BUILDING OWNERS AND MANAGERS ASSOCIATION INTERNATIONAL

1201 New York Avenue N.W., Suite 300
Washington, DC 20005
Phone: 202-408-2662
www.boma.org
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COMMERCIAL INVESTMENT REAL ESTATE INSTITUTE

430 N. Michigan Avenue
Chicago, IL 60611
Phone: 800-621-7027
www.ccim.com

COUNCIL OF REAL ESTATE BROKERAGE MANAGERS COUNCIL

430 N. Michigan Avenue
Chicago, IL 60611-4092
Phone: 800-621-8738
www.crb.com

EMPLOYEE RELOCATION COUNCIL

1720 N Street N.W.
Washington, DC 20036
Phone: 202-857-0857
www.erc.org

ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. (GIS AND

MAPPING SERVICES)
380 New York Street
Redlands, CA 92373-8100
Phone: 800-447-9778
www.esri.com/company/contactusa.html

HOME INSPECTIONSUSA
Home Inspection Directory Corp.
P.O. Box 1465
North Hampton, NH 03862
Phone: 877-491-2171
www.homeinspections-usa.com/contact.html
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RESOURCES 167

INMAN REAL ESTATE NEWS

1250 45th Street, Suite 360
Emeryville, CA 94608
Phone: 800-775-4662
www.inman.com

INSTITUTE OF REAL ESTATE MANAGEMENT

430 N. Michigan Avenue
Chicago, IL 60611-4090
Phone: 800-837-0706
www.irem.org

MORTGAGE BANKERS ASSOCIATION OF AMERICA

1125 15th Street N.W.
Washington, DC 20005
Phone: 202-861-6500
www.mbaa.org

NATIONAL ASSOCIATION OF HOME BUILDERS

1201 15th Street N.W.
Washington, DC 20005
Phone: 202-822-0200
www.nahb.com

NATIONAL ASSOCIATION OF HOME INSPECTORS

4248 Park Glen Road
Minneapolis, MN 55416
Phone: 800-448-3942
www.nahi.org

NATIONAL ASSOCIATION OF INDEPENDENT FEE APPRAISERS

7501 Murdoch Avenue
St. Louis, MO 63119
Phone: 314-781-6688
www.naifa.com
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168 5 S T E P S T O R E A L E S TAT E S U C C E S S

NATIONAL ASSOCIATION OF MASTER APPRAISERS

303 W. Cypress Street
San Antonio, TX 78212-0617
Phone: 800-229-6262
www.masterappraisers.com

NATIONAL ASSOCIATION OF MORTGAGE BROKERS

8201 Greensboro Drive, Suite 300
McLean, VA 22102
Phone: 703-610-9009
www.namb.org

NATIONAL ASSOCIATION OF REAL ESTATE EDITORS (NAREE)

1003 N.W. 6th Terrace
Boca Raton, FL 33486
www.naree.org

NATIONAL ASSOCIATION OF REAL ESTATE APPRAISERS

1224 North Nokomis N.E.
Alexandria, MN 56308
Phone: 320-763-7626
www.iami.org/narea.html

NATIONAL ASSOCIATION OF REAL ESTATE BROKERS

1629 K Street, N.W., Suite 602
Washington, DC 20006
Phone: 202-785-4477
www.nareb.com

NATIONAL ASSOCIATION OF REALTORS

430 N. Michigan Avenue
Chicago, IL 60611
Phone: 312-329-8200
www.realtor.com
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RESOURCES 169

NATIONAL ASSOCIATION OF RESIDENTIAL PROPERTY MANAGERS

6300 Dutchmans Parkway
Louisville, KY 40205
Phone: 800-782-3452
www.narpm.org

NATIONAL PROPERTY MANAGEMENT ASSOCIATION

1108 Pinehurst Road, The Oaktree Center
Dunedin, FL 34698
Phone: 727-736-3788
www.npma.org

REAL ESTATE EDUCATORS ASSOCIATION

320 West Sabal Palm Place, Suite 150
Longwood, FL 32779
Phone: 407-834-6688
www.reea.org

REALTY TIMES
5600 W. Lovers Lane, Suite 315
Dallas, TX 75209
Phone: 214-353-6980
www.realtimes.com

WOMENS COUNCIL OF REALTORS

430 N. Michigan Avenue
Chicago, IL 60611
Phone: 312-329-8483
www.wcr.org
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