book fire-2016-12-28-15-web

Report subtitleFIREFULL IMMERSION in REAL ESTATE

CENTURY 21 ® NEW MILLENNIUM NEW AGENT TRAINING MANUAL - FULL IMMERSION in REAL ESTATE

ii CENTURY 21 ® NEW MILLENNIUM

BUILDING YOUR BUSINESS

iiiiiiNEW AGENT TRAINING MANUAL - FULL IMMERSION IN REAL ESTATE

FIRE Table of Contents

TAB Section TitlePRE-FIRE Pre-FIRE Package review, FIRE Orientation

1 Overview

2 Career in Real Estate, Financing

3 Financing, Goal Setting / Business Planning, Tell 21

4 The Power of MRIS, Open House, Behavior Patterns

5 Buyer’s Process, Showing The Property

6 Contract, Red Flags

7 Buyer’s Presentation

8 Selling Process / Preparating a CMA

9 Tool Kit CMA

10 C21NM Websites, eGreetings, RREIN Content, Mobile

11 Escrow Accounts, Trust Monies and Deposits

12 Survey

iv CENTURY 21 ® NEW MILLENNIUM

BUILDING YOUR BUSINESS

Pre- Guidelines

CENTURY 21 ® NEW MILLENNIUM FIRE GUIDELINES FOR BRANCH LEADERS

FIREFULL IMMERSION in REAL ESTATE

FIRE

iiiiiiFIRE GUIDELINES FOR BRANCH LEADERS

Pre-FIRE Table of ContentsFIRE GUIDELINES FOR BRANCH LEADERS . . . . . . . . . . . . . . . . . . . . . . . . 1

FIRE TRAINING COMMITMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 2

IN-PROCESSING CHECKLIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

JOB DESCRIPTION FOR THE SUCCESSFUL REALTOR® . . . . . . . . . . . . . . 8

FIRE PRE-CLASS INTRODUCTION - Form 4 . . . . . . . . . . . . . . . . . . . . . . . . 10



THE PROSPECTING SUCCESS FORMULA . . . . . . . . . . . . . . . . . . . .. . . . . . 12

BUILDING YOUR SPHERE OF INFLUENCE . . . . . . . . . . . . . . . . . . . . . . . . . 13

iviv CENTURY 21 ® NEW MILLENNIUM

Section Title

11FIRE GUIDELINES FOR BRANCH LEADERS

FIRE GUIDELINES FOR BRANCH LEADERS

1. All agents must have completed all company paperwork, with the FIRE Pre-Class

Introduction packet having been reviewed and signed by the agent. A copy of

signed commitment Form 3a must be submitted to Adriene Pessel prior to the first

class day.

2. Registration is “first come, first served” according to seat availability. Branch Leaders

must ensure that their agents come to their second day of FIRE class with their real

estate license having been received by their branch, full access to MRIS with their

own ID and password, and a functioning C21NM e-mail address. At All agents must

have 100 names in business builder by Day three of FIRE, If the agent does not have

100 names is Business builder, then agent will not be able to continue with FIRE

until their SOI reaches 100.

3. The dress code for class is “business casual.” Agents will be prospecting and meeting

the public frequently before, during, and after class sessions.

4. Agents are expected to attend every class.Agents are expected to attend every class.

If any session is missed, the agent may make it up on the appropriate day during

the next FIRE class cycle. There will be no makeup classes beyond the end of the

second cycle and students with missed classes will not receive FIRE completion

credit.

5. Branch Leaders interact directly with new agents during the interview and hiring

process. As a hiring pre-condition, Branch Leaders are responsible for insuring that

each new agent completes Forms in the pre-FIRE Congratulations introduction

packet, as well as distributing course schedules, prospecting requirements,

attendance rosters, sample business plans, the Orientation Checklist, and any other

pre-FIRE documents. Agents attending class without completed prerequisites will

be allowed to attend that day’s instruction, but will be told to immediately see their

Branch Leaders at the end of the day to complete any missing documentation.

2 CENTURY 21 ® NEW MILLENNIUM

PRE-FIRE GUIDELINES

FIRE TRAINING COMMITMENT AGREEMENT

I, __________________________________ , agree to complete all assignments in

CENTURY 21® New Millennium’s FIRE training program because I intend to develop a

plan to become a successful, professional REALTOR®.

I agree to meet weekly with my Branch Leader to review my progress and discuss plans for

the coming week’s work.

I understand that completing my training according to the standards set in CENTURY

21® New Millennium’s FIRE program is the most beneficial way to begin my career as a

professional REALTOR®.

To help ensure that I receive the most benefit from my training, I expect my Branch Leader

to:

• Meet with me weekly for at least one-half hour

• Help me prioritize my activities

• Provide assistance in my development of specific business methods

• Provide me with resources I need to complete my assignments

• Provide support and encouragement as necessary to help me begin a

successful career as a professional REALTOR®.

I understand that this is my business and I agree to manage it according to the principles

taught to me in CENTURY 21® New Millennium’s FIRE program. My goal is to become a

successful, high producing, professional REALTOR®.

I will make a dedicated commitment to attend consecutive training sessions as outlined in

the FIRE schedule. I have made arrangements with my employer to take advance leave, if

necessary, to attend training.

Agent Signature ___________________ Branch Manager Signature _______________

Agreement Date: __________________ Program Completion ________________

FIRE PRE-CLASS INTRODUCTION Form 1


PRE-FIRE GUIDELINES

FIRE TRAINING COMMITMENT AGREEMENT

CENTURY 21® New Millennium offers education and training in the tools and systems of

the company, including basic training and support from a designated Production Coach and

a Branch Leader. This begins with your completion of Pre-FIRE entry assignments discussed

with you by your Branch Manager or Branch Leader. Upon hire, an intensive 12 week Full

Immersion in Real Estate (FIRE) training program commitment is required of all full time

agents. The FIRE training program is designed to accelerate your professional development

with good prospecting, listing, and selling skills. Your Production Coach will provide you

with assistance, training, and support commensurate with your commitment to proactive

prospecting and production. Training shall include, but not be limited to the following

subjects:

• Company and Branch Orientation • Mortgage Services

• Prospecting • Fair Housing

• Building Your Business • Goal Setting

• Buyer Services • Business Planning

• Contracts and Addenda • Business Development and Relocation

• Seller Services • Scripting and Role Playing

• Listing Presentations • Company “One Stop Service” Systems

• Negotiating and Closing • Technology Tools and Systems

• Title Services • Continuing Education

• Property Management Services • Marketing and Contact Management Systems

Your FIRE training concludes with the successful completion of the basic program.

FIRE/Peak ProducerTraining (FIRE/PP) Fee Structure

The cost of the combined proprietary Full Immersion Real Estate and Buffini Peak Producer

Training (FIRE/PP) is $750.00. If the agent so desires, as a convenience to our agents, CENTURY

21 New Millennium will advance the entire $750 and simply deduct $375 out of the agent’s

commission check from the first two closings. This advance shall be due and payable no later

than 12 months following the FIRE/PP Training graduation date. Agent will provide CENTURY

21 New Millennium a valid credit card authorization to be kept on file upon signing this

agreement. Should Agent drop out of the FIRE/PP, leave CENTURY 21 New Millennium, or fail

to complete two transactions within twelve months of FIRE/PP Graduation, the credit card on file

will be charged the remaining balance due for the FIRE/PP.

Agent Signature ____________________________ Date ____________________

Branch Leader Signature ______________________ Date ____________________


PRE-FIRE GUIDELINES

IN-PROCESSING CHECKLISTOM = Office Manager

BL = Branch Leader

TC = Transaction Coordinator

PC = Production Coach

Name:________________________________ Branch:____________________CREST Date:__________________________ Anniv Date:________________

POC Date Due Date Comp InitialsPre-License• Complete In-Processing Checklist OM

• Submit License Application OM

• Complete New Agent Information Form OM

• Complete Co Policy/Procedure Acknowledgment OM

• Complete Office Policy/Procedure Acknowledgment OM

• Complete Independent Contractor Agreement OM

• Provide Commission Schedule OM

• Complete Commission Indemnity Agreement OM

• Complete Equal Housing Acknowledgment OM

• Complete Anti-Trust Acknowledgment OM

• Complete Errors and Omissions Insurance Form OM

• Complete Credit Card Authorization OM

• Complete Misc. Forms: Auto, Liability, HR OM

• Complete Code of Ethics Form OM

• Complete IRS Status Form OM

• Create CREST EDG Temporary Entry/Screen Name OM

• Conduct Building Facilities Tour OM

• Introduce Staff/Department Personnel OM

Post License

• Order Name Badge OM

• Order Business Cards and Announcements OM

• Schedule/Obtain Web Site/Business Card Photo OM

• Assign Desk/Work Area OM

• Assign Phone Number/Extension OM

• Create/Set Up Company Email Address OM

• Edit/Provide Copy of Company Roster/Office Roster OM

• Order Name Riders and Directional Signs OM

• Submit Local Real Estate Board Membership Form OM

• Schedule RE Board Orientation Class OM


PRE-FIRE GUIDELINES

POC Date Due Date Comp Initials

• Request/Check Lockbox Keypad OM

• Submit MRIS Membership Form OMAwards, Recognition, and Events

• Top Producer and CENTURY 21® Awards BL

• CENTURY 21® National Events BL

• Company-wide Events BL

• Team Spirit Award BL

Technology

• Conduct Office Digital Camera Orientation OM

• Explain Digital Photo Submission Requirements OM

• Schedule PC Network Integration with IT Dept1 OM

• Explain PC Anti-Virus Requirements OM

• Schedule PDA/Phone Email Integration with IT Dept OM

Training

• Explain CENTURY 21® VSS Training Calendar BL

• Schedule Lead Router 21Online Training BL

• Explain Bi-Monthly Branch Business Meetings BL

• Zip / Auto Contract OM

• Business Builder - Minimum of 100 names entered OM

• MRIS 101, 102 OM• DocuSign OM

1 - PC = personal computer, including notebook, laptop, and desktop configurations


PRE-FIRE GUIDELINES

MRIS 101 up and running

MRIS 102 Simple solution for public record

Matrix 101 Rentals in Matrix

Matrix 211 Matrix custom displays

Keystone 101 enter a listing

Keystone 201 Document management


PRE-FIRE GUIDELINES

DAILY SCHEDULEConsolidated Meeting Location

AlexandriaCENTURY 21® New Millennium

Alexandria Branch Training Room

5990 Kingstowne Towne Center

Alexandria, VA 22315-5876

(703) 922-4010

[email protected]

Fredericksburg1931 Plank Road, Suite 201

Fredericksburg, VA 22401

Local Phone: 540-373-2000

Toll Free: 800-704-0048

800-997-1121

Waldorf3292 Crain Highway, Waldorf, MD 20603


Production Coach/Registration Contact:

Adriene Pessel

[email protected]


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTION

Successful REALTOR® Job Description There are two categories of activities that real estate agents complete:

1. Business Development (prospecting, showing, selling)

2. Business Support (all other activities)

A successful real estate agent completes these activities with this priority:

1. Business Development Activities (First Priority)

A. Prospect: Find potential customers and clients by identifying and

calling on the best target markets, consistently and frequently.

B. Show and List: Sales activities generated as a result of prospecting

activities, showing homes to qualified customers, and listing marketable, qualified

properties (those that will sell in current “normal” market time).

C. Sell: The only two activities that ensure a paycheck

• Sell your Buyer Client a home

• Sell your listing

All other activities support Business Development and should be completed only to the

extent required to generate a commission check!

2. Business Support Activities (Second Priority)

These activities include any action that is not directly related to “sales” activities:

• Preview properties/tours

• Complete paperwork/sales follow-up

• Education

• Meetings

• Returning telephone calls/emails

The desired end state is to create a positive memorable experience and gain a loyal

customer for life!


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTIONSUCCESSFUL REALTOR® JOB DESCRIPTION

Find Many Prospects

Qualify Prospectsas Buyers

Qualify Sellers and Properties as Marketable

Show Homesto Qualifyed Buyers List Marketable Homes

$$$Sell a Home

$$$Sell a Listing

1. Business Development (activities in the

sales cycle)

• Contacting prospects

• Following up on leads

• Qualifying buyers

• Showing homes to qualified prospects

• Writing and presenting purchase offers

• Giving listing presentations to qualified sellers

• Listing marketable properties

• Attending offer presentations on your listings

2. Business Support (activities that support

sales activities)

• Previewing properties

• Following up on transactions, making

flyers, etc.

• Sending out mailings (should not be

considered a prime contact method)

• Talking to loan officer and title companies

• Attending meetings

• Furthering education

• Creating listing materials

This list could be exhaustive. It’s common for agents to “hide out” in support activities because

they think they are not ready to talk to people. Watch out! This is a sign of creating the wrong

activities!


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTION Form 4Personal operating expenses

Regular Monthly Payments

House payments (PITI, HOA/Condo fee, etc.) $ ____________Vehicle payment (including insurance) $ ____________Appliance, TV/Computer/Electronic device payments $ ____________Home Improvement loan payments $ ____________Personal loan, credit card payments $ ____________Health plan payments $ ____________Life insurance payments $ ____________Other insurance payments $ ____________Total $ ____________Household Operating Expenses Telephone/Internet access $ ____________Gas and electricity $ ____________Water $ ____________Other household expenses, repairs, maintenance $ ____________Total $ ____________Personal Expenses Clothing, cleaning, laundry $ ____________Prescription medications $ ____________Medical bills (physician, dentist, etc.) $ ____________Education $ ____________Dues $ ____________Gifts and contributions $ ____________Newspapers, magazines, books $ ____________Vehicle maintenance/fuel $ ____________Children’s school tuition $ ____________Discretionary money and allowances $ ____________Miscellaneous $ ____________Total $ ____________Food Expenses Food (at home) $ ____________Food (away from home) $ ____________Total $ ____________Tax Expenses Federal income tax $ ____________State income tax $ ____________Other taxes $ ____________Total $ ____________Total Personal Monthly Expenses $ ____________

Total Personal Yearly Expenses (total monthly expenses x12) $ ____________

Note: This form is to be used as an initial planning document for expenses. More detailed personal

accounting can be had by using Microsoft Excel or financial accounting software like Microsoft Money

or Intuit’s Quicken.


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTION Form 5 YOUR REAL ESTATE BUDGET OPERATING EXPENSES

Monthly Yearly

Total Marketing Budget $ $Professional fees (board dues, MRIS, etc.) $ $Communication expenses (PDA, phone, Internet access) $ $Labor/mechanical $ $Professional development $ $Supplies $ $Business insurance $ $Legal fees $ $Licenses, permits $ $Other $ $

Total $ $

Note: This form is to be used as an initial planning document for expenses. More detailed

personal accounting can be had by using Microsoft Excel or financial accounting software

like Microsoft Money or Intuit’s Quicken.

FIRE PRE-CLASS INTRODUCTION Form 6PROJECTED PROFIT

Total dollars from Form 4 $Total dollars from Form 5 $ Dreams/Fun $Total $ needed to cover total expenses $Desired profit $Grand total dollars you want to earn $

Note: This form is to be used as an initial planning document for expenses. More detailed

personal accounting can be had by using Microsoft Excel or financial accounting software

like Microsoft Money or Intuit’s Quicken.


PRE-FIRE GUIDELINES

BUSINESS

THE PROSPECTING SUCCESS FORMULA

Average sales price for your market $

Multiplied by the average brokerage rate received by your company in co-brokerage transactions (.0284)

x %

Equals the average brokerage fee = $

Multiplied by your personal commission split (i.e. 50%) x %

Equals your average commission income per transaction = $

Your Annual Income Expectation $

Divided by your average commission income per transaction

÷ $

Equals the number of transactions that you need in the year (round up to the next higher number)

Multiplied by 300 x 300

Equals the number of contacts that you need in the year =

Divided by the number of working weeks in the year ÷ 47

Equals the number of weekly contacts that you need to make (round up to the next higher number)

=

Divided by 5 days per week ÷ 5

Equals the number of daily contacts that you need to make (round up to the next higher number)

=

The total transactions needed in the year

Multiplied by 2 x 2

Equals the number of listing/buyer agreements needed =

Multiplied by 3 x 3

Equals the number of appointments needed =


Equals the number of appointments needed per week (round up to the next higher number)


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTIONBUILDING YOUR SPHERE OF INFLUENCE

1. List everyone you can think of that you know.

2. Pare down the list to a manageable number that you can contact on a regular basis

(approximately 250). Remember, these people are potential business finders for you. They

are not necessarily prospects themselves for buying or selling real estate.

3. Contact members of your Sphere of Influence (SOI) several times yearly.

4. Keep track of your SOI activity. As soon as possible, enter your SOI information into

Business Builder database, so you can better manage your data. Decide what information you

want to track and the capabilities that you need...

Last Name: First Name:

Street Address: City: State: Zip Code: Work Phone: Work Fax: Cell Phone: Home Phone: Work email address: Home email address: IM address: Remarks: Contact Record:


PRE-FIRE GUIDELINES

FIRE PRE-CLASS INTRODUCTIONWHO DO YOU KNOW WHO?

Immediate family Out of town familyRecreational friends Parents of children’s friendsMerchants Former co-workersAttorneys NeighborsHair stylists Former neighborsLetter carrier FriendsBank employees High school classmatesCorporate executives College classmatesInsurance agents Church membersRestaurant employees Club membersVehicle salespersons DoctorsVehicle service personnel ChiropractorsRoofers People on your holiday card listDecorators Personal phone directoryPlumbers Spouse’s work contactsDry cleaners ClergyHealth club members


PRE-FIRE GUIDELINES

201 GAME PLANAgentName As Of:

1. BusinessSettle Units

2. Financial 3. Personal

4. Family 5. Spiritual

MEASUREMENTS:

PRIORITIES:

Agent Name here 12/08/2015

3rd QTR “Mail-Call-See Campaign ”

# Settled Transactions per month ___________# Referrals per month ____________________# Calls per day _________________________# Notes per week _______________________# Visits per week _______________________# Mailings per month ____________________

2016 Goals

Agent Generated ________________________Company Generated _____________________Avg. Commission Per Side ________________Listings Taken __________________________Listing Conversion % _____________________Listing Sold ____________________________Avg. Sales Price ________________________1st County Mortgage Loans _______________Bay County Title Policies _________________Friends &Family Placed___________________

Your text about your Financial goals here Your text about your Personal goals here

Your text about your Family goals here Your text about your Spiritual goals here

- Quarterly BL Coaching Sessions- Results from QUARTERLY “Mail-Call-See Campaign”- Century 21 Award Pacesetter Tracking

1. Set Goals 2. Mail-Call-See Campaign 3. Time Management (Calendar)

NEW AGENT TRAINING MANUAL - FULL IMMERSION in REAL ESTATE CENTURY 21 ® NEW MILLENNIUM

1FIRE - NEW AGENT TRAINING MANUAL - TAB - 1

OVERVIEW

OVERVIEW

2 FIRE - NEW AGENT TRAINING MANUAL - TAB - 1

OVERVIEW

FIRE Course Disclosure This course manual and all its contents, both current and future, are deemed

the proprietary and confidential intellectual property of CENTURY 21® New

Millennium and NM Management, Inc.

No portion of this manual, or any of its contents, may be copied or shared with

anyone outside of NM Management’s family of companies. The agent’s use of this

material is on a “loaned” basis during the agent’s affiliation with CENTURY 21®

New Millennium, and must be surrendered upon demand or termination. Failure

to surrender this material when requested will result in a “non-surrender” charge of

$500.00 debited to the agent. The agent is also subject to all of the other provisions

as stated in the Company Policy and Procedure Manual, the Employee Agreement,

and the Independent Contractor Agreement in effect at the time of demand or

termination.

I have received the FIRE Course Manual, and I have read and understand the FIRE

Course Disclosure as stated above.

Agent Signature Date


OVERVIEW

CENTURY 21® New Millennium Agent Information Sheet

Name: _____________________________ Nickname: ______________________________

Email Address: _______________________________________________________________

Home Address: _______________________________________________________________

Cell Phone #: _______________________ Home Phone #: __________________________

C21NM Office Name: _________________ Office Number: __________________________

Branch Leader: _______________________ Office Manager: __________________________

I have previously attended (check all that apply): ___________________________________

CENTURY 21® New Millennium Branch Career Night: _______________________

NM University (Licensing School)

Other Licensing School (please name school)

Length of Time Actively Licensed in Real Estate: ___________________________________

Previous Occupation: _________________________________________________________

In case of emergency, who would you like us to contact?

Name: _____________________________ Relationship: ____________________________

Address: ____________________________________________________________________

Daytime Phone #: ___________________ Evening Phone #: ________________________


OVERVIEW

DAILY SCHEDULEConsolidated Meeting Location

AlexandriaCENTURY 21® New Millennium

Alexandria Branch Training Room

5990 Kingstowne Towne Center

Alexandria, VA 22315-5876

(703) 922-4010

[email protected]

Fredericksburg1931 Plank Road, Suite 201

Fredericksburg, VA 22401


Toll Free: 800-704-0048

800-997-1121

Waldorf3292 Crain Highway, Waldorf, MD 20603


Production Coach/Registration Contact:

Adriene Pessel

[email protected]


OVERVIEW

Help Desk Information

(866) [email protected]

Call Criteria:

• If you encounter any problem with software required to do real estate business on any

computer, whether it belongs to you or the company, call for assistance if you can’t resolve

the issue yourself.

• If you encounter any problem with computer related hardware (computer, printer, fax,

etc.) that belongs to the company, call for assistance.

• If you are unsure about what to do...call!

Road map to Success:

• Have a business and life plan.

• Show the public that you have the KNOWLEDGE, can be TRUSTED and you CARE about

them.

TASKS:

• Meet as many people as you can. SMILE, BE KIND, BE HELPFUL AND BE SINCERE.

• Have a minimum of 250 in SOI/ refresh by adding 3-5 per week (use a contact management

system)

• WRITE 3-5 PERSONAL NOTES PER DAY

• Know your market, keep yourself update with real estate trends.

• Know your contracts, agreements and the addenda

• Understand the lending process


OVERVIEW


A Career in Real Estate

FLAT RENT

MULTI-FAMILY HOUSE REAL ESTATE BROKER

MOBILE HOME


A CAREER IN REAL ESTATE



_________________________________________________________________________________________________________

_________________________________________________________________________________________________________



_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________



_________________________________________________________________________________________________________

_________________________________________________________________________________________________________



Staying on TrackBuilding a Smart Calendar



PLAN YOUR DAY/ WEEK /MONTH/ YEAR

• Generate ___________ all leads per month

• Follow up on all leads in a timely manner

• Email listings to prospective buyers

• Email market updates to sellers

• Newsletter sent monthly

• Egreetings sent quarterly

• Financial articles posted weekly on fan page & emailed

• Choose_____________ prospects to make a personal touch with each week

• Choose_____________ prospects to personally call each week.

• Create and maintain an ongoing social media campaign/ BLOG/ Twitter/ Facebook

• Seminars: Buyer /Seller. Credit

• Open house _______________ per month

• FSBO/ EXPIRED ___________ per week

• Add______________________ people to my SOI each week

• THANK YOU NOTES EVERYDAY



USE A CALENDAR/ SCHEDULE YOUR DAY

• Understanding the Scheduling Process

• Use a color coded system

• Reengineer your week. Use “aha” moments. Learn and Go

• Smart Numbers and what they mean

• Scheduling appointments

• Time off

• Prospecting time

• Call back

• Schedule Flex Time

• Color Coding

• Real estate support

• Real estate with people

• Personal time

1. ATTITUDE / APPROACH TO

TIME MANAGEMENT:

a. Value time. Time is money. Don’t just talk

about it – demonstrate it.

b. There is a direct correlation between

your attitude about time management and

achieving effective time management. There

is a direct correlation between effective time

management and success. Therefore, it is a top

priority all day long.

c. You must control your environment or it

will control you.

2. KEYS TO SUCCESS:

a. Develop and maintain a good “relationship”

with your calendar = MUST SPEND TIME

• JUST DO IT

• Get into a rhythm: plan, execute &

record results / plan, execute & record

results / plan, execute & record results

b. Set priorities and then stick with them –

adjust them when needed

c. Continually ask: “Am I making the highest

& best use of my time?” If not, start doing it.

d. Stay out of the weeds and take care of the

“big stuff” (big rocks in the jar concept).

e. Honor the two week rule.

f. Build & use “tools” to maximize / save time.



3. Build & work your CALENDAR (Techniques to Build a “Balanced” Calendar)

a. Build “SMART WEEK” color code system

(see attached “Edit Labels” example):

*** Calendar toolbar > calendar coloring > edit

labels

• Green = PRI #1: PROSPECTING /

CLIENT TIME (talking to someone

about Real Estate etc. = prospecting calls

/ show homes / listing appt)

• Yellow = PRI #2: RETENTION

(coaching / training, etc)

• Orange = PRI #3: LEAD GENERATION

(Mail-Call-See Campaign support /

Social Networking, etc. = Lead Router /

Facebook / Linkedin) etc.)

• Red = FIRES / Admin

• Blue = Branch Event (A Team Mtng /

Branch Bus Mtng / etc.)

• Purple = Personal Time (Family Time /

vacations / lunch etc.)

» Grey = DID NOT CONDUCT (when

recording results)

• Branch Events (Blue):

» Bi-weekly Bus Mtng

» Monthly A-Team Webex

» Monthly Lunch & Learn

» Friday Social

» Etc. = any other Branch Related event

f. Build “self-imposed” events in sequence

based on priorities to ensure initial

“deconfliction”:

• PRI #1 = PROSPECTING / CLIENT

TIME (Green) Events:

» Prospecting = 2 hr x / day (10:00 -

11:00 am & 7:00 - 8:00 pm daily)

» Show Homes / Listing Appts (1:00 -

6:00 daily)

» Etc = Talking to Someone About Real

Estate

• PRI #2 = RETENTION (Yellow) Events:

» Monthly / QTRLY Coaching Sessions

(set same day each month = 1st Thurs

of each month 1:00-1:30)

» Monthly Team Meeting (set same day

each month = 1st Tues of each month

11:00 - 12:00)

» Weekly Team Huddle (set same

day each week = every Thurs 9:30 -

10:00)

» Etc. = Any Training Event

• PRI #3 = LEAD GENERATION

(Orange) Events:

» “Mail-Call-See Campaign” Admin

Support (9:00 - 10:00 am daily)

» CARTUS Updates

» Lead Router Analysis = daily

» Social Networking (Facebook /

Linkedin etc = 8:30 - 9:00 min daily)

» Etc. = Generating Business but not

talking to someone about Real Estate.

• FIRES / Admin Events (Red)

• Personal Events (Purple)



» Personal Time (5:30 - 7:30 & 8:00 -

11:00 pm)

» Vacations & other Family related

events (TBD)

g. DECONFLICT / “CLEAN-UP”

• Conflict = de-conflict / delete

• Take notes to reschedule

h. “Work” your Calendar and maintain the

relationship (EXECUTE & RECORD RESULTS)

• Conflict = de-conflict / delete

• Take notes to reschedule

» Annually - build your Yearly Calendar

/ match Master Calendar

» Monthly - lock in at least one month

out [mid-month prior] / match Master

Calendar

» Weekly - lock in two weeks out =

“TWO WEEK RULE”.

» Daily - validate daily calendar every

AM or PM prior to departure

» Hourly - adjust accordingly as needed

and RECORD RESULTS when an event

is completed / not completed

• YES / conducted = leave color coded

• NO / did not conduct = color grey

NOTE: get into a “DAILY RHYTHM” working

your calendar. Team up with someone for

accountability purposes.

DAILY ACTIVITIESTIME

ALLOTED

REVIEW SOI 25 Minutes

MRIS - MARKET ANALYSIS 60 Minutes

FACE BOOK - MARKETING 20 Minutes

UPDATE CALENDAR 10 Minutes

PLAN FOR NEXT WEEK 10 Minutes

MAKE CALLS 30 Minutes

LUNCH 30 Minutes

LOOK AT OPEN HOUSES 60 Minutes

CENTURY 21 WEB 10 Minutes

NAR SYSTEM 10 Minutes

E MAILS 20 Minutes

FARMING 60 Minutes

FLYERS AND NEWSLETTER 40 Minutes



Monday Tuesday Wednesday Thursday Friday Saturday Sunday

PROSPECTING / CLIENT TIME

(Talking to someone about

Real Estate)

10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt7:00-8:00 pm Prospecting

10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting

10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt

7:00-8:00 pm Prospecting



11:00-12:00 Prospecting 1:00-6:00 Show Homes / Listing Appt

12:00-5;00 pm Open House

RETENTION (Coaching /

Training)

TBD: Any TNG (PL/CE Credit)

Team Meeting (2d Tues Monthly)

9:30 3:00 e (Weekly)

LEAD GENERATION

(Mail - Call - See Campaign:

Admin SUPPORT)

8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generation Update

8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generations Update




BRANCH RELATED EVENTS

9:00-10:00“A TEAM” Mtng(1st Tues)10:00-11:00 Bus Mtng (1st & 3rd Tues)

12:00-1:00 FCM Lunch & Learn 2:30 Friday Social

ADMIN 8:00-8:30 Admin #1 12:30-1:00 Admin #2

8:00-8:30 Admin #1 12:30-1:00 Admin #2

8:00-8:30 Admin #1 12:30-1:00 Admin #2

8:00-8:30 Admin #1 12:30-1:00 Admin #2

8:00-8:30 Admin #1 12:30-1:00 Admin #2

PERSONAL

5:30-7:30am Personal Time 12:00-12:30 Lunch 8:00-11:00pm Personal Time


TBD (VACATION / OTHER FAMILY EVENTS)



10:00-11:30 worsship



Step 1 Year at Glance

1. Block out dates that are your NON-WORKING DAYS.

2. What are peak times for showing? Block them out.

3. Weekly previewing new and resale homes.

4. Plug in open house dates.

5. Plug in charity events.

6. Plug in seminar dates.

7. Season touch base.

8. Dates for post cards / newsletter and quartery mail out.

9. Mail outs dated.

E-greetings, Newsletters, Postcards, Charity Events, Open Houses, Buyer & Seller Seminars,

Credit Advice Seminars, Seasonal Touch Bases, Market Statistics, Quarterly Market Statistics,

HUD Mail Outs, VACATION



Step 2

Take each MAIL/ CALL/ SEE, and administration task and write all tasks that it takes to prepare

for it.

EXAMPLES:

• Open house

• Ask agents from your office for open houses to hold (14 days out), preview them, and

select a house.

• Complete a CMA for the community for the area, preview 5 “spin off” houses (10 days out)

• Check MRIS for past rentals or rental complexes for potential buyers to invite, get addresses

or phone numbers for neighbors (10 days out)

• START your Mail/Call/See campaign for open house invitees (7 days prior to open date)

• Ask your First County Loan Officer for a rate sheet for that property to assist potential

buyers.

• Do an update on market statistics for the neighborhood (2 days prior)

• Use Toolkit to create “ buyers book” for spin off houses.

• Get signs 2 days prior/ scout out where signs should be placed

• Determine if fresh flowers or snacks are needed? (1 day prior)

• Place signs out morning of Open. (3 hrs prior)

• Open House directional signs should be removed promptly after the Open is completed.

• Write THANK YOU Notes and follow up note. (Next day)


Financing,Goal Setting / Business Planning, Tell 21


FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21

Definitions and Terms

Front and Back Ratios: Criteria the

lender uses to determine the purchaser’s

buying power. Front and back ratios are

expressed as percentages, for example

36%/41% or simply 36/41. In this example,

the Front Ratio equals a maximum PITI of

36% of gross monthly income. The Back

Ration equals the purchaser’s maximum PITI

plus all debts, which can not exceed 41% of

their gross monthly income.

LTV: Loan to Value. The percent of the

value of the home that the loan represents.

For example, a 95 LTV means that the

purchaser has borrowed 95% of the lesser of

the appraised value of the home or the sales

price.

PITI: Principal + Interest + Taxes +

Insurance expressed as a monthly total (1/12

of the total annual cost).

Escrow: Monies held by another party

(lender/attorney) on behalf of another party,

normally the purchaser.

Earnest Money: The purchaser’s good

faith money. This money is held in escrow

until settlement. All principals to the

contract must agree regarding disbursement,

otherwise a court will decide.

Down Payment: A percentage of the

agreed upon sales price that the purchaser

provides towards the purchase of the house,

normally from their own funds.

Mortgage Insurance: Protects the

lender when the purchaser has a LTV greater

than 80%. If the purchaser defaults on

their loan, mortgage insurance provides a

means for the lender to recoup their loses.

Mortgage insurance is paid monthly as

part of the purchaser’s PITI. Under certain

conditions, the purchaser can petition of

have the mortgage insurance requirement

removed, typically when the property has

appreciated and the loan principal has been

paid down so that the LTV is less than 80%.

Title Insurance: The lender requires

that the purchaser obtain and pay for this

insurance to protect the lender (purchaser

coverage is optional), in case title issues are

discovered after settlement. Title insurance

is charged and paid in full at settlement. If

the purchaser refinances their loan, a lesser

fee may be charged for “bringing down title”.

Hazard/Homeowner Insurance: The

lender requires that proof of payment of

hazard/homeowner insurance be provided

at or before settlement, with adequate

coverage for the property being purchased.

Hazard/homeowner insurance normally

protects both the homeowner and the lender

from damage to the property from fire,

vandalism, and other catastrophic events.

Most hazard/homeowner policies don’t

provide flood insurance, which must be

purchased separately. This insurance is paid

annually, with one year’s premium paid at or

before settlement. Thereafter, 1/12th of the

annual premium is included as part of the



purchaser’s PITI. These monies are held in

escrow until payment is due to the insurance

company.

Contract Date: The date the contract

was written.

Ratification Date: The date when all

parties agree with the terms and conditions

of the contract, and all parties have received

fully signed and initialed copies of the

contract.

Settlement Date: The day ownership of

the property is transferred.

How Much House Can Your Homebuyer Afford?

Calculating Ratios and Rules

The following information and formulas are

used to calculate the ratios that will allow

you to estimate the loan amount and sales

price for which your home buyer will be able

to apply.

Information Your Home Buyer Needs to Provide

• Area in which the home buyer would

like to purchase

• Length and type of mortgage program

desired

• Amount of desired down payment

• Monthly Income

• Monthly Debt

Calculating Ratios

Ratios represent a comparison between your

home buyer’s gross monthly income and his

or her monthly debt.

Front Ratio = total housing payment + gross

monthly income

Back Ratio = total monthly debt (including

housing payment) + gross monthly income

Rules:

With a down payment of less than 10%,

conventional financing typically allows

homebuyers to obtain maximum financing

with an allowable front ratio of 28% and

back ratio of 36%. If the down payment is

more than 10%, ratios can be stretched up to

33% front, 38% back. Higher ratios may be

available on other conventional programs.

FHA Financing allows your home buyers to

obtain maximum financing with allowable

ratios of 29% front, 41% back. VA Financing

allows home buyers to obtain maximum

financing with allowable total ratios of up to

41%, both front and back.

MORTGAGE SERVICES

Field Qualifying(for approximate payment amount only)

Interest Rate Factors for a 30 Year Term (per 1,000)

4.0 % = 4.77

5.0 % = 5.37



Interest Rate Factors for a 30 Year Term (per 1,000)

5.5 % = 5.68

6.0 % = 6.0

6.5% = 6.32

7.0 % = 6.65

7.5 % = 6.99

Monthly Payment at 6% Interest Rate

(Principal + Interest Only) (P&I)

Loan Amount (P&I)

$25,000 150

$50,000 300

$100,000 600

$200,000 1,200

$400,000 2,400

Monthly Payment at 6% Interest Rate

(Principal + Interest Only) (P&I)

$500,000 3,000

Fairfax County Taxes: $1.085 per $100

(check your local jurisdiction for their

amount)

House Value* Annual Tax Monthly

Taxes

$50,000 $500 $41.66

$100,000 $1,000 $83.33

$200,000 $2,000 $166.67

$300,000 $3,000 $250.00

$400,000 $4,000 $333.33

$500,000 $5,000 $416.67

* Tax assessment value and market value are

not usually the same.

The assessed value is usually less!



Hazard Insurance:varies depending on coverage and

deductible. An average cost is about $2.50

per $1,000, based on sales price.

House Value

Annual Premium

Monthly Premium

$100,000 $250 ≈ $20.83

$200,000 $500 ≈ $42

$300,000 $750 ≈ $65

$400,000 $1,000 ≈ $85

$500,000 $1,250 ≈ $105

Field Qualifying Summary

600 P&I @ 6 %

+80 Taxes+20 Hazard Ins

$700 (per 100,000)

350 = 50K loan

700 = 100K loan

1400 = 200K loan

2100 = 300K loan

2450 = 350K loan

2800 = 400K loan

Real Estate taxes vary among counties and

cities. Confirm the tax rate using the on-line

tax record if possible.

The rates below are $ per 100:

Fairfax County 1.09 Charles

County 1.2

Anne Arundel County

1.07 St. Mary’s County 0.969

Calvert County 0.892

Prince George’s County

0.96

Arlington County 0.958 Fauquier

County 0.97

Loudoun County 1.285

Prince William County

1.204



INTEREST RATE FACTOR TABLEFactors per $1,000

Interest Rate 15 Year 30 Year Interest Rate 15 Year 30 Year

4 7.40 4.77 8 9.56 7.344 1/8 7.46 4.85 8 1/8 9.63 7.344 1/4 7.52 4.92 8 1/4 9.70 7.514 3/8 7.59 4.99 8 3/8 9.77 7.604 1/2 7.65 5.07 8 1/2 9.85 7.694 5/8 7.71 5.14 8 5/8 9.92 7.784 3/4 7.78 5.22 8 3/4 9.99 7.874 7/8 7.84 5.29 8 7/8 10.07 7.96

5 7.91 5.37 9 10.14 8.055 1/8 7.97 5.44 9 1/8 10.22 8.145 1/4 8.04 5.52 9 1/4 10.29 8.235 3/8 8.10 5.60 9 3/8 10.37 8.325 1/2 8.17 5.68 9 1/2 10.44 8.415 5/8 8.24 5.76 9 5/8 10.52 8.505 3/4 8.30 5.84 9 3/4 10.59 8.595 7/8 8.37 5.92 9 7/8 10.67 8.68

6 8.44 6.00 10 10.75 8.776 1/8 8.51 6.08 10 1/8 10.82 8.876 1/4 8.57 6.16 10 1/4 10.90 8.966 3/8 8.64 6.24 10 3/8 10.98 9.056 1/2 8.71 6.32 10 1/2 11.05 9.156 5/8 8.78 6.40 10 5/8 11.13 9.246 3/4 8.85 6.48 10 3/4 11.21 9.336 7/8 8.92 6.57 10 7/8 11.29 9.43

7 8.99 6.65 11 11.36 9.527 1/8 9.06 6.74 11 1/8 11.44 9.627 1/4 9.13 6.82 11 1/4 11.52 9.717 3/8 9.20 6.91 11 3/8 11.60 9.817 1/2 9.27 6.99 11 1/2 11.68 9.907 5/8 9.34 7.08 11 5/8 11.76 10.007 3/4 9.41 7.16 11 3/4 11.84 10.097 7/8 9.48 7.25 11 7/8 11.92 10.19



Rent vs. BuyProcessing Rentals



Rental listing1. Transaction /Case Worksheet

2. Exclusive Right to Lease Agreement

3. Copy of MRIS print out and public

record

4. Agency Disclosure

5. Affiliated Business Arrangement

Disclosure

6. CMA (Signed by Sellers)

7. Property Disclosure/Disclaimer

8. Lead Based Paint Addendum (If

applicable)

9. Landlord’s Authorization/Waiver for

photographic services

10. Photos of home

Potential Tenant Application:Application should be made using listing

company or management company forms.

$50.00 processing fee for each adult

applicant – Certified Funds Non

Refundable.

Earnest Money Deposit equal to one full

month’s rent. Upon approval such funds

become all/part of tenant’s security deposit.

Refundable if not approved. Other terms/

conditions are outlined on rental application

Pet deposit (if applicable) based on listing

instruction.

Deposit checks can be combined. Please be

sure that processing fees are kept separate.

All checks must be made payable either to

listing company, management company or

owner.

Processing time: 1-3 days.

The rental application should outline ways

to help expedite the processing procedure.

When your listing is rented

1. Rental Case sheet

2. MRIS Full listing

3. MRIS tax record

4. Rental Application

5. Copy of check(s)

6. Lease



CREDIT SCORES

760 - 850 EXCELLENT

700 - 759 VERY GOOD

723 MEDIAN FICO SCORE

660 - 699 GOOD

687 AVERAGE FICO SCORE

620 - 659 NOT GOOD

580 - 619 POOR

500 - 579 VERY POOR

Rent to IncomeLandlords typically require that your annual

income is at least 40 times the monthly rent.

For example, if you and your roommate are

looking at a $3,000 per month apartment,

the landlord would require a combined

income of $3,000 × 40, which equals

$120,000. To determine how much rent

you (and your potential roommates) can

afford, simply divide your combined annual

incomes by 40.

How Much Rent is Affordable?You might have also heard that you should

spend no more than 30% of your annual

income on rent. Spending 30% of your

yearly income on rent is widely believed to

be an affordable amount, leaving enough

money for all your other expenses.

What’s the difference between 30% and 40

times the monthly rent? Absolutely nothing,

they’re just two different ways of deriving

the same number. The 40x trick is just

easier to calculate.

For example, let’s take $120,000 of income.

1. 30% of $120,000 = $36,000.

2. $36,000 ÷ 12 months = $3,000 per

month.

But to make the calculation easier, just

divide $120,000 by 40.

1. $120,000 ÷ 40 = $3,000 per month.

Voila! Math Magic!

Again, to determine how much rent you

(and your potential roommates) can afford,

simply divide your combined annual

incomes by 40. Don’t have a calculator

handy? Use the following table to look up

your maximum rent.



Combined Annual Income Maximum Monthly$40,000 $1,000

$44,000 $1,100

$48,000 $1,200

$52,000 $1,300

$56,000 $1,400

$60,000 $1,500

$72,000 $1,800

$76,000 $1,900

$80,000 $2,000

$88,000 $2,200

$92,000 $2,300

$100,000 $2,500

$116,000 $2,900

$120,000 $3,000

$128,000 $3,200

$136,000 $3,400

$140,000 $3,500

$152,000 $3,800

$160,000 $4,000

$176,000 $4,400

$180,000 $4,500

$192,000 $4,800

$200,000 $5,000

$204,000 $5,100

$228,000 $5,700

$236,000 $5,900

$240,000 $6,000

$252,000 $6,300



Rental GuidelinesBelow is a synopsis of our guidelines for

approving/declining a rental application.

Income:• Only the incomes of two applicants will

be considered. In the event there are more

than two applicants, the lowest two incomes

will be counted.

• Only applicant income will be considered

for qualification. Co-signers may not be

used.

• Income must be verifiable to be

considered.

• Self-employed / commissioned applicants

must submit copies of Schedule C or tax

returns for the past two years.

• Applicants paid hourly must submit

copies of their W2s for the past two years.

• Applicant’s monthly income must equal /

exceed 3.5 times the rent (3.25 for military

personnel).

Assets and Liabilities:• Monthly income times .45 must be greater

than monthly rent plus all long term debts.

• Applicants must have sufficient cash

in bank to pay deposit, first months

rent, moving expenses and a reserve for

emergencies.

Credit:• A credit report will be run on all

applicants and all adults will be considered

as applicants.

• Lack of credit history is a valid reason for

not approving an application.

• 3 or more late payments (30 days late)

within the past 36 months will not be

accepted. An applicant with any 60+ days

late in the past 36 months will be turned

down.

• Applicants with liens, judgments,

collections or bankruptcies within the past

5 years will not be accepted.

If applicant has declared bankruptcy more

than 5 years ago, ALL credit established

after the bankruptcy must be good (no

late payments). If there has been a lien,

collection or judgment more than 5 years

ago, the debt must be paid in full in order to

consider the application.

Job History:• Applicant needs to have maintained stable

employment for the past 3 years and there

should be some assurance of continued

employment. If employment cannot be

verified, applicant may be turned down.

Landlord References:• Applicant must have a good reference

from current and former landlord. This

includes paying rent on time, leaving

property in good condition, giving adequate

notice of moving, etc.

• Not having a current or previous landlord



or being unable to contact current or previous landlord may cause the application to be

turned down.

Other:• All adults on the application will have their credit checked and if approved will be put on

the lease.

If the applicants are married or have a significant other, both people must be listed on the

application.

• Applicant must meet all other requirements of the landlord or agent, including, but not

limited to, pet restrictions, smoking restrictions, possession restrictions, etc. Making an

application contingent upon repairs/redecoration that an owner is not willing to do will cause

the application to be turned down.

• Multiple applications are processed simultaneously and the most qualified (if any) accepted.

• Processing will begin AFTER receipt of funds.

• Processing time is typically 2-3 business days.



FINANCING FACTS & FIGURES

Ask your loan officer these questions if you don’t know the answers.

1. What is “conventional” financing?

2. How do you determine loan to value (LTV)?

3. How much down payment do VA loans require?

4. Name a type of home ineligible for VA financing.

5. What is PITI?

6. Define a fixed rate mortgage.

7. What is a ratio?

8. The maximum allowable buydown for an FHA loan is _________.

9. To determine a “self employed” person’s income, the lender averages _________ years of

income.

10. True - False: VA approval is required on new construction.

11. True - False: If not on public water and sewer, the lender requires a clean septic and well

certificate.



MORTGAGEFINANCNG TERMS

AbstractA concise summary of information made by

a title examiner based on his examination of

available land records.

AccelerationThe right of the mortgagee (lender) to

demand the immediate repayment of the

mortgage loan balance upon the default of

the mortgagor (borrower), or by using the

right vested in the Due-on-Sale Clause.

Adjustable Rate Mortgage (ARM)A mortgage in which the interest rate

is adjusted periodically based upon a

pre-selected index. Also known as the

re-negotiable rate mortgage, the variable

rate mortgage, or the Canadian rollover

mortgage.

Adjustment IntervalOn an adjustable rate mortgage, the time

between changes in the interest rate and/or

monthly payment, typically one, three, or

five years, depending on the index.

Amortized LoansLoans on which the borrower agrees to

make regular payments on principal as well

as interest to pay off the debt at the end of a

fixed period.

Annual Percentage Rate (APR)An interest rate reflecting the cost of a

mortgage as a yearly rate. This rate is likely

to be higher than the stated note rate or

advertised rate on the mortgage, because

it takes into account discount points and

other credit costs. The APR allows home

buyers to compare different types of

mortgages based on the annual cost for each

loan.

AppraisalAn estimate of the value of a property,

made by a qualified professional called an

“appraiser”.

AssessmentA local tax levied against a property for a

specific purpose, such as a sewer or street

lights.

AssumptionThe agreement between buyer and seller

where the buyer takes over the payments

on an existing mortgage from the seller.

Assuming a loan can usually save the buyer

money since this is an existing mortgage

debt, unlike a new mortgage where closing

costs, and new, probably higher, market-rate

interest charges will apply.

Balloon (Payment) MortgageUsually a short term fixed-rate loan which

involves small payments for a certain period

of time and one large payment for the

remaining amount of the principal at a time

specified in the contract.

Bankruptcy



A provision of Federal Law whereby

a debtor surrenders his assets to the

Bankruptcy Court and is relieved of the

future obligation to repay his unsecured

debts. After bankruptcy, the debtor is

discharged and his unsecured creditors may

not pursue further collection efforts against

him. Secured creditors, those holding deeds

of trust or judgment liens, continue to be

secured by the property but they may not

take other action to collect from the debtor.

Blanket MortgageA mortgage covering at least two pieces of

real estate as security for the same mortgage.

Borrower (Mortgagor)One who applies for and receives a loan in

the form of a mortgage with the intention of

repaying the loan in full.

Bridge LoanA short-term loan made by an individual

or lending institution to “bridge” the gap

between receiving the cash from equity in

the present home and making the down

payment on the new home.

BrokerAn individual in the business of assisting in

arranging funding or negotiating contracts

for a client but who does not loan money

himself. Brokers usually charge a fee or

receive a commission for their services.

BuydownWhen the lender and/or the home builder

subsidized the mortgage by lowering the

interest rate during the first few years of the

loan. While the payments are initially low,

they will increase when the subsidy expires.

Caps (Interest)Consumer safeguards, which limit the not

to exceed amount of the interest rate on an

adjustable rate mortgage. The mortgage

may change per year and/or over the life of

the loan.

Caps (Payment)Consumer safeguards, which limit the

maximum amount of the monthly payment.

These may change on an adjustable rate

mortgage.

Cash FlowThe amount of cash derived over a certain

period of time from an income producing

property. The cash flow should be large

enough to pay the expenses of the income

producing property (mortgage payment,

maintenance, utilities, etc.).

Cash OutReceiving money back when refinancing

your present mortgage.

Caveat Emptor“Let the buyer beware.” The buyer should

inspect the property and be satisfied that it

is what he wants. The seller is not obligated

to disclose defects, but may not conceal a

known defect or lie if asked about it.



CeilingThe maximum allowable interest rate over

the life of the loan of an adjustable rate

mortgage.

Certificate of EligibilityThe document given to qualified veterans,

which entitles them to VA guaranteed loans

for homes, businesses, and mobile homes.

Certificates of eligibility may be obtained

by sending DD Form 214 (Separation

Document) to the local VA office with

VA Form 1880 (Request for Certificate of

Eligibility).

Certificate of Reasonable Value (CRV)An appraisal issued by the VA showing the

property’s current market value.

Certificate of Veteran StatusThe document given to veterans or

reservists who have served 90 days of

continuous active duty (including training

time). It may be obtained by sending DD

Form 214 to the local VA office with VA

Form 26-8261a (Request for Certificate of

Veteran Status). This document enables

veterans to obtain lower down payments on

certain FHA insured loans).

Clear TitleA title to a property that is free of legal

challenges to ownership.

ClosingThe meeting between the buyer, seller,

and the lender or their agents where the

property and funds legally change hands.

Also called settlement.

Closing CostsThese usually include an origination fee,

discount points, appraisal fee, title search

and insurance, survey, taxes, deed recording

fee, credit report change and other costs

assessed at settlement. The cost of closing

is usually about 4% - 8% of the mortgage

amount.

COFIAn adjustable rate mortgage with a rate that

adjusts based on a cost of funds index,

often the 11th District Cost of Funds.

CollateralAny property pledged to secure a loan.

CommitmentA promise by a lender to make a loan on

specific terms or conditions to a borrower

or builder. A promise by an investor to

purchase mortgages from a lender with

specific terms or conditions. An agreement,

often in writing, between a lender and a

borrower to loan money at a future date

subject to the completion of paperwork or

compliance with state conditions.

CondominiumA system of individual fee simple ownership

of portions (units) in a multi-unit structure,

combined with joint ownership of



common areas. Each individual may sell or

encumber his own unit.

Conforming LoanGenerally, a mortgage loan under a set

amount. Qualifying ratios and underwriting

methods are standardized to a large degree.

Construction LoanA short-term interim loan to pay for

the construction of buildings or homes.

These are usually designed to provide

periodic disbursements to the builder as he

progresses with construction.

Contract Sale or DeedA contract between purchaser and a seller

of real estate to convey title after certain

conditions have been met. It is a form of

installment sale.

Conventional LoanAmortized mortgage loans that are neither

FHA insured nor VA guaranteed.

Co-SignerA person who assumes joint liability for a

loan. The co-signer of a loan agreement is

not always a co-owner.

Credit LimitThe maximum amount that may be

borrowed under a home equity plan.

Credit ReportA report documenting the credit history and

current status of a borrower’s credit standing

(fee charged by lender.

Debt-to-Income RatioThe ratio, expressed as a percentage, which

results when a borrower’s monthly payment

obligation on long-term debts is divided by

his or her gross monthly income

Debt ServiceThe total amount of credit card, vehicle,

mortgage or other debt upon which you

must pay.

DeedThe written document conveying the

real property. The deed must be signed,

witnessed, and delivered to the grantee.

Once a deed is recorded at a courthouse, it

is no longer necessary to convey the title.

Deed of TrustIn many states, this document is used in

place of a mortgage to secure the payment

of a note.

DefaultFailure to fulfill a contractual obligation

when it comes due such as the failure to

make a timely payment on a mortgage loan.

Deferred InterestWhen a mortgage is written with a monthly

payment that is less than required to satisfy

the note rate, the unpaid interest is deferred

by adding it to the loan balance.

DelinquencyFailure to make payments on time. This

can lead to foreclosure.



Department of Veterans Affairs (VA)An independent agency of the federal

government, which guarantees long-term,

low or no down payment mortgages to

eligible veterans.

Discount PointSee Points.

Down PaymentThe difference between the purchase price

and that portion of the purchase price

being financed. Most lenders require the

down payment to be paid from the buyer’s

own funds. Gifts from related parties

are sometimes acceptable, and must be

disclosed to the lender.

Earnest MoneyMoney given by a buyer to a seller as part

of the purchase price to bind the transaction

or assure payment.

EasementThe right to use someone else’s land for a

specific limited purpose. They can be either

MORTGAGE FINANCNG TERMS

permanent or temporary, and may include

such things as utility lines, driveways, and

ingress and egress.

Eminent DomainThe power of the state to take private

property for public use upon payment of

just compensation.

EncroachmentAnything belonging to one landowner

that extends onto an adjacent landowner’s

property is considered an encroachment.

A storage building that is a few inches

over the property line is an example of an

encroachment.

EncumbranceA claim against a property by another party,

which usually affects the ability to transfer

ownership of the property.

EntitlementThe VA home loan benefit is called

entitlement. Entitlement for a VA

guaranteed home loan may also be called

VA eligibility.

Equal Credit Opportunity Act (ECOA)Is a federal law that requires lenders and

other creditors to make credit equally

available without discrimination based on

race, color, religion, national origin, age ,

sex, marital status or receipt of income from

public assistance programs.

EquityThe difference between the fair market value

and current indebtedness, also referred

to as the owner’s interest. The value an

owner has in real estate over and above the

obligation against the property.



EscrowAn account held by the lender into which

the home buyer pays money for tax or

insurance payments. Also earnest deposits

held pending loan closing.

Fannie MaeSee Federal National Mortgage Association

Farmers Home Administration (FmHA)Provides financing to farmers and other

qualified borrowers who are unable to

obtain loans elsewhere.

Federal Home Loan Bank Board (FHLBB)The former name for the regulatory

and supervisory agency for federally

charted savings institutions. It evaluates

applications for federal charters and also

establishes

MORTGAGE FINANCNG TERMS liquidity requirements for its members.

This agency is now called the Office of

Thrift pervision.

Federal Home Loan Mortgage Corporation (FHLMC)A quasi-governmental agency that provides

a secondary market for conventional

mortgage loans written by insured

depository institutions and HUD-approved

mortgage bankers.

Federal Housing Administration (FHA)A division of the Department of Housing

and Urban Development. Its main activity

is the insuring of residential mortgage loans

made by private lenders. FHA also set

standards for underwriting mortgages.

Federal National Mortgage Association (FNMA) (also known

as Fannie Mae)

A tax-paying corporation created by

Congress that purchases and sells

conventional residential mortgages as well

as those insured by the FHA or guaranteed

by the VA. This institution, which provides

funds for one in seven mortgages, makes

mortgage money more available and more

affordable.

FHA LoanSometimes called FHA Insured Loan.

A loan for which the Federal Housing

Administration insures the lender against

losses the lender may incur due to the

borrower’s default. Open to all qualified

home buyers.

FHA Mortgage InsuranceRequires a fee (up to 2.25% of the loan

amount) paid at closing to insure the loan

with the FHA. In addition, FHA mortgage

insurance requires an annual fee of up to

0.5% of the current loan amount, paid in

monthly installments. The lower the down

payment, the more years the fee must be

paid.



FHLMCThe Federal Home Loan Mortgage

Corporation provides a secondary market

for savings and loans by purchasing their

conventional loans. Also known as Freddie

Mac.

Firm CommitmentA promise by the FHA to insure a mortgage

loan for a specified property and borrower.

A promise from a lender to make a

mortgage loan.

First MortgageA mortgage which is in first lien position,

taking priority over all other liens (which

are financial encumbrances).

Fixed Rate MortgageThe mortgage interest rate will remain

the same on these mortgages throughout

the term of the mortgage for the original

borrower. Payments are also fixed at one

amount

Flood InsuranceA form of hazard insurance than may be

required by the lender as a condition of

making the loan. May not cover personal

property.

FNMAThe Federal National Mortgage Association

is a secondary mortgage institution which is

the largest single holder of home mortgages

in the United States. FNMA buys VA, FHA,

and conventional mortgages from primary

lenders. Also known as Fannie Mae.

ForeclosureA legal process by which the lender or the

seller forces a sale of mortgaged property

because the borrower has not met the

terms of the mortgage. Also known as a

repossession of the property.

Freddie MacSee Federal Home Loan Mortgage

Corporation

Ginnie MaeSee Government National Mortgage

Association

Good Faith EstimateA written estimate of closing costs which a

lender must provide within three days of the

borrower submitting an application.

Government National Mortgage Association (GNMA)Also known as Ginnie Mae, this is

a federally controlled and operated

corporation that supports the secondary

market. It purchases and sells residential

government mortgages (FHA, VA).

Grace PeriodA period of time during which a loan

payment may be paid after its due date, but

not incur a late penalty. Such late payments

may be reported on the borrower’s credit

report.



Graduated Payment Mortgage (GPM)A type of flexible payment mortgage where

the payments increase for a specified period

of time and then level off. This type of

mortgage has negative amortization built

into it.

Gross IncomeThe income of the borrower before taxes

or expenses is deducted, for qualifying

purposes.

GuarantyA promise by one party to pay a debt or

perform an obligation contracted by another

if the original party fails to pay or perform

according to a contract.

Hazard InsuranceA form of insurance in which the insurance

company protects the buyer from loss of

property due to hazards such as fire, hail

damage, wind, etc. for a premium.

Home Equity Line of CreditA loan providing the buyer with the ability

to borrow funds up to the maximum

credit limit for which they have qualified.

Repayment is secured by the equity in

the home. Simple interest (interest only

payments on the outstanding balance) is

usually tax deductible. This is usually used

for home improvements, major purchases or

expenses, and debt consolidation.

Home Equity LoanA fixed or adjustable rate loan obtained

for many purposes, secured by the equity

in the home. Interest paid is usually

tax deductible. Often used for home

improvements or investment in other real

estate. Recommended by many to replace

or substitute consumer loans, the interest of

which is not tax deductible.

Housing and Urban Development, Department of (HUD)This department, created in 1965, has a

wide range of responsibilities including

the regulation of the Federal Housing

Administration and the Government

National Mortgage Association.

Housing Expenses to Income RatioThe ratio, expressed as a percentage, which

results when a borrower’s housing expenses

are divided by his/her gross monthly

income. See debt to income ratio.

HUD-1 Settlement StatementA form utilized at loan closing to itemize

the costs associated with purchasing the

property. Universally used to meet HUD

regulatory requirements.

ImpoundThat portion of a borrower’s monthly

payments held by the lender or servicing

organization to pay for taxes, hazard

insurance, mortgage insurance, lease

payments, and other items as they become

due. Also known as reserves.



IndemnityA protection against actual loss or damage,

compensation for same.

Indexed RateThe sum of the published index plus the

margin. If the index was *% and the

margin was 2.25%, the indexed rate would

be 10.25%. Lenders often charge less than

the indexed rate for the first year of an

adjustable rate loan.

Ingress and EgressThe right to go in and out over a piece of

property, but does not include the right to

park on it, as applied to easements.

Interest RateThe basic price that equates to the demand

for and the supply of funds in the financial

markets. The quoted interest rate for

any type of loan is a combination of

several factors. Part of it is a fee for the

administrative costs of making a loan,

and another part is a premium for the

risk involved in making the loan. The

remainder is a payment for the use of the

money itself.

Interim FinancingA construction loan made during

completion of a building or a project. A

permanent loan usually replaces this loan

after completion.

InvestorA money source for a lender.

Joint Ownership AgreementAn agreement between owners defining

their rights, ownership, monetary

obligations and responsibilities. This could

be between an investor and an occupant

or between the occupants. If an investor

is involved, the investor does not take

deprecation deductions and none of the

occupant’s payment is deemed rent for tax

purposes.

Joint TenancyTwo or more persons own a property.

Joint tenants with the common law Right

of Survivorship means that the survivor

inherits the property without reference to

the decedent’s will. Creditors may sue to

have the property divided to settle claims

against one of the owners.

JudgmentAn unpaid court ordered monetary order

against a property owner.

Jumbo LoanA loan which is larger than the limits set by

the Federal National Mortgage Association

and the Federal Home Loan Mortgage

Corporation. Because jumbo loans cannot

be funded by these two agencies, they

usually carry a higher interest rate.

LienA claim upon a piece of property for

the payment or satisfaction of a debt or

obligation.



Loan to Value RatioThe relationship between the amount of the

mortgage loan and the appraised value of

the property expressed as a percentage.

Lock or Lock-InA commitment obtained from the lender to

“lock’ or assure a particular interest rate and

discount points for a definite time period.

This is a protection against rising interest

rates between the time of loan application

and the time of closing.

MarginThe amount a lender adds to the index on

an adjustable rate mortgage to establish the

adjusted interest rate.

Market ValueThe highest price that a buyer would pay

and the lowest price that a seller would

accept on a property. Market value may be

different from the price a property could

actually be sold for at a give time.

Mechanic’s LienAny payment owed to a contractor for work

done on the property.

MIP (Mortgage Insurance Premium)Insurance from FHA to the lender against

incurring a loss because the borrower

defaults.

Mortgage Backed SecuritiesSecurities backed by pools of mortgages.

In the case of Ginnie Mae, the securities are

issued by private institutions that Ginnie

Mae approves. The mortgages are insured

by the Federal Housing Administration

(FHA), or guaranteed by the Veterans

Administration (VA) or by the Rural

Housing Service (RHS), formerly Farmers

Home Administration (FmHA).

Mortgage BankerOriginates mortgage loans, lending their

funds and closing loans in their name.

Mortgage BrokerSimilar to a mortgage banker, in that they

take loan applications and process the

paperwork, but brokers do not fund the

loan with their own money. They work for

several investors, such as mortgage bankers,

S & L’s, banks, etc.

Mortgage InsuranceMoney paid to insure the mortgage when

the down payment is less than 20%. See

Private Mortgage Insurance and FHA

Mortgage Insurance.

Mortgage LoanA loan using real estate as security or

collateral to provide for repayment in case

of default. The mortgage or Deed of Trust is

the agreement used to pledge the home or

other real estate as security.

MortgageeThe lender in a mortgage loan transaction.



MortgagorThe borrower in a mortgage loan

transaction.

Negative AmortizationOccurs when the monthly loan payments

are not sufficient enough to satisfy all the

interest due on the loan. This unpaid

interest is added to the unpaid balance

of the loan. The danger of negative

amortization is that the home buyer ends up

owing more than the original amount of the

loan.

Net Effective IncomeThe borrower’s gross income, minus federal

income tax.

Non-Assumption ClauseA statement in a mortgage contract

forbidding the assumption of the mortgage

without the prior approval of the lender.

NoteThe signed obligation to pay a debt, as a

mortgage note.

Office of Thrift Supervision (OTS)The regulatory and supervisory agency

for federally charted savings institutions.

Formerly known as the Federal Home Loan

Bank Board.

Origination FeeThe fee charged by a lender to prepare loan

documents, make credit checks, inspect

and sometimes appraise a property, usually

computed as a percentage of the face value

of the loan.

Owner’s Title PolicyAn insurance premium charged by the

title company to insure the buyer that the

title is free from defects up to the date the

conveying instrument is recorded. The

buyer is the beneficiary.

Permanent LoanA long term mortgage, usually ten years or

more. Also called an “end loan.”

PITIPrincipal, Interest, Taxes and Insurance.

Also called monthly housing expense.

PlatA map showing all of a property’s

boundaries.

Pledged Account Mortgage (PAM)Money is placed in a pledged savings

account and this fund, plus earned interest,

is gradually used to reduce mortgage

payments.

Points (loan discount points)Prepaid interest assessed at closing by the

lender. Each point is equal to 1% of the

loan amount (i.e. two points on a $100,000

mortgage would equal $2,000).



Power of AttorneyA legal document authorizing one person to

act on behalf of another.

Pre-approvalA process by which a potential home buyer

secures a guaranteed mortgage approval

before making an offer on a property. The

lender guarantees in writing to grant the

loan in a specific amount.

Pre-paid ExpensesNecessary to create an escrow account or to

adjust the seller’s existing escrow account.

Can include taxes, hazard insurance,

private mortgage insurance, and special

assessments.

PrepaymentA privilege in a mortgage permitting the

borrower to make payments in advance of

their due date.

Prepayment PenaltyMoney charged for an early repayment of

debt. Prepayment penalties are allowed in

some form (but not necessarily imposed) in

many states.

Primary Mortgage MarketThe market where the origination or

creation of new mortgages is carried out

by the mortgage lenders such as savings

and loan associations, commercial banks,

and mortgage companies. These lenders

sometimes sell their mortgages into the

secondary mortgage markets such as to

Fannie Mae or Freddie Mac.

PrincipalThe amount of debt, excluding interest, left

on a loan.

Private Mortgage InsuranceIn the event that the borrower does not have

personal funds for a 20% down payment,

lenders will allow a smaller down payment

- as low as 5% in some cases. With the

smaller down payment loans however,

borrowers are usually required to carry

private mortgage insurance. Private

mortgage insurance will usually require an

initial premium payment and may require

an additional monthly fee depending on the

loan’s structure.

Qualifying RatiosComparisons of a borrower’s debt and gross

monthly income.

Quitclaim DeedA deed releasing whatever interest a person

may hold on a property but making no

warranty whatsoever.

REALTOR®A real estate broker or an associate

holding active membership in a local real

estate board affiliated with the National

Association of REALTORS®.

RescissionThe cancellation of a contract. With

respect to mortgage refinancing, the law

that gives the homeowner three days to

cancel a contract, in some cases, once it is

signed if the transaction uses equity in the



home as security. (Also known as “Right of

Rescission”).

Re-conveyance/SatisfactionA fee charged by the lender to execute the

Deed of Re-conveyance, or Satisfaction,

when an existing note is paid off.

Recording FeesMoney paid to the lender for recording a

home sale with the local authorities, thereby

making it part of the public record.

RefinanceObtaining a new mortgage loan on a

property already owned. Often used to

replace the existing loan(s) on a property,

usually for a lower interest rate.

RESPAReal Estate Settlement Procedures

Act. RESPA is a federal law that allows

consumers to review information about

known or estimated settlement costs once

after application and once prior to or at

settlement. The law requires lenders to

furnish the information after application

only.

Reverse Annuity Mortgage (RAM)A form of mortgage in which the lender

makes periodic payments to the borrower

using the borrower’s equity in the home as

Satisfaction of Mortgage. The document

issued by the mortgagee loan is paid in full.

Also called a “release of mortgage.”

Right of First Refusal

A prior agreement that grants a certain

prospective buyer the first right to purchase

a home, given certain conditions.

Second MortgageA mortgage made subsequent to another

mortgage and subordinate to the first one.

Secondary Mortgage MarketThe market where mortgage loans can be

resold by lenders, thus providing liquidity

to the mortgage market.

Security InterestAn interest that a lender takes in the

borrower’s property to assure repayment of

a debt.

ServicingAll the steps and operations a lender

performs to keep a loan in good standing,

such as collection of payments, payment of

taxes, insurance, property inspections, etc.

Settlement/Settlement CostsSee Closing/Closing Costs.

Shared Appreciation Mortgage (SAM)A mortgage in which a borrower receives

a below market interest rate in return for

which the lender (or another investor

such as a family member or other partner)

receives a portion of the future appreciation

in the value of the property. May also apply

to a mortgage where the borrowers share

the monthly principal and interest payments

with another party in exchange for part of

the appreciation.



Simple InterestInterest which is computed only on the

principal balance.

SurveyA measurement of land, prepared by a

registered land surveyor, showing the

location of the land with reference to known

points, its dimensions, and the location and

dimensions of any buildings.

Sweat EquityEquity created by a purchaser personally

performing work/improvements on a

property they are purchasing.

TitleThe written evidence that proves the right of

ownership of a specific piece of property.

Title InsuranceA policy, usually issued by a title insurance

company, used as a protection for lenders or

home owners against financial loss resulting

from legal defects in the title. The cost of

the policy is often borne by the purchaser

and/or the seller.

Title SearchAn examination of municipal records to

determine the legal ownership of property,

usually performed by the title company.

Truth in LendingAlso known as Regulation Z of the Truth

in Lending section of the Consumer Credit

Protection Act. It regulates the disclosure of

consumer credit costs and also garnishment

procedures, and prohibits exorbitant

credit transactions. Its purpose is to make

consumers aware of the cost of credit and

to enable them to compare the costs of

alternate forms of credit.

Two-Step MortgageA mortgage in which the borrower receives

a below market interest rate for a specified

number of years (most often 7 or 10), and

then receives a new interest rate adjusted

(within certain limits) to market conditions

at that time. The lender sometimes has

the option to call the loan due with 30

days notice at the end of 7 or 10 years.

Also called a “Super Seven” or “Premier”

mortgage.

UnderwritingThe decision whether to make a loan to

a potential home buyer based on credit,

employment, assets, and other factors and

the matching of this risk to an appropriate

rate and term or loan amount.

UsuryInterest charged in excess of the legal rate

established by law.



VA LoanA mortgage where a portion of an eligible

veteran’s loan is guaranteed in terms of

repayment to the lender by the Department

of Veterans Affairs. Restricted to individuals

qualified by military service or other

entitlements.

VA Mortgage Funding FeeA premium depending on the size of the

down payment, paid on a VA backed

loan. either paid at closing or added to the

amount financed.

Variable Rate Mortgage (VRM)See Adjustable Rate Mortgage.

Verification of Deposit (VOD)A document signed by the borrower’s

financial institution verifying the status and

balance of his/her financial amounts.

Verification of Employment (VOE)A document signed by the borrower’s

employer verifying his/her position and

salary

Warehouse FeeMany mortgage firms must borrow funds on

a short term basis in order to originate loans

which are to be sold later in the secondary

mortgage market (or to investors). When

the prime rate of interest is higher on short

term loans than on mortgage loans, the

mortgage firm has an economic loss which

is offset by changing a warehouse fee.

Wraparound MortgageResults when an existing assumable loan is

combined with a new loan, resulting in an

interest rate somewhere between the old

rate and the current market rate.



Goal Setting / Business Planning

Harvard Goal Study

This study was completed using Harvard alumni ten

years after they graduated from that institution.

• 84% had no specific goals, just “growing

generalities”

• 13% had specific goals, but not in writing

• 3% had very specific and written goals

The 13% with specific goals earned on the average 2x

more than those with no specific goals.

The 3% with specific goals earned on the average 10X more than those with no specific goals.

SMART Goal Worksheet

Specific

Measurable

Attainable

Results Orientated and Relevant

Time-bound


FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21BUSINESS PLANNING

“Anyone can figure out why not to do something. It’s too cold, I’m too busy, I’m tired, or it will just take too long to complete. All of us want spectacular results; the problem is that getting spectacular results requires effort. We see other people doing what we wish we could do and then we fall back into either criticizing them for their success or being envious of how lucky they are. If we listen carefully to their stories, we will see that they are probably no better off than we were. All they did was follow the step-by-step process that helped them arrive at the destination they desired.”

Stefan J. M. SwanepoelRealSure.com

Do not confuse business planning with goal

setting. Anyone in real estate can set goals,

but professional owners, brokers, managers

and agents build real plans. Business

planning is the road map that calculates how

many transactions you must close, what your

total overhead cost per transaction is, and how

many activities you must complete to meet

your income goal.

Most real estate professionals recognize that

working in real estate brokerage is a business,

not a hobby. But few apply basic business

principles to their real estate business. Even

agents and brokers who value setting goals

and defining specific objectives for their

business often lack the time and expertise to

develop a comprehensive budget and business

plan.

In summary, real estate business plans outline

and evaluate all aspects of your real estate

business venture. They provide you with a

specific road map and process about how to

achieve your goals. A good business plan

starts with your “wish list” (i.e. how much you

wish to earn), and then guides you through

the process of examining the key aspects of

generating positive income. Your business

plan should include the following key

elements:

FOCUS

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Mail/Call/See / SOI

• List of all names and numbers

• Attach this to your Outlook

• Each SOI assigned a number

• Decide how many each day

• Use Tracking form

Schedule

• Schedule time to track down numbers

• Schedule time prior to calling expireds

for overall market research. (MRIS)

• Schedule time to write Thank You notes

• Schedule time to stop by with more

information

Value Packages

• Letter of Introduction

• Resume, references, office location

• Relocation “Friends and Family” flyer

• MRIS statistics

• Buyer chart / Seller chart

• Rent vs. Buy Analysis

• What your agent should do

• Sample sales contract

• What to look out for

RECAP:

• Create an action list for each event

• How long does each task take?

• What is the lead time needed for each

task?

• What materials/ supplies do I need for

each task?

• Re-engineer if necessary

• Start with the end in mind, and then

work backwards, does the date work?

BUSINESS PLANNING



Financial Planning Worksheet

Monthly Totals

Personal Expenses (housing, food, vehicle, clothing, utilities, entertainment, dining, household, credit cards, gifts, etc.)

$ 3050

Business Expenses (dues, MRIS fees, fuel, vehicle maintenance, E&O insurance, advertising, mailings, supplies, training, conventions, telephone)

+ $ 1250

Savings Goal (retirement, college tuition, vehicle, pay off credit cards, travel, fun, hobbies) + $ 1000

Subtotal = $ 5300

Taxes Divide by .75 = /75

Total Monthly Income Needed = $7066

Deduct other income (if any) - $ 0

Total Monthly Net Income Needed $ 7066

x 12 Annual Income 85,000

What does retirement look like for me?

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________



Financial Planning Worksheet

Monthly Totals

Personal Expenses (housing, food, vehicle, clothing, utilities, entertainment, dining, household, credit cards, gifts, etc.)

Business Expenses (dues, MRIS fees, fuel, vehicle maintenance, E&O insurance, advertising, mailings, supplies, training, conventions, telephone)

+

Savings Goal (retirement, college tuition, vehicle, pay off credit cards, travel, fun, hobbies) +

Subtotal =

Taxes Divide by .75 =

Total Monthly Income Needed =

Deduct other income (if any) -

Total Monthly Net Income Needed

x 12 Annual Income

What does retirement look like for me?

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________



The Prospecting Success Formula

SAMPLE CALCULATION

Average sales price for your market $ 400,000

Multiplied by the average brokerage rate received by your company in co-brokerage transactions (i.e. 0284%) x .0284

Equals the average brokerage fee = $11,360

Multiplied by your personal commission split (i.e. 50%) x .50

Equals your average commission income per transaction = $5,680

Your Annual Income Expectation $85,000

Divided by your average commission income per transaction ÷ $5,680

Equals the number of transactions that you need in the year (round up to the next higher number) 15


Equals the number of contacts that you need in the year = 4,500


Equals the number of weekly contacts that you need to make (round up to the next higher number) = 96


Equals the number of daily contacts that you need to make (round up to the next higher number) = 20

The total transactions needed in the year 15

Multiplied by 2 x 2

Equals the number of listing/buyer agreements needed = 30

Multiplied by 3 x 3

Equals the number of appointments needed = 90


Equals the number of appointments needed per week

(round up to the next higher number) = 2



The Prospecting Success Formula

Average sales price for your market $ _______

Multiplied by the average brokerage rate received by your company in co-brokerage transactions (i.e. 0284%) x _______%

Equals the average brokerage fee = $______

Multiplied by your personal commission split (i.e. 50%) x ______%

Equals your average commission income per transaction = $______

Your Annual Income Expectation $______

Divided by your average commission income per transaction ÷ $______

Equals the number of transactions that you need in the year (round up to the next higher number) _______


Equals the number of contacts that you need in the year = _______


Equals the number of weekly contacts that you need to make (round up to the next higher number) = _______


Equals the number of daily contacts that you need to make (round up to the next higher number) = _______

The total transactions needed in the year _______

Multiplied by 2 x 2

Equals the number of listing/buyer agreements needed = _______

Multiplied by 3 x 3

Equals the number of appointments needed = _______


Equals the number of appointments needed per week (round up to the next higher number) = _______



What is your expected sales price and the amount of money you make per transaction?

What is the number of contacts per day? Break it all down.

The Numbers

Average sales price _____ $ per transaction _______

Transaction _____ Annual income _______

1st quarter 17.2% _____ ________+/-

2nd quarter 29.4% _____ _______-+/-

3rd quarter 30.1% _____ ________+/-

4th quarter 23.9% _____ _______+/-

TOTAL Daily Contacts _______________________________________

SOI Expires Upcoming events

SOI growth: __________ Business cards Other

*Thank you notes _____

* Thank you notes are not part of daily contacts



What is your expected sales price and the amount of money you make per transaction?

What is the number of contacts per day? Break it all down.

The Numbers

Average sales price $400,000 $ per transaction 5680

Transaction 15 Annual income 85,000

1st quarter 17.2% 3 14,600 +/-

2nd quarter 29.4% 4 25,000 -+/-

3rd quarter 30.1% 5 25,600 +/-

4th quarter 23.9% 4 29,400 +/-

TOTAL Daily Contacts 20

SOI 5 Expires 5 Upcoming events 10

SOI growth: 5 Business cards Other

*Thank you notes _____

* Thank you notes are not part of daily contacts



DAILY PLAN



A recent Natonal Association of REALTORS®’s study suggests that to be successful today, a

real estate professional must:

1. Develop a close personal relationship with both buyer and seller prospects, not just the

agent’s past clients.

2. Build a saleable “Book of Business.”

3. Possess “world class selling skills.”

1. Prospects

A. Develop multiple referral sources

B. Concentrate on Listings

Prospect Sources

Prospecting requires time, money, and energy. Concentrate on those prospects that require the

least of all three.

2. Build a saleable book of business that has value. Set up a database that enables you to mail

something to your SOI/BOB each month, call three times a year, and visit your customers and

clients at least once each year.

3. Schedule your week one week in advance to create balance in your life.

4. Develop top selling skills that allow you to control situations.

“Customer satisfaction is worthless. Customer loyalty is priceless.” Jeffrey Gitomer

d h

sources Platinum Book of Business

Book of Business

FSBO

Expired Listings

Open House

Just Listed/Just Sold

Opportunity Time

Farming (geographic)

RELATIONAL



Definitions:

1. Contact: Someone with whom you have

had a conversation about real estate. This can

be by phone or in person.

2. Lead: Someone who has a possible real

estate need.

3. Referred lead: Someone who has a

possible real estate need, and has been

referred to you. For example, your friend Joe

tells you that Mark, the manager of the local

grocery store, may be moving.

4. Prospect: Someone with a definite real

estate need, an admitted need. An example

would be a FSBO.

5. Referred prospect: Someone who has a

definite real estate need, and has been referred

to you. For example, you visit the grocery

store and introduce yourself to Mark, who

confirms that he is indeed moving prior to the

end of the year.

6. Validated referred prospect: This occurs

when Joe contacts Mark and advises Mark that

you are the best person to help him with his

real estate needs. Joe actually refers Mark to

you. He validates your expertise. Joe actually

contacts Mark and advises Mark that you will

be contacting him.

7. Book of Business (BOB/SOI): A

list of 250 people with whom you have

relationships.

8. Platinum Book of Business: A list of the

top people in your BOB/SOI. These people

are the source of multiple referrals. These are

people who know people, and have told you

that they would refer people to you. They

have also said that it is OK for you to stay in

touch with them. Your job is to find five new

Platinum BOB/SOI’s each week!

9. Client: Someone with whom you already

have a real estate agency relationship.



friends, family, acquaintances, past customers,

and business associates. These are people you

know, who know you. Each person within

your network also has their own SOI that can

be a source of leads for you.

Your SOI/BOB should be contacted monthly

so they will keep YOU in mind when hearing

about someone making a move. There are

several different ways you could keep in

contact with your SOI/BOB:

1. Phone call: Call to gather any leads that

they have for you.

2. Email: Get their email address and give

them updates on real estate in your market

and your personal successes.

3. e-Newsletter: CENTURY 21® New

Millennium offers you an amazing tool that

you are able to personalize or generalize,

depending upon who and how many clients

or prospects you want to send it to. It’s

called the e-Newsletter, and it is located at

www.21Online.com. There is also a training

session that will help you to develop the skills

you need to write successful e-Newsletters.

Use the free e-Newsletter from 21Online!

4. Mail: The best mail they can receive from

you is your “Just Listed”, “Just Sold”, or “Just

Participated” announcement cards so they

know you are doing business and will feel

comfortable in referring people to you.

5. Monthly Mailer Program: This is a great

tool! Have a monthly mailer post card go to

everyone on your SOI/BOB list automatically

for one year!

Who Should Be On Your SOI/BOB List?

When you’re finished with this list of who

YOU know, start all over with the people your

spouse/significant other knows, who your

children know, who your parents know, who

your siblings know, etc. Compiling a list of

250 names is an easy task when you put your

mind to it!

For Sale

VESTED IN YOU.Together We’re Better!



SOI/BOB sources include, but are not limited to the following:

1. Past buyers and sellers/past customers in a

former business

2. Relatives

3. Friends/neighbors (present and former)

Where else do you find prospects?

Who do you know…

4. From college or high school (classmates,

teachers, fraternity, sorority, alumni…)?

5. From your religious organization?

6. From civic activities (civic organizations,

charities)?

7. Because you rent or own a home?

8. From your organizational contacts (military,

professional, civic)?

9. From your business connections (former

employers/employees, customers, clients,

vendors, competitors)?

10. Who do you have lunch with?

11. Who is your best friend?

12. Who runs your day care center?

13. Who is your babysitter?

14. Who were the bride and groom at the last

wedding you attended?

15. Who sold your car?

16. Who repairs your TV?

17. Who sells you gas, tires, etc.?

18. Who repairs your car?

19. Who is your barber/beautician?

20. Who is your veterinarian?

21. Who is your pharmacist?

22. Who is your insurance agent?

23. Who is your plumber?

24. Who works at your bank?

25. Who was your maid of honor/best man?

26. Who is your attorney?

27. Who heads the local PTA/PTO?

28. Who sells you clothing?

29. Who sells you shoes?

30. Who sells you cosmetics?

31. Who sells you office supplies?

32. Who is your stockbroker?

33. Who is your Dentist? Doctor(s)?

34. Who heads your homeowner/condo

association?



YOU WANT TO WORK WITH VALIDATED/REFERRED PROSPECTS BECAUSE:

1. More warmth. They are more loyal

2. You will have a higher success rate

3. It saves time

4. There is less pressure

5. They are more likely to refer you to others

6. Given the above, there is a greater “net” to

you

Book of Business ingredients: 250 persons with whom you have

relationships.

1. It contains up-to-date information

2. It has a drip marketing system in place

3. There is a history of doing business with

the people in it, and the longer you have been

working with them, the better

Book of Business candidates:

1. They have the potential to refer people to

you

2. They have a connection with you

3. You have up-to-date contact information on

them

Platinum Book of Business candidates: A

source of multiple referrals, and they have

advised you that it is OK to stay in touch.

Candidates would include:

1. People who “talk” real estate all the time.

An example would be a loan officer.

2. People who have repetitive contact with the

public. An example would be a hair dresser.

3. People who build relationships of trust with

others. An example would be an attorney.

4. People with high visibility.

5. People who are willing to trade referrals.



Remember that the purpose of your call is to

get the referred lead!

Telephone techniques: You must call

a minimum of four hours each week. This

effort is over and above your face-to-face

contacts:

1. Call early. Nine AM on Saturday is best.

2. Call together. Call with another agent or

with your manager present to critique your

technique!

3. Do not pause between calls...just keep

calling

4. Do not stop until you get one!

5. Track your numbers.

6. If you get an answering service, leave the

following message: “Hi, this is ________ from

CENTURY 21® New Millennium. I have a

real estate matter that I would like to discuss

with you. If you are interested...give me a call.

After speaking with the contact, you must:

1. Place them in your SOI/BOB, or better yet,

your Platinum SOI/BOB.

2. Put them in a prospect follow up file.

3. Throw them out.

You are rotating people in your SOI/BOB to

keep the number of persons at 250.

Sphere of Influence/Book of Business—Your

SOI/BOB is comprised of your network of



35. Who is the principal at your children’s

school?

36. Who runs a local business?

37. Who is a business executive?

38. Who is your tennis partner?

39. Who are members of your computer club?

40. Who are members of your book club?

Country Club?

41. Who do you hunt with?

42. Who do you play cards with?

43. Who do you play golf with?

44. Who sells you sporting goods?

45. Who gives music lessons to your children?

46. Who is your child’s scout leader?

47. Who are your religious organization’s

youth leader and secretary?

48. Who is your children’s coach?

49. Who cleans your house? Carpets?

50. Who does your dry cleaning?

51. Who is your photographer?

52. What appraisers do you work with?

Lenders? Surveyors?

53. Who heads your election board?

54. Who do I know because of my

expenditures?

55. Who do I know because of my charitable

and public interests?

56. Who is my accountant/CPA?

57. Who does painting? Remodeling? Yard

work?

58. Who rents my investment property?

59. Who is my grocer?

60. Who manages the local theater?

61. Who walks the dog?

62. Who plays the organ/piano at my religious

organization?

63. Who sells you specialty advertising?

64. Who sells you your clothes?

65. Who sold you the fence surrounding your

house?

66. Who owns the hotel closest to you?

67. Who is your postal delivery carrier?

68. Who delivers the paper?

69. Who is your architect?

70. Who recently received a promotion?

71. Who sold you furniture?



WHAT IS “TELL 21”?

People are always interested in neighborhood real

estate activity, and that gives you the opportunity

to find prospects. We call it “Tell 21”.

When a home is being held open for an open

house, goes on the market, or is sold… do you

think that the neighbors are interested?

This means telling at least 21 neighbors - either

on the phone or in person - about the home that

we are marketing, or that has sold, or that will

be held open. You can either tell people about

your own listings, or other office listings, but

check with your Branch Manager first. Note: If

calling to make sure the numbers you wish to

call are not listed on the national Do Not Call

list! Although “Tell 21” often involves telling

neighbors in the immediate area about one of

your listings, don’t feel that you are limited to

only telling 21 people. Consider telling 30, 40,

50, or 100 people!

“TELL 21” PROSPECTING TOOLS

1. Business cards

2. Property flyers

3. Personal brochures

4. Company brochures

5. Your name badge

6. Open house invitations

7. Post cards, Just Listed/Just Sold

8. SOI mailing programs

9. Contact management database

10. Positive attitude + focus on results!

Take these steps to complete a successful “Tell 21”

• Determine the reason for your contact

• Select a contact method (e-mail, telephone,

door knocking)

• Clearly state your name

• State CENTURY 21® New Millennium and

the office area

• State a clear, specific purpose for your call or

visit

• Plan what you are going to say, but don’t

sound “rehearsed”

• Be positive, confident, and enthusiastic

• Wear your name badge and dress

professionally if making a visit

• Have something to give people (i.e. local real

estate information)

• Don’t wear dark glasses

• Don’t stand too close to the door



“Tell 21” Sample Scripts

Use the following scripts in this guide.

Modify them only after you can instinctively

speak the dialog in a comfortable and

knowing manner.

• Just Listed

• Price Reduction

• Just Sold

• Open House

“TELL 21” JUST LISTED SCRIPT

Sales Associate: Hello, Mrs. Foster, I’m

_________________ with CENTURY 21®

New Millennium. I’m calling to let you know

that we’ve just listed your neighbor’s house

at __________, and I was wondering if you

might know of someone who would want to

move into the neighborhood?

Prospect: I really can’t think of anyone.

What are they asking for their home?

Sales Associate: $625,000. Are you

familiar with it?

Prospect: Oh, yes. But I didn’t think it

would sell for that much!

Sales Associate: Do you know of

anyone who might be interested in seeing it?

Prospect: Not really, but I would be

interested in knowing how much it finally

sells for.

Sales Associate: When it does sell, I

will be happy to let you know how much it

went for. You seem interested in home prices.

Have you given any thought to selling?

Prospect: A little. We’ve been thinking

about getting a little smaller place closer

to work. We both work in DC, and the

commute is killing us. We don’t really need

this much house.

Sales Associate: What neighborhoods

are you considering?

Prospect: Well, nothing specific. But

with gas prices the way they are, it would be

good to be within walking distance of a Metro

station.



Sales Associate: Let me suggest this. I

can gather some information on properties

for sale around Metro stops, and I will also

complete a market evaluation of your current

home. This will give you the facts that you

need to make an informed decision. How

does that sound to you?

Prospect: Sounds fine, as long as we are

not committing to anything.

Sales Associate: There is no obligation.

First, I’d like to meet with you and Mr. Foster

to get a clearer idea about your needs and

to take a look at your home. Would you

have some time either tomorrow night or

Wednesday night for a brief visit?

Prospect: Tomorrow’s not good, but

Wednesday would be fine.

Sales Associate: How does 6:30 pm

sound?

Prospect: That will be fine. We’ll look

forward to it.

“TELL 21” JUST LISTED SCRIPT (short version)

Sales Associate: Hello, Mrs. Foster, I’m

_______________ with CENTURY 21® New

Millennium. Your neighbors at __________

have just listed their home with us, and I

thought you might know someone, friends or

relatives, who may have an interest in moving

into the neighborhood, that I should contact.

Prospect: How much are they asking?

Sales Associate: It’s listed at $625,000.

Would you be interested in knowing the area

values?

Prospect: Maybe.

Sales Associate: I can stop by tomorrow

to drop off some information related to

current market conditions and values. Would

4 pm be OK, or would after dinner, say 7 pm,

be better?

Prospect: No, but if you want to send me

some information in the mail, that is OK.

Sales Associate: May I keep in touch

with you if there are any changes in the

property status?

Prospect: No. I’ll call you if I am

interested

Sales Associate: OK, thanks for

speaking with me. Perhaps I can be of

assistance in the future.



“TELL 21” OPEN HOUSE SCRIPT

Sales Associate: Good morning, I’m

______________ with CENTURY 21® New

Millennium. The reason I stopped by is to

invite you to the open house reception that

I’m conducting tomorrow at ____________

between 1:00 and 4:00 pm.

Prospect: Thanks.

Sales Associate: I hope that you can

make it. It is a beautifully decorated home,

and, if you know of anyone who might be

thinking of moving to this area, it might be

“just right” for them. Is there anyone that you

can think of who might have an interest in

this neighborhood?

Prospect: No, I’m afraid I can’t think of

anyone.

Sales Associate: OK. Well, I hope to

see you tomorrow. Oh, by the way! Have

you given any thought about moving in the

foreseeable future?

Prospect: We’ve talked about it some.

Maybe next year.

Sales Associate: Here’s my card. If you

have any real estate questions, or know of

someone who does, please call me.

Prospect: Thanks, I’ll do that.

Sales Associate: Thank you, and have a

nice day!

“TELL 21” JUST SOLD SCRIPT

Sales Associate: Good morning! Is this

Mr. Jones? I’m __________ with CENTURY

21® New Millennium. I’m calling to let you

know that we have sold the home down the

street at _______________. We’ve generated

a lot of buyer interest in this area, and I was

wondering if you know of anyone in the

neighborhood who might be thinking of

moving in the near future?

Prospect: No, but can you tell me how

much they got for the house?

Sales Associate: Actually, I can’t disclose

the price until the sale closes, but I’ll be happy

to let you know the final sales price at that

time. Are you interested in knowing what

other homes have sold for recently?

Prospect: Well, I’m alone and getting

close to retirement. I am getting tired of all

the upkeep that goes along with this place.

I have been thinking of getting something

smaller, with less maintenance. So I guess

that I am interested in knowing what houses

are selling for now.

Sales Associate: I’d be happy to

help you if you like. I can give you some

preliminary information about neighborhood

home values, as well as information about

areas that you might be interested in moving

to. The best thing would be for us to get

together so that I can view your home and

also get a clearer idea about your needs. Does

your schedule allow you any time during the

week, or would during the weekend be more

convenient for you?



Prospect: I have Thursday off, if you can

make it then. Afternoon would be best.

Sales Associate: I could be available

around 3:00 pm this Thursday. How does

that sound?

Prospect: Fine. See you then.

ANATOMY OF A HOME

Common items of concern found from a

home inspection.

Exterior

Fascia Boards

Soffits

Flashing

Gutters/Downspouts

Wet rot

Dry rot

Electrical Panel

Fuse

Circuit breakers

Junction box

Reverse polarity

Not grounded

GFI

Heat/Cooling

Electric

Natural gas

Propane gas

Oil

Solar

Forced air

Baseboard

Radiator/convector

Boiler

Furnace

Heat pump

Wood Destroying Insects

Environmental and Structural Concerns to learn more about:

Expansive soils, Radon gas, Mold spores,

FRT, Polybutylene pipes, Stucco, Aluminum

wiring, Satellite dishes and DSL lines.

For further study on house facts, visit 21online.

11NEW AGENT TRAINING MANUAL - FULL IMMERSION in REAL ESTATE

The Power of MRISMarket Trends

Market Statistics

Community information

Know your competition

Prospecting tool

Absentee owner list

Network with the local agent community


THE POWER OF MRIS, OPEN HOUSE, BEHAVIOR PATTERNS



Open House Training



1. The selection of a house is important.

Accept an open house only if you think you

will get traffic, either from price or location.

2. Check with your Office Manager about ad

deadlines and office procedures.

3. Write an ad for your open house. Include

the address, date/time, and price. Highlight

the best features of the house.

4. Prepare an open house informational

flyer. Ask your loan officer from 1st County

Mortgage Services to work up a financial

scenario for this home. Get familiar with it!

5. Secure your directional signs, sign rider,

and balloons. Every county and subdivision

has different rules concerning the posting of

signs and balloons. Check first, so you don’t

generate neighborhood “bad will.”

6. Place the Open Sunday rider on the post

several days prior to your open house.

7. Invite neighbors to your open house. Ask

them if they know anyone who would be

interested in living in the area or would they

like to sell their home?

8. Plan on going to your open house 1/2 hour

before the start time, and remain 1/2 hour

later.

9. Make sure the owner leaves the house

during the open house...by politely asking

them to engage in some type of off-site activity

(shopping, see a movie, etc.)

10. Dress for business.

11. Be positive and enthusiastic. Selling is

95% positive attitude!

12. Place your signs and balloons. Make sure

that one is directly in front of the house and at

the nearest intersection.

13. Your security is very important. Always

keep your cell phone on and within easy

reach. Note the location of all doors in the

home, and decide if there are any which

should remain locked. Observe everyone who

enters and exits the house. Plan an escape

route, just to be safe.

14. Place flyers, business cards, and the sign-

in sheet on a table in a high traffic area.

15.Make sure all lights are on and that the

house smells “fresh”.

16.Make sure all valuables are hidden. This

includes medications

17.Adjust the temperature to a comfortable

level.

18.Memorize information about the house (lot

size, taxes, closest shopping, etc.)

19.Do not offer suggestions about how to

improve the house (i.e. “I know we need a

new kitchen.”) Keep your negative opinions

to yourself.

20.Answer all objections, and if you don’t

know the answer, don’t be afraid to say “Let

me do some research and I’ll call you with the

answer.”



21.Always walk through the house before you

leave. Turn off all music and lights. Make

sure the home looks nice before you leave.

22. Leave an open house summary form for

the sellers, and let them know you will call

them later in the day with more details about

what took place.

Buyer Follow-up Contacts

1. Call buyers listed on your open house sheet

the next day and thank them for attending.

2. Ask them what they thought of the house,

and what price they would pay for it.

3. If you didn’t obtain their e-mail address, ask

them for it now.

4. Urge them to call 1st County Mortgage to

become pre-qualified.

5. Ask them if they could use any relocation

assistance.

Ask them if they know of anyone else who

might be interested in the house that you held

open.

OPEN HOUSE GUIDELINES

Preparing for an open house is the most

important step in ensuring that you have a

successful event. Follow the steps below:

Goal: Sell the home or gain referrals to help build your business!

• Make 50 contacts to make neighbors

aware of the open house and generate

activity. (Thursday-Friday)

• Print 25 copies of the short listing for the

home to hand out to open house guests.

• Update your lock box key.

• Bring plenty of your business cards.

(Friday)

• Have 1st County Mortgage put together a

current loan rate sheet specifically for your

home. (Thursday)

• Strategically place CENTURY 21® New

Millennium signs/balloons throughout the

neighborhood

• Make follow-up calls to all guests and

write “Thank You” cards within 24 hours

of the open house. (Monday)

• Preview 4-5 other homes in the area for

“spin-off” houses. (IMPORTANT)

• Arrive 1/2 hours before, and leave 1/2

hour after the open house.

Materials

Open House Registry book/pens

Lock Box Card/key

Business Cards

Short Listing sheets

Loan rate sheet

Refreshments/snacks/napkins/cups

Signs/posts/hardware/balloons

Music/candles



OPEN HOUSE CHECKLIST

Place directional arrows at all major

intersections leading to the home

Park in front of home, but not in the driveway

Remove yard debris/litter, especially any near

the walkway to the front door

Ensure the entry area is clutter free

Place guest registration book and pen in a

prominent location

Place property flyer/brochure copies in a

prominent location

Place personal brochure and business cards in

a prominent location

Turn on every light in the house

Open all blinds, drapes, window coverings

etc. to let light in

Open windows and sliding doors if

appropriate

Close all commode lids

If the home has organized closets, open them

for viewing

Ensure all hinged and sliding doors open

easily

Play easy listening music from the same radio

station in as many rooms as possible

Ensure that no valuables are left in plain sight

or are unsecured

Make sure the kitchen is spotless

Set up your briefcase and business materials in

a prominent location

Place a supply of area maps with your

business information in a prominent location

Provide a list of other CENTURY 21®

New Millennium homes for sale in the

neighborhood

Provide blank sales contracts and addenda

Rehearse a verbal presentation of the home

(without referring to notes)

Place refreshments, if any, in the kitchen or

dining area

Take notes to help you remember attendees

after they depart

Leave a note for the sellers and call them later

in the day with an update

Write personal notes to attendees and

neighbors



OPEN HOUSE FEEDBACK

Seller Name: ________________________________________________________________

Property Address: ____________________________________________________________

Agent: _____________________________________ Phone: ________________________

Date Open House Held: _______________________________________________________

OPEN HOUSE RESULTS

Total Showings: ______________ # Agents: ______________ # Buyers: _______________

AGENT/BUYER COMMENTS

Price: ______________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Property Condition: _________________________________________________________

__________________________________________________________________________

Location: __________________________________________________________________

__________________________________________________________________________

Suggestions: ________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________



OPEN HOUSE PHONE SCRIPT

1. Good Morning! This is ______________________ with CENTURY 21® New Millennium.

2. I’m calling to let you know that I’ll be conducting an open house at your neighbor’s home at

____________________ this _______________ from _______________ until ___________.

3. I wanted to invite you to come by and visit, as well as see who you know that might like to

live in the neighborhood.

4. Tell me, have you ever thought about moving? Really! No kidding!

5. If you were to move, where would you go? Great!

6. And when would you like to be there?

7. I’m sure you realize that it will take about

___________ months to get your home sold

and settled. If you’d like to be living in your

new home in _______________, we’d better

set up an appointment so that I can help you

get there!



OPEN HOUSE FEEDBACK FORM

Property: Poor Average Excellent

Directions from newspaper and sign placement

Hosting agent’s attitude

Hosting agent’s knowledge about the property

Hosting agent’s knowledge about surrounding properties

MRIS print-out accuracy

Access to the property: appointment/lockbox/ease of entry

Availability of brochure and other property information

Brochure

Home staging, lighting, ambiance, etc.

Personal safety of hosting agent

Price

Property: Poor Average Excellent

Directions from newspaper and sign placement

Hosting agent’s attitude

Hosting agent’s knowledge about the property

Hosting agent’s knowledge about surrounding properties

MRIS print-out accuracy

Access to the property: appointment/lockbox/ease of entry

Availability of brochure and other property information

Brochure

Home staging, lighting, ambiance, etc.

Personal safety of hosting agent

Price



Behavior Patterns



Behavioral Patterns Questionnaire

Name: ________________________________________________ Date: _______________

Please answer this questionnaire according to how you usually interact with others. Your

answers should reflect how you are most of the time, in most situations, with most people.

Read each set of statements. Circle the letter on each that best indicates your behavior in that

situation.

1S Prefers to work independently or dictate the relationship

O Prefers to work with others or be included in relationships

2S Easy to get to know personally in business or unfamiliar social environments

O More difficult to get to know personally in business or unfamiliar social environments

3S Naturally approaches risk or change more slowly or cautiously

O Naturally approaches risk or change more quickly or spontaneously

4S Shows less enthusiasm than the average person

O Shows more enthusiasm than the average person

5S Goes with own agenda

O Goes with the flow

6I Infrequent contributor to group conversations

D Frequent contributor to group conversations

7D Tends to express own views more readily

I Tends to reserve the expression of own opinions

8S Focuses conversation on issues and tasks at hand; stays on subject

O Conversation reflects personal like experiences; may stray from “business at hand”

9D Tends to naturally decide more quickly or spontaneously

I Tends to naturally decide more slowly or deliberately

10O Flexible about how own time is used by others

S Disciplined about how own time is used by others

11D More naturally assertive behavior

I More naturally reserved behavior

12S Makes most decisions based on goals, facts, or evidence

O Makes most decisions based on feelings, experiences, or relationships

13I Infrequent use of gestures and voice intonation to emphasize points

D Frequently uses gestures and voice intonation to emphasize points



14O Greater natural tendency toward animated facial expressions or observable

body responses during speaking and listening

S More limited facial expressions or observable body responses during speaking and listening

15D More likely to make emphatic statements like, “This is so…” “I feel…?”

I More likely to make qualified statements like, “According to my sources…”

16I Tends to adhere to the Letter of the Law

D Tends to interpret the Spirit of the Law

17S Tends to keep important personal feelings private; tends to share only when

necessaryO Tends to be more willing to show or share personal feelings more freely

18D More likely to introduce self to others at social gatherings

I More likely to wait for others to introduce themselves at social gatherings

Total number of circled S’s ______ O’s _______ I’s _______ D’s________

I + O = _______________

O + D = _______________

I + S = _______________

S + D = _______________

Total = _______________ (must equal 36!)



Behavioral Patterns Analysis

CONTROLLERPros = high achiever, natural leader

Cons = rude, blunt, bossy

AT THEIR BEST Awesome

AT THEIR WORST Insensitive

BODY LANGUAGE Self-confident, impatient, confrontational

WORDS To the point

APPEARANCE Professional, expensive, well put together, designer labels

OPERATE FROM Planner, focus on goals, tasks, they are risk takers

THEY LIKEQuality, tasteful things, to deal with the decision maker, people who save them time. They thrive on conflict and change. Of all personalities, they like change the most

THEY DISLIKE People who waste their time and don’t stick to business, excuses, being wrong and evasive

THEY FEAR Being seen as soft

HIGH NEEDS Control, power, success, winning

LISTEN TO THEM Tell him/her to come to my office now. What’s the bottom line? You handle it, but keep me in the loop.

PROFESSIONS Control related: football coaches, Army generals, dictators

HANDSHAKE One firm pump, full handed




PROMOTERPros = fun loving, charming, loves people

Cons = scattered, always overbooked, speaks before they think

AT THEIR BEST Highly intuitive

AT THEIR WORST Insensitive

BODY LANGUAGE lots of movement, likes to talk with hands

WORDS lots of them, and very optimistic

APPEARANCE wants to be noticed, colorful, flamboyant

OPERATE FROMheart, highest risk taker, relationship base, results through people, makes snap decisions because they operate from an emotional base

THEY LIKE flexibility, flexibility with time, procrastination, latest fads, to interrupt, creativity, brainstorming

THEY DISLIKE boredom, tedium, details, routine (no implementers)

THEY FEAR not being liked

HIGH NEEDS admiration, attention, recognition and approval

LISTEN TO THEMLet me entertain you. Let’s have a party. I feel this is the way to go. Tell me what you think. Forget the details, just give me a quick summary. Let’s try it a different way, just for the fun of it.

PROFESSIONS sales, people related industries, creative, entertainers

HANDSHAKE vigorous multiple pumping, firm full hand, HUG




ANALYTICAL

Pros = meticulous, accurate, dependable, dry humor

Cons = too critical, picky, over-analyzes

AT THEIR BEST makes few mistakes

AT THEIR WORST takes too long to make a decision

BODY LANGUAGE very little, guarded, closed down

WORDS few, a lot of silent pauses

APPEARANCE neat, tidy, practical, formal, basic, little style

OPERATE FROM caution, logic, tasks over people

THEY LIKE working alone, neatness, promptness, accuracy

THEY DISLIKEmistakes - yours or theirs, snap decision, hype, surprises, flexibility, huggers and touchers, being embarrassed, being disorganized, illogical people

THEY FEAR irrationality

HIGH NEEDS knowledge, predictability, practicality, functionality, value, independence, accuracy, organization

LISTEN TO THEMI need more facts to make a preliminary decision. I don’t expect any surprises. Precisely what do you mean? Can that method be justified?

PROFESSIONS architects, engineers, comptrollers, CPA’s, data related

HANDSHAKE cuts you off at the knuckles




AMIABLE

Pros = helpful, calm, discreet, friendly, team player

Cons = too sensitive, martyr

AT THEIR BEST caring and sensitive

AT THEIR WORST very timid

BODY LANGUAGE easy going, modest

WORDS few, but when they do speak, nothing offensive

APPEARANCE dress in comfortable, informal, loose clothing, muted less showy styles and colors

OPERATE FROM relationships, emotion, from a position of hesitancy, lowest risk taker, hardest to get to change

THEY LIKEto please people, keep harmony, to be listened to, to talk about their family; they like to be a long-term member of an ongoing team that has stability and predictability

THEY DISLIKE a sales pitch, having to tell someone “no”, making decisions, being rushed into anything

THEY FEAR change

HIGH NEEDSthey must be liked, they must be trusted, they need tranquility and stability, they need reassurance, productive routine

LISTEN TO THEM Let me help you. I’m not sure yet. I really enjoyed working with you. I’d like to help you any way that I can.

PROFESSIONS customer service related industries, social work, teachers

HANDSHAKE light, soft, tentative, unsure



Open

Guarded

AmiableRelater

PromoterSocializer

AnalyticalThinker

ControllerDirector



Do you have a Niche? Find one.

Who are you?

What are your interests?

What are your strengths?

Who and what are you connected with? Family, friends, work, hobbies…?

• Single / Married / Divorced/ Children / Pets

• Social Network/ Military/ Academic groups

• Bilingual / Embassy / International Connections

• Athletics / Country Clubs/ Church Groups

• PTA/ Political Organization/ Charity Groups/ Past Careers

• Social Activities/Associations

Create a referral worthy businessThe GOAL…

Your SOI should be ambassadors for your business.

1. Niche

2. Geographic/Social/Occupational Farming

3. Social Media

4. FACEBOOK/ personal or FAN page

5. LinkedIn

6. Open houses

7. Networking

A. Business community

B. Agent community

8. Community involvement

YOUR REPUTATIUON IS EVERYTHING.



Sample Flyer



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© Copyright 2013 CENTURY 21®

CARTUSMASTERS CUP

WINNER

You are invited!



Sample Flyer

VAOrchard Name: Carter Mountain OrchardWebsite: http://www.cartermountainorchard.com/Address: 1435 Carters Mountain Trail, Charlottesville, VA 22901, Albemarle County Phone: (434) 977-1833

Orchard Name: Muskrat Haven FarmAdress: 20 Cedarbreak Lane, Amissville, Culpeper County, VA Phone: (540) 937-5892

Orchard Name: Stribling OrchardWebsite: www.striblingorchard.comAddress: 11587 Poverty Hollow Lane, Markham, Virginia 22643Phone: (540) 364-3040

Orchard Name: Hollin FarmsWebsite: www.hollinfarms.comAddress: 410 Snowden Road, Delaplane, VA 20144Phone: (540) 592-3574

MDOrchard Name: Forrest Hall Website: http://www.forresthallfarm.com/Address: 39136 Avie Lane, Mechanicsville, Maryland 20659Phone: (301) 884-3086

Orchard Name: Queen Anne FarmAddress: 18102 Central Ave Mitchellville, MD 20716 Prince George’s County

Orchard Name: Papa John’s Farm Address: 8065 New Cut Rd Glen Burnie, MD 21061Phone: (410) 969-8810

Orchard Name: Harvest Run At Piney Orchard Address: 2402 Autumn Harvest Ct,Odenton,MD21113Phone: (410) 672-6513

Orchard Name: Natures Trail At Piney OrchardAddress: 8702 Natures Trail Ct,Odenton,MD21113Phone: (410) 695-0727

MDOrchard Name: Forrest Hall

LOCAL ORCHARDSNEAR YOU:



Sample Flyer

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CENTURY 21 NEW MILLENNIUM CAN HELPWe know the experts in every market.

DO YOU KNOW SOMEONE WHO IS MOVING?Across Town... Across Country... Anywhere Around the World ...

WWW.C21NM.COM

FRIENDS AND FAMILY PROGRAM

#1 CENTURY 21® FIRMIN THE WORLD

.CCCCCCCCCCCCCCCCCCCCCCCCCCOOOOOOOOOOOOOOOOOOOOMMMMMMMMMMMMMMMMMM

USMA ’77Jeff Hetherington

Branch [email protected]

(703) 818-0111

USMA ’85Todd Hetherington CEO/[email protected] (703) 922-4010

© Copyright 2013 CENTURY 21® New Millennium. Each Office Is Independently Owned And Operated. Equal Housing Opportunity. Equal Housing Lender.

16 Locations in the DC Metro Area



Sample Flyer

CARTUSMASTERS CUP

WINNER

© Copyright 2013 CENTURY 21 New Millennium. Each Office Is Independently Owned And Operated. Equal Housing Opportunity. Equal Housing Lender.d Operated Equal Housing O

Janet Jacobs Chris & IQ Team April M English240-687-0595 Chris Thomas 410-610-0118 410-562-2632 (cell)

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Conveniently located in the Herring Bay Plaza5720 Deale-Churchton Rd, Unit D, Deale, MD 20751.

AnnouncingNew Office in Deale!

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*Cash bonus offer limited in some states. Bonus amount is based on sales price of home sold or purchased and cannot exceed $6,000 per transaction. A bonus is not available in Alaska, Louisiana, Mississippi, and Oklahoma. In Kansas and Tennessee, a gift card will be issued that is accepted at

transaction.MoversAdvantage

Ask us about your eligibility for cash back* through

the USAA MoversAdvantage® program.

Get up to $6,000 For more information contact us at

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Sample Flyer

55+

© Copyright 2013 CENTURY 21 New Millennium. Each Office Is Independently Owned And Operated. Equal Housing OpporEqutO tedOper tunity. Equal Housing Lender.

WELCOM

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EME

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Presented by CENTURY 21®New Millennium and Compass Pointe Homes!

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Sample Flyer

During this time of Thanksgiving, I would like to thank you and your family for your business and referrals. As a small token of appreciation I would like to offer you a FREE holiday pie. Here’s how it works...

Call or email me by November 5th to let me know if your family would prefer a pumpkin or apple pie. I will let you know when to pick it up at our office!

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CARTUSMASTERS CUP

WINNER


Buyer’s Process, Showing The Property


BUYER’S PROCESS


BUYER’S PROCESS

CONSULTATION QUESTIONS BY CATEGORY

Buyer’s Motivation

Are you working with an agent?

Do you have a signed agreement?

Why are you buying?

Why did you decide to move now?

If we found the right home for you today, is

there anything that would prevent you from

buying it?

Home Buying Experience

What experience have you had buying or

selling homes in the past?

When is the last time that you bought a

house?

Are you working with another broker right

now?

Time Considerations

How soon do you need to move?

How much time do you have to find a

home?

How long have you been looking for a

home?

Lifestyle

How many people are there in your

household?

What family activities will be important to

you in your new home?

What are your school requirements?

Is transportation to and from work an issue

for you?

Emotional Concerns

How do you feel about this move?

How does your family feel about moving?

Who will have the most difficulty adjusting?

What are your children’s expectations of

their new home?

Experience with Current Home

Where do you live now?

How long have you lived there?

What features of the home have you enjoyed

the most?

Is there anything you don’t like about your

current home that you want to avoid in your

new one?

What have you liked about living in that

neighborhood?

Are you working with a broker to sell your

current home?

May I assist you in marketing your current

home?


BUYER’S PROCESS

Features the Buyers are Looking for in a New Home

What are you looking for in a home?

Are there any of these features you would do

without if you could have the others?

Have you seen anything so far that matches

what you want?

Community Considerations

What is important to you in a neighborhood?

What areas are you considering?

What do you like most about those areas?

Is there anything you don’t like about those

areas?

Financial Considerations

What price range do you have in mind?

How did you decide upon that amount?

How are you planning to finance your new

home?

What monthly payment would you be

comfortable with?

Probing and Problem Stacking Questions

1. Where are you moving?

2. What is the reason for the move?

3. How did you happen to pick the last agent?

4. Who else are you considering?

5. When do you plan on moving?

6. What would happen if your home doesn’t

sell?

7. What would that do to your plans?

8. What would be the worst case scenario if

you…?

9. What would the hardships be on your family?

10. What are you basing that on?

11. What is your greatest fear?

12. Why did you choose your home (what are

your home’s strengths)?

13. Does your home have any potential

drawbacks?

14. What is the most important thing that needs

to be accomplished regarding the sale of your

home?

15. What kind of communication do you prefer?

16. What would it take for you to list your home

with me today?


BUYER’S PROCESS

FINANCIAL ANALYSIS Timing analysis used for buyers requires backward planning from the anticipated settlement

date. Allow plenty of time for the process.

Financial analysis for buyers is showing the financial value of buying now and not waiting.

1. Housing prices low

2. The savings of buying now.

Example:

» Interest rate 30 year fixed 5.5% = 568 per 100 k



» Interest rate 30 year fixed 8.5%= 769 per 100k

1% rate change (if all points were the same) approximately= $64-70 per 100k.

A loan for a 400k house has a savings of is $ 256 per month ( 4 X 64).

If the payment needs to remain the same then the buyer will lose about 10% less purchasing

power.

If rates go up by 2% that’s over $512 per month, 6,144 per year $30,720 after 5 years .

Sellers: Costs of holding two mortgage payments for 4 months, vs. selling it now…


BUYER’S PROCESS

REAL ESTATE TIMING ANALYSIS

Today’s Date:

Days Date

Wait Time

Home Search

Adjusted Home Search Time

Processing Time

Total Days / Estimated Move Date


BUYER’S PROCESS

BUYER SERVICES

Before you start looking for a new home, isting what you want and don’t want in your new

house will help you and your REALTOR® to fi nd exactly what you want. Rank order the

features listed below to help you defi ne what is most important regarding your new home:

1 = Absolutely essential2 = Would prefer but could compromise3 = Not essential

House Features 1 2 3

2 Bedrooms

3 Bedrooms

4 Bedrooms

Eat-In Kitchen

Separate Dining Room

Family Room

Energy-Efficient Features

Finished Basement

Garage or Off Street Parking

Attic

Workshop Area

Deck and/or Patio

Neighborhoods and or schools

Commute time/ distance from work

Time frame for move


BUYER’S PROCESS

HESITATIONS/OBJECTIONS

GUIDELINES FOR HANDLING OBJECTIONS OR HESITATIONS

The objective in prospecting is to get the

appointment. We don’t handle objections

over the phone. It is impossible to get an

appointment signed over the phone. The

challenge is to provide enough information to

the prospect to address their concerns while

closing for the appointment. If we “argue”

or attempt to handle the objection, the caller

wins and you lose.

The prospect is not motivated to meet with you until you give them a reason to do so. Probe/Problem Stacking/Open Ended Questions use Hot Buttons.

Effective language:• “You probably have a good reason for that.

Do you mind if I ask what it is?”

• “I can appreciate that, tell me more.”

• “I agree.”

• “I understand.”

• “That is a valid concern.”

• “That is true in some cases.”

• “I have had that experience with other

sellers.”

CLOSING BUYERS

Purchasing property is a major decision for

most people, and can be difficult to make

because buyers are often afraid of making

mistakes. In order not to make mistakes, they

frequently avoid making the decision to buy at

all, which is not always in their best interests.

The following are examples of different types

of buyer situations with the appropriate

closing technique:

The Assumptive Close is the easiest and

most effective close to use. Example: “I put

a sample of our contract in your homebuyer

folder so you will be familiar with it when we

write an offer on your new home.”

The Alternate of Choice close. Example:

“I can show you the home at two, or would

three be better?”

The Tie-Down close. Example: “The

bedrooms are conveniently arranged, aren’t

they?”


BUYER’S PROCESS

PROSPECTING ‘TIE DOWN’ WORDS

1. Aren’t they?

2. Aren’t you?

3. Can’t you?

4. Couldn’t it?

5. Doesn’t it?

6. Don’t you agree?

7. Don’t we?

8. Shouldn’t it?

9. Wouldn’t it?

10. Couldn’t you?

11. Haven’t they?

12. Hasn’t he?

13. Hasn’t she?

14. Isn’t it?

15. Isn’t that right?

16. Didn’t it?

17. Wasn’t it?

18. Won’t they?

19. Won’t you?

20. Weren’t they?

The Active Question close.

Example:“Where would you put the sofa?”

The Feel, Felt, Found closing technique

uses third party experiences to help buyers

resolve the dilemma of indecision:

Example:Buyer: “I just don’t know what to do!”

Agent: “I know how you feel. Others have felt

the same way. They found that…”

(explain the experience and close).

The Ben Franklin close.

Example:Buyer: “I can’t decide which property I like

better.”

Agent: “Let’s try and see if this makes it easier

for you. Let’s take a piece of paper and draw

a line down the middle. On one side of the

paper, list the things you like about the first

house, and on the other side, list the things

you like about the second house. It looks like

the second house is the winner, doesn’t it?”


BUYER’S PROCESS

BUYING SIGNALS

Buying Signals can be a good measure of the Buyer’s interest in the property.

Lingering...

Wanting a Friend or Relative to see the property

Specific Concerns

Asking Each Other Questions

Touch & Feel

Silence

“Placing” Their Furniture

Minor Concerns


BUYER’S PROCESS

Showing The Property


BUYER’S PROCESS

SHOWING THE PROPERTY

1. Be prepared.

2. Plan your tour.

3. Take nothing in the property except a copy

of the listing.

4. Be sure the seller is out of the home while

you are showing it.

5. Show the buyer what he/she wants...

location, bedrooms, baths, etc.

6. Never show a property without an

appointment, or checking with the listing

office to see if it is vacant.

7. Always call the occupants if you cannot

show a property, or call and let them know

that you are running late.

8. Ask questions of the buyer while you are in

the car together.

9. Do not over-sell the house before showing

it. Do not over-sell while showing it either.

10. Show a maximum of 3 - 6 houses. You

may need to show more if you are working

with an “out of town” buyer.

11. Select a good route to the property. The

buyer is buying amenities as well as the house,

so show him/her parks, shopping locations,

country clubs, pools, etc.

12. Never park in the driveway.

13. Before entering the house, say to the

buyers, “Let’s look at the home as if it were

vacant.”

14. Always knock or ring the doorbell before

using the lockbox.

15. After opening the front door, call out “Is

there anyone home? If there is, introduce

yourself as the REALTOR®.

16. Always leave your business card.

17. If your buyers are accompanied by their

children, make sure they keep them under

control at all times.

18. Keep the buyers together when showing

the house.

19. Show the buyers their “hot buttons” (i.e.

huge kitchen) first and last, and then follow

the natural flow of the house.

20. Never show a garage or unfinished

basement last.

21. Never enter a room first.

22. Keep your position close to the room exit.

Don’t get cornered.

23. Ask the buyers what they like and don’t

like about each property.

24. Take one car...yours.

25. Never say “This is the kitchen.”


BUYER’S PROCESS

26. After showing the home, ask your buyers

“If this home is even a possibility for you, I

think we should go through it again. Don’t

you agree?”

27. At the conclusion of each showing, ask

three questions:

1. Does this home appeal to you?

2. Does this home meet your needs?

3. Do you want to buy it?

28. Close the sale. Take the buyer back to

your office and write an offer!

29. Always (as in always) be enthusiastic!

Leave the following information on a seller’s

answering machine if no one is home:

1. Your name

2. Your company’s name

3. Date and time you will show the home

4. Your work and cell phone numbers

Ask your sellers to change the message on

their answering machine to prompt agents to

leave the proper information!

What to keep in a Car

1. Flashlight

2. Pens, paper and post it notes

3. Tape/ laser measure

4. Breath freshener

5. Digital camera

6. Outlet tester

7. Small first aide kit

8. Lint brush for clothes

9. Toolbox

10. Light bulbs

Tool Box

1. Hammer and screw driver

2. Duct tape

3. Water

4. WD-40

5. Scissors

6. Rope

7. Lock deicer

8. Bungee cords

9. Clips – magnetized

10. Key markers

11. Garbage bags

12. Air freshener

13. Zip ties

14. Nine volt batteries

15. Bendable wire

16. Sewing kit


BUYER’S PROCESS


Contract

Contract Terms & Red FlagsNew ConstructionOffer to Purchase


CONTRACT

Class ObjectiveTo become familiar with the most commonly

used Sales Contract and Addenda forms and

be able to complete them accurately.

Prior to writing an offer:You would have explained to the buyer:

• The home-buying process

And, the buyer would have read and signed:

• Useful Information about Real Estate

Transactions

• Buyer Agency Representation Agreement

and /or

• Disclosure of Brokerage Relationships

PreparationIn order to complete an offer you need:

• Public tax record

• MRIS record

• Names of how buyers want to take title

to the property

• Lender loan qualification letter

• Info from lender - type of loan, years,

rate

• What date they want to close

• Earnest money amount and check or

money order on that amount

• Will there be a power of attorney

involved in writing the offer?

• Street address to contact buyers (no PO

Box)

What is a Sales Contract?

• It is binding legal agreement between a

buyer and seller that outlines what has

to happen for the property to formally

change hands from seller to a buyer.

• All of these elements must be present to

form a contract: competent parties, an

offer and acceptance, consideration, and

a legal object.


CONTRACT


CONTRACT

SALES CONTRACT TERMS

Home of Choice (HOC):

When used in conjunction with a

contingency clause, provides the seller with

a way to void their contract if they don’t fi nd

a suitable follow-on home within a specifi ed

time period.

Kick-Out Clause:Specifi es a time period within which a

purchaser must satisfy a contingency,

otherwise their sales contract may be “kicked

out” in favor of a better one.

Waive a Contingency:To voluntarily relinquish the right to require

the other party to satisfy a condition which

might otherwise void the sales contract or

make it non-binding.

Rent-Back Agreement:Allows the seller to remain in the home

after settlement for a specifi ed time period

(normally 60 days or less), based upon

terms agreeable to both parties. The seller

usually pays the purchaser a sum equal to

the purchaser’s per diem PITIO. If the seller

can’t vacate the property by the specifi ed

date, the occupancy charge usually doubles

and other fees and penalties may apply.

Pre-Occupancy Agreement:Allows the purchaser to occupy the home

prior to settlement for a specifi ed time period

based upon terms agreeable to both parties.

The purchaser normally pays a security

deposit and a per-diem occupancy fee. The

fi nal walk-through is normally completed

prior to the purchaser occupying the home.

Limited Access Agreement:Allows the purchaser to make limited,

specifi c redecorations or place furniture

in the property, without occupying the

premises, with permission from the seller.

Home of Sale Clause:Normally specifi es that the contract is

contingent for a specifi c time period after

ratifi cation because the purchaser must

sell their existing home. Usually used in

conjunction with a Kick-Out provision.


CONTRACT

Third Party Approval:Normally specifi es that the contract is


ratifi cation because a third party (i.e.

relocation company) has to approve the sale.

Coinciding Settlements:Normally specifi es that the contract is


ratifi cation based upon the settlement of the

purchaser’s prior home (or other property).

All contingency clauses must be written so they specify the 5 “W’s”: Who, What, Where, When, Why. It is critical that a beginning and ending period be specified, in addition to detailing what happens if that period should be exceeded.

Example:“Contingent on the Seller Purchasing Another

Home. This contract is contingent until 9

p.m., 7 days after the Date of Ratifi cation

upon the Seller Delivering a notice to the

Purchaser that: (1) the Seller has entered into

a ratifi ed contract to purchase another home;

OR (2) the Seller removes this Contingency.”

CONTINGENCIES/CLAUSES ADDENDUM

1. CONTINGENCIES/CLAUSES

ADDENDUM TO SALES CONTRACT”,

contains a variety of “boiler plate” clauses

which may be used to modify the sales

contract. Many of these clauses address

terms defi ned on Page 1 of this FIRE

document.

2. It is vitally important that you read and

fully comprehend every clause contained

in this addendum. All of them contain

terms and conditions which modify the

contract. In every case, if a condition isn’t

met pertaining to a clause, the contract will

become void and one party or the other may

be in default, thereby subjecting that party to

potential legal liability.

3. Do Not modify the boiler plate clauses by

inserting your own verbiage! These clauses

were drafted by committee and reviewed

by attorneys to insure they were legally

suffi cient with regard to modifi cation of the

sales contract.

4. Paragraph H, “GENERAL”, provides you

with space to write your own contingency

clause. You should only use this paragraph/

clause if none of the other clauses contained

in Form 1226 apply to the contingency you

wish to establish. If you do write your own

clause, make sure it addresses the

5 “W’s”: Who, What, Where, When, and Why. *As an added precaution, have

your Managing Broker review and approve

the clause before you present it to your

purchaser for initials and signature.


CONTRACT

CONTRACT WRITING CHECKLISTAssemble the following documents and

information before writing a contract:

1. LENDER LETTER:Obtain either a Pre-approval, Approval, or

Commitment Letter from the purchaser’s

lender of choice. Note: In a seller’s market

where multiple offers are presented,

contracts presented with a lender’s letter

have a greater chance of being accepted than

those presented without one. The letter

should specify the loan amount for which

the purchaser qualifi es, as well as the interest

rate. You should also fi nd out how soon the

lender can complete the loan package so the

purchaser is prepared to attend settlement.

2. EARNEST MONEY DEPOSIT (EMD):Obtain the purchaser’s personal check or

certifi ed funds, with the contract property

address clearly marked on the check. If

the purchaser doesn’t have their checkbook

or certifi ed funds available, a promissory

note must be written as a substitute for

actual cash. This weakens the purchaser’s

leverage with regard to contract acceptance

and negotiation, and should only be used

as a last resort. The amount is arbitrary, but

generally speaking, the higher the amount,

the more “earnest” the purchaser is in buying

the home. In a buyer’s market, 1% of the

sales price might be enough earnest money;

in a seller’s market, 3% or more might be

required.

3. POWER OF ATTORNEY (POA): Determine whether a POA will be needed

at settlement. If one is required, make sure

the format you use is acceptable to both the

lender and the title company.

4. HOME INSPECTION:

If your client doesn’t have a preferred home

inspection company/inspector, provide

him with a list of recommended companies

from which he can choose. Some home

inspection companies can also conduct

Radon inspections as well, if not, a separate

Radon inspection company will have to be

contacted. Once the company is selected,

immediately schedule the appropriate

inspections so that any related contingencies

can be satisfi ed by the specifi ed time limit.

5. LISTING AGENT:

Contact the listing agent regarding

clarifi cation about any items which do/do

not convey, settlement date and time, and

whether a post occupancy agreement is

needed.

6. CLOSING FUNDS:If the purchaser needs proceeds from the

sale of another home in order to close on the

home you helped them purchase, check with

the title company regarding assignment of

funds procedures, bank wiring instructions,

etc. Make sure the listing agent is informed,

and protect your client with the appropriate

contingency clause just in case settlement is

delayed on the fi rst home!


CONTRACT

BUYER AGENT CONTRACT PREPARATION

QUESTIONS TO ASK THE LISTING AGENT

• Is the property still available?

• Match the owner(s) name on the listing

to the one on the property tax record. If

there is a difference, ask the listing agent

for clarification.

• Has the seller received any offers in the

past?

• Will multiple offers be presented? If

so,from what other companies/offices?

Are any offers being presented from

the listing agent’s office...or from the

listing agent himself? Has the sales

commission been modified?

• What settlement date would the seller

prefer?

• Does the seller need to execute a post-

occupancy agreement?

• Would the seller consider agreeing to

a buyer pre-occupancy agreement (if

applicable?)

• When will the contract(s) be presented.

CONTRACT PRE-WORK

• Prepare a CMA for the subject property

and suggest an offer range for the buyer.

• Notify the lender that the buyer has

identifi ed a property to purchase.

• Prepare a buyer net sheet.

• Discuss contingencies and concerns that

the buyer may have:

a. Home Inspection

b. Radon Inspection

c. Mold Inspection

d. Home Warranty...who pays?

e. Physical characteristics of the

property

f. Settlement date

g. Sale of current residence or current

lease obligations

h. Proof of funds and fund availability

for settlement

i. Items which convey

j. Time limit for seller to respond to

offer

k. Identify a back-up property and

discuss an action plan


CONTRACT

NEGOTIATING AND CLOSING

CONTRACT CHECKLIST(Buyer and Listing Agents)

• Lender letter (with contact information

for the loan offi cer)

• Check for neat and legible information in

all contract blank spaces

• Write the property address on the bottom

of all pages (in case the pages become

separated)

• Make copy of the earnest money deposit

• Provide proof of funds (if applicable)

• Determine date and time of anticipated

inspections

• If the buyer has a sale of home

contingency, provide proof to the listing

agent that it is currently under contract

or that it is priced aggressively

• Prepare the buyer for delayed responses

from the seller if the seller is out of town

or otherwise indisposed. Consider

indicating a time by which the seller

must respond.

• Obtain critical phone and fax

numbers from all parties so that rapid

communication is facilitated.

CONTRACT CHECKLIST(Listing Agent)

• Interview the loan offi cer and confi rm the

buyer’s fi nancial qualifi cations

• Double check the items which convey

• Ask the Buyer’s agent questions to

uncover any “hidden” contingencies

• Prepare a seller’s net sheet

• If there are multiple offers, compare them

side-by-side to help the seller select the

best offer. Issues to consider:

a. Contingencies

b. The amount of the earnest money

deposit, and how tendered

c. The amount of the down payment

d. The purchaser’s cash reserves

e. Proposed settlement date

f. Which buyer is most likely to

perform the best and have the fewest

issues

• Accept or counter-offer

• If the sellers are accepting a back-up

offer, make sure that contract is noted as

such


CONTRACT

HOW TOPROCESS YOUR FILES

Listing Checklist:• Transaction Worksheet

• Listing Agreement

• Copy of MRIS Print Out and Public

Record

• Agency Disclosure

• Consent for Dual Agency (if applicable)

• Affi liated Business Arrangement

Disclosure

• Home Warranty Application (Acceptance/

Waiver)

• CMA (Signed by Sellers)

• Property Disclosure/Disclaimer

• Seller’s Net Proceeds (Signed by Sellers)

• Plat/Survey (if available)

• Outbound Referral (Acceptance/Waiver)

• Lead Based Paint Addendum (If

applicable)

• Photo’s of home

Contract Checklist:

• Transaction Worksheet

• Copy of MRIS Print Out and Public

Record

• Agency Disclosure

• Consent for Dual Agency (If Applicable)

• Fee Disclosure (If Applicable)


Disclosure

• Buyer Agency Agreement

• Good Faith Deposit Check (or copy)

• Ratifi ed Contract w/all addendums

• Purchaser’s Closing Costs Estimate

• Home Warranty Application

• Lender Letter

Settlement Checklist:

• Settlement Papers

• Settlement Checks (Commission Checks

and Admin Fee Check)

• Excess of escrow reminder

• Signed Walk Through Inspection

• Power of attorney


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Buyers Agreement:

• Exclusive Right to Represent Buyer

Agreement

• Types of Real Estate Representation


• Disclosure Statement Purchaser’s

• Pre-Approval Letter

• Is a retainer fee is attached. ($ )

Agreement states amount to be:

• A buyer’s wants and needs list.

NEGOTIATING AND CLOSINGCONTRACT CONTINGENCY DATES

Adhering to contingency terms and

conditions can reduce the number of

contracts that become void or end with one

of the parties being judged in default. Sales

associates should secure an extension of any

contingency date as soon as it is determined

that the deadline can not be met. It is

important that you make note of every date

when a contingency must be met, so that

no requirement is overlooked. Note: There

are times when you can use the expiration

or imminent expiration of a contingency to

negotiate better terms for your client. Can

you think of some examples?

THE HOME INSPECTION

• Contact the company chosen by the

buyer to arrange the inspection as soon

as possible after contract ratifi cation.

Depending upon the size, age, and

condition of the house, the inspection

may take as long as four hours, although

two to three hours is the norm.

• Coordinate the time with the buyer and

the inspector. The buyer should attend,

and you should avoid attending for the

buyer unless it is absolutely necessary. If

the buyer has children, they should not

be present during the home inspection as

this will cause an unnecessary distraction

to buyer and inspector alike.

• Remind the buyer to bring their

checkbook. The inspector is normally

paid immediately after the inspection is

completed.

• Notify the seller (or listing agent) of the

date and time of the inspection. The

seller has the right to be present...adjust

the appointment if necessary.

• Accompany the buyer and inspector

through the property (does not apply

to dangerous areas like the roof...and

sometimes the attic or crawl spaces!). No

one should wander.

• Do not permit the inspector to damage

anything related to the property. If

something is damaged, it is the buyer’s

responsibility to see that it is repaired.

• Request a copy of the inspection.

• Obtain the buyer’s permission to make

a copy available to the seller (items that

need attention) and the appraiser.

• If the seller was not present during the


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inspection, make sure the home is left the

way you found it prior to the inspection,

and that all outside doors are locked.

• The home inspector’s attitude is

important. He should not suggest who

should make or pay for repairs. He is

there to note and record facts.

RELEASE OF DEPOSIT

The terms for the dispositions of deposits are

contained in the sales contract. The release

of deposit form mentioned on the previous

page, provides specifi c instructions for the

disposition of the earnest money deposit.

This agreement (absent a court order), when

signed and agreed to by all parties, governs

the control of the deposit, and the broker

is required by law to abide by it. In the

absence of a written release by court order,

state law takes precedence.

VOIDING/CANCELLING A CONTRACT

Not every real estate transaction comes to

a successful conclusion. No matter how

successful you become as an agent, you will

experience your share of voided contracts,

default situations, and “Murphy’s Law”

scenarios.

Sales associates should consult with their

Supervising Broker regarding contracts that

are in danger of becoming void or being

rejected by either party. The Supervising

Broker may be able to salvage the situation

based on their experience with similar

situations. Failing that, the Supervising

Broker may be able to help you review the

chain of events which led to the contract

failing so that you can try to avoid the same

situation in the future.

After contract termination, you should

immediately start showing (or re-showing)

alternative properties to your client if you

are a buyer agent. If you are the listing

agent, you should immediately change the

status of the property in the MLS system,

perhaps entering “Contract Fell Out!” in

the comments section to help explain the

number of days on the market for the listing.

CANCELLATION DUE TO CONTINGENCY FAILURE

When contingencies cause a contract

to become void, the sales associates are

responsible for completing a Release of

Sales Contract and Deposit or similar form,

declaring the contract null and void. The

release must be signed by all parties to the

transaction. Sales associates should use the

execution of the release to stimulate further

negotiation among the parties that may result

in a new, binding, sales agreement.

BROKER PORTION OF RELEASED DEPOSITS

Most listing agreements include a provision

for the broker to receive a portion of the

deposit forfeited to the seller. CENTURY

21® New Millennium will vigorously enforce

the terms of the listing agreement, in that


CONTRACT

the company’s responsibilities have been

fully discharged when a binding agreement

between buyer and seller has been obtained.

Contracts cancelled by mutual decision of

both parties are subject to the commission

arrangement stated in the sales contract.

CENTURY 21® New Millennium will invoice

commissions, pursuant to the terms of the

contract of sale, and expect payment.

HOME INSPECTION ADDENDUM A professional home inspection was

conducted on ________________________

by _________________________ company.

The following defi ciencies were noted

(report attached). The home inspection

contingency is hereby removed provided

that the seller agrees to make the following

repairs/replacements at seller’s expense prior

to settlement:

Group by categoryExterior:

» A. Rotted wood on Northwest dining

room window sill to be repaired

and…

Interior:

» A. Two joists cut by the installation

of pull down attic stairs to be

structurally repaired so that they

support the attic floor as originally

intended…

All repairs are to be completed by licensed

professional according to county codes and

receipts to be given to purchaser prior to

settlement.

RED FLAGS AND OTHER WARNING SIGNSInform your client(s) about events and

conditions that might have an impact on

negotiation or execution of the contract.

Examples include, but are not limited to:

• Divorce

• Estate Sales (heirs)

• FSBOs

• Type of Ownership

• Foreclosure/Vacant

• Agency

• Tension between Parties

• Survey (property lines, easements,

encroachments)

• Inspections (home, radon, mold, lead-

based paint, etc.)

• Short Sale

• Major renovation

Your job is to educate your clients so they can make an informed decision! If you make the decision for them, you get blamed if things don’t work out!

• Never hide or fail to disclose information

to your clients or customers

• All conditions should have a start date,

end date, and a “What if?” solution.

• Have clients sign off on all decisions so

they take ownership of them.


CONTRACT

Do not put yourself in a position where you might be sued!Checklist

• Complete all disclosures

• Educate all parties

• Recommend Home Warranties and Home

Inspections

• Use NVAR and MAR forms and verbiage

• Have your supervising broker check your

work

• Slow down and think

• Monitor contract dates and deadlines

• Know the law as it pertains to the

practice of real estate

• Keep detailed records of every transaction

so you have an audit trail

• Ensure all documents are properly

initialed and signed

• When in doubt...ask for help!

MEETING THE APPRAISER

Ensure that the loan offi cer has ordered the

appraisal as soon as the loan application has

been taken. If the appraisal has not been

completed within 30 days of settlement,

make frequent contact with the lender as

necessary to ensure the the appraisal is

completed. The length of time it takes to

complete the appraisal depends upon the

size, age, and condition of the property, but

30 minutes is the norm.

Make note of the date and time of the

appraisal, and notify the listing agent and/or

the seller. If you are the listing agent, update

your CMA the day prior to the appraisal and

give a copy to the appraiser when you meet

him at the property. Provide the appraiser

with a copy of the following as well:

• Complete MRIS listing

• Property brochure (it may list upgrades

that don’t appear anywhere else)

• A copy of the fl oor plan, if available

• A copy of the last survey, if available

• Your business card

Open the front door for the appraiser if

he does not have a lockbox keypad. Offer

your paperwork to him. Do Not follow the

appraiser around the property, and Do Not

ask how much the property will appraise for

or anything else that might jeopardize the

appraisal. Instead, ask him to call you if he

is unable to support the price after analyzing

the data.

SERVICING THE SALE CHECKLISTAs soon as the contract is ratifi ed, make

arrangements to receive/pick up all

completed copies.

Ask for referrals• Turn in earnest money deposit check

• Review documents upon receipt for

completion, esp. initials and signatures.

Make sure that all documents that

are supposed to be included with the

contract are in fact included

• Arrange for the contract to be delivered

to the buyer/seller/agent

• Remind buyer’s/seller’s agent of second

deposit, if applicable

• All appointments to be made according


CONTRACT

to the terms of the contract

• Advise clients/customers about HSA

home warranty if not already offered

• Advise buyer to choose lender (1st

County Mortgage). Provide copy of

contract, addenda, MLS printout, tax

record, etc.

• Advise buyer to choose home inspector,

radon, mold, termite, etc. Schedule as

appropriate based on contract terms

• Advise buyer to choose title company

(Bay County Title). Provide with same

document copies as lender, plus Death

Certifi cates, Divorce Decrees, POA, etc.

Schedule settlement date/time

• Advise buyer to choose homeowner’s

insurance company/fl ood insurance (if

necessary) ASAP

Turn in completed fi le folder to Transaction Coordinator.• Company fi le must remain in offi ce!

• Complete fi le folder details and keep

them updated

• Include copy of contract and all addenda

• Include copy of listing and tax record

• Include EMD check made out to

CENTURY 21® New Millennium with

property noted on check (copy of check

if it is held elsewhere)

• Include copies of additional addenda

(i.e. contract changes, removal of

contingencies, notices)

• Include copy of case processing sheet

• Include copy of purchaser’s fi nancial

statement (if available)

• Include copy of all agency disclosure

forms with original signatures

• Include copy of Buyer Agency Agreement

if buyer is your client

• Include any confi dential information in a

sealed envelope.

Be Certain to:• Coordinate appointments for home

inspection, radon, termite, appraisal, etc.

Attend if required

• Maintain contact with our client/

customer on a regular basis

• Follow-up on any seller repairs or lender

directed repair conditions

• Monitor loan process

• Notify seller’s agent when buyer’s loan is

approved

• Provide buyer with a listing of all utility

companies

Mark the Following Milestones on your Calendar:• Second deposit due date (if applicable)

• Mortgage application date (weekly

follow-up dates with lender)

• Date one week prior to mortgage

commitment (extend in writing if

necessary)

• Mortgage commitment date (remind

buyer to sign and return commitment

letter (check for accuracy: amount, rate,

settlement date, any conditions, etc.)

• Home inspection date (plus mold, well,

septic, radon, termite, etc…. See “The

Home Inspection”

• Deadline for responses about home

inspection and other tests/inspections

• Appraisal date (if you are the listing

agent). See “Meeting the Appraiser

Checklist”


CONTRACT

• Date to order termite inspection

• Date one week prior to settlement in case

extension needed

• Pre-settlement walk-thru date. Walk-

thru inspections are typically conducted

the day prior or morning of settlement.

The purpose is to ensure that all systems

and appliances are working and that any

repairs have been made to the purchaser’s

satisfaction. Suffi cient time should

be allocated to make any necessary

corrections prior to scheduled settlement.

• Settlement date

Two Weeks Prior to Settlement:• Notify Bay County Title (if they are being

used) at least 10 days in advance so they

can make arrangements to pay you at

settlement

• Follow-up on any repairs still

outstanding from the home inspection

• Arrange for pre-settlement walk-thru just

prior to settlement.

• Include any confi dential information in a

sealed envelope

• Remind buyers to bring homeowner’s

insurance, fl ood insurance, and paid

receipt to settlement (send copies to

lender one week prior to settlement).

• Remind buyer/seller to contact utility

companies, telephone and cable

company, post offi ce, internet provider,

etc.

• Check to determine if termite inspection

is complete. Does lender need report

prior to settlement?

• Does title company have all necessary

documents to complete settlement? (i.e.

death certifi cate, divorce decree, property

settlement, power of attorney, etc.)

Seven Days Prior to Settlement:• Check offi ce fi le: Keys present (if listing

agent)?; Draft accurate and closing papers

current ?; Home warranty paperwork

complete?

• Call buyers (if you are the selling agent)

to remind them to: bring insurance

policy with paid receipt; bring photo ID;

bring certifi ed check for amount owed;

contact utility companies; arrange to

meet for pre-settlement walk-thru (obtain

release signed by all parties); arrange

settlement meeting

• Call sellers (if you are the listing agent)

to remind them to: bring all keys,

appliance manuals, future address,

telephone numbers, and e-mail address

to settlement

Prior to Settlement:• Pre-Settlement Walk-Thru (if you are the

Selling Agent)

• NOTE: Even in transactions where

walk-thru inspections are required by

the lender well in advance of settlement,

Selling Agent and Buyer should still visit

the property just prior to settlement.

• Conduct a walk-thru inspection with

the Buyers to ensure that appliances and

major systems are in working order.

• If there has been signifi cant weather

occurrences between the home

inspection and settlement dates, make

sure to check for water and or wind

damage that might have resulted.


CONTRACT

Take to Settlement:• Offi ce fi le and your personal fi le (keys,

draft/fi nal settlement papers, HSA

Warranty paperwork, contract, etc.)

• Calculator and pens

At Settlement:• If buyer and seller arrive at the settlement

location at the same time, sit them on

opposite sides of the table, closest to the

settlement offi cer

• Provide the settlement offi cer with the

original termite inspection with invoice,

and any other documents required for

the loan package

• Provide the settlement offi cer with the

HSA Warranty application and bill

• Have the buyer provide the settlement

offi cer with the homeowner’s insurance

policy, fl ood policy (if applicable) and

paid receipts

• If the seller didn’t provide an HSA

Warranty, have the buyer complete the

form (accept/reject), date and sign

• Obtain a copy of the fi nal settlement

papers and double check all fi gures with

your calculator. Focus on settlement, not

on socializing with the other agent

• Obtain a completed settlement papers,

signed in the original, to return to the

offi ce

• Obtain a copy of the survey (can be used

in the future)

• When settlement is complete, make sure

that you: have all necessary checks and

that they are in the correct amount; have

copies of all necessary documents; thank

the settlement offi cer; thank the co-op

agent; thank both buyer and seller; ask

for referrals

After Settlement:• Return the offi ce fi le to the Transaction

Coordinator with the following:

completed agent split sheet; copy of all

pertinent settlement documents; Home

warranty forms and check; commission

check (if applicable); make copies of

everything for your fi le!

• Remove yard sign

• Send Thank You notes to the other agent,

the settlement offi cer, your client, etc.

• If you are presenting your buyer

client with an American Flag and the

accompanying New Millennium fl ag

letter, consider doing that immediately

following settlement as a way of showing

the signifi cance of the client’s ownership

of the “American Dream.” Your offi ce

manager can assist you in obtaining a fl ag

and the letter.

• Schedule a follow-up appointment with

your client

• Register your client with the appropriate

CENTURY 21® follow-up program/

magazine subscription

• Obtain e-mail, phone, and mail contact

information


CONTRACT

EVALUATING AN OFFER

Property Address: __________________________ List Price: $ ______________________

Offer A

Agent: ______________

Company: ___________

Phone: ______________

SA ____ BB_____ DA ___

Offer B

Agent: ______________

Company: ___________

Phone: ______________

SA ____ BB_____ DA ___

Offer C

Agent: ______________

Company: ___________

Phone: ______________

SA ____ BB_____ DA ___

Purchaser’s Last Name

Offer Price

Earnest Money Amount & Date

Deposited

Down Payment Amount

Financing Terms

Settlement Date

Home Inspection + Deadline Date

Radon Inspection + Deadline Date

Lead Based Paint Inspection +

Deadline Date

Other Inspection + Deadline Date

Seller Paid Closing Costs

Type Lender Letter +

Commitment Date

Sale of Home Contingency?

Other Contingency?

Pre-occupancy Agreement?

Post Occupancy Agreement?

Remarks

Seller Net Proceeds

Accept/Reject/Counter?


CONTRACT

HOW TO WININ A MULTIPLE CONTRACT SITUATION

• Speak with the listing agent before

writing the offer. What closing date

would the seller prefer? Is there anything

else you need to know before writing the

contract?

• Ensure your offer is as complete as

possible, with no errors. Use Zip Form

or Auto Contracts if it will improve

legibility.

• Don’t ask for items that are not

specifi cally mentioned in the listing.

• Ensure that you have the best possible

lender letter to present to the seller. A

loan approval letter “is considered the

same as cash.

• Ask the loan offi cer to provide a one page

professional résumé that you can include

with the contract.

• Encourage the buyer to make as large

a down payment as they can afford.

A larger down payment reduces the

chances of appraisal issues and makes the

contract more appealing to the seller.

• Consider making an offer for more than

the listed price. Even with an escalation

clause, this may make your offer stand

out, especially if a competing contract

has an escalation clause similar to yours.

Make sure you discuss possible appraisal

issues with your buyer.

• Offer a large earnest money deposit...at

least twice the “normal” amount.

• Use conventional fi nancing if possible.

VA and FHA loans are usually less

attractive to sellers because of more

stringent appraisal standards and the

possibility that the seller might have to

pay some buyer loan fees.

• Don’t ask the sellers for any concessions.

• Choose a settlement date that is

convenient that for the seller.

• Choose a settlement offi ce that is near

the property or the listing agent’s offi ce.

Make things convenient for the listing

agent because their input carries the most

weight in multiple contract presentation

scenarios. Or...indicate in the contract

that the seller can choose the settlement

company. This might be important if the

seller is purchasing another home and

needs “back-to-back” settlements.

• Discuss the home inspection contingency

with the buyer, and explain that other

buyers may waive the home inspection

entirely or ask that it be done “for

informational purposes only.” An

informational purpose inspection will

still address walk-thru items as well as

helping to educate the buyer about their

future home. Make sure the buyer is the

decision maker concerning this option.

• Consider having a home inspector

accompany the buyer during the

pre-settlement walk-thru if no home

inspection contingency is used.

• Ask the buyer to pay for the Home

Warranty. Circle the word “Purchaser”

in the contract so the listing agent

understands who is paying for the

warranty.

• If the seller requests a rent back, allow

him to rent back at no charge or with a

reduced charge.

• Always indicate a deadline for the seller


CONTRACT

to accept the offer. This will help to

prevent the listing agent from “shopping

the offer” with other buyer agents.

• If the buyer really wants the property, use

an escalation clause.

• Research property values by searching

comparables in the same subdivision.

Look at similar properties within the

same zip code to identify trends.

• Check neighborhood appreciation by

using MRIS’s Real Estate Trend Indicator

report, and other summary statistics

available on line at www.mris.com.

• Discuss how long the buyer intends to

own the property, since this might affect

how much above listed price they should

offer. The longer they stay, the more they

can pay.

• Consider different loan options. For

example, using a 5/1 ARM vs. a 30 year

fi xed rate loan might allow the buyer to

raise his escalation cap and allow better

qualifying ratios.

• Discuss what might happen if the

appraised value ends up being lower than

the contract price. Will the buyer have

the funds to make up the difference?

• Make your escalation clause cash

increments larger, for example $2,100

vs. $1,000, $1,500 etc. Ask the question

“How would you feel if you lost this

home because of a $1,000 difference?”

• On Page 1 of the contract, next to the

sales price, write “See Escalation Clause

Addendum” in bold letters to make

sure the listing agent knows that one is

attached!

• Ask the buyer to write a one page

personal letter to the seller, explaining

why they want to purchase the

house. It should include personal

background information, stress their

fi nancial fl exibility and credibility, and

complement the seller about their home.

It should also mention any other issues

in which the buyer has fl exibility. For

example, “I am fl exible regarding the

settlement date, and can settle as soon as

__________ or as late as __________.”

• Place your offer in a large envelope and

hand-carry it to the listing agent. This

will make sure the contract is delivered

in pristine condition, and show the other

agent that you are sparing no effort on

behalf of your buyer.

• Call the listing agent and personally

register your offer, making note of the

date and time. Don’t rely on the listing

agent’s offi ce to register the contract or

call the agent.

New Construction1. Understand the Contract: Builders

often complain that buyers will scrutinize

parts of the contract such as completion

clauses (they often want to insert a penalty

clause which most builders will not accept)

while they overlook the substance of the

contract such as what features they actually

are buying.

2. Change Orders: A buyer must

understand that the builder is going to abide

by the contract unless changed by a work

order. All changes must be in writing, not

verbal. Changes are the reason usually that

cause a project to extend beyond the due

date and are the source of most disputes. A

change will usually necessitate an extension

of time and builders that do not add time


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with every change order usually end up in

a dispute with the buyer when the house

completion date is missed. By adding time

as changes are made, the owner becomes

fully advised of the change in the completion

date. Also, unless the builder has controlled

the process tightly, changes are requested by

the owner at the last minute which causes

numerous problems and delays. Often the

builder authorizes the sub to make a fi eld

change in good faith but when the owner

gets the bill, the owner says it is too much. A

builder should never make a change without

it properly priced and agreed to in writing.

The owner should not agree to a change

unless it is in writing as well.

3. Good Communication: This is

a two way street. A professional builder

should be experienced with this and use

e mail, monthly construction update

memos, schedule frequent fi eld meetings

etc. A buyer should learn to befriend the

site supervisor. This means that good but

professional communication should be

encouraged. This does not mean the buyer

will be bullied by the super or builder,

rather, the tone of communication will not

be one of distrust. Usually if the builder and

site crews feel they are respected for their

skills, they will want to do a good job for the

customer and will often give the extra effort

to make sure the customer is satisfi ed.

4. Understand the process of construction: The work today is mainly

subcontracted out to specialists. They

will not be on the job everyday, however,

a schedule should be available and bench

marks should be met. What happens

in-between should be the concern and

responsibility of the builder. Often the

builder has to change the schedule due to

materials not being delivered, inspectors not

showing up, or changes requested.

5. Walk Through: This is very important

and should be done with the buyers and

the builder or his rep. This usually means

the buyers and their agent, the builder and

maybe some of his subs such as a painter.

(Sometimes builders will have the painter

there to touch up defi ciencies on the spot).

Children, dogs, relatives, or anyone not listed

as the buyer should not be there as often

they create distractions to the owner that

prevent them from focusing on the house.

It is important to ascertain the condition of

the house and to record clearly in a punch

list what is not acceptable or not complete.

Also, the operation of the house, location of

cut-offs, and the warranty process should be

discussed during the walk through.

6. New Construction Home Inspection: Most builders do not object to

the homeowner engaging a home inspector.

A typical builder policy requires that the

buyer’s home inspector be licensed and

insured and that he schedule inspections

through the builder’s construction supervisor

who will be present during the inspection.


CONTRACT

Red Flag: Some home inspectors are not

familiar with current codes or construction

practices. Some Real estate attorneys

recommend that the buyer does not move

in until they are satisfi ed that the home has

been built in accordance with the contract

and expected quality. All punch list items

(small defi ciencies) should be completed and

signed off by the owner. Both the builder

and the homeowner will be more satisfi ed

if they follow this advice. Of course, this

means the builder must perform in good

faith to correct the mistakes quickly. Since

most defi ciencies tend to be about paint and

drywall, these items should be able to be

corrected within a week or two.

Quick reference List1. Triple check the builder

2. Know the builders contract

3. Ask about construction materials and

methods

4. Know your warranty

5. Be clear on landscaping packages

6. Read Manuals

7. Fulfi ll your (Realistic Dream) home

8. Think details and big picture

9. Site the home properly

10. Be cognizant of change orders

11. Visit other homes the builder has

completed

Completion of home, be aware that the

seasons play a factor


CONTRACT


Buyer Presentation


BUYER PRESENTATION

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________


BUYER PRESENTATION

_________________________________________________________________________________________________________

_________________________________________________________________________________________________________


BUYER PRESENTATION


Selling Process/Preparing a CMA


SELLING PROCESS/PREPARING A CMA

The Home Selling Process Flowchart



CMA PREPARATION:

BEFORE THE APPOINTMENT/ MAKE THE CALL

Step 1: Permission

I am looking forward to talking with you,

Bob. I think I have a lot of information that

will be beneficial to you, and I will have the

opportunity to make a new friend. Before

we end this conversation, I would like to

ask you a few more questions, just to make

certain that I have all the information I need

to be prepared for our meeting. Do you have

another minute or two?

Step 2: All Present

First of all, is there anyone else who would

need to be involved in the sale of your home?

Anyone else listed on the Deed? Oh, your

wife. OK. And what is her name? Would

it be convenient for Janet to be there when

I come by? I feel that it is important for

everyone involved in the sale to be present.

That way, everyone is able to voice their

opinions, concerns, and ask any questions

they may have. I believe the foundation of

any relationship is open communication. Do

you agree?

Step 3: Enough Time

I also want to make sure that I have allotted

enough time in my schedule for our meeting.

You said that six o’clock was good for you

and for Janet, right? May I ask if you have

anything else planned? Don’t worry, I won’t

stay still Christmas. The reason I am asking

is because, looking at my schedule, I see that

I have an appointment prior to six. I should

be finished, but in the past Bob, sometimes

my clients need a little more time than I

scheduled, and I don’t ever want to cut them

short. So, would it be convenient for you to

leave, say, between six and eight open? Great!

I promise I will be there as close to six o’clock

as possible.

Step 4: Property Information

In preparing a Highest Price Analysis, Bob,

I will need to look at your home, but I can

begin the analysis before we meet by asking

you a few general questions about your

property. Would you mind?

• How many square feet does your home

have?

• How many bedrooms, bathrooms?

• Have you made any major

improvements

• How long have you lived in your home?

• Have you taken advantage of recent low

interest rates and refinanced your home?

• Do you have a home equity line of

credit? If so, what is the balance?

• Do you have a price in mind?

• What are the special features of your

home?

Step 5: Would you List?

Just a couple more questions, Bob, and I do

appreciate your patience. I want to make

certain that I am as prepared as possible

before I meet with you and Janet. I know

how valuable time is for everyone. First, are

you planning to talk with anyone else about

selling your home?



And secondly, if after analyzing your situation,

we decide that it would be in your best

interest to go ahead and get your home on

the market, would you be ready to give me

permission to list your home?

Great! Are you on-line? Then why don’t you

take a minute and go to my website before I

arrive. There you will have an opportunity to

learn more about my company and me and

the services we provide.

OR

Great! Would you mind if I send over a

packet before we get together? It includes

useful information about the selling process

and about the services my company and

I offer. Thanks for your time, Bob. I am

excited about meeting you and Janet.

Here is a number to call just in case you need

to reach me before six.

DOING YOUR HOMEWORK:

• Identify the seller’s needs: Is it a one step

or two step listing presentation?

• Verify the tax information with the

information provided by the seller.

• Scroll through the tax record and

highlight pertinent data.

• Check the property’s MRIS history: the

price, sales, rentals and agents of record.

• MRIS: Search Subdivision/Streets or zip

code area. Evaluate the following:

» A. Bedrooms/ Baths

» B. Listing agents/ Selling agents

» C. List price/sale price

» D. Time on market

» E. Seller subsidy

» F. Above ground/ below ground living

» G. Days on market

» H. Remarks written by agents

• Call the listing agents of the

comparables and attempt to verify the

information

• Preview homes that are currently on the

market

• Create a one-line summary/ or gallery

printout of all homes in the subdivision

or surrounding area.

• Go back to MRIS and make

adjustments.

• Repeat search if necessary

• Select: available, contract and solds.

• Enter MLS into toolkit CMA



SELLER SERVICES

COMPARATIVE MARKET ANALYSIS

Four primary factors affecting the value of a

property (there may be more, depending upon

the situation) are:

Location

• Near busy road(s)

• Backs to parkland

• Close to transportation

• Close to schools

• Near power lines

• Has water view

• Future development potential

Physical Characteristics

• Number of bedrooms/bathrooms

• Above/below grade living area

• Has covered parking

• Porch/patio/fence/pool

• Functional obsolescence

• Number of levels

Condition

• Appliances

• Bathrooms

• Flooring/interior paint

• Exterior/roof/siding

• Plumbing

• Heating/Air conditioning

Time of Sale

• Immediate

• 30 days

• 1 to 3 months

• 3 to 6 months

• Greater than 6 months (+/- $ depending

on market conditions)

Definition of Market Value (as defined on

Freddie Mac Form 4396-93): “The most

probable price which a property should

bring in a competitive and open market

under all conditions requisite to a fair sale,

the buyer and seller each acting prudently,

knowledgeably, and assuming the price is not

affected by undue stimulus.”



TECHNOLOGY - CMA PREPARATION

Owner’s Information: _________________________________________________________

Subject Property Address:

Does the Subject Property tax record match the information provided by the owner?

Subdivision: ______________________________________________________________

Style of Home: __________________ Model: ________________________

Age: ______ Bedrooms: ____ Baths: ____ Levels above Ground: ______

Interior Upgrades:

Kitchen: __________________________________________________________________

Baths: ____________________________________________________________________

Room Additions: ____________________________________________________________

Basement: __________________________________________________________________

Painting: ____________________ Flooring: ____________________________________

Other: _____________________________________________________________________

Exterior Upgrades:

Building Materials: ________ Siding/Brick: ________ Windows/Doors: ________

Deck: _______________ Patio: _______________ Porch: _____________________

Landscaping: Below Average Average Above Average

Other: _____________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________



TECHNOLOGY - CMA PREPARATION

Location: Below Average Average Above Average

Homes surrounding the subject property:

Below Average Average Above Average

Overall General Condition: _____________________________________________________

____________________________________________________________________________

____________________________________________________________________________

General Search: MRIS, by subdivision. If there isn’t a subdivision, use a more detailed

search area using area location or Zip Code.

• All available

• All Under-Contracts

• All Sold in the past 6 months

• Review and compare information

Detailed Search By:

• Style/Model/Garage

• Bedrooms/Baths


Fine Tune Search:


• Re-enter MRIS numbers and generate Price Analysis Report

If you are unfamiliar with the area, go back 1-2 years to determine market statistics about the

area before performing your general search.

Depending on the subject property, you may need to preview and/or call the listing agents of

the properties found in the detailed search before beginning your Fine Tune Search.



TOOLKIT CMA QUICK START GUIDE

1. Sign In. Go to www.toolkitcma.com.

Your Username is your email address (fname.

[email protected]) and your password is

“password”.

2. Download Program Components. Click [Continue] to download the latest

program components required to create your

presentation. (Note: You will only need to

download these updates the first time you

log in or when a ToolkitCMA update becomes

available).

3. Update Your Agent Profile. If ToolkitCMA detects that you haven’t created

your Agent Profile, a page will display for

you to complete. Verify and correct any

information. Click [Save].

4. Optional Step View/Print the Start Up Guide. Print the Start Up Guide

as a reference. You can also access the on-line

Help System, which is located in the upper

right hand corner of each page.

5. Optional Step Create Your Résumé and Your Customer Reference Sheet. If you wish to include

a Résumé and/or a Customer Reference

Sheet in your presentations, select [Edit

your Résumé] or [Edit your References] and

complete the required fields.

6. Select Presentation. On the right

side of the screen is a list of presenttins that

are available to you. Select the one you want

by clicking the button immediately to the left

of it, then click [Begin].

7. Select Documents. Check all

of the pages you wish to include in your

presentation and then click [Next>>]. To

become familiar with all of the available pages,

we suggest selecting [Check All] the first time

you use this program.

8. Prospect Information. Enter your

prospect’s name and address and then click

[Next>>].

9. Compose Cover Letter. You may

edit the default cover letter and save your own

customized default letter.

10. Load Listings from the MLS.

» a. Click [Import Property Data] and

then log in to the MRIS Matrix MLS

System.

» b. Click [Search]. Choose any

Residential Search option.

» c. Enter search criteria, then click

[Search].

» d. Mark properties you want to

download into Toolkit CMA by

clicking the boxes next to the

property listings. Then click

[Export].

» e. Select [Residential Exchange] and

click [Export].

» f. When the Save dialog window

appears, click [Save this file to disk]

and choose [OK]. Click

[Save] to complete the Export and



close the save dialog window if

necessary.

» g. When the export is complete,

click [Exit MLS] in the upper right

portion of the page to Log off

and exit the MLS completely.

The listing and photos will begin to

be imported.

» h. Select the desired properties and

continue with ToolkitCMA.

» i. On the Downloaded Properties

screen, select the desired comparable

properties and click

[Next>>] to continue.

11. Subject Property. Enter the subject

property information and subject property

photo (if available) and then click [Next>>].

12. Customizable Pages. If you

selected to print the following pages, forms

will display for you to tailor the presentation:

» a. Customizable Cover Letter. Edit

the default letter and save your own

customized letter.

» b. Price Adjusted CMA. This form

will allow you to enter your price

adjustments.

» c. Pricing Strategy. You may edit this

draft and save your own customized

default page for pricing strategy.

» d. Marketing Strategy. You may

edit this draft and save your own

customized marketing plan.

13. Print. Print your presentation or create

an Acrobat PDF file. PDF files may be emailed

as attachments or saved to your computer for

future reference.

Save. Click on [Save] located at the upper

right hand portion of the page. You will be

able to return to ToolkitCMA and edit saved

presentations.


PRESENTATION / TOOLKIT CMA

Presentation / Toolkit CMA

POCA• Ring the Bell

• Smile!

• Extend a compliment

• Kitchen Table

• Break the Ice

• Preview Of Coming Attractions (POCA)

5 Steps

Before we begin, let me show you how I work.

5 Steps

1. Understand concerns

2. Analyze the property

3. Customize a marketing plan

4. Determine price and estimate of Net

5. Forms, Details, Timing

One reason so many people choose us is…

What this means to you is…

Would something like that be of value to you?

What to put in a value package

• Resume

• Recommendation list

• Office location sheet

• Office support diagram

• Flow chart

• Utility list

• What your agent should do (from listing

presentation)

• Sample contract and estimate sheets

• Prepping your home for sale (From tool

kit CMA)

Count the number of documents that are

signed in a typical transaction (in your

jurisdiction). And know that number.

Overview: Market trend graph (from your

office, a new one each month)



THE DANGERS OF OVERPRICING

Many potential buyers won’t even look,

thinking it’s out of their price range.

Those buyers who do look are shopping by

comparison, and looking at your home may

convince them to make a bid on a different

property.

Since an appraisal is often required in

financing a property, it’s futile to price a

property for more than it’s worth.

Properties left on the market for extended

periods of time usually become “shopworn,”

causing many to believe that something is

amiss.

Overpricing lengthens marketing time and

invariably results in a lower selling price than

would otherwise have been attained.

PRICING DIALOGUE

“As you are probably aware, there are three

prices for any house.”

“There is the wholesale price. That is the

price, for example, that an investor would pay

in cash so they could realize the maximum

profit when buying a house.”

“There is the retail price, which is the current

market value.”

“Then there is your list price. One factor

alone determines your price...time. How long

do you want to wait to receive your money?”

Persuade:

Complete an estimate of closing costs

Ask a closing question. “Are there any

questions?”

“Let me explain this form.”

Ask a closing question. “Are there any more

questions?”

Hand them a pen.

Point to where they should sign the forms.

Wrap up and shut up!

Avoid discussing the price for the listing until

the sellers are sold on you and the company…

“If we can agree upon price, will you list with

me tonight?”

You may need to ask probing questions. For

example:

“You probably have a good reason for that.

May I ask you what it is? (Don’t talk)



Once you have narrowed the listing discussion to price only…

1. Confirm the listing

2. State that you face a dilemma

3. Explain how a CMA works

4. Explain how you weren’t able to sustain their

desired price

5. Explain the dilemma

“I am being completely honest with you, and

I hope that I don’t lose the opportunity to

list your house because of that. But I would

rather choose not to list your home now,

rather than have to come back to you later

and tell you that I couldn’t sell your home for

$__________.”

6. “Would you rather that I be honest with you...

or deceive you just so I can list your home?”


C21NM Websites, eGreetings, RREIN Content, Mobile

In this class we will cover the Agent Dashboard, how to set up your FREE agent IDX website,

and how to use our eGreetings system to promote your listings and connect with your SOI.

The RREIN Content segment will help you set up your Market Resource Center, Home

Matters monthly eNewsletter, and show you how to access a ton of content that’s FREE for

you to use on your blog. The Mobile segment will cover how to utilize our text sign riders to

ensure that you capture every single mobile inquiry on your listings. Your sellers will LOVE

this!


C21NM WEBSITES, EGREETINGS, RREIN CONTENT, MOBILE



•


ESCROW ACCOUNTS AND DEPOSITS

Escrow Accounts,Trust Monies and Deposits

The word escrow is used many times during the home buying process. It’s something of

value, often money, held by a neutral third party in order to be used at a later date to fulfill

an obligation. The escrow agent is holding it for both parties. Establishing, maintaining and

record keeping of escrow accounts comes with a great deal of responsibility. We have rule and

obligations that must be followed. These funds must be kept in a federally insured account and

in the firms licensed named. This account must be designated as an escrow account, and the

funds cannot be comingled.



Trust monies/Earnest Money

When purchasing a home, the first exposure

to escrow is with the Earnest Money Deposit

(EMD); the buyer’s “good faith money”. This

EMD reflects the buyer’s commitment to

purchase the home. In the event the buyer

defaults on the terms of the contract, the EMD

may be at risk.

Earnest money deposit checks are typically

written to the selling broker at the same time

as the contract and must be deposited within

5 days unless otherwise agreed to in writing

by all parties to the contract. This rule also

applied to all rents and/or other money paid

to a licensee/broker in connection with a

lease. Such monies can only be distributed

according to the terms of the lease agreement.

Deed of Trust

A deed of trust is where legal title to a

property is transferred to a trustee. The

typical deed of trust is a contract between

three parties— the borrower (trustor), the

lender (beneficiary), and a neutral third

person (trustee).This is a voluntary lien on

real property, similar to a mortgage. Under

a deed of trust, a property owner enters into

a contract to borrow money and voluntarily

agrees to give up his rights in his real property

in favor of the lender, if he fails to pay the lein

according to the terms of the loan agreement.

The right of the trustee to sell the premises is

called foreclosure by power of sale

Lender Escrow Accounts: is used to

describe accounts a lender sets up in order to

pay the homeowner’s insurance and property

taxes on behalf of the purchaser.

Understanding the requirements of Escrow and deposits

I, Interest

T, 1/12 of the annual Taxes

I, 1/12th of the homeowner Insurance

Section 10 of the Real Estate Settlement

Procedures Act (RESPA) limits the amount

of money a lender may require the borrower

to hold in an escrow account for payment of

taxes, insurance, etc. RESPA also requires the

lender to provide initial and annual escrow

account statements.

Lenders are required to make escrow

account disbursements on time. If a lender

fails to do so, a borrower may bring a

private law suit under this Section. An

owner can seek damages due to the lender’s

negligence. Owners should keep copies of all

correspondence and payments for reference in

the event of lender negligence.

Understanding the requirement of Escrow account and deposits

• Escrow instructions should specify in writing how and under

what conditions monies will be disbursed,

especially if the transaction doesn’t close.



• The escrow agent is a trustee of both parties and is equally

responsible to both parties for the proper

administration of the escrow.

• If a transaction fails to close as scheduled, monies may continue to be

held in escrow provided there’s no written

demand from one party to cancel the

contract. Monies are typically held after

the closing date if the date to obtain a loan

has passed but the parties still want to

proceed with the transaction.

• If either party cancels the transaction, the agent holding the

escrow monies shouldn’t disburse any

funds until all parties agree in writing how

to disburse them.

• If parties can’t agree on how to disburse funds, the escrow agent may

file an interpleader, which names all the

parties that might have an interest in the

monies and asks a court to decide how to

disburse the money. Otherwise, an escrow

agent may be obligated to keep funds

indefinitely.

• If the parties cancel a transaction, real estate brokers and

other third-party vendors may have

first claim to escrow funds. That claim

would depend on procuring cause. For

example, if the transaction failed because

the seller backed out, but the buyer’s

agent had produced a ready, willing, and

able buyer, the buyer’s agent might earn a

commission.

Source: Portions adapted from Going into

Escrow, V.R. Oltmanns, Xlibris Corp.,

2000.

1. When does an earnest money(EMD) need

to be deposited?

» Within 5 banking days following

ratification unless otherwise agreed

upon and it will remain there until

settlement or disbursed by competent

legal authority.

2. Can the deposit of the EMD be delayed

because the buyer wants to wait on 3rd

party approval or certain inspections?

» Yes as long as it is in writing and all

parties agree

3. What happens if an agent forgets to

deposit the EMD with the broker?

» The principal broker will need to self-

report to the REAL ESTATE BOARD

4. Does Escrow money need to be in an

Interest bearing account?

» It doesn’t matter but it needs to be

disclosed who gets it.

Two Videos from Blake Hegeman:

(Received permission from Mr. Hegeman)

http://www.varealtor.com/hotlinearchive

Property Management Escrow account

Earnest money deposits (the sequel)



Earnest Money: Risky Refunds

AUGUST 2007 | BY DAMON RUBIN

Is there an old saying about handling other

people’s money? If not, there should be.

When disputes arise over the disbursement of

earnest money funds, you may find yourself

caught in the middle, facing civil liability,

forfeiture of compensation, or disciplinary

action by the real estate commission.

Fortunately, you can reduce the risk to your

clients and to yourself by ensuring that all

parties understand their rights and obligations

regarding earnest money deposits. Some tips:

Understand your duties.

Although you may represent only one party

in a real estate transaction, you should

recognize that you might nonetheless owe

the other party a fiduciary duty with respect

to deposited funds. For example, in Vicki

Bagley Realty Inc. v. Laufer, 1984, the District

of Columbia Court of Appeals upheld the

trial court’s finding that the buyer’s broker

owed the sellers a fiduciary duty concerning

the earnest money deposit. The court found

a breach of duty in part because the buyer’s

broker had accepted the deposit check,

though he knew, or should have known, that

because there were insufficient funds in the

buyer’s account, the check couldn’t be cashed

for 10 days.

When brokers act as escrowees of the

funds in a real estate transaction, they

have a duty to act in accordance with the

escrow instructions. In the absence of such

instructions, brokers should hold the funds

for the benefit of both parties. If a dispute

arises without clear written instructions signed

by both parties, the safest course is to remain

neutral and not release the funds until the

parties can reach an agreement or until the

court decides the issue.

If you wish to take a proactive approach

during a disagreement, you can file a lawsuit

seeking a judicial declaration—essentially

a request that the court determine what

the contract says about disbursing funds.

Alternatively, you can wait for one of the

parties to bring a similar action.

Follow rules to the letter.

Be extremely careful when handling other

people’s funds and follow regulations.

For instance, in Depugh v. Ohio Dept. of

Commerce, 1998, the Ohio Court of Appeals

upheld a one-month suspension of a broker’s

license after the broker had waited a week—

longer than the law allowed—to deposit a

$1,000 check into a trust account. The broker

had only clipped the deposit check to his

client’s file during that week.

Clarify the deposit terms.

Take the time in every transaction to review

the proposed contract language and determine

whether it clearly states how deposit funds

will be handled. Confusion often occurs if the

broker representing the other party is using

forms with potentially inconsistent deposit



provisions. For example, in Sheaffer v. Ohio

Dept. of Commerce, 1996, the broker found

himself in a self-described “catch-22” because

the earnest money deposit contract terms in

the parties’ primary contract were arguably

inconsistent with the terms in the parties’

inspection addendum.

The primary contract form gave the sellers

certain notice rights before the deposit funds

could be released. By contrast, the addendum

form appeared to authorize the broker to

immediately release the earnest money

without any notification or authorization.

Relying on the addendum, the broker

returned the deposit to the buyers after the

parties had reached an impasse. Although

the Ohio Court of Appeals recognized the

inconsistency in the forms, which were widely

used in the area, the court upheld the finding

that Sheaffer (the broker) had engaged in

misconduct and suspended his license for 30

days.

Provide adequate written disclosure.

Brokers should clearly and immediately

communicate (preferably in writing) all

material information concerning the deposit

to all persons having an interest in the funds.

Material information can include the fact that

an uncashed deposit check has been returned

to the buyer or that a deposit check was

returned by the bank for insufficient funds.

RE/MAX Realty 100 v. Basso, 2003, helps

shed some light on the consequences of

a failure to provide adequate disclosure

concerning deposit funds. The Wisconsin

Court of Appeals found that a brokerage

representing both the buyer and the seller

in the transaction through different agents

violated Wisconsin law by returning the

buyer’s personal check for the deposit without

notifying the seller. The check was returned

with the understanding that it would be

replaced with a certified check. But the buyer

never provided such a check. When the buyer

breached the contract, no earnest money

funds were available to compensate the seller.

The court found that by returning the deposit

check to the buyer in violation of the listing

contract, the broker “arguably placed the

needs and interests of its business ahead of

[the seller’s] needs.”

Escrow Requirements

Case Studies

Sally Doright, agent for Blackwing Realty has

been an agent for twenty years and specializes

in finding great values for first time buyers.

Her clients Rob and Laura Petrie were recently

married and while they are renting they want

to experience the dream of home ownership.

Rob is a member of the Navy’s Seal Team

Six and they will be interested in seeking

a VA Loan in financing their home. As a

young military couple they have only $3,000

available to put down as earnest money.

Sally has found a short sale listing in Virginia

for $275,000 that needs some work but “the

bones” of the house seem solid. After lots of

discussion and the blessing of Laura’s dad

(who is a contractor) they submit an offer for

$250,000 and give Sally an Earnest Money

check from their joint bank account for $1500

on October 1, 2013. They make it clear to

Sally (who told them short sale approval may



take a few months) they didn’t want their

funds tied up if the short sale is not approved

by Sally’s lender. Sally promises to keep the

check in her possession until the short sale is

approved. She tells the Petrie’s she has been

involved with short sales for years and this is

her standard practice.

Sally’s husband, Donald Doright is the

Principal Broker of Blackwing Realty.

Blackwing Realty has never had any

complaints filed against the firm with DPOR.

In order to reduce expenses, Donald has

elected to obtain the statutory minimum E&O

Insurance coverage for Blackwing Realty.

The sellers Janice and Joseph Jablres sign the

agreement October 2, 2013 and their Agent

Randy Reo delivers the signed contracts to

Sally and the Petries October 4, 2013. Randy

lists a number of short sale properties. He

immediately begins assisting Janice and Joseph

in gathering information to be submitted to

their lender Bank of Underwater to get the

contract (they owe $300,000) approved.

While there are no guarantees, everything

seems to be on the right track.

Sally and Don go out to dinner October 10,

2013 to celebrate Sally’s success and she

mentions that the Petries really appreciate the

fact she is holding the check for $1500. She

feels her understanding of the time it takes to

go through the entire short sale process is a

key to her success.

She says cash strapped young families who

are renting can deal with the delays for a good

value. There is little risk since the lender still

has to approve the sale and a Veteran has the

VA Escape Clause anyway.

The Petries understand that the sale has to

be approved by Bank of Underwater so they

also contacted Sally and said Sally’s dad came

across another For Sale by Owner property for

$260,000. They would like to use their other

$1500 on a contract offer in case the first one

doesn’t get approved.

Don Doright has just completed his CE classes

and is concerned about this situation. He and

Sally are going through a difficult period in

their personal life and he wants to keep his life

in balance.

What, if any, issues are raised in this scenario

and what actions does Don need to take?

SOLD

VESTED IN YOU.Together We’re Better!



Settlement Checklist:Helpful Tips For A Better Settlement

Send to a legible sales contract to the title

company If you represent the buyer, be sure to

include with the contract the buyer’s mortgage

lender contact information.

Notify us if any buyer or seller is unable to

attend settlement. If a power of attorney is

required, it must be approved well in advance

of settlement.

Coordinate with all parties a mutually

convenient date and time for settlement.

Provide the title company with the

commission rate and, flat rate fees, and

any other reimbursements due, along with

documentation if available.

Fax, email a copy of the termite report or any

work invoices

(e.g. repair work, plumbing, etc.) that must be

paid at settlement. Remember, if the termite

report reveals infestation, the lender will

require treatment and the necessary repairs

be completed. Documentation of the work

should be at titile office prior to closing.

Notify the title company if the sellers will rent

back the property. In order to avoid delays

in settlement, please try to have the Post

Settlement Occupancy Agreement completed

prior to settlement.

If you are aware of any special disbursements

for the settlement proceeds, such as wiring

funds or division of proceeds, please let title

company know as soon as possible so they

can have the information prepared prior to

closing. All special disbursements must be in

writing and approved by parties involved

Maryland Agents: let the title company

know as soon as possible if the seller is not a

Maryland resident (applicable for MD sales) or

if the buyer is a first-time home buyer.

Give yourself enough time between the final

walk-through and settlement to resolve any

issues discovered at walk-through.

If your client would like to review documents

prior to closing, advise them to contact the

title company well in advance so their request

can be accommodated.

Some Settlement forms

1. Deed of trust (approx. 14 pages)

2. Settlement Papers

3. The Deed

4. Note

5. Truth in lending

https://dl.dropboxusercontent.

com/u/40245548/MD%3AVA%20laws/

settlement%20papers%20for%20FIRE.pdf



SETTLEMENTS

The common goal of everyone involved

in the process is to complete settlement.

Always remain calm, and keep a level

head. Do not get emotional, even when

others around you are.

Seek privacy with your clients to discuss

the situation and listen to their concerns.

There is a solution. Gather all the facts

and ask yourself what the probable outcome

is. Determine possible solutions and compare

them with regard to the costs involved,

potential settlement delays, etc. Present these

alternatives to your clients first.

Present the Options to Others

HOWWOULD YOUHANDLE THESEPRE-SETTLEMENT ISSUES?

It is two hours before settlement. You and

your buyer discover that a home inspection

item was not repaired.

The curtains in the master bedroom are

missing, and they were supposed to convey.

Two rose bushes have been removed.

While conducting the pre-settlement walk-

through, you and your purchaser discover that

the sun has discolored the hardwood floors

surrounding the area where the dining room

rug was.

The crawl space is filled with the owner’s

junk. The owner is 80 years old.

Your buyer calls and says that he can’t get his

money from the bank, and the bank can’t find

a record of his deposit which he made two

days ago.

The buyer’s agent calls with a new condition

that the lender is requiring on the purchaser’s

loan. The seller has a shared driveway,

and the lender wants proof of a written

maintenance agreement.

A neighbor’s fence is encroaching on the back

yard.

The seller can’t find one of the remotes for the

garage door opener.

The buyer’s agent calls en route to settlement

and says that the house if filthy based on the

pre-settlement walk-through. You were in the

house one hour ago, and it isn’t filthy.

10 Things to Do After the Sale

On February 17, 2012, in Marketing, Real Estate,

by NATIONAL ASSOCIATION OF REALTORS

The paperwork is signed and all your hard

work is finally coming to an end – but

what should you do next? It’s in the days

immediately after the sale where REALTORS®

can really shine, build on their successes, and

work towards the next sale. Here are 10 things

you can do after a sale to keep that winning

streak going.

Deliver a Housewarming Gift

For new buyers, closing gifts are a great touch

and put a nice exclamation point on, “Thank

you for your business!”



NOTE: At New Millennium, we have found

that most home buyers appriciate the gift of

an american flag. Your office manager has

the details.

Find me on Facebook!

A lot of people keep in touch with friends,

relatives, and coworkers on social networks

and would be glad to add you on Facebook.

Getting access to a client’s social circle is a

good way to find potential clients who may

have a lot of overlapping friends, as well as a

perfect way to keep in touch with past clients.

If you’re concerned about privacy, Facebook

allows you to create private lists that you can

place clients in to limit the amount of personal

information you divulge.

Capture the Moment

Few images are more iconic than a family

standing outside their new home. Don’t be

afraid to ask your clients for a family portrait

which you can easily take and share with

them. They’ll cherish the photo, likely put

it on Facebook, and you can do the same –

concrete proof of your success. Clients can

tag you when they post the photo and word

could spread in their social circles. If all goes

well, their entire social sphere could view you

as the person to see when buying or selling a

house. It’s a little thing, but a picture is truly

worth a thousand words.

Add Contacts to Your Email Newsletter List

While adding your clients to your records,

don’t forget to add them to any email

newsletters you produce. Send your clients

a congratulatory email after closing, perhaps

with incentives to refer, then keep them in

your contacts for periodic updates. Email is a

powerful tool and you never know when your

client will be looking to do business again.

Ask for a Referral and Stay in Touch

The majority of buyers and sellers said they

would use the same real estate agent again

when they were back in the market. Capitalize

on the success of a new purchase or sale and

ask for a referral. Then be sure to record the

details and keep in touch with your clients.

You never know when they’ll be calling you in

the future.

Be a Helpful Resource

Buyers might be new to the area and if they

don’t have family or connections, you might

be their only source for information. Grocery

stores, mechanics, good restaurants – offer to

orient your clients to the area and make their

transition as easy as possible.

Strike While the Iron is Hot

You have a “Sold” sign on one house in

a neighborhood – strike while the iron is

hot and reach out to prospects looking

for homes in the area. You have concrete

proof that you can find a match and word

can spread through the happy family that

you’re trustworthy, reliable, and get results.

Hopefully it leads to a few more “Sold” signs

on lawns in the near future.



Toot Your Own Horn

Celebrate your achievements by doing a little

self-promotion. If you have a blog or social

media networks, be sure to tout another sale

and show that you’re an agent who can get

results. You never know who’s listening.

Update Your Advertising

If you’re advertising in local newspapers or

other publications, you might want to update

your ads to reflect recent successes. If you

aren’t advertising, perhaps a few successful

sales in a row will convince you that you’ve

built enough of a reputation to get your name

out there. Don’t be afraid to celebrate your

success and build your brand.

Update Your Files

While the sale is still fresh in your mind,

update your files with all the information

you’ll need to remember the transaction.

What lessons did you learn from this sale?

Who were the parties involved? Did the sale

generate any potential leads? Use each sale

as a learning opportunity and each client as

a potential source of advertising. Remember

their names and the situations of the sale to

follow up with cards around the holidays or

even on the anniversary of their signing.

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