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Real Estate
Texas Real Estate Marketing
| Question | Answer |
|---|---|
| Kotler's idea | it costs the average business about five times more to obtain a new customer than to maintain the relationship with an existing customer. |
| How are niches created? | Same as micro-marketing - by identifying needs, wants, and requirements that are currently not being addressed or are being poorly addressed, and then developing and delivering goods or services to satisfy those needs/wants. |
| Mass Marketing | An attempt to appeal to an entire market with one basic marketing strategy utilizing mass distribution and mass media. |
| Strategy implementation | refers to the means associated with executing the strategic plan. |
| Strategy implementation includes what type of steps? | Creating teams Adapting new technologies Focusing on processes rather than functions Facilitating communications Offering incentives Making structural changes |
| Small Business Administration (SBA) offers five criteria to help you define your ideal outcome through strategic thinking. | 1. Organization 2. Observation 3. Views 4. Driving Forces 5. Ideal Position |
| What does the organization of your business involve? | your employees, the organizational structure of your business, and the resources necessary to make it all work. |
| What does increasing your powers of observation mean? | Looking at the big picture like looking down from a plane, What motivates ppl, how to solve problems more effectively, etc |
| What is a view? | Simply another angle to consider |
| 4 viewpoints to consider when forming a business strategy: | 1. Environmental view 2. marketplace view 3. Project view 4. Measurement view |
| How can viewpoints be used as tools? | To help you think about outcomes, identify critical elements, and adjust your actions to achieve your ideal position. |
| Driving Forces | Vision, business focus, office motivation, incentives, empowerment, qualitative factors like results, commitment, value and effectiveness |
| Ideal Position | Working through the first 4 SBA criteria will help you get to your ideal position. |
| What questions are important to determine your ideal positon? | best niche? what conditions do I need to be productive, what opportunities exist? What skills do I have? What strategies can I use to pull them all together? |
| average human attention span | 7 seconds |
| Who does my sphere of influence include? | friends, family, neighbors, past co-workers, schoolmates, and contacts from church, the gym, social clubs, friends of friends, and friends of family |
| Marketing mix | a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. |
| 4 P's of the marketing mix: | product, price, place and promotion |
| Product | item or service that is built or produced to satisfy the needs of a certain group of people. |
| What 3 Phases does a product go through? | growth phase, maturity phase and sales decline phase |
| What questions should I ask myself about the market? | product satisfies what? What are needed features? How & where used? What does product look like? Name? Branding? How does it stand out and is different from others? |
| Promotion | Important part of your marketing mix as it builds your brand recognition and product sales |
| Elements of Promotion: | Sales Organization Public Relations Advertising Sales Promotion |
| When creating a promotion strategy, What question should I first ask? | How do I reach target market? Do I use internet, print, TV, radio, billboards? Best time to promote? How do competitors promote? |
| What should I ask about price before I set it? | what is the value? Is the consumer price sensitive? How does your price compare to competitors? |
| Advertising | communication with your consumers regarding your products |
| marketing | activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. |
| marketing mix | general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. |
| Which country had the highest percentage of resident internet users? | Japan |
| How do you use Psychology in your marketing? | Run emotional ideas Highlight your flaws Reposition your competition Promote exclusively Introduce fear, uncertainty and doubt |
| The elements of a service plan should include: | Frequency of communication with the client; Means of communication with the client; Methods of marketing the property; Method of following up on transaction status; Method of following up after closing. |
| a few question to ask about the branding of your real estate business. | What are your goals? Who will help your reach those goals? How are you helping them? |
| What should graphics contain? | Real estate logo Website Email templates Banner ads |
| Why do peaks and valleys occur in your business? | because when we’re busy doing the work (managing the pipeline), we’re not busy creating the work (filling the pipeline). Therefore, when you take time from prospecting and redirect your focus to managing the transaction |
| Different categories of home buyers: | First-time home buyers Buyers looking to trade up Buyers looking to trade down Buyers looking to stay the same, but in a new location Second-home buyers |
| Who is #1 generational group with the largest population segment in the nation, the largest group of tenants, and the #1 generational group of homebuyers across the nation as of 2015? | millennials |
| To find a Millennial prospect, how should you prospect? | Twitter or Instagram feeds |
| What is most people's favorite word? | Their name |
| What things forms the relationships with clients? | communication, competency, Availability, organization, Attitude and demeanor, Empathy |
| Why should you: know your competition? | How am I different, what are their strengths and weaknesses? what can you offer that others do not? |
| How should you describe a home in an ad? | don't just say the home as a pool, add the benefit with the feature. ex: house has a pool; say that it offers a great environment for entertaining guests. |
| how should your plan go beyond simply advertising? | include in the plan how you will market to cooperating brokers and how you will attract qualified buyers. |
| According to Nar, how often do people move? | Every 8 years |
| When Selling a house for a client, what kind of things should you be reporting back to them? | At least once a week, showings, feedback, suggestions to increase showings, sales that have occurred in the neighborhood. What you are doing to market the property. |
| What is on a "listing" checklist? | put a sign in the front yard, lock box on the house, put on mls, create a flyer, schedule an open house, back office documents, |
| Contract checklist | earnest money and option money to title co, deadlines for the listing, disclosures, inspections, appraisals., work with lender |
| how long should you wait to call the client after closing? | 1 week to see how everything is going, then at week 2, then 1 mo, |
| How should gifts be handled when a client closes on a home? | not at closing. Make it personal and long lasting so they think about you when they use it. |
| How can you make an impact with the client that was represented by the other realtor? | Call them and wish them well. They remember this and it goes a long way. |
| What kind of things do you talk about after 1 mo after the clients have closed on their home? | This time, ask them if they are satisfied with the purchase and the service you provided. Ask them if they have any friends or family that might need your services. If you have provided good service, they will reward you with a referral or two. |
| When a seller sells, what should your follow up look like? | Thank you for hiring me card, call in a couple weeks, ask them if they are satisfied with the price they received for the home and the service you gave them. If so, ask them for referrals. Follow up with the sellers again in a couple of weeks. |
| What do we ask previous clients? | Do they have any friends or family that are in the process of relocating, divorcing, adding to the family, or any other situation that might mean they will be buying or selling a house? Ask them if they have any friends that have been laid off recently. |
| Your _____________ should address the question of why your business needs to exist. | Mission statement |
| What is just as important as creating your business plan? | Establishing service standards |
| How many homes are owned by singles? | 55 million |
| What should agents learn about the market they are farming? | local schools, housing price trends, rental vacancy rates, employment numbers |
| What is the average age of home buyers today? | 30 years, part of millennial generation |
| What age are first time home buyers? | 20-30 |
| When were baby boomers borne | 1946-1964 |
| Who can help you find military client home buyers? | Both customer service representatives at title insurance company and professional data marketing firms |
| What are some good short term goals | 20 listings, referrals from at least 50% of past or current clients, #1 selling agent, $10 million dollars worth of total real estate sales, 50 new prospects within the next year |
| What kind of things should an agent share about themselves? | education or past work experience (i.e., financial, accounting, or legal backgrounds), securities licenses, insurance licenses, or past business awards |
| What are some marketing strategies an agent may use? | cold calling, door knocking with flyers or brochures, email, postcards, sphere, online marketing |
| Marketing Mantra | Repetition is the key to programming |
| How many times do people need to see an ad to be interested in the product or service? | 5, 7, or 11 times |
| How long should you stick with a marketing strategy? | 6 months |
| When courts consider the priority in a listing and commission payment dispute, they will likely reference which law as it pertains to written instructions as opposed to verbal instructions?` | Statute of Frauds |
| ____________ homes require special marketing venues that generally require a larger investment on the part of the listing brokerage. | Luxury |
| Who are your best referrals? | Those who have large spheres of influence |
| What is the average age of a home buyer in the U.S.? | 30 |
| A person cannot really create a solid target marketing plan without first understanding what his or her true _____________ is behind the selection of the targeted or desired plan. | Motivation |
| What is the top factor for the demand and high prices paid for a property? | Location |
| What designation might benefit someone who wants to target the niche market of baby boomers and seniors? | Seniors Real Estate Specialist |
| What does technology include in real estate? | computer software and high resolution digital cameras, smart phones, and global positioning systems. |
| The rule of 7 | the average consumer needs to see the same ad over and over at least seven times because they will eventually take action and buy the product or service being offered. |
| difference between Internet and world wide web? | the World Wide Web is to the Internet what television programs are to televisions. |
| What questions should I ask myself to identify my customers? | Who is your customer? Where is your customer? What does the customer purchase? What does the customer consider a value? |
| Your web site will be a reflection of what? | your customer-driven philosophies |
| How do you develop your philosophies? | from both internal and external perspectives |
| What are some ways to promote your website? | links on other websites, real estate directories, advertising in your local media, URL on business cards, bumper stickers, car window shades, and magnetic signs. |
| The right things gone wrong trap | they have a good idea, but it lacks proper planning, proper execution, or proper follow-through example: Offering free real estate guides offered through your website (Right idea!), then not shipping them for four weeks. |
| What does the acronym IDEA stand for? | Identify, Diagnose, Explore, and Act |
| "I" stands for Identify in customer service-what does this mean? | Identify the problem. By using "gap analysis" - that is, determining the gaps between what customers ideally expect and what they actually get from you |
| What should you keep in mind when using surveys on your site? | USE the surveys to incorporate changes, Don't get info just to make them feel important, thank them for their time |
| "D" stands for Diagnose in customer service-what does this mean? | Look deeply for the "root" or most underlying cause. by using scientific approaches (such as charts, graphs, and trend studies |
| "D\E" stands for Explore in customer service-what does this mean? | explore for solutions to the problems and areas of concern. do not initially feel the need to rein yourself in. Be free with the ideas. Who cares if the solutions you come up with, this may lead to another idea. |
| What country has the most internet users? | China |
| The top four websites visited on the planet | Google, Youtube, Facebook & Baidu (China) |
| T OR F There are more mobile internet users than desktop users around the world? | True |
| On Web-site, blog or business page, The most important contact information should include? | agent’s full name, employing brokerage firm’s name and license number, physical and email addresses, and phone number |
| Where can agents on a budget Blog for free? | Blogger (owned by Google), Wordpress, and GoDaddy |
| What should go in a blog? | A well-written blog with the latest sales price and demographic trends may keep the customers coming back to the site and eventually calling the agent to set up an appointment |
| What types of multi-media should an agent use to keep people interested? | video, images, audio |
| How often should you post statistics on your site? | monthly or semi-regularly basis along with email alerts that go out to past viewers to entice them to visit the sites as often as possible |
| How do you get your site to rank high or towards the top of the search engine site? | Pay per click and Engine Optimization |
| Pay Per Click | You pay every time someone clicks on your web-site |
| How should you set up your pay per click? | Very specific or you may get people to click on your add from London. Say DFW real estate agent. Or DFW new condominum agent. |
| How do you get started using Pay per click/engine optimization? | You simply visit the website of the search engine company of your choice and fill out an online form. Then you select the keywords on which you wish to bid. Then give ad copy. |
| What is the ad copy? | This is an ad you provide for your search engine optimization. It must be very conservative. No I am the best agent... |
| How often should you check your placement once you place an ad for optimization? | 2 times per week. If it drops, add more to your bid. |
| 9 steps to keep clients for life: | 1.top mgmt 2. internal evaluation 3. know customers' needs 4. Establish measurable goals 5. cust. contact mgmt 6. improve CUSTOMER relationships 7. Help solve customer problems 8. Give teammates feedback & rewards 9. Have customer focused network |
| hyperlinkS | The World Wide Web is a system of documents or "web pages"- connected by address links |
| What can happen if you set your goals to high? | you may become discouraged, as they may appear unattainable. Set short term goals instead. |
| What should you consider when choosing an ISP (Internet Service Provider)? | Connection speed Features and services ISP capabilities |
| What do customers want when using a web site? | Speed and ease in maneuvering through the website. Addressing and resolving concerns in a satisfactory way. Timely responses to the customer's questions. |
| How do you earn customer loyalty? | being on the customer's side, Respect privacy, make searching, virtual tours of properties, Move at their pace, be enthusiastic |
| Highly ranked two leading benefits of the Internet. | speed of communication and 24-hour access |
| 4 steps for a growing a database | Design a system that works for you Maintain it every day Schedule daily communication time Service your leads |
| Hot leads | ready to move now |
| warm leads | are considering making a move, but usually want more information about the market. They want to consider their options as they make their decision. |
| Cold leads | no immediate real estate needs but don’t ignore them. If you maintain contact with your cold leads, you will find that they can be a great source of referrals. |
| What should you remind each of your contacts of when you reach out to them? | That your are a real estate professional and would love to help them. |
| What are some ways you can partner with others to promote your business? | real estate events and partnering with attorneys, title companies, credit repair services |
| How much time per day should you follow up? | 3 hours |
| traditional business mindset | managers train or ensure training for the lowest levels of workers to complete tasks |
| service-minded economy | managers train or ensure training for everyone and empower everyone in the company to serve the customers. |
| Customer Champion | is someone who acts as the eyes, ears, and voice of the customer in your company, Customer Champion reviews the decision and its enforcement while "thinking like the customer." |
| Listing portal | a reference to sites like www.realtor.com, Trulia, and Zillow. |
| One-click rule | person online can find the agent’s contact and real estate licensing information within one click |
| Syndication listing sites | to companies such as Postlets, ListHub, or other sites that send listings to multiple portal sites around Texas or the rest of the nation. |
| Technology | broad definition that includes topics like high-resolution digital cameras, smartphones, and global positioning systems. |
| According to the National Association of REALTORS®, what percentage of real estate agents market properties with video? | 5% |
| As of 2017, how many blogs were posted around the world every single day? | 2 mm |
| Would it be better to make the customer reiterate the information he or she has already provided to you via customer surveys through your site? | NO! |
| How can you gain information regarding the quality of ISP service and support? | Repetition |
| What does the letter "E" represent as the third step in the IDEA problem-solving process? | explore |
| What is the technological alternative to a real-time walk-through of a home that is for sale? | Virtual tour |
| How many users does Facebook have? | more than 1 billion |
| How many users for FB in US and Canada | 160 million |
| strategies on FB | High quality images, client thank yous, share vendor list, Post multiple view points, brainstorming, |
| how often should you post on FB | regularly |
| Where do you find the real estate agent directory on social media? | |
| visually oriented platform to grab attention of high quality images | |
| Find out what audiences like and provide them with information | |
| google+ | get access to a wealth of targeted info by joining google+ group like real estate marketing and branding |
| professionals, find ideas, join relevant groups | |
| ideal for sharing quick tips on activities that are important to you target client. Use to ask questions. | |
| youtube | create your own channel to feature video content that's relevent and useful to your clients. |
| What are the best kind of blogs? | interactive |
| What is the benefit to the client when we use social media? | better targeting, narrow you audience, get info quickly, |
| How can you use emails on Facebook? | upload a customer list with their email addresses to users on Facebook, allowing for identification of their FB accounts. |
| When you use a FB list how many will you connect with? | 30-50% |
| social media strategies musts: | be findable, grow networks, listen, communicate |
| what is critical for brand developement? | listening |
| 5 considerations noted by Hootsuiete to be effective on social media: | 1. consistent 2. have a content strategy 3. never forget - real estate is local where to get coffee, pizza 4. Dip your toe into more that one stream 5. measure your efforts |
| how often should you check analytics? | 1 X per week |
| Integration key | you can combine your platforms. Using twitter to direct traffic to a personal blog or page is a great example. |
| Millennials housing wants? | small efficient technologically advanced condos, apts, and small houses. close to city centers, outdoor rec and community gatherings |
| Generation X | shrinking as a housing demand demographic. hardest hit by housing market downturn. More are now renting. |
| Boomers | had more equity in their homes and went through market down turn easier. Worked hard to enjoy their luxury. |
| How do the different generations like to communicate? | boomers - telephone, Gen X email, millennials - texting. Silent gen likes a formal letter. |
| what is good about using a video for marketing? | tells a story, 88% watch videos, using a video in email subject line boost open rates 19%, 69% of smartphone users say videos are perfect solution for smartphone viewing |
| how many people would prefer to market their home with a video? | 73% |
| What place can you use a video to market you business? | social media, website, testimonials, office promo, profile, informational videos, local business reviews, neighborhood videos, community events, listing videos, livestream |
| One of the most popular sites for marketing videos? | |
| What do people want when they go online? | entertained and educated |
| When making a testimonial video what are some good things to ask? How long should it be? | should be a few minutes, What di you like best about working with agent, were there any particular challenges, what did she do differently? |
| profile videos | give people the opportunity to get to know you. be real, ppl person, tell about yourself, silly story, this creates a bond |
| what kind of informational videos can you share? | design ideas, or household tips. |
| Ideas for how to videos | 1. How to get pre-approved for a mortgage 2. how to select a real estate agent 3. How to pick a dream house 4. How to understand a home inspection report |
| How often should you post videos on you site? | 1-4 per month |
| local business reviews | businesses and restaurants |
| neighborhood videos | focus on immediate neighborhood, pools, playgrounds, parks, what the area looks like, testimonials about what homeowners like about the area. events. |
| LIsting videos | walk through a property, gives buyer the feeling of moving through the home, can show size and features. |
| What does inman.com say about making high quality videos? | tell compelling story, don't include every room, focus on features, 3 good pans, use umbrella, shoot during brightes time of day, shoot outside at sunrise or sunset, keep windows behind camera, 60-90 sec long |
| streaming media | continuous. in real time like a virtual open house. can use this for out of town buyers. |
| popular live streaming apps | periscope, meerkat, and facebook live. |
| what video free software is available ? | For MAC use iMovie, and for PC use Windows Movie Maker |
| keywords are used for? | can use in post to for search engine optimization. they are typically based on geographic location, property type, property features, |
| Generating ________________requires an understanding of what clients look for and how they are using social media. | Relevant content |
| ___________________ is key. | Integration |
| In any_________________________, it's essential to post regularly and respond to comments or requests for information n a timely manner. | social media campaign |
| How can you increase your following on social media? | Understand audience, be aware of options, create a schedule of social medial work |
| what percentage of consumers are more likely to buy a product after watching a video about it? | 64% |
| Average adult reads at what grade level? | 7th |
| What do most consumers want to know about real estate? | value, DOM, unsold inventory, price changes year to year basis |
| What type of things can play a role in annual increase or decrease changes for median homes? | external factors like available supply, job openings, etc. |
| How do agents find housing trends? | speaking with homeowners at parties, door knocking, etc., www.realtor.com and other mls sites, title companies, newspapers,, planning and zoning offices, |
| how can zoning changes help agents? | Agents can learn about new zoning that may increase the value of land, new zoning guidelines can make raw land valuable b/c of growth. Agent can reach out to land owners. |
| Unique traits of real estate | Inherent value, unique appeal , demand must come to supply, illiquid, slow to respond to changes, decentralized local market |
| t or f Real estate does not depend on the local economy? | False. a real property cannot be shipped to a large central real estate market. so local in nature and highly susceptible to swings in the local economy |
| Supply | the amount of propery available for sale or lease. |
| Supply for real estate include: | residential, commercial, agricultural |
| Factors that influence real estate supply: | development costs, availability of financing, investment returns, community's master plan, government police powers and regs |
| Real Estate demand | the amount of property buyers and tenants wish to acquire by purchase, lease or trade at any time. |
| Units of demand by property classification: | residential, commercial and industrial, agricultural |
| formula for demand for office and industrial space: | employment growth or shrinkage X avg are of floor space typical employee uses. Ex 500 new employees X 120 sf = demand for 60,000 sf. |
| the demand for a particular type of real estate relates to what? | the concerns of the users |
| the concerns of real estate users revolve around what components? | value, desire, utility, scarcity and purchasing power |
| What are residential users of real estate concerned with? | quality of life, neighborhood quality, convenience and access to services and other facilities, dwelling amenities in relation to household size, lifestyle and costs. |
| Retail users are concerned with? | sufficient trade, level of trade, sales volume, consumer spending, growth patterns |
| Office users are concerned with? | costs of space, efficiency of the bldg, accessibility of employees and suppliers, matching building quality to the image and function of t he business |
| Industrial users are concerned with? | functionality, availability and proximity of labor, compliance with envir. regs, permissible zoning, health and safety of workers, access to suppliers, and distribution channels |
| What engine drives demand for real estate? | employment |
| base employment/industries | the number of persons employed in the business thay represent the economic foundation of the area. |
| supporting industries | industries that support the base industry. Ex car factory (base). supporting or secondary parts industry, or service industries to take care of the cars. |
| What does total employment include? | base, secondary, and support industries |
| vacancy | the amount of total real estate inventory of a certain type that is unoccupied in a given time |
| absorption | the amount of available property that becomes occupied over a period of time. |
| local market influences | cost of financing, availability of devel land, construction cost, city's ability to handle growth, gov regs and police poowers, change in economic base, in and out migrations of major employers |
| How do national trends influence real estate? | can influence the local market by changes in money supply, inflation, national economic cycles |
| Gov influence | Local zoning power, local control permitting, local taxing power, fed influence on interest rates, environmental leg. and regs. |
| Why would a city declare a moratorium on new construction? | possibly because of water or power shortages, insufficiency of thoroughfares, or incompatibility with the master plan. |
| How do you find out what people want? | search trends on google. Google trends, Google insights, magazine.com ebay pulse, Yahoo's Buzz, ComScore, JupiterResearch, amazon, Google adwords, wordTracker |
| 5 C Analysis | Company, Collaborators, customers, competitors and climate |
| competitive advantage | determination of your core competencies, analysis of which core competencies can become competitive advantages and calculation of how sustainable comp advantage can be constructed |
| customers include: | market size & growth, market seg, customer benefits, motivation, decision maker, retail channels, consumer info sources, buying process and frequency, quantity and trends |
| climate | political and regulatory, economic, social, and tech environment |
| competitors | actual or potential, direct or indirect, products, positioning, market share, strengths, and weaknesses of competitors |
| collaborators | distributors, supplies, and alliances |
| company | produce line, image in the market, tech, experience, culture and goals |
| completive advantage: | determination of your core competencies, analysis of which core competencies can become competitive advantages, and calculation of how advantage can be constructed. |
| What does SWOT analysis analyze? | same purpose as 5 c's but evaluates strengths, weaknesses, opportunities, and threats involved in a particular project or business venture. |
| Types of value when appraising a property: | use, exchange, market, reproduction, replacement, value, assessed, condemned, depreciated, rental, insured, mortgage |
| use value | the value the property holds for the owner |
| Several factors contribute to USE Value: | Income, appreciation, use and tax benefits |
| exchange value | results from comparing the property to other similar properties on the open market. This is the type of value that real estate agents are concerned with |
| market value of a property | the highest price a buyer is willing to pay and the lowest price the seller will accept |
| factors that influence property pricing: | anticipation, Assemblage, change |
| anticipation | The benefits a buyer expects to receive over the period of time he or she has the property influence the decision to purchase it. |
| assemblage | When two adjacent pieces of property are joined together, the value of the one larger parcel may be greater than the value of the two separately. |
| plottage value | merging two lots and creating a greater value than 2 separate lots |
| Economic Principles | conformity, competition, contribution and diminishing return |
| conformity | This principle says that a property is at its highest value when it conforms with and fits into its surroundings. If all houses have 2 bath then you need 2 baths to conform |
| competition | his principle holds that when several businesses of a similar type are close to one another, together they may make more money than they would have individually. many fast food together |
| contribution | his is what the market recognizes as the change in value an improvement makes to a property, rather than what that improvement actually costs. |
| diminishing return | This condition is a result of continuing to add improvements to a property when those improvements will have no effect on increasing the value of the property. |
| Highest and Best Use | every property has a single use which produces the greatest income and return. Therefore the property will have its highest value when it is used for that purpose. |
| what factors must be true for Highest and best use to be in effect? | Legally permissible Physically possible Financially feasible Maximally productive |
| progression | The value of the "smallest house on the block" will tend to increase if the other homes on the street have more value |
| regression | the value of the "largest home on the block" may decrease if the other homes on the street are much lower in value |
| substitution | buyer will not pay more than what he would pay for another home that is = value. Ex, if there are several homes for sale in a neighborhood and they are alike in size, quality and amenities, a buyer won't usually purchase the home with the highest price. |
| Supply and Demand | value of a property depends on: How many properties are available in an area Property prices Number of prospective buyers Price buyers are willing to pay |
| Zoning categories | residential, commercial, industrial |
| 3 approaches to appraisals | Cost Approach Income Capitalization Approach Sales Comparison Approach |
| When is it best to use cost approach? | new builds, and special purpose buildings when data on income is not available or there are no comparable sales. |
| cost approach attempts to estimate what? | reproduction or replacement cost |
| reproduction cost | the construction cost at today's prices of producing an exact duplicate of the current building, including its improvements and its flaws. |
| replacement cost | construction cost at today's prices of producing a similar or equivalent structure. |
| When is replacement cost a got appraisal to use? | most popular when appraising older buildings with outdated features. Newer materials and techniques can replace the outmoded ones. |
| Appraisers use the income approach for what purpose? | o estimate the value of properties that produce income, usually from rent paid on leases. This approach assumes that an investor will purchase a property based on the future income stream the property will produce |
| sales comparison approach | based on the principle of substitution, which says that a buyer will not pay more for the subject property than he or she would pay for a property that is similar in characteristics and amenities. |
| What is the easiest to understand and the most reliable appraisal method for a residential property? | sales comparison approach |
| factors that determine the value of a home at any given point in time: | location, condition, improvements, supply and demand, & financing trends |
| what are some things to consider about the neighborhood? | rentals and vacancies |
| Do people prefer narrow or wide streets normally? | Wide, they are less crowded |
| how does community status affect a neighborhood? | Determine if the neighborhood is considered to be prominent compared to other nearby communities. Prestigious neighborhoods tend to have higher property values. |
| what rooms do not count in appraisal or cma total number of rooms? | BATHROOMS OR ROOMS IN THE BASEMENT |
| What does energy efficient include? | extra insulation, double- or triple-paned windows, and energy-efficient appliances such as hot water heaters, dishwashers, and heat pumps. |
| How far back should comps go? | 3-6 months |
| How many sold comps should you use? | 3 |
| How can agents use overpriced Expireds with sellers? | This will illustrate rather graphically how the home was originally overpriced and failed to sell, but when re-listed at a price that was on target, it sold readily. |
| Three of the main components that make up the value of something like a home are: | demand, scarcity, and transferability |
| equilibrium point | The market price is described as the equilibrium point (or price point) where a qualified buyer’s offer price is accepted by a willing seller who is not under duress. |
| inelastic | available supply of housing in most market regions is generally defined as inelastic due to the fact that it is relatively slow to change, replace, or rebuild |
| elastic | demand for housing can fluctuate up or down due to factors such as current unemployment rates, interest rate levels, mortgage underwriting guidelines, and other issues. |
| functional obsolescence | properties with outdated features that aren’t too much in demand in modern times such as a home with just one small bathroom |
| three main stages in a real estate cycle | development, maturity, decline |
| three types of inflation during a certain economic cycle. | demand pull, cost push, anticipated inflation |
| Demand Pull Inflation | Inflation increases due to a combination of increased consumer demand for goods, services, and assets during periods of time when there is relatively low unemployment and higher annual wages being paid. |
| Cost Push Inflation | The time period when the available supply of a specific item for sale is much lower due to excess demand for the same product or asset. 50 ppl waiting on Dallas apt with 2 apts available. |
| Anticipated Inflation | If enough people believe that the future value will be much higher in the near term than at present, then this belief in future higher prices may be the main catalyst to push prices higher if enough people are certain that it is true. |
| Deflation: | decrease in the general overall price of goods and services as measured by the Consumer Price Index from year-to-year. Deflation exists when the annual inflation rates fall below zero percent (0%). |
| Disinflation | measurement of slowdown in the annual rate of inflation. If the previous year’s inflation numbers were too high, the Federal Reserve might decide to start increasing short-term interest rates in an attempt to reduce the reported annual inflation numbers. |
| Stagflation | This cycle has some combination of stagnation (or flat cycles) and inflation. |
| Reflation | The inflationary stage when prices for consumer goods and assets like homes begin to increase once again after years of declining prices during sluggish economic times. |
| Hyperinflation | happens when annual inflation rates and prices move too quickly skyward in a short time. Like when the Fed U.S. Treasury print too much money, keep interest rates low, and banks are more flexible with underwriting approval for loans & home loans. |
| When adjusting for differences in comparable properties, what do you make changes on the comps or subject home? Does it matter where you make the changes? | licensee will always be making the adjustments to the comparable properties. He or she should never try to make any adjustments to the perceived value of the seller's property. |
| target market strategy will likely identify groups of potential customers how? | by breaking them down into smaller subcategories that related to their personal preferences, demographics, behaviors, personality traits and characteristics, and locations where the prospects live at the time of the marketing campaign. |
| main customer or prospect traits that a person using target marketing methods may focus on: | Size of family Annual income Gender Marital status Age ranges Occupation Educational background |
| 4 P's of marketing | Price, product, promotion and place |
| What is one more marketing "P" if the agent does well at marketing? | Profitable return on their time and money |
| Why do appraisals come in low? | Artificially inflated prices resulting from multiple offers. Overpricing by the seller. Appraiser uses only sale data |
| solutions for low appraisals: | buyer can make up difference in cash, seller can lower price, seller can offer to carry a second mortgage, buyer can apply to another lender and get another appraisal |
| two common methods that can help determine a reasonable asking price for a property are: | cma and appraisal |
| why are appraisals normally done? | for lenders to help set a maximum amount for the loan a buyer is hoping to get to purchase a property. |
| Value Influencers | Anticipation Assemblage Change Conformity Competition Contribution Diminishing Return Highest and Best Use Progression and Regression Substitution Supply and Demand |
| What does the principle of conformity say? | A property is at its highest value when it conforms with and fits into its surroundings |
| If the subject property has one less bathroom than a comparable property, how is the sales price adjusted? | The value of the bathroom will be subtracted from the price of the comparable |
| What condition is a result of continuing to add improvements to a property when those improvements will have no effect on increasing the value of the property? | Diminishing return |
| how old must home owners be to get a revers mortgage? | 62 or older |
| How can payments be made for a reverse mortgage? | in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or through an established line of credit. |
| What happens if the Reverse mortgage home owner dies and the home is sold and it is not enough to pay off the loan. Does the remaining balance pass along to the heirs? | NO. HUD will pay any shortfall to the lender. The Federal Housing Administration (FHA) charges a mortgage insurance premium on the HUD RAM to provide this coverage. |
| How does FHA charge for the insurance premium for a Reverse mortgage? | The senior borrower is charged 2 percent of the home's value as an up-front payment plus one-half percent of the loan balance each year. The lender usually pays both of these amounts and includes them in the principal balance. |
| How can seniors 62 or older use reverse annuity mortgage to purchase new home? | pay some cash, and obtain reverse annuity mtg for balance. Reverse mtg has no payment as long as they live in the home. |
| How much can you borrow in reverse mortgage? | The older you are the more you can borrow, 26-60% roughly. These funds are not repaid until the home is sold. |
| What are the normal terms for a lease purchase? | Non-refundable deposit, Accelerated rent with credit back, Tenant/purchaser is responsible for all repairs, Contract should be settled within a one-year period (2 @ most), Financing terms to be arranged at least 60 days prior to projected settlement |
| can an agent in TX write a lease purchase contract? | No. this is to be done by an attorney |
| how long does seller of investment property have to select the next property | 45 days |
| How long does investor have to close on second property after first property is sold in a 1031 exchange? | 180 days or less. |
| taxable boot | funds that go back to the seller in a 1031 exchange. If sold property sold for more than the next property costs. |
| FHA Title I Loan | HUD insures lenders for home improvement loans, making it easier for the borrower to obtain the loan. insure a 20 year loan up to $25k for improving a single-family home.$12k per unit are also available for multi-unit dwellings, with a cap of $60k |
| What does a title search reveal? | The legal description of the property. The owners of record. Any outstanding liens or encumbrances on the property. |
| examples of liens against a property: | Outstanding property tax bills. Mortgage loans. Court-ordered judgments. |
| encumbrance | indicates that some other party has some rights or claim to the property. |
| encumbrance examples | A utility right-of-way. Neighbor's fence or garage encroaching. Driveway easement through the property. |
| what does title insurance do? | guarantees the validity and accuracy of the title search., makes good on any loss arising from a defect in the title or from any liens or encumbrances on the property. |
| what could be some hidden defects on a title for a real property? | Forged documents, such as deeds or mortgages. Undisclosed heirs. Mistaken legal interpretation of a will. Misfiled documents. Confusion arising from similarity of names. Incorrectly stated marital status. Mental incompetence |
| who should have title insurance on a property? | both the lender and the buyer? |
| standard title policy | may be issued to a lender only, a buyer only or jointly, |
| joint-protection standard coverage policy | title policy that covers both buyer and lender |
| are there items a standard policy does not cover? | Defects, easements encumbrances and liens not on public record, Taxes or assessments that are not yet liens. Mining claims. Reservations in patents, Water rights, Zoning ordinances, Rights or claims of persons in or property, Unrecorded claims |
| what kind of title policy do lenders want? | extended coverage policy. |
| what does a extended coverage policy cover? | nonrecorded liens. Off-record easements. Mining claims. Water rights. Rights or claims of persons in physical possession, Unrecorded claims |
| What information does the escrow agent need? | The length of escrow. Terms of loans. Commissions. Instructions about inspections, such as termite reports. Personal property included in the sale. Legal description of the property. Earnest money deposit. |
| corporate records files | documents that are created as part of the process of setting up the business itself. For example, you might keep your bank account application and agreement, corporate tax returns, and copies of any leases of which your business is a party in this file. |
| accounting file | contains payroll and other information you provide to your accountant. |
| client file | contains correspondence and other information you have gathered about your clients. This file is different from the transaction file. |
| 5 elements of accounting to consider: | assets, liabilities, equity, revenue and expense. |
| what is the sum total of assets, liabilities, equity, revenue and expense? | sum total = 0 |
| What numbers are used in the balance sheet? | assets-liabilities-equity (equity the money you put in or started with) |
| what items are used in the earnings statement? | revenue-expenses |
| accrual accounting | an accounting method that matches revenues to expenses at the moment in time the transaction occurs. |
| why do most companies use accrual accounting? | because it provides a more accurate picture of the financial condition of the company. It is also more expensive to track and maintain. |
| Profit and loss statements or P&Ls | statements that summarize the revenues, costs and expenses incurred during a specific period of time -- usually a fiscal quarter or year. |
| SOURCE DOCUMENTS | the pieces of paper that compose the back-up to your accounting entries. These are the receipts of your expenses, the invoices and payments for work completed, etc. |
| What things must you decide when you file your business taxes? | 1. calendar year or fiscal year 2. cash or accrual accounting |
| Name the four kinds of business taxes: | Income Tax Self-employment Tax Employment Tax Excise Tax |
| When must you pay self employment tax? | you are self-employed and earn over $400 per year to cover the cost of social security benefits. You can deduct one-half of your SE Tax on your Form 1040 return. |
| What employment taxes do you file if you have employees? | Social Security and Medicare (FICA) Unemployment Federal withholding |
| How are FICA taxes paid? | withheld from employees' wages. The employer must match the FICA withholdings. |
| Who pays unemployment taxes? | the employer to pay unemployment benefits if the worker loses a job. The worker is not taxed; only the employer pays this tax. |
| What it the W4 form used for? | form that states the filing status and withholding exemptions the employee is claiming |
| form 8300 | form you use if you receive over $10,000 in cash from one transaction or from two or more related transactions. |
| What is the grace period for submitting forms to the IRS? | Aug 1st of the tax year |
| when can you deduct business expenses? | It is ordinary. It is necessary. It is documented. |
| Publication 583 | describes deductible business start up costs. |
| examples of business start up costs? | advertising, travel, surveys, and training. |
| How much can you deduct for start up cost and organizational costs in a year? | $5000 for each |
| When can you deduct some of your home expenses in connection with a home office? | If business part of the home is exclusive. It must be regular, must be for your trade, Your principal place, place where you meet customers, separate structure detached from your home |
| must keep records of your assets | When you acquired it. The purchase price. Cost of any improvements. Section 179 Deductions. Deductions taken for depreciation. How you used the asset. When and how you disposed of the asset. Selling price. Expenses of the sale |
| A small real estate brokerage company might keep its business records on the following forms: | Business checkbook. Daily summary of cash receipts. Monthly summary of cash receipts. Check disbursement journal. Depreciation worksheet. Employee compensation record |
| What do typical closing fees consist of: | lending fees, appraisal fees, title company fees, survey, inspection, |
| MIP | Mortgage insurance premium, usually charged if there is less that 20% equity in the home (the lender is funding 80% or more of the loan) |
| What methodologies are used for measuring your marketing program? | Single Attribution (First Touch/Last Touch) Single Attribution with Revenue Cycle Projections Attribute across Multiple Programs and People (Multi-Touch Attribution) Test and Control Group Full Market Mix Modeling |
| A HUD reverse annuity mortgage is for homeowners who ________. | have paid off their mortgages |
| What is an example of a "source document"? | receipt for expense |
| Which form states the status and withholding exemptions the employee is claiming? | W4 |
| How often do clients find a home online before contacting an agent? | about 90% of the time. |
| When writing a mission statement, what things should you consider? | competition and what is happening in the market, what are their strengths and weaknesses, What can your company offer diferently,? |
| What is critical component of creating a business plan? | evaluating companies (self) strengths and weaknesses. |
| Components found in a business plan: | Executive Summary, market research, business structure, Marketing & Sales, objectives and plans, The Financial Plans |
| Executive Summary | describe the business and set forth the mission statement for the business. It will be a summary of the business and financial strategy for the company. It answers the "what" and the "why" of your business. |
| Market research | research what has been happening in your area and what trends are developing. Read the trade magazines, attend seminars and workshops, Include market estimates |
| Business Structure | describe the company formation. What kind of entity will it be? How many employees? Where will the office be and what is the market area to be reached. Who will run the operation? |
| Marketing & Sales | "meat" of the plan", define the target customer groups, whom will you be marketing to, How do you reach them? commission structure, advertising budget |
| Objective and plans | goals for 1 year |
| Financial Plans | plans for staffing, a startup budget, sales forecasts, projected profit and loss statements, and cash flow projections. do a month- by-month projection of sales, profit and loss, and cash flow |
| what are the benefits of a large and small brokerage? | large company: name recognition, more sophisticated support systems, and established training programs small co: more personalized programs, less structure, and more autonomy |
| Graduated split | common split arrangement where early on in your career you split your commission 50-50 with the company. Once you have reached a certain level of sales, the commission goes to 60-40 |
| Capped graduated split | graduated split arrangement, but the company puts a cap on the revenue the company can receive from the split |
| Rolled back graduated split. | graduated split on an annual basis., company will get the maximum amount of earnings from every associate, split of 50-50 and their percentage increases as their sales increase, cycle starts over each year |
| 100 percent commission | obviously attractive in terms of earning potential, it might be the kiss of death for a new associate - it may come with a monthly desk charge whether you sell or not. |
| Asking the Right Questions to find a brokerage include what? | How is company viewed? How successful is company? how much advertising does co do? Who has best training? Company turnover? Which co is the most supportive and encouraging? |
| Value Proposition | a skillfully written description about a real estate agent’s background and a description of how the agent can benefit any customer who decides to hire him. |
| A strongly worded value proposition should tell the target audience what? | How your service or product can help solve or improve problems What sort of benefits that customers can expect Why customers should work with you instead of with your competitors |
| What questions should agent ask self before creating a slogan or tagline? | What skills do I have that sets me apart, How does my background help me, what have I learned that will help me? Why should a homebuyer or home seller work with me? |
| What time frame should you use to break down your goals? | 1, 3, 6, & 12 months |
| What will happen if business plan is not created? | your business will suffer from disorganization |
| A skillfully written description about a real estate agent’s background and a description of how the agent can benefit any customer who decides to hire him is known as a/n ______________. | Value Proposition |
| Answering which question will help you to assess the competition? | What is different about your business? |
| Research shows that which generation is the group most likely to use an agent to purchase their home? | Millennial generation |
| __________________ is useful when figuring out how to treat the home buyer the way he or she wishes to be treated. | A psychological profile |
| Which types of learners prefer to learn as they go along with something that is relatively new to them? | Kinesthetic learners |
| When most people first hear very bad news like their home sale escrow just fell apart or a close loved one died, what is usually the first stage of grief? | Denial |
| Which generation group was heavily influenced by World War II? | Maturists |
| Baby boomers ages 50 to 68 made up ____ percent of home buyers last year. | 31 |
| Individuals within a generation will generally respond better to different modes of ____________ when making important decisions. | Communication |
| Silent generation | 1925-1945, maturists, influenced by WWII, Thrifty, efficient, most are retired and want retirement recreational facilities, |
| Baby Boomers | 1946-1964, priveleged, saw divorce, women now entering workforce, hippies, Changed the family dynamic with womien no longer being home and working, fought through challenges and now enjoying homes |
| Gen X | 1965-1981, Latch key kids with parents working and coming home to be alone, invented grunge, problem solvers, prefer renting |
| Millenials | 1980-90's also called echo boomers, or Gen Y, largest purchasing group, prefers city, condo, apt, townhomes |
| Homeland generation | too young to purchase a home now |
| auditory learners | learn by hearing, ask lots of questions, need lot of patience |
| kinesthetic learners | hands on, no reading long docs, wants to see and learn |
| visual learners | see things like charts and videos, watch others do things first |
| personality | mask we wear in public |
| 2 core emotions | fear and love |
| aspects of love | compassion, empathy, generosity |
| aspects of fear | greed, anger, envy, jealousy, hurt |
| 5 stages of grief | 1 Denial 2 anger 3 bargaining 4 depression 5 acceptance |
| 3 stages of truth | Ridicule, opposed, and acceptance |
| Personality types of real estate clients | excited, negative, just the facts, open buyer |
| excited buyer | no negative talk, likes and is excited about everything, not really serious about buying just looking, good to get pre-qualified first to see if they are serious |
| negative buyer | fault everywhere |
| just the facts buyer | irritated by search process, treat well and be brief, they have done their research and know what they want. |
| Open buyer | like the long answers and you doing the research for them. |
| floor time | periods of time when agents can take inquiries, usually on a rotational basis. When a licensee is on floor duty, any new caller who does not ask for a specific agent by name becomes that licensee's prospect. |
| What formula do you use when prequalifying someone for a home? | monthly mortgage pmt/gross monthly income = no more than 28%. |
| What do good presentation packages include? | property information sheet, photos, a map and a place for the buyers to make notes. |
| What can a listing agent do to prepare their house? | fresh paint, landscaping, repair obvious defects, shutters or curtains, update main areas, declutter, remove extra furniture, clean carpet and floors |
| "tie-down" | sales technique - statement that elicits a positive response. For example: "You really need to be close to the middle school, don't you?" "This kitchen is big enough to accommodate your large family, isn't it? |
| What do tie down statements achieve? | The idea is that a lot of small "yes" answers create a positive imprint on the buyer's mind. |
| Categories of buyers: | 1. first time home buyers 2. upsizing or downsizing buyers 3. Relocation buyers 4. Investors |
| first time buyers may feel? | terrified, big investment, what if you can't get a loan, need information and hand holding, have them prequalify, |
| How do you address the fears about the home being a money pit? | talk to buyers about getting a home warranty in the contract, and also talking about the option period and them having time for isnpections |
| What types of inspections should you encourage buyers to obtain? | roofing, foundation, and electrical contractors, pests/termites |
| How do you deal with the buyer having too many options and not being able to decide? | Have them pick their top 3 and then go from there. Ask why these houses are their favorites. |
| Upsizers or downsizers | not in a hurry to move. Looking for the perfect home. |
| downsizers | more practical and driven by convenience, have a list of features that are important, they may be emotionally attached to their current home. |
| how do you help a down sizer who is attached to their current home? | By providing facts showing how much money, time and energy they will save by moving into a smaller, maintenance-free home. Showing the the benefits of moving. |
| Relocation Buyers | no nothing of the area and will need help. give them a relocation package. focus on good neighbor hoods. Be prepared, they will want to make and offer quickly. |
| Investor buyers | find quickly, some buy fixers other buy rentals, they care only of the bottom line. |
| Prequalification | informal by agent or lender. Agent can ask questions about income, assets, debt and credit history |
| pre-approval | only done by a lender. client fills out and application. Lender will set max amount. |
| how long do pre-approval letters last for? | 3-4 months |
| advantages of pre-approval letter | already have a letter from the bank. lender only needs to get an appraisal |
| sometimes Lenders say that the letter is a pre-approval letter but in fact it is a pre-qualification letter. How can you tell the difference? | Letter states approval is subject to "verification of the buyer's income and credit information," this is a prequalification letter! |
| what kind of things do you as an agent want to know from your buyers? | Motive for buying. Current home ownership or tenant status. Timeframe for moving. Size of down payment. Price range they're considering. Employment information. |
| steps for pre-qual | 1. find mo. mtg pmt (mo mtg/mo gross income = 28% or less) 2. amt in #1 * 20% (taxes & Ins) (subtract from first pmt in 1) 3. enter new amount, int. rate and loan term into pre qual calculator, = loan amt 4. divide by loan to value, 80-90% |
| When a lender is processing a loan, what four critical procedures are involved? | 1 Ability of the borrower to repay. 2 Value of the property is enough for collateral. 3 Research marketability of the title. 4 Prepare docs needed to approve the loan and close the transaction |
| What risk does the lender run? | The borrower will not be able to repay the loan. If the borrower defaults on the loan, the property will be worth less than what is still owed on the loan. |
| underwriting | The evaluation process used to determine the borrower's ability to repay a loan and estimating the value of the property being used as collateral |
| default insurance | The lender has borrower purchase this insurance policy to protect the lender from potential losses |
| To qualify for a mortgage loan, a borrower must meet the lender's qualifications in terms in what areas? | income, debt, cash, and net worth. In addition, the borrower must demonstrate sufficient creditworthiness to be an acceptable risk. |
| When lender looks at income, what are they looking for? | stable income, permanence, permanent employment, changed job several times? |
| Is overtime considered to be stable income? | not normally unless the applicant can prove that it has been regular and consistent for some period of time. |
| what secondary income will lenders consider | ssn, alimony, child support, public assistance (welfare), dividends, rental income |
| There are certain types of income a lender will not consider b/c they are unstable: | unemployment, Income from other family members , temp jobs |
| red flags for lender reviewing employment | employ overlap, no prior yr earnings, $$ amounts are rounded off, hired on weekend or holiday, Most income comes from commissions, prior employer is now out of business, borrower changed professions, inc not match employ, cross outs or white outs on app |
| what does an income ratio tell the lender? | establishes the borrower's capacity to pay by limiting the percent of gross income a borrower may spend on housing costs. |
| With a conventional loan, what must the income ratio be? | 28% or less |
| With a FHA loan what must the income ratio be? | 29% or less |
| debt ratio | calculated based on all of the monthly obligations the borrower has, including those items or payments the borrower must make for other debts. |
| Conventional loans usually require the debt ratio be what? | 36% or lower. |
| FHA loans usually require the debt ratio be what? | 41% or lower. |
| If a couple earn $5500 combined per month, what would their max monthly payment for a mtg loand be? | $5500 X .28 = 1540, $1540-(1540*.20 insurance and taxes) = $1232 |
| Red flags that might appear when evaluating the Verification of Deposit forms | not enough $, new acct, not in borrower's name, gift letter is not backed up by any bank statements, borrower really has no bank accounts , IRA is shown source of the down payment, significant changes in a balance, excessive balance in checking account |
| net equity | buyers who currently own a home, more than likely they will be counting on the proceeds from the sale of their current home to help finance the purchase of the new home. |
| What are the average sales cost for selling a home? | 12% |
| If family gives buyers funds for a down payment, what must happen for the lender to consider these funds towards getting their loan? | The family must sign a gift letter that at funds are fully a gift and do not need to be repaid. |
| What do credit agencies use to score borrowers? | past payment history, the types of credit the borrower has used, outstanding debt and other factors |
| What does FICO stand for? | Fair Isaac and Company - who created this test |
| What deducts points from your FICO score? | timeliness the borrower pmts, (35%) how much borrower owes (30%), length of time with credit (15%), number of inquiries (10%) |
| What is the span for the FICO score? | 300-900 |
| What number FICO score do mtg lenders prefer? | 600 or higher |
| tri-merge credit report | credit information from all three of the credit bureaus. Different information is often provided on the three reports, and there are usually three different credit scores for the individual. |
| If lender request tri-merge credit report, what score will they use? | Typically the one in the middle and not the average of all 3. |
| Typically, to satisfy the requirements of the statute of frauds, the written document must identify what? | 1. parties entering into the contract 2. subject matter 3. essential terms and conditions of the parties' agreement 4. consideration |
| valuable consideration | forms the foundation for every promise in every enforceable contract may be intangible, relates to good faith |
| What fees are typically prorated at the closing? | taxes, insurance and homeowner association fees |
| who usually benefits from a contingency? | the buyer |
| Elements common to all contingencies: | statement that tells exactly what the condition is and what has to happen, How the benefiting party will notify the other party, deadline, explanation of the parties' rights |
| common types of contingency clauses: | financial, appraisal, Title and survey, inspection and buyer sale of property |
| What are some things to look out for in a finance contingency? | if the buyers write a contingency based on a below-market interest rate or very low loan fees, the sellers may not agree to it, knowing that the buyers could have a much more difficult time securing such an arrangement. |
| If buyers have a sale of home contingency and and their home does not sell and falls through, how long do they have to notify the seller? | 12-24 hours |
| bump notice | Sellers get another offer on the property before the Buyer's home sale contingency is satisfied, sellers must notify the buyers .that they have accepted a new offer and give the buyers a specified number of days to waive the contingency. |
| bump period | specified number of days given to buyers who have a contingency to sell their existing home to waive that contingency. |
| t or f If the contingent property has been sold, the buyers must give the sellers a complete copy of the purchase and sale agreement for the contingency property or the buyers' notice to the sellers will be void. | True |
| What happens to all other contingencies if the buyers waive contingency to sell their current home? | They also waive ALL other contingencies - including the financing contingency. |
| What must you have to close on new construction from the city or county? | Certificate of Occupency |
| What should the seller do if someone knocks on the door and asks to see a property listed with your company? | Call your office immediately. |
| What can cut down on confusion for buyers while allowing an agent to get specific feedback from buyers? | Limiting the number of homes shown at a time |
| types of financing | conventional, FHA, VA |
| 2 categories of conventional loans | conforming and nonconforming |
| conforming loan | one that meets the underwriting guidelines established by America’s two largest secondary market investors named Fannie Mae and Freddie Mac |
| How much of the funded mortgages nationwide do Fannie Mae and Freddie Mac owned combined? | 60% |
| What is the conforming loan limit in the state of Texas? | $453,100 for owner-occupied single-family units (homes, condominiums, or townhome) as of January 2018. |
| What is the largest loan amount Fannie Mae or Freddie Mac will purchase? | Same as the conforming loan amount of $453,100 |
| Who establishes the Conforming loan limits? | Fannie Mae and Freddie Mac’s governing agency named the Federal Housing Finance Agency (FHFA). |
| do conforming limits go up for 2, 3 and 4 units increase? | yes |
| Who has to pay MIP private mortgage insurance? | Borrowers who qualify for conforming loans that exceed 80% LTV. |
| how is MIP (private mtg ins. paid) | MIP fees can vary between 0.5% to 1% of the entire loan amount and are paid on a monthly or annual basis. |
| MIP can be avoided by a borrower if they do what? | Choose some combination of a piggyback loan that offers a first mortgage up to 80% LTV and a concurrent second mortgage up to 10% or 15% (90% to 95% CLTV - combined loan-to-value) at the time of closing. |
| Jumbo or Nonconforming | Any loan with an amount higher than these maximum ceiling loan limits |
| Why are there few lenders willing to approve jumbo or nonconforming loans? | partly due to the fact that there are less secondary market options available to them who can offer cash to purchase these funded loans. |
| hybrid combination | Between a fixed and adjustable loan that is fixed for the first several years before later converting to a fully adjustable loan as seen with a 5/1 |
| what are the vast majority of loans in US? | Qualification process is easier than most other types of loan products, the borrower only has to come up with a 3.5% down payment (most of which can be gifted from family), and the allowable FICO credit scores can be as low as 580 (subject to change). |
| Borrowers with FHA loan with 80% LTV will pay what two fees? | 1. Upfront Mortgage Insurance Premium (UFMIP) fee that ~1.75% of loan amount 2. MIP fee will be due along with the mortgage payment (principal + interest) that may range from 80 - 105 basis points (.008%) - of loan amt (bps). |
| In a homeowner has a FHA loan, how can the monthly MIP fee can be deleted? | After the homeowner provides enough new evidence (i.e., sales comparables or an appraisal) that the current mortgage loan amount is lower than 80% of the most recent market value for the subject property. |
| Who is eligible for a VA loan? | active or retired military personnel and / or to their surviving spouses. |
| What does a veteran or active duty need to get a VA loan? | Certificate of Eligibility |
| What must a VA Appraiser provide before closing on a home purchased with a VA Loan? | Certificate of Reasonable Value (CRV) report |
| What are some of the main reasons people sell their homes? | High medical bills and divorce are two of the main reasons , and foreclosure and bankruptcy or buying a larger home |
| first rule of negotiation | ask yourself, "What is it that I want?" |
| How can you negotiate from a position of strength? | if you know the other party's interests and goals. The object of the negotiation is to come to a settlement. |
| what is a "must read" negotiating book | Getting to yes: Negotiating agreement without giving in |
| sum it all up clause | Restate all of the nice features in the home that the client seemed to appreciate, the seller’s list price, names of the best third party inspectors and mortgage brokers, and other details |
| what question should agent ask at the end of the sum it all up clause? | “Should I move ahead and draw up the purchase offer today?” |
| Assumptive Close | when the agent just acts as if the clients wants to move ahead with the deal. |
| Automated underwriting | (AU): refers to the “desktop underwriting” systems used by primary lenders. |
| The allowable _____________ have increased from lows once near 36% or 38% DTI ratios to as high as 45% to 50% DTI. | debt-to-income (DTI) ratios |
| A conventional mortgage product typically has this kind of rate _____________. | 30-year fixed rate |
| Borrowers who qualify for conforming loans that exceed 80% LTV will be required to pay a _____________ fee to the lender for the potential high risk of default. | Private mortgage insurance |
| Which of the following is not a protected class under Federal housing law? age, family status, nationality, race | age |
| When a consumer provides the broker with written notice prior to filing a DTPA lawsuit, how much time does the defendant have at his disposal to respond? | 60 days |
| What are the public remedies under the DTPA? | Temporary restraining orders Injunctions Monetary penalties |
| How many titles does the Americans with Disabilities Bill have? | 5 |
| rebate | this is sharing portion of the licensee’s commission, the advertisement must disclose that the rebate is subject to the consent of the party the licensee represents in the transaction. |
| If the language in a real estate advertisement is not clear and conspicuous, TREC shall consider the advertisement what? | deceptive and likely to mislead the public. |
| TREC shall consider the language to be clear and conspicuous if what is true about the size of print in a billboard advertisement? | it is in at least the same size of type or print as the largest telephone number in the advertisement. |
| who maintains the national do not call registry? | Federal Trade Commission |
| Under federal rules, when does an established business relationship exist? | When the caller had a transaction with the receiver within the last 18 months; or The customer has made an inquiry with the caller’s firm in the last 3 months. |
| What are the times real estate licensee may make calls? | 9:00 am and 9:00 pm on weekdays and Saturdays and 12:00 pm to 9:00 pm on Sundays. |
| What things must a realtor disclose if making a cold call? | dentify himself or herself before making the solicitation, must identify it is a solicitation call, and must disclose all material information related to the solicited service. |
| How does the Safe Harbor act protect brokerages? | Written Procedures, training personnel, records, Tools for Agents, National Do Not Call Registry Purchase, compliance monitoring enforcement, forgiveness of legitimate errors |
| Do-Not-Call Penalties | $11,000 fine by the federal government and the state attorney general may bring a civil suit for $500 per call. |
| What are the 3 requirements that apply to sending unsolicited advertising faxes? | Sender must have an established business relationship with recipient. The sender must have obtained the customer's fax number through methods described in the legislation. The sender must provide an opt-out mechanism that meets the Act's requirements |
| Under Texas law, unsolicited fax advertisements cannot be sent between what times? What must be on the fax? | 11:00 p.m. and 7:00 a.m. They must also include a toll-free number for the consumer to call to remove his/her fax number from their list. |
| What is the penalty if a business sends a consumer another fax after they have requested them to stop? | Class C misdemeanor |
| Anti-SPAM Actual Operation | Applies to any e-mail that contains an advertisement. Prohibits the falsification of routing information or sending information. Prohibits any false, misleading, or deceptive information in the subject line. |
| Anti-SPAM Penalties | Civil liability of $10 per unlawful message or $25,000 for each day, whichever is less. |
| When was the seller's disclosure adopted? | 1996 |
| What was Lead was added to paint? | speed up drying, increase durability, maintain a fresh appearance, and resist moisture that causes corrosion |
| what percentage of houses have lead based paint in them prior to 1978 | 86% |
| How long must sellers provide buyers to inspect for LBP hazards? | 10 days |
| How do you remediate the lead based paint? | Paint over it and keep the paint fresh. |
| If a real estate licensee fails to disclose they are the owner of property for sale, what act does this violate? | Texas Real Estate License Act and the Deceptive Trade Practices Act. |
| What makes an act "unconscionable"? | It "takes advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree." |
| "bait and switch" tactics | Placing an ad in the paper for the sale of a home that you do not intend to sell. This is prohibited by DTPA. |
| Where are rules for DTPA found? | Chapter 17 of the Texas Business and Commerce Code and is titled "Deceptive Trade Practices." |
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