Help me please...

[Ocelot]

Hey guys, I'm new to the Forum and Real Estate and I want to see if I could get some information and help from you guys. I've got a billion questions that just aren't bein covered right now by my professors. So I'll just try to detail a few.

First Commissions: The understanding being that commission is split between 9-10%. its split 50/50 between the buyer and seller then your remaining 4.5-5% is split between the broker and the agent, depending on the agency. The agency split is depending on the company. The higher the split the more benefits the company provides? Is this correct? Do the Brokerages that have say, 80-20 splits do these companies provide the same type of services toward the Agent? or do they cut costs by making the Agent pay for more things, ie; the desk, phone time, space..etc.?

Training: I hear alot about getting first hand training with other realestate Agents. The agencies I talked with say that the agent with train but expects 30-40% of your commission for the first 3-5 sales. Is this fair? What about the training coarse I've heard about? I hear Keller Williams, Remax, and Coldwell Banker offer really comprehensive training programs. What is taught in these training programs? Are they worth it? The Brokers I talked to that have the "better" training programs also have the 50-50 and 60-40 splits...is this worth it? I believe that being trained 1 on 1 with an experienced agent is far more valuable than the online training and classes that they other agencies give, what's your opinions on this?

Loan Companies: Whats the beef here? Many of the Agents I talked to seem to have a genuine distrust for Loan companies. I haven't got this far into the my classes yet so I'm still in the dark about this. How many people do you have to deal with as far as the Loan company and why is it such a negative experience?

Advertising: I have a billion questions about advertising but thats really all about learning so I'll just address my current questions. But I see it very important to have a webpage regardless of what company I work with. I've very efficient in web design so its no real problem there. Is it big that I use the MLS? What types of things do you think are key on your webpage? I want to seem very, personal so I think I want to put a blog on my webpage so potential customers can get a sense of my personality. What are the key things you want on your webpage?
I'm a natural conversationalist, so I believe that face to face contact is where the bulk of my customers will come from, as well as referrals from family and friends. Do you guys just go to busy areas and talk to as many people as you can, or do you just go about your business and talk to those you come about? I want to talk to as many people as possible in a day, I've already started doing it. I'm working on talking to at least 25 people a day. Also, how much do you guys invest toward your advertising? I was looking at local newspapers, giving out cards, advertising in the local home guides, possibly billboards, and things. Is this the best thing to do at this moment? What do you guys do? Also, I figure I'd put the word out amongst friends that I'll give them $200 for every referral that will I sell a house to/for, any success with that?

[Ocelot]

Floortime: What exactly is this? What do you do? Is it necessary, because I noticed a few companies don't have floortime.
Vehicles: I really want a G35 coupe, but its impractical for real estate purposes so I'm probably gonna settle on the sedan G35. What do you guys drive, and what do you suggest for transportation. I understand that you have to be presentable, but at the same time you have to be functional. I want to impress potential buys and at the same time, I want to get fuctionality outta the car with things like good MPG, navigation, comfortability. Suggestions?
Lastly, what do you guys thing overall about your satisfaction in the industry. I got into real estate because I enjoy the idea of a challenge. Challenges that stem from competition motivate me to work harder to be the best. Is this the attitude that has helped you guys succeed, is there anything else besides a good plan and lots of determination? Any/ Everything you guys offer will be extremely appreciated. I'm beyond pumped about the new venture, anyone who cares to tutor and advise me, the advice won't go unheeded. THANKS

[cody]

hoping to hear some good answers, these are some good questions

[LoanDoctor]

Hello Ocelot,
I have worked in the lending industry for some time now, and I can let you in on a little bit of the frustrations that most people have when working with loan officers.
1. Barriers to Entry- Unfortunately and fortunately, the industry has relatively low barriers to entry, making it easy for just about anyone to give it a try. With the refi boom, this opened the flood gates for people to come in and make a quick buck, at the expense of just about all of us. With excessive fees, no real understanding of finance, and only with a short term focus in mind, a lot of LO's came in and have been burned. So most borrowers out there have had at least one negative experience.
2. Communication- One of the easiest parts of the equation, and one that we control directly, seems to be the hardest for some people in the industry. I worked as a Wholesale Lending Account Executive for over 5 years, and my clients were loan officers. Most of the problems I encountered usually could have been resolved or avoided with one 5 minute phone call. Unfortunately, they were either too afraid to pick up the phone, didn't have the experience to fix a problem, or were leaning on the rest of us to fix it for them. Communicate.Communicate.Communicate. If you don't communicate when there is a problem, you are looked at as part of the problem. When you make that difficult phone call when something is going wrong, you now become part of the solution in the clients eyes, and that is so powerful, yet why is it so hard for people. So find someone who is easy to get a hold of and always calls you back!!!!!!
3. No committment or long term goals- With the ones who "Just give it a shot", there is no commitement there. They came in to make a quick buck with as little work as possible. Well this might work in an order taking, refi boom market, but not know. I want to work with people who are commited to their work and their clients, because that is how I work, and I don't expect anything less. It's like the bacon and eggs breakfast, I look for the pig, he is committed. The Chicken just simply can walk away.

What you need to look for in a lender/broker:
1. Service: The operational support that can give you faith that the loan will get done in time, with little headaches, with availability to all programs, and the experience and stability to know they are not going anywhere.
2. Technology: We are all here because we embrace what the net and technology can do for our business. The company you work with needs to have that as a back bone to their business model, because when utilized correctly, can make your job much more efficient and it also makes communication that much easier. This will also support your business, driving more referral business to you.
3. Not born out of the refi business! - Find a company that has expertise in the purchase market and understands the nuances of that market. Refi's and purchases are two completely different animals, and I can tell you for sure that most mortgage brokers out there are still concentrating on refi's, and have little to no experience in the purchase market.

Hopefully something here helps!
And as far as the splits go, training is everything in the beginning. Give up a little on your split early on, to gain as much experience and training as possible. Work with a mentor who is successful, and just follow their lead. Franchises work for a reason, it is duplication. Don't try to reinvent the wheel.

[klinckphilip]

do not give your friends money for referals unless they have there license. That is in violation of somthing I cant think of it now but I know not to do it. you will or did learn that in class

[Jennifer Allan]

You ask lots of good questions!

Okay, here goes...

1. Splits. Brand new agents pay a higher percentage of their gross commission to the broker because it is assumed that the broker will be spending a lot more of their time with the agent in training, mentoring and oversight. Also, new agents don't do a lot of business typically, so the broker needs to ensure that he/she will get some payment for "all" the training and support provided. Splits are also based on the amount of service the company provides all agents - for example, does the company pay for newspaper advertising? Provide home brochures? Pay for MLS time? Pay for E&O Insurance? stuff like that.

80/20 splits are for experienced agents who either don't want the company to pay for all their advertising, etc (in other words, they want to do their own) and/or are producing enough that they are bringing substantial money into the brokerage, even at the higher split. Agents on a higher split are there because they want to be, not because the company is "cutting costs".

2. Training - a hot topic for new agents. First, Re/Max does not offer training - they are an office for experienced agents who do not want or need training and don't want to pay for it. Re/Max is a 100% commission company with a desk fee... not a good place to start, but a great place to end up.

In my opinion, most company real estate training is mediocre at best. I've seen exceptions, but overall, it's disappointing. However, I would recommend that you start at a company that is used to having brand new agents so that they know how to help you get started and are prepared for your billions of questions!

(As an aside, I do local real estate consulting and mentoring for brand new agents and am looking to work with a few agents online - I would love to chat with you to get your ideas on what would be valuable to you. You can see what I do here in Alabama at www.nprea.com (http://www.nprea.com). Would love your feedback.)

3. Loan Companies. There are good lenders and bad lenders, just like there are good real estate agents and bad real estate agents. Ask around your office and get referrals. A good loan officer is responsive, creative and knowledgeable.

4. Advertising. You have a lot of good ideas about advertising. Don't pay your friends for referrals - yes, it is against the law - but even so, you don't need to pay them. Your friends want to help you and your doing a good job for their referrals will be payment enough, truly! Believe me, I'm always looking for a gimmick to draw business my way and I've finally realized that paying people to give it to you is unprofessional and doesn't work anyway.

Web page - truthfully - I wouldn't worry about that right now. Right now you need to be spending your time and money on other avenues... There's a chapter in my book about this... I can forward you a copy of the chapter if you'd like to check it out. As a brand new agent, you don't have much to say in a webpage and web leads aren't all that great usually.

DO NOT DO billboards or anything else expensive!!! And yes, you definitely will be using the MLS.

The topic of self-promotion is huge...and there are 100 different theories...

5. Floor time - that's when you sit at the office and take phone calls from buyers or sellers who just call the main number. Not a waste of time - you should probably do it. However, if an office doesn't offer floor time, it's not something to get worried about.

6. Car - something with 4doors that represents your personality. If you drive in snow or in the mountains, make sure you have something with 4WD. I always drove Subaru's which seemed to make people feel comfortable - they weren't flashy (most of your clients won't be rich and you don't want to seem like a snobby Realtor), but they were trendy (in Colorado).

7. I love selling real estate. I loved it from Day One. There are a lot of idiots in the business, but that's okay. There are a lot of difficult buyers and sellers, but that's okay too. I've made a ton of money in this business and had a blast doing it. Unfortunately, the industry suffers from a lack of trust from the public (We're third on a list of the most UNTrusted professions!) and a lot of this mistrust is warranted. But that doesn't mean you have to buy into it....

Jennifer Allan
www.sellwithsoul.com (http://www.sellwithsoul.com)

[Codythebest]

Hey guys, I'm new to the Forum and Real Estate and I want to see if I could get some information and help from you guys. I've got a billion questions that just aren't bein covered right now by my professors. So I'll just try to detail a few.

First Commissions: The understanding being that commission is split between 9-10%. its split 50/50 between the buyer and seller then your remaining 4.5-5% is split between the broker and the agent, depending on the agency. The agency split is depending on the company. The higher , any success with that?

9-10% ? :confused: :confused:
I'm at the wrong place ! :eek:

[VegasRealEstate]

Giving referral fees to freinds, family, loan officers, title agents, etc... that are not licensed as a Real Estate Agent is a viloation of RESPA. You can get fined and even have your licensed revoked for doing this.

[Lockett The Lender]

1.First and foremost giving your friends cash or any third party source for a referral violates RESPA and you do not want a RESPA violation (although it happens). There is a legal way around this with an affiliated business agreement, which are actually very common. However they can get a little involved, and would recommend having a talk with a lawyer.

2. As fas as lenders and agents there is a love hate relationship on both sides and I think it boils down to a lack of understanding on both sides.

A. Most lenders aren't really that good and got into the business for what they though was quick cash (trust me I know a great deal of these people). Real estate is a very attractive career where you can make a great deal of money with little formal education (lenders & agents alike).
However most people don't understand how much work and Patience goes into this business and although your formal education can be limited you will definitely need to educate yourself about your market and your craft.

B. I would also say many agents don't really understand the loan process and have unreal expectations. This being said I think this is the fault of the lending industry for not taking the time to properly educate agents and the public as well.

C. Lenders don't always call back and keep agents informed.

D. Lenders are not always available at the most crucial juncture ie.. weekends.

E. Lenders take to long to back to clients.

F. Fees are to high, lenders make to much money. 9 times out of 10 lenders make less than the agents. I find it funny that no one ever complains about the agents commissions but always about lender fees. Agents commissions actually push up the sales price of the house since they come out of the sellers end (not that I'm complaining, I just find it funny). There are certain fees that are accrued with any loan and although there are many lenders who try and take advantage of the consumer this is not true in every case. Sometimes traditional banks will not have as many fees but their rate may be higher, or they lack program flexibility.

G. Not closing on time. This is a problem that no lender wants but does happen. However I have found that when everyone is communicating and on the same page this problem can be anticipated and dealt with.

H. Higher closing rate then initially quoted. When I first got into the business I heard horror stories of clients showing up to closing and their rate being higher then they were originally quoted. I vowed that this would never happen to me at that this type of practice was unacceptable. OK after a few years and a bitter does of reality I can say sometimes things happen. Personally I have had this happen to me a few times but the buyer was aware before closing. This was because the buyers circumstances changed a few days before closing (credit score, cash to close etc..). No matter how well you prepare your clients there are a few who just won't listen, and they get burned.

I hope this helps, my advice is to find a loan lender and develop a relationship with this person and stick with them feeding off each other and growing each other businesses. Marketing is great, technology is great, having access to hundreds of lenders is great, but the key is to find someone who can get things done, keep you in the loop, and follow through.

[FlaGal]

do not give your friends money for referals unless they have there license. That is in violation of somthing I cant think of it now but I know not to do it. you will or did learn that in class

Let me help ya out there:
It is a violation of license law to share a commission with or to pay a fee or other compensation to an unlicensed person for the referral of real estate business clients, prospects, or customers.

[TJ2007]

1st - Lockett the Lender - thank you for a great post, you really seem to know your biz.

& Loan doctor - that's funny - I'm sure there are hundreds of loan officer that have NEVER done a purchase loan - :eek: sad.

And all you realtors out there - great idea to really, try to understand how it really works (scary), as Lockett put it, lots of misunderstanding on how things really happen - comunication, comunication.
Not just the new guys either, I still find agents who claim they have been agents for over 10yrs but still have never heard of 100% financing or seller contributions to closing costs!!! HELLO!

[TJ2007]

Referral fees!!!! watchout you might not get caught, but if the broker giving you the cash gets busted it all comes down - don't lose your license for a few pennies!

That said there are legal structures and ways for real estate agents to benefit monetarily from the loan side through, ABAs and other agreements that are not in violation of RESPA.