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California Real Estate Exam: Everything You Need to Know
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One day or another, every agent has been faced with (or will face) this problem: What do you do with a buyer that doesn’t qualify for a loan on the home they want to purchase? It’s a common problem and one that’s only becoming more common as loan payments increase.
A great benefit to working with buyers, especially first time homebuyers, is the excitement that they bring to the table. They are often transitioning from renting and very happy (giddy, even) to be embarking on this new chapter of their lives. You get to share this chapter with them too -- enjoy it!!
However, sometimes they do not have perfect credit, employment, or income -- and they cannot qualify for the loan that will get them the house they really want. Many times, people have a FICO score that is not up to par for the lender to work with. As we covered in our previous Credit Score blog, the buyers’ FICO scores will reflect their payment history and debt percentage.
Sometimes, there’s a small debt or past-due account that’s hurting the credit, and a great lender will know how to look over a credit report and decide what to pay off and what to adjust for a “rapid rescore.” This is one of the reasons why you want to help homebuyers get in touch with a mortgage broker and not necessarily with the banks directly. A bank is not as likely to recommend a rapid rescore or give advice as a mortgage broker would.
In a rapid rescore, once the debts are removed from the credit, usually by paying them off in full, the credit is re-run in a process that takes from 3-7 business days. After that’s done, the score is often many points higher - often bringing the buyer above the threshold to qualify for a loan!
There are three credit bureaus - Equifax, Experian, and TransUnion. The lender takes the middle score of the three, and therefore sometimes a buyer (borrower) can raise one score and qualify for the loan. Again, it’s really best to advise buyers with iffy credit to go to a mortgage broker and explore their options there, rather than just going directly to a large bank or corporation.
However, the FICO score is not always the reason that someone does not qualify for a loan. The lender will also look at employment history and debt-to-income ratio (DTI) to see if the borrower’s income seems stable, if they are tapped out with other debts or if they can easily afford the proposed monthly loan payment. A car payment is a common payment to eliminate, if the borrower has the cash reserves to pay off the loan or lease. It’s usually a few hundred dollars a month and can dramatically affect the DTI ratio, so it’s often one of the big ones to be considered.
Sometimes the borrower has not been at their job long enough, or their income is not a stable W2 income (for example - if they are a real estate agent!!). In this case, the lender is likely going to want copies of bank statements to verify the dollars coming in compared to the dollars going out.
Very often, a smaller lender (for example - a credit union instead of a bank) will have more relaxed guidelines on the above criteria and they will allow a borrower to obtain a loan when a bigger lender would not lend money. Ideally, it will be an institution such as a credit union or small bank, but every once in a while, borrowers will go to a “hard money” lender. A hard money lender charges high interest and usually wants the money paid back in a short period of time, so this is really not an ideal situation unless the borrower plans to refinance fairly soon after purchase.
All in all, it’s really best to steer clients toward a mortgage broker you know and trust - hopefully an intelligent and creative one that can come up with alternative ideas to the big banks. Like everything in real estate, it’s also important to have a good relationship with these mortgage brokers so that they can refer business your way as well. Some people actually contact their mortgage broker before their real estate agent, and that could be a source of business for you!
Don’t hesitate. Don’t let your buyers walk away. Keep your good connections with lenders and mortgage brokers, and steer your buyers in the right direction. Real estate is all about relationships and ensuring that the customer comes first -- keep that in mind, even when they don’t qualify for the first loan!
Welcome back to CA Realty Training’s weekly blog! This week we’re covering a touchy subject - sexual harassment in real estate, and what to know in general about real estate agent safety.
Though some people prefer to shy away from the topic, the reality is that it happens, and we wanted to address it for all of our curious subscribers! Where is that line in the sand that you shouldn’t cross? What types of situations make a client uncomfortable?
First, keep in mind that you are a professional as a real estate agent, so you should reflect that with your conduct. Yes, it’s important to be personable, but keep that line in mind and don’t cross it! It would be better to seem “overly professional” -- which isn’t really a criticism -- than to seem overly casual, and overly personable.
When people hire you as their agent, they are often heavily swayed by your first impression. Do they see you in a suit, business casual clothing, or are you unkempt? How do you carry yourself, and how do you introduce yourself? All these things are very important factors in making a positive first impression.
Second in their decision is usually evaluating the professionalism of your mind, your conduct, and the presentation of the facts you have. Do you speak professionally and keep slang to a minimum? Do you have an explanation for your recommendations? Keep in mind, these are not your buddies from the bar or from bowling club; this is not your sibling -- professionalism is key in these situations so that you can impress the clients and earn the listing.
Thirdly, use your actions to make a client reassured you’ll be professional. Don’t make any inappropriate comments, don’t suggest anything unethical, and make sure you keep your interactions above-board at all times. People respect honesty and integrity -- key factors in someone’s decision to do business with you.
Also, it’s important not to be overly physical with clients -- it could easily give off the wrong impression if you are not already friends. A hug can be good, but can also be too much depending on the situation. Be cautious, and see how your clients express happiness, and then match their personality.
Don’t mix business with pleasure - keep your relationship professional. Sure, you might be attracted to some clients more than others, but that’s no excuse for making anyone uncomfortable. Be reasonable!
Today’s world is one of political correctness and minding what you say, and especially so in work situations. Don’t let a small slip-up create a negative impression, because impressions are lasting and could lose you business!
Just as a reminder, these are not your friends from a bar, these are not your family, these are potential clients that you want to impress! Keep everything professional and be tactful, and make sure you don’t give off the wrong impression which could send clients packing.
Balancing a career in real estate with personal life is challenging – especially when you’re just starting out!
New agents often find themselves working long hours, juggling clients, and trying to manage family responsibilities all at once.
While the flexibility of real estate is appealing, achieving true real estate work life balance takes time.
In this article, we’ll explore practical strategies to help you stay organized, set realistic goals, and focus on what matters most—both in your career and personal life.
Achieving real estate work-life balance starts with setting a structured daily schedule.
Real estate can be unpredictable, but by creating a plan for your day, you’ll be better equipped to manage client needs, personal responsibilities, and downtime.
Having a consistent routine ensures you stay productive without sacrificing your well-being.
One of the best ways to stay organized is by using time blocking.
Dedicate specific blocks of time to tasks like prospecting, returning client calls, or paperwork.
This method ensures every aspect of your business gets attention without overwhelming your schedule. For example:
By assigning tasks to specific times, you avoid multitasking and stay focused on what matters, leaving space for personal time with family and friends.
It’s crucial to establish clear start and end times for your workday. While real estate often requires flexibility—like handling last-minute showings or negotiating contracts—you should aim to protect your personal time whenever possible.
Inform your clients of your availability, and use scheduling tools to ensure tasks stay within the designated work hours.
Balancing your schedule early in your career will set the foundation for long-term success and prevent burnout.
With time, you’ll build the flexibility needed to enjoy both your professional and personal life.
Managing clients, appointments, and paperwork can quickly become overwhelming.
By incorporating the right tools, agents can streamline their workflow, save time, and reduce stress.
Below are two key ways technology can help agents stay organized and maintain balance between work and personal life.
Scheduling apps like Google Calendar, Calendly, or Microsoft Outlook allow agents to manage their day efficiently.
These tools provide real-time visibility into your schedule, helping you plan showings, meetings, and personal time.
These apps ensure you aren’t scrambling to keep track of tasks, making it easier to create boundaries and protect your personal time—one of the most important aspects of work-life balance.
Automating routine activities can free up valuable time, allowing you to focus on what matters most.
Automation not only saves time but also helps maintain consistency in your operations.
This frees up mental space, allowing agents to dedicate more energy to personal priorities and client relationships, which are both crucial for sustainable success in real estate.
Incorporating these technologies can significantly improve work-life balance for real estate agents, giving them the flexibility to manage both work and family responsibilities.
An underrated element of a good work life balance is your personal health. When you feel good, you have more energy. When you have more energy you can do more. We'll you decide if "more" is more work or more relaxation.
Real estate can be a demanding career, with long hours, constant client communication, and high-stakes transactions.
Prioritizing health helps prevent burnout, improves focus, and ensures you stay energized throughout your busy days.
Here are two key strategies for maintaining your well-being.
Regular exercise is not just about staying in shape—it also boosts energy levels, reduces stress, and enhances mental clarity.
By maintaining a regular fitness routine, agents will find it easier to manage stress and stay sharp, which ultimately benefits both their personal and professional lives.
In real estate, it’s easy to get caught up in the hustle and forget to slow down. Mindfulness practices help agents stay present, reduce anxiety, and handle high-pressure situations with calm and clarity.
These small but impactful habits can help you recharge, making it easier to maintain focus and engage meaningfully with clients, family, and friends.
A healthy body and mind are foundational to creating a balanced and successful real estate career.
How do you set good goals for work and personal time?
While it’s tempting to aim for large milestones, breaking those goals into smaller, manageable steps ensures steady progress without becoming overwhelmed.
Instead of focusing on lofty goals like closing several deals in a month, narrow your efforts to specific, actionable tasks.
For example, make a plan to contact five people from your Sphere of Influence (SOI) each week or attend one networking event a month.
These smaller tasks build momentum toward bigger achievements and help you stay focused along the way.
Real estate can be demanding, but taking on too much at once can lead to burnout.
Set boundaries for how many clients or deals you can manage without sacrificing personal time.
It’s important to recognize that progress in real estate takes time—trying to rush the process may negatively affect both your performance and your well-being.
Remember, steady and consistent work leads to sustainable success.
Focusing on high-quality clients is more effective than spreading yourself thin across too many.
Building deeper relationships with a select number of clients allows you to provide better service and increase the chances of repeat business or referrals.
Focusing on fewer clients gives you the opportunity to provide personalized attention, which leads to stronger connections and long-term loyalty.
When clients feel valued and well-cared for, they are more likely to refer you to others and become repeat customers.
These relationships often become the foundation of a lasting and successful real estate business.
Not every inquiry will lead to a closed deal. Prioritize your time by focusing on serious buyers or sellers who are ready to act.
By identifying and investing in these high-value leads, you maximize your efforts and free up time to manage other aspects of your life.
This approach reduces wasted time and ensures that the work you put in directly contributes to your success.
Achieving a real estate work life balance is no easy task, especially for agents just starting out.
The reality is that balance doesn’t happen overnight—it requires time, intentional effort, and sometimes a bit of sacrifice.
In the early stages of your career, long hours and unpredictable schedules may feel overwhelming.
But with thoughtful goal-setting, strategic use of technology, and a focus on building meaningful client relationships, you can gradually create a lifestyle that supports both personal and professional success.
If you want to know how to find more clients, close more deals, and earn bigger commissions, then check out our program, From Rookie to Rockstar.
This is a residential training program that teaches you how to become a successful agent. There's practice tips, thoughtful insights, how-to guides, scripts, and more. It's built to teach you how to revolutionize your career.
Learn more about the program and see what it takes to grow your career while achieving more personal time.
There are many reasons why people set their sights on a career in real estate. From unlimited earning potential to the freedom and flexibility, the benefits of a career in real estate seem endless.
Perhaps that’s why the United States Bureau of Labor Statistics expects the overall employment of agents and brokers to grow by 4% between 2020 and 2030.
Oftentimes, there are 10 reasons why people start a real estate career:
Let's dive into each reason to learn why it makes so much sense.
A real estate agent is paid a commission when they represent a client through the transaction process. The commission is based on a percentage of the final sale of the home.
As a real estate agent, your yearly salary depends on many factors. These include: number of completed transactions, your commission percentage, and your brokerage commission split. This is why your earning potential is unlimited. Nobody else dictates how much you earn in a year. It is entirely dependent on how many properties you sell.
Real estate agents work as much or as little as they want. Because real estate agents are paid a commission, they choose to work full-time, part-time, or in their spare time. Remember that the income will likely be higher the more hours the agent dedicates to their job. That's because they dedicate more time to finding new clients and more work.
A real estate agent can work from anywhere. Most agents work from home or on-site at the brokerage firm that sponsors them. However, the industry affords agents the flexibility to work from wherever they choose. In fact, an agent can work from an island in the Caribbean! But, I don't recommend that. What if a client wants to tour a house in Sacramento?
A licensed real estate agent can't work without being sponsored by brokerage. Agents represent their broker. But, this isn't like the standard employee-boss relationship we associate with 9 to 5 jobs.
Agents are like entrepreneurs. They finance expenses, take ownership of their actions, and find their own work. They sign with brokerages to offset the legal responsibility of running their business. That's why agents split their commission with their broker.
In other words, agents run their own business inside a brokerage. The broker won't tell them when to show up to work. Agents are free to make their own decisions. If they want to work in the afternoons only, that's fine!
The beauty of the an agent's freedom is that you can enter into contracts on your terms. If a client asks an agent to represent them, the agent has a right to turn them down. It is entirely up to the agent to decide who they want to work with.
Many agents exercise this freedom when they pick clients. If the agent ever gets a "bad feeling" in their gut about a client, they don't have to work with them.
People don't need a college degree to become a real estate agent. This makes real estate one of the highest earning careers for people without a college education.
In fact, most people enter the industry without experience in sales. Learning on the job is popular quality of being a real estate agent. That's because most brokerages provide training courses, workshops, and seminars. Agents who succeed always focus on learning new skills and ways to run their business.
Those who don't prioritize learning and growing struggle the most. Just because you don't need a college degree doesn't mean you don't need to learn.
Getting a license is more accessible and affordable than most people think. While getting a license won't happen overnight, it's by far easier and quicker than other career options.
Although the time frame will vary by state, the average time to complete real estate school and pass the real estate licensing exam is approximately 5-6 months. There are hundreds of real estate schools that helps students get their license, study for the exam, and launch careers. CA Realty Training, in our opinion, is the best. But we could be biased.
Every day is different for real estate agents. Because agents have flexibility, they can schedule each day however they want. Some days, agents need to give an open house whereas another day may involve presenting a sales pitch to a potential seller.
Whatever the agent needs to accomplish, they can stack their calendars with new and exciting activities. This keeps the agent's job ever changing and engaging.
Another aspect of a real estate career is choosing your specialty area. Some agents love working with families looking for a new home, whereas others may love working with investors buying commercial property.
Real estate markets include:
A career in real estate doesn’t necessarily mean that you need to work as a real estate agent, either.
In addition to being a buying or selling agent, other typical real estate jobs include:
Agents meet new people every day. Whether it's a lead at a coffee shop or new mentor, an agent's network is always growing. For agents to be successful, it has to!
Agents will also meet interesting people who are leaders in their community, local celebrities, big time celebrities, representatives, and other high performing people. The reason why is because everyone uses real estate. The type of people who are buying and selling are typically people with wealth. Agents still represent these people, because they need a home, too.
Meeting interesting people is what keeps people interested in real estate.
As you can see, there are many reasons why people become real estate agents. Unlike most conventional 9 to 5 jobs, a career in real estate offers freedom and flexibility. Additionally, agents work with interesting people and manage large investments. The excitement factor is ever present.
A real estate agent is much more than just a salesperson — they guide their clients through one of the most important transactions of their life. And while Hollywood has shown the glamorous sides of being a real estate agent, it’s a tough job with a lot of responsibility.
That’s why real estate agents have a unique set of skills and personality traits that help them succeed in the industry. Here are some of the most common personality traits in real estate agents, and how they can be helpful throughout their careers.
Are you comfortable going up to a stranger at a coffee shop? Do you enjoy mingling at parties? Being sociable and outgoing is the key to getting new business as a real estate agent. Real estate agents, like other salespeople, should be able to build connections and sell themselves to people they meet daily.
You have to leave a good impression on clients, earning their trust and building connections so they feel confident that you can help them in a major life purchase. While you don’t necessarily have to be an extrovert to succeed as an agent, you should feel comfortable meeting and talking to new people in a variety of settings.
Whenever you’re selling something or working with a salesperson, there can be a natural level of distrust between parties. However, Realtors work under a code of ethics and should always strive to be honest and transparent in their business.
Whether disclosing information about a property they're selling or guiding their clients through the buying process, being honest and building trust is key to succeeding as a realtor. Showing you have integrity and are ethical and honest is a fundamental quality to have in any profession - but especially in real estate.
Your reputation will quickly plummet if clients and other agents feel there’s any dishonesty in your work.
As a real estate agent, you are your own boss. You decide what hours you work, set your own goals, and pave your own path. That's why real estate agents have to be disciplined in their work ethic. This is especially true when you’re just starting out in your career and building your network.
Once you’ve completed all of your training and education, agents should expect that it will take time to find clients to work with — and you will have to work hard to find business! Sometimes that requires countless phone calls and sending dozens of emails without a lead.
But, despite the hard work needed to get there, the freedom of being a real estate agent is appealing to many who are capable of staying disciplined without much direction.
Real estate is a complicated industry — there are legal terms, multiple steps in the transaction, and lots of back-and-forth communication. That’s why real estate agents need to be clear and direct. In today’s age, clients expect to be frequently updated on their home buying or selling process from their agent regularly.
With clear and direct communication to clients, you’ll provide better service and they’ll be more likely to refer business to you — a key step in growing your business early on as an agent! Whether you’re explaining the terms of a contract to first-time homebuyers or working to negotiate with another real estate agent, real estate agents should be excellent communicators who can clearly articulate in any situation.
Most real estate agents are go-getters, ready to take their business to the next level through hard work and proactivity. As an agent, you must proactively grow your business through networking, marketing, and stellar customer service.
New clients or listings won’t just come to you without taking the first step. Being proactive also means remaining professional and in control of the situation at all times. A real estate agent must be able to keep a positive attitude and address any challenges that arise with a can-do attitude to solve them.
While being honest as a real estate agent is always important, you should also be prepared to handle any situation tactfully. Buying or selling a home is a highly emotional process, and as an agent, you should be able to be mindful of all the complexities at play.
In times where being brutally honest can hurt someone's feelings or be disrespectful, you must exhibit tact to manage the situation skillfully. For example, if a client tells you they think their house is worth $1 million, but you know, based on your expertise, it’s really only worth $900,000.
In this situation, you’ll need to tactfully explain your reasoning and walk them through your thought process.
Real estate can be a cutthroat and challenging industry for new agents to enter. They might think being an agent is filled with glitz and glamor as portrayed on TV, but in reality, it involves unique skills to navigate each transaction and client with finesse.
That’s why, according to some statistics, nearly 87% of real estate agents fail in the first five years. With only 13% succeeding after five years, it’s essential to consider what personality traits you have and if they’re aligned with becoming a real estate agent.
While this number may seem staggering, the reality is that the barrier to becoming a real estate agent is generally low, with the possibility of high earnings, driving many people to seek a real estate license without examining if they’re a good fit for the job.
If you struggle early on in your career as an agent, find a mentor or someone who can give you advice. With guidance, you can understand your areas of opportunity to improve.
As with any career, you can succeed as a real estate agent with hard work and perseverance. Maybe you’re not the most extroverted. Or maybe you’re working to become more disciplined in your daily life.
The key is understanding your weaknesses and how they impact your work in the real estate industry. With the right knowledge and positive attitude, you’ll be poised to use your personality traits to your advantage!
Welcome to the weekly CA Realty Training blog! This week we bring you a topic that Head Trainer, Robert Rico, is really passionate about -- motivation. In truth, Rico is really passionate about what motivation leads to, which is ACTION!
The word “motivation” comes from the Latin word movere, which means “to move” or to make something happen. In real estate, because you are your own boss, it’s key to stay in motion so that you are successful in real estate. One thing that you have to discover, even before you get into the real estate career, is what gets you to move.
“What gets you to move?” Rico has asked thousands of students this same question, and usually, the answer is simply, “money”. But that’s not truly what gets most people to move -- money is usually a vehicle for something else. Because the second question after that is almost always, once you have the money, what would you do with it?
For some people, that answer might be “travel the world”, and for some people that might be “have a beautiful house”... and for the ambitious ones, maybe even both! Once you dig deep down, that’s where the true motivation comes from. For a lot of people, they would give it to their kids or put it towards their children’s education. That way, their children can get a good job and be happy -- so their motivation is actually their children’s happiness.
No matter how much motivation gets you going, though, it’s important to remember that it’s only the first step. In Rico’s eyes, it can actually be a little overrated -- because everyone can pick a factor that motivates them. The second step is action -- and this is often where people get distracted. Very few people throughout the country actually act on their motivation, for reasons due to being scared, lacking direction, or simply wanting to work for someone else because of the security it provides.
Motivation + Action … we are at Success already, right? Not quite yet! To get that final component, you have to add in some Discipline -- in Rico’s words, the “highway to success”. Actions, repeated many times, lead to Discipline, which is the third component of this cocktail. Whether it’s cold calling during certain “time blocked” hours or studying your real estate material strictly, there are a lot of things you can do to boost your discipline. See our blog: Why Is Time So Important In Real Estate?
In sum, in real estate or any other career, you have to find what motivates you and what will lead you to continued success. Whether it’s money, family, vacations, living in a preferred area… whatever motivates you will be the best reward to get you moving in a new career. Think also of the end game of your motivation - it’s important to enjoy what you are doing.
So, how do you do get to success, you ask? It’s very important to have a passion for both the final product (the motivation, beyond the money) as well as the activity that will get you there. If you love houses and people, being a real estate agent is a great combination career of the two. If you are passionate about getting a deal done and solving problems, get into real estate - there is always a new problem to solve!
If you have correctly identified your motivation, there should be a reserve of energy and discipline, deep down, that will keep you going toward your eventual goal. Remember to keep repeating your positive actions, which will drive you toward your motivating factor. Repetition creates discipline, and Motivation + Discipline + Passion = Success!
The path to most careers begins with getting a college degree.
But what about real estate? Do you have to go to college to become a real estate agent?
The good news is: no!
You don’t need a college degree to become a real estate agent. Actually, it's not even necessary to have a high school diploma to practice real estate.
Of course, if you do have a college degree, it can help you. But it’s not required to be a good real estate agent. Not all degrees apply to real estate.
Let’s examine both sides of “college vs no college” when it comes to pursuing a career in real estate.
We’ll also talk about the requirements to get your license. But first, let’s discuss the college advantages.
As mentioned earlier, you don’t need to go to college for real estate. But, college has never hurt a person’s professional development. Enrolling in college for real estate comes with perks. Some of which will carry over into your professional growth.
If you already have a degree, it can help you practice real estate. For example: studying finance helps you understand confusing mortgages. When your client is in escrow, you may find it easier to explain a buyer or seller net sheet to them. You can provide financial advice to your clients.
But, that doesn’t mean that having any degree will give you an advantage. If you have a science degree, there might not be much overlap with real estate.
Another advantage of going to college for real estate is access to a broker's career. You can fulfill the experience required to become a real estate broker. A 4-year major or a minor in real estate will allow you to become a broker after you get your salesperson license.
Usually, you are required to hang your license for 2 years at a brokerage. Then, take additional courses before you apply for a broker’s license. With a 4-year college degree, you can expedite this process.
Don’t discount the value of college when it comes to cultivating people skills. College is a social environment. So, it teaches students how to interact with different personalities. Real estate is a “people” business and that's an important skill to have.
The design of college courses is to educate and promote critical thinking. This is crucial and useful during a difficult real estate transaction.
Omit, there will be some advantages to having some college experience or a degree. But, the question was, “is college necessary to become a real estate agent?” Nope!
So now, let’s explore the alternative if you don’t have a college degree.
There are fundamentals that every person should have to succeed in real estate. This goes beyond the classroom curriculum. It’s personal mindsets and skills that will help you excel.
Don’t underestimate the importance of having a passion for something. It’s the driving force that leads and motivates a person to pursue an interest. If you have a passion for real estate, you already have a foundation for success in the field.
Real estate agents are in the business of helping people. If you are a “people person,” you already have the skills needed to be a great real estate agent. If you enjoy being of service to others, this trait will serve you well.
Don’t think of yourself as a “people person?” Whether you realize it or not, your previous work experience has prepared you to work with people. It’s how you interact with your coworkers and the customers themselves. Real estate agents apply people skills all the time in their careers.
If you currently work at a big company, see how many people you know and try to expand the circle. It should be good practice for when you become an agent! Also, this will expand your sphere of influence!
Education will be a constant throughout your real estate career.
You have to complete a real estate school program before you take the real estate state exam. While licensed, you will learn about new laws, regulations, and contract updates. Upon renewal of your license, there will be continuing education requirements. Not to mention career training throughout your career.
To say the least, this career requires you to be open to learning new things. Having the mentality of being a lifelong student will help you improve. Be an education sponge – absorb everything!
We've explored the “college vs no college” question. Also, we learned about the merits of both sides.
Now, let’s get to the good part!
Whether you have a degree or not, there are only a few actual requirements needed to get your real estate license in California.
That’s it!
There’s no requirement to have your high school diploma or GED. Also, there's no requirement to have a college degree.
Students can take the 3 pre-licensing courses at a college or real estate school. This satisfies the educational requirement to get your real estate license. Most real estate schools offer courses online, which makes them accessible to everyone.
It’s also worth mentioning that an accredited real estate school offers college-level courses. This doesn’t mean real estate school is hard. People often choose to enroll in real estate school over a college for a quick start to a real estate career.
Whether you have a degree or not, people who want a real estate career have many things in common.
They want the opportunity to have their own business with limitless earning potential, the freedom of making their schedule, to provide a good life for themselves and their family.
They have a desire to help people.
The college experience will promote critical thinking and developing great people skills. This will help shape you into a great real estate agent. So, the takeaway is that a college degree can help, but it is not necessary.
What is necessary is to have great passion, people skills, and drive. These are the true key characteristics to succeed in real estate.
Selling a home can be an emotional and stressful process under the best of circumstances, but it becomes even more complex when the sellers are going through a divorce.
For real estate agents, understanding how to navigate the intricacies of selling a home for divorcing clients is crucial to ensure a smooth transaction.
In this guide, we'll explore best practices for managing these types of listings and how to handle the unique challenges they present.
Understanding the motivation behind the sale is key in any listing.
For divorcing clients, the sale is often driven by the need to divide assets, which can make the process more emotionally charged.
Unlike most other sellers who are anticipating an exciting new chapter, divorcing sellers are often not in the best of spirits.
Real estate agents need to be prepared for this reality and adapt their approach accordingly.
Before proceeding with the listing, it is essential to check the title on the property.
In many states, properties owned by married couples are held as community property, meaning both parties have equal ownership. If the divorce is amicable, this process can be relatively straightforward.
However, if it is contentious, managing the interests of both parties can be challenging. It is important to know who has ownership rights and ensure that both parties are in agreement on the sale.
When dealing with divorcing clients, it is critical to remain neutral. As a real estate agent, your role is to facilitate the sale, not to mediate the divorce.
Avoid taking sides or allowing yourself to be pulled into any disputes. Your focus should remain on selling the property for the best possible price while treating both parties with equal respect.
Communication is key when handling a divorce sale. It is important to keep both sellers equally informed at all times. If you need to communicate with each party separately, ensure that you provide the same information to both.
Transparency helps to build trust and ensures that both parties feel heard and respected throughout the process.
Divorcing couples will need to make key decisions regarding the sale, such as setting the listing price, accepting an offer, or deciding how much to invest in preparing the home for the market. These decisions often require discussion between both parties, and it is best to give them the space to do so without interference. Be patient and understand that it may take longer for divorcing clients to reach consensus compared to other sellers.
The ultimate goal is to sell the house at the best possible price. While it may be challenging to manage conflicting opinions and emotions, keeping the focus on the shared objective can help guide the process. Remind the sellers that you are there to help them achieve the best outcome for both of them and to support them through the sale process.
Ideally, the divorce is amicable, which makes the sale of the home much easier for everyone involved. However, if there are challenges, maintaining a professional and unbiased stance is essential. Always treat both parties equally, provide them with the same level of information, and avoid becoming involved in their personal disputes.
Ensure that you are accessible to both parties and keep them updated on any developments. Clear communication can help alleviate some of the stress involved in the sale and reassure both parties that you are working in their best interests.
Handling the sale of a home for divorcing clients requires a delicate balance of professionalism, empathy, and neutrality. By understanding their unique motivations, maintaining open communication, and giving them the space to make decisions, you can help ensure a smooth transaction.
Always remember to remain impartial, treat both parties equally, and keep your focus on the goal—selling the property at the best possible price. With the right approach, you can successfully navigate these challenging situations and support your clients during a difficult time.
This law was created in response to an actual event that happened in New Jersey. In 1994, there was a tragic rape and murder of a 7-year-old girl named Megan Kanka. Her killer was a neighbor and he had been previously convicted of sexual crimes against a minor.
At this time, there was no way to research a person convicted of sexual crimes. To prevent a similar situation from happening again, lawmakers introduced Megan’s Law.
Megan’s Law is a federal law that requires convicted sex offenders to enter their names on a registry. Some states also require these offenders to notify their community when they relocate. This action is considered part of SORN, Sex Offender Registration and Notification, laws.
So, interesting information — but what does it have to do with real estate?
As an agent, Megan’s law will directly affect you when it comes to working with both buyers and sellers. Let’s start with how the Megan’s Law disclosure comes into play when you are representing a buyer.
It’s usually a very exciting and emotional time for your clients. For most people, this is the largest investment they will make in their lifetime. A home can represent stability and a chance to plant roots and build a family.
When you help your client find the house of their dreams, you get to be a part of that experience and people are usually happy.Your buyers have found the right house, the offer is accepted, and escrow is opened!
Escrow is a legal and binding contract so it’s crucial that everything goes smoothly. An important part of this process is the disclosures. The disclosures are given by the sellers to the buyers. They cover everything about the house itself and the area surrounding the house.
One of these documents will be Megan’s Law disclosure.
It lets the buyers know where they can access the information regarding sexual predators. This will be extremely important to your buyers who have families with young children.
In California, you can go online to MegansLaw.ca.gov and the information is publicly available for anyone to view. You can see where registered sex offenders live by entering an address. For example, the address of the new house you want to purchase.
It gives buyers the opportunity to evaluate the neighborhood and make an informed decision on whether or not they want to purchase the home. If the results are unfavorable, they have the right to cancel the escrow and get their earnest money deposit back.
Megan’s Law is instrumental for buyers in ruling out houses in an area where sexual predators reside. However, there is another side to this.
What if you’re representing the seller?
At face value, it may seem that Megan’s law can hurt a homeowner’s chance of selling their home. After all, the database shows where all registered sex offenders currently live and it could lessen their chances of selling their homes.
Also, the database does not take into account that the homeowner may have purchased their home BEFORE an offender moved into the area.
Is it fair that this information can immediately lower the value of their house? Is it right that it may make it more difficult to sell their home? We don’t think so, and neither does the state of California.
So let’s talk about how this works when you are representing the seller.
It comes back to the disclosures. As a real estate agent representing the seller, it is your responsibility to give the disclosures to the buyer. This includes everything that the seller is aware of regarding the property and the area.
The key phrase is “everything that the seller is aware of”. It’s important to remember that you only have to disclose the information you know — you don’t have to do research beyond what you already know to be true.
As we know, one of those documents is Megan’s Law Database Disclosure form. This form lets the buyers know that there’s a website where they can check the proximity of sexual predators in the area. This is where the responsibility on the seller's side ends.
The responsibility is not on the seller to look up any sexual offenders nearby – it falls on the buyer.
While buyers understand that this information is out there and available, some may choose NOT to do their due diligence on the neighborhood. This means that the information potentially doesn’t become a factor in choosing to proceed with the escrow.
When the buyers sign the disclosure form, they are saying that they are aware of the website, they are waiving their right to contest the findings, and that the escrow is proceeding.
In this way, the information is disclosed, the seller is not adversely affected and has an equal opportunity to sell their home.
As an agent, your responsibility is to provide the proper disclosures to your client and protect their interests. We know that disclosures are designed to both inform and protect both you and who you are representing.
Not disclosing this information will hurt you as an agent. If you don’t disclose this information for fear of not selling the listing, the buyer can sue you and your seller if they discover a sexual predator after the transaction.
The same situation can happen if you are representing the buyer. Don’t fail to properly inform your buyer because you believe it will affect their decision to buy. In the end, it is not worth the liability.
It is understandable that having to discuss or disclose the topic of sexual predators can be uncomfortable. That is why Megan’s Law Disclosure is so crucial. But it is necessary, so it’s important to not bury any facts. We can’t stress this enough.
Welcome back to the CA Realty Training blog, filling your head with knowledge on a weekly basis! This post is a technical one, and addresses one of the problems that agents sometimes run into.
Let’s say you’re putting together a deal and representing the buyers. The home is listed at $1 million, which means that the seller wants a million dollars for the house. Your buyer really wants the house, so they offer a million dollars and you think it will be a super easy, 30-45 day escrow period! You’re looking forward to closing the deal and you may even already have plans for your commission check…
As usual, though, the buyer is using a loan to purchase the property.
When there is a loan, there is a bank - acting as the lender. Since the lender wants to make sure their property (the home) is worth what they are lending, they send out an appraiser to give an unbiased opinion of value. Remember, that’s all the appraiser does in this process - review the house and comparables to provide a report of market value. They are not invested in the deal, so they don’t have any reason to say the property is worth more or less than market value.
Let’s say the appraiser comes out and, after doing the report, gives the opinion that the house is only worth $900,000. The appraiser has been hired by the lender, so the lender immediately knows that the value opinion of the home is below the sales price. And not by a few thousand - by a full 10%! Is your deal dead on arrival? Not necessarily!
Now, keep in mind that your commission will be around 2.5% - of the sales price, a million dollars. What’s that? The answer is: $25,000 - good money!! So your commission is on the line to be reduced or even completely taken away, if this deal does not go through at $1M.
You’re going to be stuck between two different parties. The buyer obviously doesn’t want to over-pay for the house, but the seller still wants $1M. They’re $100,000 apart - how are you going to reconcile this difference?
Well, if you listen to us and follow Rico’s advice, don’t despair and don’t fear. You have the skills to deal with this! Just have some self confidence and use your analytical thinking to come up with a solution that works for everyone.
Depending on the market, different scenarios will usually play out. In a hot seller’s market like there is right now, there is a very constricted amount of inventory and therefore buyers have very few choices for houses in any given price range. Thus, they may pay more than they were originally willing to pay. This also holds true for when there is a buyer’s market - usually the seller will settle on less than their asking price. The third option that usually works, is that both buyer and seller meet somewhere in the middle.
So, don’t be discouraged if your property appraises undervalue. There is always a solution. As William Shakespeare says: when there is a will, there's a way!
As an agent, when you are working with buyers it all starts with finding that perfect home. When you find it for your client, they will be excited and ready to make a real estate purchase offer.
This is where you come in as an agent.
One of the most important things you can do is write the real estate purchase offer. The success of getting the home your client wants is dependent on your offer being accepted – which means it should be well put together!
There will be times when there are multiple buyers fighting for the same property. So you want to make sure that your offer is strong and stands out from the rest.
Let’s start by discussing the basics that make a good offer. There are three key components to consider and factor into your offer.
One of the basics of a real estate purchase offer is the Earnest Money Deposit (E.M.D.) This is the amount of money that the buyers put down to secure their position in the offer and take it off the market. This deposit is given to a third-party escrow company.
The bigger the deposit, the more serious the buyer.
Why?
Because of a higher E.M.D. indicates that the buyer is interested in the house and less likely to back out of the deal.
Let’s talk about what amount is considered a good Earnest Money Deposit in the eyes of a seller.
If the buyer puts down 3%, that is considered a very good earnest money deposit. Let’s put this into perspective by looking at an example.
The seller gets 3 different offers from buyers, all for the same price of $1,000,000. What do you think is going to stand out to the seller when reviewing the offers?
Offering 2% is acceptable, but any less may imply that the buyer does not seem serious about purchasing the property.
That’s always a concern for the seller. Because they are taking their house off the market for a buyer, they will want to make sure the deal will go through.
If a seller is looking for a strong offer, this is one element that will make a difference. Especially when the offer price is not a factor.
That brings us to our next point: the offer price.
Every real estate purchase offer is different. But, it’s important to know how much to offer depending on the situation. There are circumstances around every deal that help dictate the price.
If it’s a buyer’s market, there are tons of listings available. So, in this situation, buyers can offer a list price or just below. That’s because they have more listing options to choose from if their offer is not accepted.
In a seller’s market, inventory is low. More buyers are interested in a few houses. So, sellers are receiving multiple offers. In this situation, buyers should make sure their offer is strong since they are competing with other buyers.
In either market, if you want your real estate purchase offer to be considered, it’s important to start the offer at the list price.
Let’s say the house is priced at one million dollars.
What’s an appropriate offer?
Well, it definitely depends on the market, the house, and the sellers. Your job as the real estate agent is to help your buyers put together the best purchase offer with the best chance of getting it accepted.
One way to determine the best offer price is knowing the D.O.M., which stands for Days On Market.
This is the measure of how many days a house has been listed on the MLS for sale. If the listing is priced right, a home doesn’t last long on the market.
If the house has been on the market for a while and there have been no offers, that usually means the sellers will be more motivated. So, chances are the sellers will accept an offer below their asking price.
Using the D.O.M. is one tool to help you decide on price. But, you also need to consider why a home has been on the market for a long time.
Is it just overpriced or is there some other flaw that you’re not seeing?
It’s a good idea to call other agents in the area who may have already been through the house with their clients and see if they have any feedback.
Communication between agents is always helpful since the client gets your expertise PLUS the expertise of your colleagues.
Another way to improve your chances of your offer being accepted is to have few or no contingencies. Contingencies should only be included on reasonable items.
What is a contingency? A contingency is another way of saying “only if.”
For example, one contingency that many buyers would love to put in is a “sale contingency.” That means that they will only buy the new house ONLY IF their current house sells. But, this makes for a terrible real estate purchase offer.
The sellers are already trying to sell their house. They don’t want or need the stress of waiting on someone else’s house to sell too.
You have to be careful when drafting contingencies. You want to protect your buyer’s interests. But, you also want to present attractive offers that will get accepted. That’s why it’s best to stick to the standard, reasonable contingencies like the loan or appraisal.
LOAN CONTINGENCY
If you have a loan contingency with your offer, that means you will buy this property only if you can get a loan on it.
APPRAISAL CONTINGENCY
You will buy this property only if the appraiser says it’s worth what you’re offering.
Most sellers will move forward with these restrictions since they are comfortable with these “only if” statements.
As an agent representing the buyer, you will want to make sure that YOUR offer stands out. So, remember to include these key components to ensure your offer gets accepted.
Once again, make sure to include a good earnest deposit of 3%, offer at least the list price, and have few to no contingencies.
Your well-written offer will let the seller know that your buyer is serious about the purchase and less likely to back out. That means a happy buyer and another commission check in your pocket.
There’s a first time for everything, and real estate is no exception. Starting a new career in real estate can be intimidating, and it’s easy to wonder, “Now what?” after getting your real estate license. The key to overcoming this uncertainty is building self-confidence.
Self-confidence is one of those qualities that people can see and feel, and it creates a positive impression. If you’re confident in your skills, motivated, and disciplined, potential clients will notice and be drawn to work with you. Remember, clients want to see someone determined and goal-driven who can deliver results.
It’s important to remember that building a client base takes time. Not everyone you meet is looking to buy or sell right away. When meeting potential clients organically, it could take months—or longer—for them to be ready to utilize your services. During this time, it's essential to maintain a strong work ethic and continue showcasing your drive.
Example: You might meet someone at a community event, and while they may not need your services immediately, your enthusiasm and professionalism can leave a lasting impression. When the time comes for them to buy or sell, they'll remember you.
Tip: Stay visible, stay engaged, and keep demonstrating your dedication—eventually, clients will come.
People appreciate and reward hard work. Clients want to see that their real estate agent is not just working but working intelligently and effectively. Discipline and motivation go hand in hand—being driven to work is important, but so is the discipline to work effectively.
One advantage of being new is that people are often willing to try you out, especially if they see your enthusiasm and potential. However, you need more than just excitement—you also need to show intelligence, hard work, and self-confidence.
Tip: Let your clients see how capable you are. Show them that even though you’re new, you’re knowledgeable, driven, and ready to provide excellent service.
Dr. Seuss said it best: “You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose. You're on your own. And you know what you know. And YOU are the one who'll decide where to go...”
As a new real estate agent, it's up to you to decide where you'll go. Don’t act like a newbie—act like a veteran who knows how to get things done. Be confident in your direction and your decisions.
One of the most important skills you can have as a real estate agent is excellent customer service. Use your customer service skills to steer yourself in the right direction and make a great impression on every client.
Rico, the owner of CA Realty Training, often tells a story from his childhood. As a kid, he played baseball most of the time, but one year his dad encouraged him to play soccer. Rico wasn’t thrilled, but he turned out to be good at it, scoring most of the goals for his team.
One day, however, he wasn’t in the mood to play. He was tired, low-energy, and not putting in his best effort. During the game, he caught a disapproving look from his dad on the sidelines—a look that said, “You can do better than this.” At that moment, Rico realized that success isn’t just about natural talent—it’s about the effort you put in every single time.
With renewed energy, Rico scored three goals in a row and helped his team tie the game. His teammates and father weren’t just cheering for the goals—they were cheering because they saw the effort he put in.
Lesson for New Agents: In real estate, as in sports, your effort matters more than anything else. People notice when you put in the work, and they will reward you for it. Clients will cheer for you when they see your dedication and effort, even if you're just starting out.
Building a successful real estate career starts with self-confidence. Clients want to work with someone who is determined, motivated, and dedicated to helping them achieve their goals. If you act with confidence, discipline, and a strong work ethic, success will follow.
Cold calling often evokes feelings of anxiety—both for the caller and the recipient.
However, for real estate agents, cold calling can be an effective tool to generate new leads and grow your business.
The key to success lies in creating a positive first impression and providing value to potential clients.
In this guide, we'll explore how to approach cold calling in a way that increases your chances of success, including practical scripts you can use.
Cold calling gives you the opportunity to make a fresh first impression with potential clients who may not yet know your name or that you’re a real estate agent.
This is a double-edged sword—it gives you a chance to make a strong, positive connection, but you must also overcome initial objections and skepticism.
Approaching cold calls with a strategy that emphasizes value will help you turn these initial challenges into opportunities.
One of the biggest hurdles in cold calling is dealing with rejection. People are naturally guarded when receiving unsolicited calls, and their initial reaction may be to say “no.”
It’s important to approach these situations with resilience and patience. Instead of directly asking if they want to sell their home, focus on creating a connection and building trust before diving into the details of selling.
Sample script:
Agent: "Hi, this is [Your Name] with [Your Brokerage]. I know this call is a bit out of the blue, but I'm reaching out because there's been some interesting activity in your neighborhood recently. Are you aware of the recent sale on [Street Name] for $1.7 million?"
Homeowner Response: (Likely skeptical or unsure)
Agent: "I understand this might not be something you're thinking about right now, but I wanted to share some market insights that might be helpful to you. The market is moving quickly, and I just thought you might want to know what your home's current value might be in today’s market."
A great way to establish a connection with a potential client is to offer something valuable—and this doesn’t mean something physical like a gift card. The best value you can provide as a real estate agent is information. Before making a call, make sure you’ve done your homework: research recent sales in the neighborhood, understand market trends, and have data ready that might be of interest to the homeowner.
Agent: "Hi, this is [Your Name] with [Your Brokerage]. I wanted to reach out because I noticed some recent activity in your neighborhood. Your neighbor just sold their home for $1.7 million, and it made me curious about the potential value of your home in today's market. Would you be interested in a quick analysis of your home's value?"
Homeowner Response: (Shows interest)
Agent: "Great! I’d be happy to provide a quick estimate, and if you’d like, we can schedule a time for me to give you a more detailed report."
People are naturally curious about what’s happening in their neighborhood, especially when it comes to property values. Sharing information about recent comparable sales or trends in the local market provides immediate value to the recipient. This approach not only makes the call more engaging but also increases the chances that the prospect will want to continue the conversation.
Sample script:
Agent: "Hi, [Homeowner's Name], this is [Your Name] with [Your Brokerage]. I wanted to let you know about some interesting sales happening right in your area. One of your neighbors just sold their property for a record price, and it made me wonder if you’d be curious to know what your home could be worth in this hot market?"
Homeowner Response: (Interested)
Agent: "I’d be happy to share a quick estimate with you. It’s incredible how much homes are appreciating lately, and I think you’d be pleasantly surprised by the current market value of your property."
Once you’ve piqued their interest, offer a little more information but save the “meaty” details for an in-person meeting.
As Head Trainer Robert Rico suggests, giving a “teaser” is an effective way to engage potential clients.
If they’re intrigued by the initial information, they’ll likely be interested in learning more, which opens the door for future contact or an in-person consultation.
Sample script:
Agent: "Based on what I’m seeing in your neighborhood, I think there’s a great opportunity here. I can give you a detailed report on what your home might sell for, but I’d love to meet in person to go over the specifics and answer any questions you have. When might be a convenient time for us to connect?"
Your goal during a cold call is to build enough interest that the potential client feels comfortable reaching out to you again.
Provide value, be informative, and make it easy for them to get in touch—whether it’s by offering your direct contact information or suggesting a convenient time for a follow-up conversation.
Sample script:
Agent: "If now isn’t a great time, that’s perfectly fine. I'd love to set up a time that works better for you, or I can send over some information by email. What works best for you?"
Cold calling doesn’t have to be intimidating if you approach it with the right strategy. By focusing on providing value, making a strong first impression, and engaging prospects with targeted information, you can turn cold calls into meaningful connections.
Remember to offer a teaser of valuable information to pique curiosity, be resilient in the face of rejection, and always be prepared with relevant data. With practice and persistence, cold calling can become an effective tool in your real estate business arsenal.
Good luck, and remember—you've got this!
Financing is the bedrock of any real estate transaction and commonly, most investors obtain these funds by applying for mortgages from lenders.
However, it is also possible to purchase real property without the assistance of these mortgage institutions or banks.
Cash offers are probably more popular than you think, and this fact is backed up by recent research that shows that about 30% of all home buyers in America paid cash within the first four months of 2021.
If you are looking to get a home soon, this article will help you understand what a cash offer is, who a cash buyer is, some of the benefits of purchasing a property with cash as well as give you insight into how the process works.
The term ‘cash buyer’ is often mistaken for a lot of things; however, buying a house with cash simply means purchasing the property upfront without the assistance of a mortgage or house loan.
This entails that the cash buyer must be able to pay for the property in full without financing from lenders.
Another misconception most people have is thinking you have to show up with a briefcase full of cash to close the deal. The truth is that there is no room for raw cash in the real estate market as no one wants to be stuck counting large wads of cash.
For example, if you are looking to purchase a property worth $500,000 without a mortgage, all you have to do after identifying the property is to make an offer on it.
Once your offer is accepted and all criteria have been met, proof of funds is then presented as evidence of financial stability.
Both parties then proceed to draw up and sign the agreement contract, which would also state that the property is being purchased without a loan involved.
Once this is completed, you are expected to put down earnest money as a deposit for the home while the rest of the money will typically be held in an escrow account to be wired to a title company just before closing day.
Selling or buying a property through a cash payment does come with some benefits over the conventional method of purchasing a property with a mortgage. Some of these benefits include:
When paying cash for a property, investors can save thousands of dollars by waiving closing costs.
Not only do cash buyers get discounts on some closing fees, but they can also avoid excess charges associated with mortgages, like mortgage application fees, and loan origination fees, that make up a substantial part of the closing costs.
Before getting approved for financing from a mortgage institution, a major requirement is to carry out an appraisal of the property by an approved appraisal company, usually, one that is suggested by the lender.
Lenders do this to ascertain the real value of the property and ensure that they are not giving out a loan that is higher than the property value.
The average cost of appraisals ranges between $300-$400 but it can also cost as high as $1200 and traditionally, the buyer pays the fees for the home appraisal because it is required by a lender.
However, since a cash buyer is not working with lenders, he or she is not mandated to carry out a property appraisal, thus enabling them to avoid paying the appraisal fees.
One of the significant advantages of purchasing a property with cash is the absence of loan contingencies in the transaction.
This is a security, especially for the seller as no clause entitles the buyer to a refund of any money spent during the transaction process.
Therefore, the buyer is most likely to see the transaction through because the transaction is independent of mortgage approval and the buyer would not want to lose any money by forfeiting the deal.
Another important benefit of cash transactions in real estate is the elimination of interest payments associated with loans. Due to the fact that the buyer is paying for the property out of their pocket, they are not required to make monthly mortgage payments afterward.
Consequently, the issue of paying high interest on borrowed funds is removed. This, in turn, could potentially help the buyer save a significant amount of money in the long run.
Real estate investors opt for cash transactions when buying or selling a property because of the lesser time it takes to close the deal.
Typically, the closing process when you purchase a home with a mortgage can take over a month to be finalized. This is due to activities like obtaining mortgage pre-approval, underwriting, and other time-consuming steps of the home-buying process.
However, the reverse is the case when you purchase with cash as it is possible to close on a deal in as little as a week or two.
This in turn makes the process very convenient and saves both the buyer and seller ample time and money.
Selling a property directly to a cash buyer simplifies the transaction process, reduces the hassles faced by both buyer and seller as well as limits the number of individuals involved in the entire process.
Because the buyer does not work with third parties like lenders and appraisal companies, there is no complex chain to work through and an even lesser risk of complications.
This is perhaps the most important benefit of paying cash for a property as the buyer is not encumbered by a mortgage.
Hence, the buyer does not have to worry about fluctuating housing market trends, increasing interest rates, or losing the property to foreclosures so long as all payments, such as property taxes, are made on time.
The process of purchasing a property with cash is relatively straightforward. After securing your funds and drawing up a practical budget, here are the next steps to take when buying a property with cash:
The next step is to select a suitable property within your budget that caters to your specific needs. When choosing a property, ensure to carry out due diligence, taking a look at the location of the property, other surrounding properties, title search, previous transaction history, and any other document of importance.
As soon as you have chosen a suitable property and done thorough research, it is time to create and submit a compelling offer to the seller. This is a crucial aspect of the procedure and should be handled with expertise.
It is therefore advisable to work with a professional and experienced agent to improve your chance of getting selected. Once your bid is chosen, negotiate with the seller and agree on the price to be paid.
As soon as a price is agreed upon, proof of funds or a financial statement is obtained from your financial institution and presented to the seller, stating that you are in good financial standing and have enough money to put in a cash offer.
You are also expected to put down a holding deposit or earnest money which is typically 1-3% of the total price to secure the property and show commitment.
A legal agreement that outlines the terms of the transaction is drawn up and signed by both parties. Regardless of whether you are purchasing a property with cash or a mortgage, it is important to employ the services of a solicitor to handle all legal affairs related to your property.
Once all the necessary inspections have been carried out and contracts have been signed, you will transfer the full outstanding payment for the property purchase to a title company just before the day of closing.
After the final house inspection is performed, it is time to finalize the deal. Closing a cash deal is quite faster and only requires you to come with a means of identification i.e a government-issued ID card, a cashier’s check or wire transfer for the payment of purchase price, and all other necessary documents.
Once payment is completed, there is a legal transfer of ownership of the property to the buyer and this signifies a successful end of the transaction.
Purchasing a property with cash is one of the appealing avenues investors use to acquire properties as it not only makes your offer more appealing but it also speeds up the closing process and helps you save money in the long run.
However, just like any other transaction, it is important to carry out thorough research to understand what buying a property without mortgage entails. It might also help to discuss with a professional, such as a real estate agent or lawyer.
If you think being tough will win you more negotiations, then you are putting yourself at a huge risk of losing your next deal. Contrary to this belief, a more empathetic approach can lead to better outcomes.
Mastering the art of negotiation involves a blend of empathy, strategy, and smart tactics that go beyond mere assertiveness.
Here are 10 surprising negotiation tips that can help you close more deals and build lasting relationships with your clients.
Effective negotiation starts with understanding. By actively listening to your clients and the other party, you can uncover their true needs and motivations. This not only builds trust but also provides valuable insights that can be leveraged to craft mutually beneficial agreements.
During a listing appointment, instead of immediately presenting your marketing plan, ask the seller about their goals and concerns. By listening attentively, you discover they prioritize a quick sale over maximum profit, allowing you to tailor your strategy accordingly.
Knowledge is power. Research market trends, comparable property values, and the backgrounds of all parties involved. Being well-informed allows you to present compelling arguments and anticipate potential objections, giving you a strategic advantage during negotiations.
Before negotiating an offer on a property, analyze recent sales in the neighborhood. Presenting data that shows similar homes sold for less can help justify your client's offer and persuade the seller to accept a lower price.
Establishing a genuine connection with your clients and counterparts can create a positive negotiating environment. Simple gestures like remembering names, showing genuine interest, and maintaining a friendly demeanor can make the other party more inclined to work with you.
At the first meeting with a potential buyer, take note of their hobbies or interests. Later, mention something related, like a local event or a favorite restaurant, to strengthen your relationship and make negotiations smoother.
Before entering any negotiation, define your goals and establish your limits. Knowing what you want to achieve and where you can compromise helps you stay focused and make informed decisions, ensuring that you don't concede too much too soon.
When listing a property, decide in advance the minimum acceptable price and your ideal listing price. This clarity helps you confidently negotiate with buyers, knowing exactly when to hold firm or make concessions.
Understanding and managing emotions—both yours and the other party’s—can significantly impact the negotiation process. By staying calm and empathetic, you can navigate tense situations more effectively and keep the conversation productive.
If a buyer becomes frustrated during price discussions, acknowledge their feelings and address their concerns calmly. This approach can de-escalate tension and lead to a more constructive dialogue.
Silence can be a powerful negotiating tool. After making a point or presenting an offer, pause and give the other party time to respond. This can encourage them to share more information or make concessions without feeling pressured.
After presenting an initial offer, remain silent and maintain eye contact. The seller may feel compelled to fill the silence by revealing their bottom line or making a counteroffer.
Offering a range of solutions provides the other party with a sense of control and increases the likelihood of finding a middle ground. Presenting multiple options also demonstrates your flexibility and willingness to work towards a mutually beneficial outcome.
When negotiating closing dates, offer the seller a few different timeframes to choose from. This flexibility can make the seller more willing to agree to your preferred terms on other aspects of the deal.
Negotiations can take time, and rushing the process can lead to suboptimal deals. Patience shows your commitment to finding the best solution, while persistence ensures that you stay engaged and focused on achieving your objectives.
If a buyer is hesitant about a property's price, avoid pushing for an immediate decision. Instead, give them time to consider and follow up periodically, demonstrating your dedication to helping them find the right home.
Not every deal is worth pursuing. Recognizing when a negotiation is no longer viable and being prepared to walk away can often prompt the other party to reconsider their stance and come back with better terms. This demonstrates your confidence and reduces the likelihood of settling for unfavorable conditions.
If a seller refuses to negotiate below a certain price and it exceeds your client's budget, politely decline and inform them you’re willing to explore other options. This may encourage the seller to lower the price to keep the deal alive.
After the negotiation, maintain open lines of communication. Following up reinforces relationships, addresses any lingering concerns, and keeps the door open for future opportunities. A thoughtful follow-up can turn a successful negotiation into a long-term partnership.
After closing a deal, send a thank-you note and check in a few weeks later to ensure everything is going smoothly. This gesture can lead to referrals and repeat business, enhancing your reputation as a reliable agent.
Negotiation doesn’t have to be a battle of wills. By using these surprising tactics, you can approach each deal with confidence and a fresh perspective. It’s all about connecting with people, staying flexible, and thinking strategically. When you focus on understanding your clients and the other party, you’re setting yourself up for not just more deals, but better relationships too.
Here’s the secret sauce: Keep learning and stay adaptable. The real estate world is always changing, and the agents who thrive are the ones who keep growing their skills and embracing new strategies. So, stay curious, keep honing your negotiation game, and watch how these tips help you stand out and succeed in your real estate career.
As a real estate agent, the most important thing you have to do when deciding to work with a seller gets the residential listing agreement signed. As a general rule, you should not start working with a seller without first having them sign this document.
This is important because listing agreements are the contractual document that binds a real estate agent with a homeowner. This agreement outlines terms in which the agent helps the homeowner find a buyer to purchase their property and commission to be received.
In real estate, there are three common types of listing agreements. Each is different and how you get compensated as an agent, depends on which agreement you use with your seller.
This article will help you become more familiar with the three different listing agreements and in what situation they may be used. Understanding how they function will bring you more success in your career as a listing agent.
So, let’s get started.
The first type is the “exclusive authorization and right to sell” agreement. With this agreement, you’re the only one who has the right to sell this property. You alone represent the seller. It is the most secure agreement regarding representation and compensation.
So, how do you sell this house if you have the exclusive listing? How do you get the most exposure to get this listing sold?
The best method to use is to put it on the MLS, which is the Multiple Listing Service. This is an online database that real estate agents use to search for properties for their buyers.
Typically, the seller agrees to give you 6% of the sales price as the listing agent. When you list your property on the MLS, you offer to split your commission with the buyer’s agent at 3%. The buyer’s agent becomes the cooperating broker.
With an “exclusive authorization and right to sell”, there is no getting around paying the agent’s commission. It guarantees that you will earn a commission if the property gets sold, regardless of who brings the buyer into the transaction.
If a random buyer knocks on the seller’s door or contacts them on social media, you’re still the only person authorized to sell this property. So you earn your commission because of the compensation structure of the agreement.
This is the most common listing agreement used, the one that forms the strongest bond with the seller and guarantees compensation to the agent.
The second type is called the “exclusive agency” agreement. This means your relationship to represent the seller is exclusive to you only. There is one major difference between this and the “exclusive authorization and right to sell” agreement.
The most important phrase missing from this agreement is “right to sell.” With this agreement, there is a little more risk when it comes to getting paid. This will directly affect you receiving a commission if you are not the one who brings a buyer to the table.
With the “exclusive agency” agreement, the “right and authorize to sell” extends to the homeowner. In this scenario, the seller actually has a financial incentive to find a buyer. If the seller secures a buyer, the seller does NOT have to compensate you.
Let’s be clear. This does not refer to a buyer who is represented by an agent. An agent knows that if they have an offer from their buyer that they must present it to the seller’s listing agent.
Some sellers hesitate about having to pay a real estate agent when they believe they can find the buyer themselves. While this is not the optimal listing agreement to use, this can be useful in cases where the seller is doubtful about listing with an agent.
You can present this Exclusive Agency as opposed to not getting the listing at all. With this agreement, the seller feels comfortable knowing that if they find the buyer they will not be obligated to compensate you.
This agreement has the most risk when it comes to compensation and commitment.
With an “open listing” the seller is not committing to one agent. In fact, it’s the opposite. The open agreement allows the seller to engage with multiple agents.
Basically, the seller is saying that they will entertain and compensate any offer from any agent who brings them the buyer. That means you are competing with multiple agents with no guarantee that you will get paid for your time and effort.
If the market is hot, sometimes an agent will take the risk on an open listing agreement in hopes that they will find a buyer before anyone else. But like we mentioned before, there’s no guarantee that they will receive a commission if another agent finds a buyer first.
So why would a SELLER want and agree to such an arrangement? In some cases, an “open listing” would be attractive.
The seller wants to increase the chances of getting the home sold in a short period of time by having more agents looking for a buyer.
The seller believes they have a property that is high in demand. They will choose to have an “open agreement” to negotiate better terms and pay less in commission.
As a real estate professional, your time and expertise are valuable. The “open listing agreement” is not the best contract to use as a general rule.
Overall, the “exclusive authorization and right to sell” agreement is the ideal contract to have your clients sign. It secures your agency with the seller and guarantees your commission when the property is sold.
The “exclusive agency” and “open listing” agreements, while valid, have some definite drawbacks. They do not secure your compensation. You want to ensure that you get your commission if the house sells.
If you’re going to put your time, effort, and money into marketing a property, it’s definitely best to make sure you’re going to be rewarded for your investment. Evaluate the market, weigh the risk and use the best listing form whenever possible.
Like many other markets, the real estate market goes in “peaks” and “valleys” where property values are very high (the peaks) and very low (the valleys); this is done in a repeating cycle. Now, most readers will likely remember the Great Recession of 2007-2009 when all the property values were in the toilet, people were being foreclosed upon left and right, and people were desperate for buyers for their homes.
Now, this may sound like doom and gloom to you, but it’s not always a bad thing if you play your cards right. However, many agents were too scared in the recession, and got out of the business for more secure, 9-5 jobs that paid a consistent wage. Some agents, like Robert and Carolee Rico, did not let the state of the market discourage them - they just pivoted and changed their business model.
The real estate life cycle follows a pattern that is caused by four phases:
Before the recession, values were going up, houses were selling quickly, and it was easy to buy a home for the first time or “upgrade” to a bigger home. This was an increasing market, and it was extremely lucrative to go after sellers, because listings were the guaranteed source of income and it was easy to sell a home. This led up and up, eventually leading to the market peak, where values hit their high and started to decline. This meant that people were “upside down” on their houses, which means that they owe more on the loan, than what the house is worth. Therefore, many people stopped making their house payments and allowed the lender to foreclose on them, or take the property back. This kicked off an enormous recession, the biggest in the US since the Great Depression.
In a recession or depression, the supply is high, and the demand is low. This drives down value, due to basic economic theory. People are unable to pay their bills, due to low demand for their services or labor, and not making enough money. So how are people supposed to buy a house?
Well, one of the facts of the Great Recession was that there were certain sectors of the economy that were actually doing well - and these people were some of the few with money and liquid assets during the Recession. They were able to buy houses, and they were able to get some killer deals on them too! Some Real Estate Agents thought, instead of focusing on the scarce seller’s market, why not focus more on the buyer’s side and help the buyers out there, find the home of their dreams at a steal of a price? The inventory was ample and, although much of the homes were damaged from deferred maintenance, they were mostly restorable through some construction and labor efforts.
As the market slowly recovers, usually through some sort of government intervention, the general public has a little more money to spend and can consider purchasing homes again. At this point, it’s still very good to be a buyer’s agent, but there are going to be a few more listings coming on the market. People are always going to need to sell their homes, and as the market recovers, more and more people will want to sell their homes as well.
The drawback to being a buyer’s agent, of course, is that it’s much more active work (day to day) than being a seller’s agent. If you’re a seller’s agent, once you’ve put the home on the MLS and set up the advertising, you can take days off and just be available on your cell phone! If you’re the buyer’s agent, however, you are going to be more active -- looking for new MLS listings, driving the neighborhoods looking for FSBOs, and communicating constantly with your buyers.
After the market has recovered a little bit more, it will bypass a certain threshold, and the market will now be in “expansion” mode -- when the economy is growing. This means that more construction will start, and the existing housing will be fuller. This raises values, which means it’s becoming a better and better time to be a seller’s agent. More and more people will want to sell, so you can secure listings and earn income in a reasonable manner. If it’s a quick expansion, near the top of the market, home values will soar because the economy is strong. People want to buy homes because they think values will keep increasing, but homeowners want to hold onto their homes for the same reason. At the top of the market, there is very constricted inventory, and a high amount of construction, but a shortage of available homes.
Once all the new construction comes available, the market will stable out for the most part -- rents will fall a little from their peak, and values might go down slightly, but for the most part there is a market equilibrium where supply meets demand and everyone is content. However, the downside is that with the new construction, old buildings become less desirable and rent falls on them.
So... the cycle continues... Once rent starts to fall on the older housing stock, rents start to fall in general, and then (due to the cyclical nature of the market) the market begins to trend downward, until it hits the tipping point and starts another recession. As we said, what do we advise you do in this time? Become a buyer’s agent!
Standing out as a real estate agent simply means being prominent, distinct, and capable of getting potential clients to see what you are capable of as an agent. Standing out is very important because it not only makes you well-known but also gives you an advantage over your competition and establishes your place in the vast real estate market.
Fortunately, standing out from the crowd is not as difficult as you might make it out to be. Here are some practical tips that you can work with to achieve this goal:
A real estate niche is a specialty or area of the market you choose to focus on. The most flourishing real estate agents are not jacks of all trades. Instead, they focus on just one market niche and build a name for themselves in it.
Initially, choosing a niche might seem counterproductive as you might feel you are restricting yourself. However, when you are specific about the kind of services you provide, it allows you to focus your time and efforts on mastering your chosen niche and also gives potential clients the confidence that you are an expert. This immediately stands you out from other real estate agents in the area.
When choosing your niche, ensure to:
Social media is one of the most effective marketing tools to help you distinguish yourself in the real estate market. The benefits of social media to every business including real estate can not be understated. Research has shown that the majority of home searchers begin their search online and what better way to put yourself in their way than through online platforms.
Social media and other online platforms help create more awareness for your agency and broaden your reach to potential clients. It also allows you to build meaningful connections with your customers, thereby giving you an idea of what your customers want and how to best serve them. Furthermore, it helps you stay on top of the latest trends and provide fast services to your clients.
Optimally maximizing social media will not only build you a strong reputation in the market but also give you a great advantage over your competitors. There are various effective ways to grow your online presence such as:
It is essential to give the right information regarding investing in real estate to your clients without sounding unrealistic or too negative. Learning to communicate properly to your clients by explaining the potential gains, possibilities, and obstacles they might experience helps them to adjust their expectations of the market going forward.
This will not only prevent them from making costly mistakes but also help to maintain a good agent-client relationship hence, improving your reputation.
Nothing captures people’s interests like originality, and believe it or not, incorporating uniqueness into your brand will help you stand out. Being authentic leaves a strong and lasting impression on your clients and this will keep your customers thinking and coming back to you.
Take time to identify your strengths as a person; study the things you enjoy and excel at and at the same time, research your competitors to find gaps in their services. Then work towards developing a unique approach that will fill these gaps accurately.
Being unique also includes having a unique selling proposition -a message that shows potential clients what differentiates your brand from your competitors. This is more than just special catch-phrases, services, and incentives. It is one thing that will make your brand stand out, and you should put some thought into developing it.
The real estate market is a very competitive field, and if you are hoping to succeed in it, then you are going to need advertisements and promotions targeted at reaching your potential customers and creating tangible avenues for your customers to relate to your brand.
Utilizing creative pieces to promote your brand distinguishes it from the rest and captivates the attention of your target audience until they finally choose to work with you. In addition, it can help you amass a fanbase, as studies have shown that many people believe that a brand is high-quality based on how good its advertisement is.
You can creatively promote yourself in the real estate market by:
Community leadership is simply working towards a common goal with the welfare of a specific group of individuals in mind. A community leader tackles the problems and rising issues while serving as a representative for this group of people.
Thriving real estate agents understand the importance of being problem solvers in their communities. Activities like volunteering, organizing, donating to or sponsoring community events, not only open you up to meet more people but also help you create a good reputation for yourself and long-lasting relationships within the community.
By becoming someone the community recognizes to provide leadership and solutions, you establish yourself as someone they want to work with and this naturally makes you stand out in the market.
The advantages of establishing a name for yourself in the real estate market can not be overemphasized. Not only does this expand your clientele base and help you forge lasting networks but it also creates a wide margin between you and other agents within your region.
While everyone can stand out in the real estate market, it takes effort, strategically positioning yourself within the reach of potential clients, and smart planning to do so.
Transferring property after someone is deceased doesn’t have to be difficult. There are 4 common ways a property deed is transferred:
Without written instructions on what to do with a property after someone is deceased, the property owner could be contested. In these scenarios, the assets will be divided out in probate court, which is a long, arduous process that nobody enjoys.
This article will help you understand the ins and outs of transferring property when someone is deceased and break down the common terminology you’ll see along the way.
First, let’s start with deeds.
A deed refers to a legal document with which the holder can lay claim to ownership of real estate or other assets. The deed is used to transfer asset title to a new owner.
Real estate transactions see the deed handed over at closing, and a valid deed must have certain elements depending on the jurisdiction. These include:
Deeds vary, and as a result, they would feature various warranties of title. Common deeds include:
In order for a property owner to sell, refinance, or obtain a line of credit on a property, there must be a record of such deed with the local government. The title insurance company or buyer’s attorney usually handles this part of a real estate transaction.
The document in itself as well as the transfer of title is valid, however, in the event of legal issues, the only way to avoid a delay would be to have related paperwork be on file alongside the register of deeds.
The following features are required of a deed:
A deed and a title chiefly vary in the manner in which they exist.
A deed is a legal document that clearly states that the holder legally owns property or owns the title, and then intends to transfer both title and property to a new owner.
A property title on the other hand is an intangible concept with no physical documentation. It refers to theoretical rights that a homeowner holds to a piece of real property. It is the deed that holds a public record showing the property owner’s title.
The rights that can be accessed via a title may vary on the basis of the deed. Clear title vests absolute ownership rights in the titleholder, however, the title’s validity present in the deed can still be contested based on any of these two factors:
Homeowners may opt to hold title in several ways, and this may in turn impact how ownership rights can be transferred in the future. Here are the most common ways:
Sole ownership sees a single owner to the property title. This holding method commonly applies to single individuals, legally divided Ed individuals, married individuals looking to acquire property separate from their spouse (there may be restrictions based on the jurisdiction).
Joint tenancy sees two individuals purchase a property together and hold equal shares in said property. Since joint tenants have equal rights, decisions made about the property must be done unanimously.
In addition, rights of survivorship may be included here which allows the surviving tenant to assume ownership of all shares upon the passing of the other tenant.
Co-owners of a home have equal rights in the home to use the property for the duration of their lives. However, they hold title to their share of the property individually and can choose to will away or dispose of their individual rights.
There is no survivorship option here and no tenant inherits the rights of the other. Rather, ownership becomes vested in the decedent's heirs upon the death of either owner. This is where the difference between joint tenancy and tenancy in common lies.
This tenancy type is especially for married couples and regards the couple as a single legal entity with property rights shared and undivided. The right to survivorship applies here, and before one spouse can take any action on property, the other must approve. This tenancy type may be found in all states.
This form of title holding, sometimes known as marital property, implies that spouses acquire property during marriage and have the shares split evenly between them. Either spouse can choose to transfer their ownership share or will it however they want.
A living trust sees the trust or title holder maintain ownership rights to real estate property until they die or become incapacitated. This then sees an appointed trustee assume property management and control.
An irrevocable trust ensures that the terms of the agreement cannot be modified and the titleholder basically transfers their ownership rights into the trust. A revocable living trust permits the tile holder to alter agreement terms when they are still alive and their mind is still sound.
Probate refers to the legal process that reviews the will to ascertain validity and authenticity. It may also encompass the entire process of administering the estate of a deceased person without a will or a deceased person’s will.
Following the death of the asset holder, an executor (if the deceased had a will) or administrator (in the absence of a will) is appointed to administer the probate process. It mainly involves a collection of assets to pay off liabilities and then distributing what is left over to beneficiaries.
The probate court usually reviews findings and is the final ruling on how assets should be divided and distributed amongst the recipients. Probate provides protection especially when the deceased did not leave a will.
Transfer of deceased real estate may involve a pretty extensive process depending on how the title was held. Probate might be necessary except for when:
In the event that the deceased held the property in a trust, the most updated deed would indicate that the trustee of the trust had the property transferred to them.
If a transfer-on-death deed was filed by the deceased, the deed would specify the property’s new owner. There would be the need for some paperwork including filing a death certificate copy and an affidavit with the county’s land records office.
In the event that a surviving co-owner inherits, while rules may vary from county to county or even state to state, it is general to have the surviving co-owner file a statement detailing that they are the new sole owner. They would also file a death certificate, all in the county’s land records office.
Using a trust or will rests on certain factors. For instance, a will might be great for small estates with assets that are easily transferable and simple bequests.
Similarly, having a trust without a will might result in problems when it comes to assets not covered by the trust which become subject to intestacy laws. In other words, larger estates may be better off using both.
A trust administration has no waiting period which implies that beneficiaries have easier and speedier access to assets left behind. A trust also provides a firmer control for determining how your assets are distributed more than a will would.
At the end of the day, your choice of will or trust or both should be determined by the size of your estate, tax considerations, age and capabilities of heirs, as well as bequest complexity. To ensure that everything moves smoothly, it is essential to carry out thorough planning.
Transferring property is done in various ways and various factors affect how it can be done. The major factor is how the property is owned or ownership type. Beyond this, understanding how the entire process goes is key, and if it gets too much at any point, you can always engage the services of an expert to guide you.
A real estate property lien is a claim against a property to secure debts. The property is used as collateral to compensate the debts if the owner is unable to pay the debt owed.
This information is crucial to know especially if you are an agent. A listing that has a property lien will directly affect how you are able to market and sell the property.
There are three common types of liens and each one has a unique role on a property owner's land: mechanic's lien, voluntary lien, and involuntary lien.
The mechanic’s lien. The name can be misleading. It does not refer to the common definition of someone who fixes cars. But it is related to someone who fixes your home.
This can refer to someone who put a pool in the backyard or a contractor who did remodeling in the house or major construction. The person who has made the improvements is referred to as a “mechanic.”
So what happens when the owner decides they are not going to pay the person who has done the work on the home? The worker can place a mechanic’s lien on the property in an effort to get paid.
This can get this done by going to the county recorder’s office. The mechanic’s lien gets filed and added to the property. If the lien gets approved, it will also be added to the title.
This is important when it comes time to sell the property. Buyers will not be as interested in a home that has a lien on it.
A voluntary lien is when the owner agrees to have the lien placed on the home. They volunteer to accept it. It sounds counterintuitive to the property owner’s interests. So under what circumstance would, the owner agree to a lien?
One example of a voluntary lien is a mortgage.
A mortgage is a lien. In this case, the lender puts a lien against the property’s value. Having the bank place a lien on the property as a mortgage, allows the individual to borrow the money against it to purchase the home.
A mortgage gives the individual the advantage of homeownership. Since they would benefit, they are more inclined to voluntarily accept this type of lien.
Another example of a voluntary lien would be a home equity loan. The owner is borrowing money against the current worth of the property.
These are liens that homeowners do not want and are unwelcome. They are placed by other parties against the homeowner in an attempt to collect fees or compensation. Here are some examples that would fall under this category as an involuntary lien:
One common example of an involuntary lien would be a tax lien. If you don’t pay your federal income taxes, the government will place a tax lien on your house. This also includes property taxes, special assessments, and state tax liens.
The mechanic lien is also considered an involuntary lien because it’s initiated by a third party. As discussed earlier, it’s filed by a worker or service provider. The file to receive compensation for work completed and the homeowner refusing to pay.
If a homeowner has an unpaid debt to a creditor, the creditor can file a judgment lien. A judgment lien can also be created when someone wins a lawsuit against you and records the judgment against your property.
Ideally, you don’t want to list a home that has any liens on it, because that can be seen as a negative to potential buyers. But that doesn’t mean you have to refuse the listing.
As an agent, it’s important to know if a property you are about to list has liens taken against it. You can find this information by having your title representative pull a preliminary title report for you.
This preliminary title report will give a full history of the property. It will include information like the names of the previous owners, the current mortgage amount, and when the property was purchased. Along with this information, you will find any liens currently on the home.
So what happens if you do find liens listed on the property?
If the liens are voluntary, there are usually no issues when it comes to selling the home. When the property sells, the owner will pay them off with the profit of the home. Again, the most common examples of a voluntary lien would be a mortgage or home equity loan.
If the liens are involuntary, the seller has to address them. Whether it’s paying it off or coming to a settlement, sellers will want to get that lien cleared before putting it on the market.
It’s inevitable, some of the listings you’ll take in your real estate career will have liens on the property. While not all liens are negative, it’s still important as an agent to know and understand the difference between the two.
The preliminary title report will be instrumental in accessing the home’s history and letting you know about current liens on the property. If you are working with the seller, you can communicate which liens need to be addressed with urgency.
This knowledge will ultimately help in getting the property sold with no issues, leading to a happy client and another closed escrow.
Becoming a real estate appraiser is an exciting career choice.
Appraisers help determine the value of real estate.
They work closely with agents, investors, banks, buyers, and sellers to identify the value of a specific property or home. This helps entities find a fair value of the real estate to sell it at the right price.
Becoming a real estate appraiser requires time, effort, and studying. However, once you become an appraiser, you will find the work was worthwhile.
To become a real estate appraiser, there are 9 steps you must meet:
You must be at least 18 years of age to be a residential real estate appraiser. An associate's, bachelor's, or doctorate degree from college or university is not required. You can be fresh out of high school and ready to dive into appraisal studies. A real estate appraiser is a great career option if you enjoy houses, report writing, and numerical analysis.
As with many real estate jobs, there are prerequisite courses that must be completed before you can take a State Exam. To become a real estate appraiser, the state of California requires you to pass 150 hours of appraisal courses. Following these classes is a live proctored exam. You get 3 attempts to pass this exam. If you do not pass within those 3 attempts, you are required to retake the prerequisite courses.
After you have completed your exam, you can apply for your license. Applications are sent to the Office of Real Estate Appraisers (OREA). You need your application (one of the RE forms available on the Department of Real Estate’s website), certificates of completion from your prerequisite courses, and payment forms or checks. This process is similar to your real estate (salesperson) exam application.
After their waiting and verification period, the OREA will issue a date for your initial Appraisal License exam. Along with this, you are requested to send in a Live Scan. A Live Scan is a fingerprint and background check. Once you have completed these requirements and sent in the verification, you are ready for your exam.
Sharpen your pencils–it's time for a test! After you pass the exam, you have one (1) calendar year to pass the exam, pay any additional fees, and get your real estate appraisal license. However, this does not mean that you can appraise independently–yet. At this point, you have to find an established appraiser who is can train you. Additionally, they cannot have trained three (3) real estate appraiser trainees prior to you.
When you find an appraiser, you must accompany them on inspections and assist them in writing reports for at least 2,000 hours. That’s 40 hours a week for 50 weeks, which equates to one year of full-time work. During this time, a Supervising appraiser must review and approve your work. This does not mean it has to be the same appraiser every time. It is possible to get experience at two separate firms.
Tip: Choose an experienced and reputable appraiser as a mentor to build industry connections and gain valuable insights.
After 2000 hours of experience, you can become a certified residential real estate appraiser. This is where you can work for yourself, control your schedule, and income. Most appraisers are self-employed. Therefore, there are more certified appraiser than there are trainees. Your Certified Appraiser (the one training you) must approve your 2,000 hours of work, which includes the quality of your work and your work ethic.
You can apply for your residential real estate appraiser license when you have received supervisor approval, practiced report writing, and practiced appraising. You are then eligible to complete your application and send it to the OREA and wait for the department's response.
After you get your license, you can file with banks, loan reps, and more. This will allow you to receive requests for jobs. If you follow the typical appraiser’s business model, you will be self employed. Therefore, you will have to market your service and prospect for leads. Unlike a real estate agent, your target market is not the consumer. You will have a different marketing strategy than typical agents or title reps.
It typically takes 1-2 years, depending on your state's requirements and how quickly you complete coursework and experience hours.
The average salary of a real estate appraiser varies by state and experience level. According to industry reports, certified appraisers earn $60,000 - $100,000+ per year.
Yes! Appraisers enjoy job stability, flexible work schedules, and the ability to work independently. It is a lucrative career path with opportunities for growth.
You will be churning out reports on a weekly basis and, hopefully, getting multiple jobs a week. Once you are “on the list” with a lender or bank, you are will be more likely to receive passive work. It is a facet of the real estate industry that operates heavily on trust capital and experience. This is why it is helpful to do your 2,000 hours with a professional, profitable, and busy appraiser–your name gets in front of the right people even before you are licensed.
This job path requires a big time investments. At first, it can seem daunting. You have to spend more than year studying and training for the chance to become a real estate appraiser. But, when you apply yourself and do the work well, you will achieve your goal. And, when you do, you will realize what a terrific decision it was.
Think about today’s world versus the world of 20 years ago. Everything is different now due to the technology that we possess in our palms and pockets. Make sure to use this technology wisely and meticulously, given that we are all so bombarded with online advertisements. It’s tough to stand out from the pack unless you’re really putting work and dedication into it!
The digital world makes life so much easier for so many people, in so many ways. Just one example: instead of getting in your car, walking around the grocery store, and shopping for your own food, now you can do all of the shopping on a laptop or phone from the comfort of your couch, and the groceries get delivered right to your door!
That’s great for people that want to do less work, but imagine if you were disabled -- this would literally be a life-changing development.
Back in the day, marketing yourself required legitimate legwork - walking to houses, knocking on doors, canvassing neighborhoods, and more.
It was tough, it was grueling, and it was costly - both in time and money. But, it started conversations with people -- and conversations are what led to business.
Nowadays, though, situations have evolved. With the advent of the digital world, interactive websites and apps, and unfathomable computing power in your pocket, marketing has completely shifted tracks to the digital world. The younger generation tends to be much more accepting of digital advertisements and digital/online personas, but also more skeptical and judgmental of the content they see online.
That’s why it’s absolutely key to be authentic and genuine by posting engaging content and promoting/advertising with posts that naturally encourage people to interact.
Marketing yourself digitally also has many more components than old-school, traditional marketing. Whereas with traditional marketing you’re simply selling yourself as an agent; when you’re selling yourself digitally, you’re selling your products, yourself, AND how well you can put together an online presence.
One great thing about digital marketing compared to in-person marketing is that you can do it from anywhere - be it your office, home office, or even your bed!
Of course, we’re not suggesting you work from your bed (it’s not great for work/life balance), but in a pinch, sometimes you need to. You can also do a lot more productive work by spending time and money on promoted posts, rather than spending the same time and money driving through neighborhoods and knocking on doors where nobody’s home.
Especially with a listing, digital marketing is king -- you can post pictures, describe the home, put your contact info, and more, all within one post online!
However, there’s something to be said for the in-person marketing angle. Humans, by nature, are social creatures. This means that we are programmed to LIKE interacting with other people. Sharing information and experiences are all key to forming a strong bond with clientele. When you’re in person, networking, and actually shaking hands, you form a stronger and quicker bond than if you are competing for their attention online (with everyone else’s ads competing with yours for eye space and brain space).
So what should you do now to make yourself the most successful Real Estate Agent? We definitely recommend -- can’t stress enough -- that you do both online and in-person marketing to make yourself successful.
While everyone expects you to do online marketing, people will be surprised that you went above and beyond to do in-person, traditional marketing. Judge the neighborhood, but door-knocking and traditional cold calling are surprisingly effective! Connecting is super important in this industry. Instead of just making someone’s life easier with your digital marketing, make it better through your traditional marketing.
Competing with others to be the absolute best is in our blood - it’s survival of the fittest. This drive pushes us to become better than the people with whom we surround ourselves.
When it comes to being a successful Real Estate Agent, it’s easy to be overwhelmed with the competition.
Competition isn’t just the drive to push us further, but a tool to measure our own success. However, we forget that competition isn’t always good. Being competitive is destructive to our own self-worth.
The secret to being a successful real estate agent isn’t by competing with others, but rather it’s competing with yourself.
In real estate, you might consider yourself successful if you’re making $50,000 a year, but someone else might consider yourself successful when making $150,000 a year. Everyone has their own definition of success. This is because people have goals that are unique to their own ambition.
If earning $150,000 a year isn’t important to you, then you shouldn’t let the number of yearly earnings define your success as a real estate agent.
Taking time to consider how you define success is important to your growth as a real estate agent. If you want to take your career in real estate seriously, then you need to be honest with how you measure your growth. Defining success for yourself is the first step in becoming the agent you’ve always wanted to be.
Everyone has their own level of success, therefore you can’t compare yourself to others.
Being competitive is the fuel that pushes you towards success. However, the idea of competing with others is fundamentally flawed. The reason why you shouldn’t compete with others is that you can’t race someone else when you both have different finish lines.
If your goal is to make $50,000 a year in real estate, you can’t compete with someone whose goal is to earn $150,000 a year. Competing with others for the sake of being the best is a losing battle. As a result, you will lower your self-worth, make yourself resentful of others, and have the never-ending feeling of constantly craving more out of your life.
You will never be happy in your real estate career if you compete with others.
You are the only constant in your life. Therefore, your own progress is the only way to measure your success. Instead of competing with other people, compete with yourself. Real estate agents should not be pressured to be better than others - they should push themselves to be better than they were yesterday.
Improving yourself is the only true way of being successful.
Competing with yourself gives you the opportunity to grow as a real estate agent and person. When you’re not worried about other people, you’re free from the stress to outperform others in your field. Moreover, you will appreciate your career and the development you’ve made as a professional.
Start competing with yourself today by monitoring your progress then consistently make an effort to outperform that growth. Doing so will eliminate the thousands of competitors in your industry because the only real competition is yourself.
Encumbrances are quite common in real estate transactions, and because they affect the legal right of a person to buy or sell properties, every real estate enthusiast needs to understand them.
Although encumbrances mainly come as monetary claims, some are more about property control than debts. These could be seen as land use covenants or government restrictions.
In this article, you would get to know what an encumbrance is, the various types of encumbrances, and how to discover and remove them to avoid complications down the road.
In real estate, an encumbrance refers to any claim on a property that prevents its owner from fully utilizing and benefiting from it.
This claim is usually placed by a third party who is not the owner of the property. Claims like these, when filed, can restrict and limit the ownership and/or use of the property.
An encumbrance on a home could be a result of anything, ranging from a loan agreement to a type of restricting license.
Depending on what type it is, legal processes may be necessary to address encumbrances. The existence of an encumbrance on a home has major consequences that could prove unpalatable for homeowners. Some of these effects are:
One effect of encumbrances is their limitation on ownership. This can result from a debt, legal contract, or a transfer of property ownership when given as a gift.
In cases where an encumbrance limits home ownership, the home is owned by the lessor or creditor, and the homeowner is subject to the limitations specified in the agreement or deed. These limitations prevent property sale or transfer of ownership by the homeowner.
If extremely restrictive, an encumbrance on a home may make the property's title unmarketable. This simply means that the property cannot be sold or bought.
As a result, it is extremely important for anyone looking to buy or sell a house to carry out findings into the property’s title to make sure it is not in any way encumbered.
There are various types of encumbrances in real estate. However, all of them have the same effect -create restrictions on a property.
Here are the four most common types of encumbrances that can be found on real estate properties:
An easement is a permission given to another party that grants them access to the home owner’s property for a specific purpose. It is created by an easement deed that is recorded in the public records of your county and becomes part of the title.
Easements sometimes ensure public services are available to all and are sometimes voluntarily granted to help another person.
For example, a landowner may allow a neighbor to construct an on-site well to avoid the cost of extending sewer lines to the property, or a driveway could be constructed through a person’s property to provide easy access to another location.
An encroachment occurs when a part of the property extends beyond its boundary and onto another property. This is often unintended and may not be detected until a survey is conducted.
Encroachments can be resolved simply by one landowner offering to sell part of the land which has been encroached on to the other landowner. If this offer is refused, legal actions can be taken.
An example of an encroachment is when barns, fences, backyards, and sheds stretch beyond their boundaries into someone else’s property.
Deed restrictions are contractual promises that bind a buyer to be subject to certain terms and conditions on a property.
These encumbrances may include a conditional purchase agreement when a buyer does not have enough money to purchase the property and needs financing, and very often, they determine the property's legal use.
An example would be a restriction that prohibits the construction of certain structures on a property.
Generally, if a deed restriction is too restrictive, many buyers may be unwilling to purchase the property.
Liens are one of the most common types of encumbrances in real estate.
If a property owner defaults on his mortgage payment, then a financial claim called a lien will be issued against the property.
This is to assist the creditor -banks or other mortgage agencies- to get back their money.
An example of a lien is when a court order that transfers ownership of the property to the creditor is issued.
Knowing if a property is encumbered is important to understand the restrictions and determine if they wouldn't interfere with your real estate plans.
The following are a few ways through which you can find out if a property is encumbered.
A title search is an investigation into the history of a property to ascertain and reveal any claims or restrictions and who the legal owner is. A title search reveals every detail about a property, including its transfer of ownership over the years, making it one of the best ways to discover if a property is encumbered. To carry out a proper and in-depth title search, it is best to hire the services of a title company.
Another way to learn more about the encumbrances on a property is to talk to a real estate professional.
A good and experienced real estate attorney will be able to detect and interpret any encumbrances on a property, as well as advise you on whether the property should be purchased or not.
Removing encumbrances is essential to the full utilization and benefits of your property. There are different ways to remove encumbrances, depending on the type.
In some cases, it could be as simple as destroying a structure from the property, while in other cases, it could be complicated enough to require legal action.
In the case of a lien, if the homeowner pays off the mortgage, a deed of reconveyance will be issued. This deed transfers ownership of the property from the lender to the borrower. Likewise, if it is an encroachment, reconstructing boundaries or purchasing the encroached land should remove the encumbrance.
Although encumbrances may appear to be terrible because of their restrictions, they serve to safeguard the property and can be advantageous to both owners and buyers.
Sellers who fail to disclose encumbrances to potential buyers expose themselves to severe legal action and buyers who fail to take note early may need additional funds to remedy encumbrances.
Encumbrances are one of the many ways the real estate industry regulates and monitors the sale and purchase of properties to ensure equity.
Understanding the different types of encumbrances will enable you to make informed decisions regarding buying or selling properties.
It will also provide you with an easy way out when you find yourself with an encumbered property on your hands.
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