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THE REAL ESTATE BUSINESS (What you can do with a license) The term "real estate" is used in two common ways. The first way describes the commodity, that is the property, the land, the building and all of the rights attached. The second indentifies the broad spectrum of activities that it encompasses. In spite of popular usage in some circles, the general term real estate should not be limited to the brokerage field alone. The real estate industry is much broader, more complex and much deeper than is commonly realized. Let us consider some of the elements of this far-reaching field. REAL ESTATE BROKERAGE Under this broad title are a number of specialty areas. The vast number of licensees go into the area of selling houses (i.e. about 36% of the over 550,000 licensees are in residential sales in Tract Sales -- This involves the sale of new homes in a subdivision. One may find employment directly with the builder as an employee or with a temporary employment agency that specializes in finding and training sales reps for new home builders. Resales -- Most new licensees find employment in the resale market listing and selling existing homes. Large national franchises as well as "mom & pop" brokerages find this area exciting because of the heavy involvement with people and problem solving. Highly successful licensees work as a "team" or "group" because of the many skills and time required to bring each sale to fruition. Sub-specialities could involve condo sales, the REO market, fixers, estate properties, etc.. Commercial Real Estate -- Commercial realty is usually divided into four separate categories: retail (the sale or leasing of stores); office space (which is sales or leasing of office buildings); industrial brokerage (sale or leasing of industrial properties); and vacant land sales. This is not the arena for the timid or the faint of heart, so be ready for life in the fast lane to take you straight to the high-rent district. Contact Realtors National Marketing Institute or www.ccim.com for information. Business Opportunities -- Most people are not aware that in order to sell a business, you need a real estate license. To be successful in this arena, one needs to understand financial statements such as Balance Sheets, Profit and Loss Statements, bulk sales laws, sales tax regulations, personal property loans, liquor licensing and franchise laws.
Timeshares -- Virtually all kinds of properties can be sold on a timeshare basis. Timeshares usually involve recreational property and may be sold at the project itself or anywhere in the world. The sale of a timeshare property that is offered to Specialty properties -- A definite specialization is in the area of selling farms, ranches, groves, horse properties, etc. A strong working knowledge of tax codes is required particularly in the area of depreciation, special financing and the crops themselves. A knowledge of soil types, water and mineral rights, crop values, land leases, equipment valuation and animal appraisal are only a few of the subjects with which you need to become conversant. The Realtors Land Institute at www.rliland.com will give you a good description of the professional courses they offer. PROPERTY MANAGEMENT There are enormous opportunities in property management. This involves the handling of rentals or leases of many different kinds of property as well as looking out for the best interests of the owners. Again, specialization is the key. Some firms manage only single family units and condos for absentee owners. Some manage office buildings, retail locations, shopping centers or industrial properties. A fairly recent specialty that has been gaining popularity is managing condominiums for the association of owners overseeing the landscaping, pool and spa maintenance, roofing and plumbing repairs, painting as well as interacting with the association attorneys and security service enforcing the CC&R´s. The REAL ESTATE FINANCE A considerable number of people have been drawn into the mortgage business which includes everything from loan origination to refinancing, construction loans to home equity loans, swing loans, etc. To be a "loan broker" or "mortgage broker" does require a real estate sales or broker license. One can specialize in the wholesale or retail market. As a licensee becomes more knowledgeable, they can enter the area of Real Properties Securities Dealers which involves the buying and selling of "paper" that is secured by real property. Probably the ultimate in the finance business is working with syndications (investment groups) and REIT´s (real estate investment trusts). The job of mortgage broker is an interesting variation. When real estate is booming, there are tremendous opportunities in this field, but when times get tough and loan applications decrease, these specialists feel the pinch. The Mortgage Bankers Assoc. of REAL ESTATE COUNSELING This involves the rendering of expert advice on a professional level to real estate clients. While a real estate license may or may not be required, usually one will acquire a professional designation of CFP (Certified Financial Planner) to have some credentials. Practically speaking, it is difficult to see how you could establish credibility as a counselor without first having achieved great success as an agent. Counselors offer their services for a fee, and if they are expert enough, people will gladly pay for it particularly when considering investment properties. Contact the Counselors of Real Estate at www.cre.org in SUBDIVIDING AND PROPERTY DEVELOPMENT Subdividing is the "manufacture" of urban land into buildable sites, wheras Property Development is the complete process from sub-dividing through construction. One may or may not need a real estate license but would probably have a Contractors License. Each city, county and state has extensive requirements that must be satisfied before land can be converted to subdivisions. Only the well informed and astute players can prosper in this area. The Urban Land Institute at www.uli.org is a good source of information. REAL ESTATE RESEARCH /PLANNING This involves the scientific investigation into fields such as marketing, finance and management. An economics background or degree in urban planning along with statistical analysis may be a necessary background to gain employment with a real estate research firm, real estate magazine publisher or even a Realtors Association. Government agencies and educational institutions are a primary source of jobs, but some larger corporations have a staff of planners also. For career information contact The American Planning Association at www.planning.org. REAL ESTATE APPRAISAL This involves the professional determination of real estate values for every kind of property and even property rights (eg. What is the value of the timber on a parcel of land?). A separate Appraisal License is issued by the Office of Real Estate Appraisals (OREA) in One can work as an independent operating out of your home or a salaried employee of a tax assessors office or on the staff of a financial institution. There have been some predictions of dire downsizing of the appraising profession based largely on the impact of the computer. Lenders can now access real-time information of comparable sales in seconds. They simply run the numbers and perhaps send someone out for a drive-by to ensure the property exists and is still standing. Check with www.orea.ca.gov for specifics. SPECIALTY AREAS of real estate also includes Mineral, Oil and Gas Brokers, Land Locaters (deal in government land) and Pre-paid Rental Listing Brokers. Also, Trading and Exchanging which facilitates the transfer of equities for the respective parties. Larger transactions may include several different high priced properties with a total value in the millions. People exchange for two major reasons. First there are substantial income tax advantages and secondly, to use the built up equity in much the same manner as cash. For more information, contact www.1031it.com or www.1031tax.com. Why the repeated 1031 citation? That´s the pertinent IRS code reference. International Real Estate --The International Real Estate Federation (FIABCI) is your best source of information for this specialized area. The headquarters are in REAL ESTATE EDUCATION There are several possibilities if you decide you would like to teach real estate. The first is to teach at a community college. A bachelor or masters degree plus teaching credential is usually required. There are also some opportunities at various independent real estate schools or brokerages. The content is strictly monitored by the Dept. of Real Estate and instructors are carefully evaluated. You need excellent qualifications to qualify. Another possibility is to present individual training seminars. This could be anywhere from continuing education for license renewal to "how to succeed" in a big way and command big money. Also, many of the franchises and large independents have full-time trainers (listing and selling) and are ordinarily former agents who were successful and have a lively sense of communication. The Real Estate Educators Association (REEA) at www.reea.org is active in promoting communication and professionalism among real estate educators. TRAITS AND SKILLS YOU´LL NEED TO BE SUCCESSFUL Here are some of the personality traits and job skills you will need in real estate. 1. You need to like the lifestyle (It needs to be more than just a job for you to put up with the demands on your time). 2. You need to be self-starter (You will either succeed or fail almost entirely based on your own individual efforts). 3. You need to be a hard-worker (Real estate is NOT easy work or easy money). 4. You need to be smart worker (You are paid for results, not the hours you put in. So organization, efficiency and productivity become the key words in the business). 5. You need to enjoy solving "people problems" (You must be good at working with all types of people). 6. You must be a good listener. (The old phrase "you´re a good talker, you should be in sales" just is not true. Sell, don´t tell is the keyword). 7. You need to be emotionally stable and mature (You must maintain the trust and confidence of other people while maintaining your own sense of balance and fairness). 8. You need to know your product. (Be familiar with the practical matters that are of primary concern to home owners). 9. You need to be convinced of your product´s value. (It should be easy to be enthusiastic about your product). 10. You need to know the territory. (You must be knowledgeable about shopping centers, hospitals, schools, crime rates, etc). 11. You need to be flexible. (Major changes in technology as well as fundamental ways of doing business are always taking place and you must be willing to adapt to whatever). 12. You have to persevere. (Dogged perseverance -- you do not take rejection personally but professionally -- quit is not part of your vocabulary). |