Book FIRE-2016-12-28-15-WEB

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Book FIRE-2016-12-28-15-WEB

  1. 1. Report subtitle FIREFULL IMMERSION in REAL ESTATE CENTURY 21 ® NEW MILLENNIUM NEW AGENT TRAINING MANUAL - FULL IMMERSION in REAL ESTATE
  2. 2. ii CENTURY 21 ® NEW MILLENNIUM BUILDING YOUR BUSINESS
  3. 3. iiiiiiNEW AGENT TRAINING MANUAL - FULL IMMERSION IN REAL ESTATE FIRE Table of Contents TAB Section Title PRE-FIRE Pre-FIRE Package review, FIRE Orientation 1 Overview 2 Career in Real Estate, Financing 3 Financing, Goal Setting / Business Planning, Tell 21 4 The Power of MRIS, Open House, Behavior Patterns 5 Buyer’s Process, Showing The Property 6 Contract, Red Flags 7 Buyer’s Presentation 8 Selling Process / Preparating a CMA 9 Tool Kit CMA 10 C21NM Websites, eGreetings, RREIN Content, Mobile 11 Escrow Accounts, Trust Monies and Deposits 12 Survey
  4. 4. iv CENTURY 21 ® NEW MILLENNIUM BUILDING YOUR BUSINESS
  5. 5. Pre- Guidelines CENTURY 21 ® NEW MILLENNIUM FIRE GUIDELINES FOR BRANCH LEADERS FIREFULL IMMERSION in REAL ESTATE FIRE
  6. 6. iiiiiiFIRE GUIDELINES FOR BRANCH LEADERS Pre-FIRE Table of Contents FIRE GUIDELINES FOR BRANCH LEADERS . . . . . . . . . . . . . . . . . . . . . . . . 1 FIRE TRAINING COMMITMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 2 IN-PROCESSING CHECKLIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 JOB DESCRIPTION FOR THE SUCCESSFUL REALTOR® . . . . . . . . . . . . . . 8 FIRE PRE-CLASS INTRODUCTION - Form 4 . . . . . . . . . . . . . . . . . . . . . . . . 10 FIRE PRE-CLASS INTRODUCTION - Form 5 . . . . . . . . . . . . . . . . . . . . . . . . 11 FIRE PRE-CLASS INTRODUCTION - Form 6 . . . . . . . . . . . . . . . . . . . . . . . . 11 THE PROSPECTING SUCCESS FORMULA . . . . . . . . . . . . . . . . . . . .. . . . . . 12 BUILDING YOUR SPHERE OF INFLUENCE . . . . . . . . . . . . . . . . . . . . . . . . . 13
  7. 7. iviv CENTURY 21 ® NEW MILLENNIUM Section Title
  8. 8. 11FIRE GUIDELINES FOR BRANCH LEADERS FIRE GUIDELINES FOR BRANCH LEADERS 1. All agents must have completed all company paperwork, with the FIRE Pre-Class Introduction packet having been reviewed and signed by the agent. A copy of signed commitment Form 3a must be submitted to Adriene Pessel prior to the first class day. 2. Registration is “first come, first served” according to seat availability. Branch Leaders must ensure that their agents come to their second day of FIRE class with their real estate license having been received by their branch, full access to MRIS with their own ID and password, and a functioning C21NM e-mail address. At All agents must have 100 names in business builder by Day three of FIRE, If the agent does not have 100 names is Business builder, then agent will not be able to continue with FIRE until their SOI reaches 100. 3. The dress code for class is “business casual.” Agents will be prospecting and meeting the public frequently before, during, and after class sessions. 4. Agents are expected to attend every class.Agents are expected to attend every class. If any session is missed, the agent may make it up on the appropriate day during the next FIRE class cycle. There will be no makeup classes beyond the end of the second cycle and students with missed classes will not receive FIRE completion credit. 5. Branch Leaders interact directly with new agents during the interview and hiring process. As a hiring pre-condition, Branch Leaders are responsible for insuring that each new agent completes Forms in the pre-FIRE Congratulations introduction packet, as well as distributing course schedules, prospecting requirements, attendance rosters, sample business plans, the Orientation Checklist, and any other pre-FIRE documents. Agents attending class without completed prerequisites will be allowed to attend that day’s instruction, but will be told to immediately see their Branch Leaders at the end of the day to complete any missing documentation.
  9. 9. 2 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES FIRE TRAINING COMMITMENT AGREEMENT I, __________________________________ , agree to complete all assignments in CENTURY 21® New Millennium’s FIRE training program because I intend to develop a plan to become a successful, professional REALTOR®. I agree to meet weekly with my Branch Leader to review my progress and discuss plans for the coming week’s work. I understand that completing my training according to the standards set in CENTURY 21® New Millennium’s FIRE program is the most beneficial way to begin my career as a professional REALTOR®. To help ensure that I receive the most benefit from my training, I expect my Branch Leader to: • Meet with me weekly for at least one-half hour • Help me prioritize my activities • Provide assistance in my development of specific business methods • Provide me with resources I need to complete my assignments • Provide support and encouragement as necessary to help me begin a successful career as a professional REALTOR®. I understand that this is my business and I agree to manage it according to the principles taught to me in CENTURY 21® New Millennium’s FIRE program. My goal is to become a successful, high producing, professional REALTOR®. I will make a dedicated commitment to attend consecutive training sessions as outlined in the FIRE schedule. I have made arrangements with my employer to take advance leave, if necessary, to attend training. Agent Signature ___________________ Branch Manager Signature _______________ Agreement Date: __________________ Program Completion ________________ FIRE PRE-CLASS INTRODUCTION Form 1
  10. 10. 3FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES FIRE TRAINING COMMITMENT AGREEMENT CENTURY 21® New Millennium offers education and training in the tools and systems of the company, including basic training and support from a designated Production Coach and a Branch Leader. This begins with your completion of Pre-FIRE entry assignments discussed with you by your Branch Manager or Branch Leader. Upon hire, an intensive 12 week Full Immersion in Real Estate (FIRE) training program commitment is required of all full time agents. The FIRE training program is designed to accelerate your professional development with good prospecting, listing, and selling skills. Your Production Coach will provide you with assistance, training, and support commensurate with your commitment to proactive prospecting and production. Training shall include, but not be limited to the following subjects: • Company and Branch Orientation • Mortgage Services • Prospecting • Fair Housing • Building Your Business • Goal Setting • Buyer Services • Business Planning • Contracts and Addenda • Business Development and Relocation • Seller Services • Scripting and Role Playing • Listing Presentations • Company “One Stop Service” Systems • Negotiating and Closing • Technology Tools and Systems • Title Services • Continuing Education • Property Management Services • Marketing and Contact Management Systems Your FIRE training concludes with the successful completion of the basic program. FIRE/Peak ProducerTraining (FIRE/PP) Fee Structure The cost of the combined proprietary Full Immersion Real Estate and Buffini Peak Producer Training (FIRE/PP) is $750.00. If the agent so desires, as a convenience to our agents, CENTURY 21 New Millennium will advance the entire $750 and simply deduct $375 out of the agent’s commission check from the first two closings. This advance shall be due and payable no later than 12 months following the FIRE/PP Training graduation date. Agent will provide CENTURY 21 New Millennium a valid credit card authorization to be kept on file upon signing this agreement. Should Agent drop out of the FIRE/PP, leave CENTURY 21 New Millennium, or fail to complete two transactions within twelve months of FIRE/PP Graduation, the credit card on file will be charged the remaining balance due for the FIRE/PP. Agent Signature ____________________________ Date ____________________ Branch Leader Signature ______________________Date ____________________
  11. 11. 4 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES IN-PROCESSING CHECKLIST OM = Office Manager BL = Branch Leader TC = Transaction Coordinator PC = Production Coach Name:________________________________ Branch:____________________ CREST Date:__________________________ Anniv Date:________________ POC Date Due Date Comp Initials Pre-License • Complete In-Processing Checklist OM • Submit License Application OM • Complete New Agent Information Form OM • Complete Co Policy/Procedure Acknowledgment OM • Complete Office Policy/Procedure Acknowledgment OM • Complete Independent Contractor Agreement OM • Provide Commission Schedule OM • Complete Commission Indemnity Agreement OM • Complete Equal Housing Acknowledgment OM • Complete Anti-Trust Acknowledgment OM • Complete Errors and Omissions Insurance Form OM • Complete Credit Card Authorization OM • Complete Misc. Forms: Auto, Liability, HR OM • Complete Code of Ethics Form OM • Complete IRS Status Form OM • Create CREST EDG Temporary Entry/Screen Name OM • Conduct Building Facilities Tour OM • Introduce Staff/Department Personnel OM Post License • Order Name Badge OM • Order Business Cards and Announcements OM • Schedule/Obtain Web Site/Business Card Photo OM • Assign Desk/Work Area OM • Assign Phone Number/Extension OM • Create/Set Up Company Email Address OM • Edit/Provide Copy of Company Roster/Office Roster OM • Order Name Riders and Directional Signs OM • Submit Local Real Estate Board Membership Form OM • Schedule RE Board Orientation Class OM
  12. 12. 5FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES POC Date Due Date Comp Initials • Request/Check Lockbox Keypad OM • Submit MRIS Membership Form OM Awards, Recognition, and Events • Top Producer and CENTURY 21® Awards BL • CENTURY 21® National Events BL • Company-wide Events BL • Team Spirit Award BL Technology • Conduct Office Digital Camera Orientation OM • Explain Digital Photo Submission Requirements OM • Schedule PC Network Integration with IT Dept1 OM • Explain PC Anti-Virus Requirements OM • Schedule PDA/Phone Email Integration with IT Dept OM Training • Explain CENTURY 21® VSS Training Calendar BL • Schedule Lead Router 21Online Training BL • Explain Bi-Monthly Branch Business Meetings BL • Zip / Auto Contract OM • Business Builder - Minimum of 100 names entered OM • MRIS 101, 102 OM • DocuSign OM 1 - PC = personal computer, including notebook, laptop, and desktop configurations
  13. 13. 6 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES MRIS 101 up and running MRIS 102 Simple solution for public record Matrix 101 Rentals in Matrix Matrix 211 Matrix custom displays Keystone 101 enter a listing Keystone 201 Document management
  14. 14. 7FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES DAILY SCHEDULE Consolidated Meeting Location Alexandria CENTURY 21® New Millennium Alexandria Branch Training Room 5990 Kingstowne Towne Center Alexandria, VA 22315-5876 (703) 922-4010 Alexandria@c21nm.com Fredericksburg 1931 Plank Road, Suite 201 Fredericksburg, VA 22401 Local Phone: 540-373-2000 Toll Free: 800-704-0048 800-997-1121 Waldorf 3292 Crain Highway, Waldorf, MD 20603 Local Phone: 301-870-8400 Production Coach/Registration Contact: Adriene Pessel adriene.pessel@c21nm.com
  15. 15. 8 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION Successful REALTOR® Job Description There are two categories of activities that real estate agents complete: 1. Business Development (prospecting, showing, selling) 2. Business Support (all other activities) A successful real estate agent completes these activities with this priority: 1. Business Development Activities (First Priority) A. Prospect: Find potential customers and clients by identifying and calling on the best target markets, consistently and frequently. B. Show and List: Sales activities generated as a result of prospecting activities, showing homes to qualified customers, and listing marketable, qualified properties (those that will sell in current “normal” market time). C. Sell: The only two activities that ensure a paycheck • Sell your Buyer Client a home • Sell your listing All other activities support Business Development and should be completed only to the extent required to generate a commission check! 2. Business Support Activities (Second Priority) These activities include any action that is not directly related to “sales” activities: • Preview properties/tours • Complete paperwork/sales follow-up • Education • Meetings • Returning telephone calls/emails The desired end state is to create a positive memorable experience and gain a loyal customer for life!
  16. 16. 9FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION SUCCESSFUL REALTOR® JOB DESCRIPTION Find Many Prospects Qualify Prospects as Buyers Qualify Sellers and Properties as Marketable Show Homes to Qualifyed Buyers List Marketable Homes $$$ Sell a Home $$$ Sell a Listing 1. Business Development (activities in the sales cycle) • Contacting prospects • Following up on leads • Qualifying buyers • Showing homes to qualified prospects • Writing and presenting purchase offers • Giving listing presentations to qualified sellers • Listing marketable properties • Attending offer presentations on your listings 2. Business Support (activities that support sales activities) • Previewing properties • Following up on transactions, making flyers, etc. • Sending out mailings (should not be considered a prime contact method) • Talking to loan officer and title companies • Attending meetings • Furthering education • Creating listing materials This list could be exhaustive. It’s common for agents to “hide out” in support activities because they think they are not ready to talk to people. Watch out! This is a sign of creating the wrong activities!
  17. 17. 10 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION Form 4 Personal operating expenses Regular Monthly Payments House payments (PITI, HOA/Condo fee, etc.) $ ____________ Vehicle payment (including insurance) $ ____________ Appliance, TV/Computer/Electronic device payments $ ____________ Home Improvement loan payments $ ____________ Personal loan, credit card payments $ ____________ Health plan payments $ ____________ Life insurance payments $ ____________ Other insurance payments $ ____________ Total $ ____________ Household Operating Expenses Telephone/Internet access $ ____________ Gas and electricity $ ____________ Water $ ____________ Other household expenses, repairs, maintenance $ ____________ Total $ ____________ Personal Expenses Clothing, cleaning, laundry $ ____________ Prescription medications $ ____________ Medical bills (physician, dentist, etc.) $ ____________ Education $ ____________ Dues $ ____________ Gifts and contributions $ ____________ Newspapers, magazines, books $ ____________ Vehicle maintenance/fuel $ ____________ Children’s school tuition $ ____________ Discretionary money and allowances $ ____________ Miscellaneous $ ____________ Total $ ____________ Food Expenses Food (at home) $ ____________ Food (away from home) $ ____________ Total $ ____________ Tax Expenses Federal income tax $ ____________ State income tax $ ____________ Other taxes $ ____________ Total $ ____________ Total Personal Monthly Expenses $ ____________ Total Personal Yearly Expenses (total monthly expenses x12) $ ____________ Note: This form is to be used as an initial planning document for expenses. More detailed personal accounting can be had by using Microsoft Excel or financial accounting software like Microsoft Money or Intuit’s Quicken.
  18. 18. 11FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION Form 5 YOUR REAL ESTATE BUDGET OPERATING EXPENSES Monthly Yearly Total Marketing Budget $ $ Professional fees (board dues, MRIS, etc.) $ $ Communication expenses (PDA, phone, Internet access) $ $ Labor/mechanical $ $ Professional development $ $ Supplies $ $ Business insurance $ $ Legal fees $ $ Licenses, permits $ $ Other $ $ Total $ $ Note: This form is to be used as an initial planning document for expenses. More detailed personal accounting can be had by using Microsoft Excel or financial accounting software like Microsoft Money or Intuit’s Quicken. FIRE PRE-CLASS INTRODUCTION Form 6 PROJECTED PROFIT Total dollars from Form 4 $ Total dollars from Form 5 $ Dreams/Fun $ Total $ needed to cover total expenses $ Desired profit $ Grand total dollars you want to earn $ Note: This form is to be used as an initial planning document for expenses. More detailed personal accounting can be had by using Microsoft Excel or financial accounting software like Microsoft Money or Intuit’s Quicken.
  19. 19. 12 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES BUSINESS THE PROSPECTING SUCCESS FORMULA Average sales price for your market $ Multiplied by the average brokerage rate received by your company in co-brokerage transactions (.0284) x % Equals the average brokerage fee = $ Multiplied by your personal commission split (i.e. 50%) x % Equals your average commission income per transaction = $ Your Annual Income Expectation $ Divided by your average commission income per transaction ÷ $ Equals the number of transactions that you need in the year (round up to the next higher number) Multiplied by 300 x 300 Equals the number of contacts that you need in the year = Divided by the number of working weeks in the year ÷ 47 Equals the number of weekly contacts that you need to make (round up to the next higher number) = Divided by 5 days per week ÷ 5 Equals the number of daily contacts that you need to make (round up to the next higher number) = The total transactions needed in the year Multiplied by 2 x 2 Equals the number of listing/buyer agreements needed = Multiplied by 3 x 3 Equals the number of appointments needed = Divided by the number of working weeks in the year ÷ 47 Equals the number of appointments needed per week (round up to the next higher number)
  20. 20. 13FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION BUILDING YOUR SPHERE OF INFLUENCE 1. List everyone you can think of that you know. 2. Pare down the list to a manageable number that you can contact on a regular basis (approximately 250). Remember, these people are potential business finders for you. They are not necessarily prospects themselves for buying or selling real estate. 3. Contact members of your Sphere of Influence (SOI) several times yearly. 4. Keep track of your SOI activity. As soon as possible, enter your SOI information into Business Builder database, so you can better manage your data. Decide what information you want to track and the capabilities that you need... Last Name: First Name: Street Address: City: State: Zip Code: Work Phone: Work Fax: Cell Phone: Home Phone: Work email address: Home email address: IM address: Remarks: Contact Record:
  21. 21. 14 CENTURY 21 ® NEW MILLENNIUM PRE-FIRE GUIDELINES FIRE PRE-CLASS INTRODUCTION WHO DO YOU KNOW WHO? Immediate family Out of town family Recreational friends Parents of children’s friends Merchants Former co-workers Attorneys Neighbors Hair stylists Former neighbors Letter carrier Friends Bank employees High school classmates Corporate executives College classmates Insurance agents Church members Restaurant employees Club members Vehicle salespersons Doctors Vehicle service personnel Chiropractors Roofers People on your holiday card list Decorators Personal phone directory Plumbers Spouse’s work contacts Dry cleaners Clergy Health club members
  22. 22. 15FIRE GUIDELINES FOR BRANCH LEADERS PRE-FIRE GUIDELINES 201 GAME PLANAgent Name As Of: 1. Business Settle Units 2. Financial 3. Personal 4. Family 5. Spiritual MEASUREMENTS: PRIORITIES: Agent Name here 12/08/2015 3rd QTR “Mail-Call-See Campaign ” # Settled Transactions per month ___________ # Referrals per month ____________________ # Calls per day _________________________ # Notes per week _______________________ # Visits per week _______________________ # Mailings per month ____________________ 2016 Goals Agent Generated ________________________ Company Generated _____________________ Avg. Commission Per Side ________________ Listings Taken __________________________ Listing Conversion % _____________________ Listing Sold ____________________________ Avg. Sales Price ________________________ 1st County Mortgage Loans _______________ Bay County Title Policies _________________ Friends &Family Placed___________________ Your text about your Financial goals here Your text about your Personal goals here Your text about your Family goals here Your text about your Spiritual goals here - Quarterly BL Coaching Sessions - Results from QUARTERLY “Mail-Call-See Campaign” - Century 21 Award Pacesetter Tracking 1. Set Goals 2. Mail-Call-See Campaign 3. Time Management (Calendar)
  23. 23. NEW AGENT TRAINING MANUAL - FULL IMMERSION in REAL ESTATE CENTURY 21 ® NEW MILLENNIUM
  24. 24. 1FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW OVERVIEW
  25. 25. 2 FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW FIRE Course Disclosure This course manual and all its contents, both current and future, are deemed the proprietary and confidential intellectual property of CENTURY 21® New Millennium and NM Management, Inc. No portion of this manual, or any of its contents, may be copied or shared with anyone outside of NM Management’s family of companies. The agent’s use of this material is on a “loaned” basis during the agent’s affiliation with CENTURY 21® New Millennium, and must be surrendered upon demand or termination. Failure to surrender this material when requested will result in a “non-surrender” charge of $500.00 debited to the agent. The agent is also subject to all of the other provisions as stated in the Company Policy and Procedure Manual, the Employee Agreement, and the Independent Contractor Agreement in effect at the time of demand or termination. I have received the FIRE Course Manual, and I have read and understand the FIRE Course Disclosure as stated above. Agent Signature Date
  26. 26. 3FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW CENTURY 21® New Millennium Agent Information Sheet Name: _____________________________ Nickname: ______________________________ Email Address: _______________________________________________________________ Home Address: _______________________________________________________________ Cell Phone #: _______________________ Home Phone #: __________________________ C21NM Office Name:_________________ Office Number: __________________________ Branch Leader: _______________________ Office Manager: __________________________ I have previously attended (check all that apply): ___________________________________ CENTURY 21® New Millennium Branch Career Night: _______________________ NM University (Licensing School) Other Licensing School (please name school) Length of Time Actively Licensed in Real Estate: ___________________________________ Previous Occupation: _________________________________________________________ In case of emergency, who would you like us to contact? Name:_____________________________ Relationship: ____________________________ Address: ____________________________________________________________________ Daytime Phone #: ___________________ Evening Phone #: ________________________
  27. 27. 4 FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW DAILY SCHEDULE Consolidated Meeting Location Alexandria CENTURY 21® New Millennium Alexandria Branch Training Room 5990 Kingstowne Towne Center Alexandria, VA 22315-5876 (703) 922-4010 Alexandria@c21nm.com Fredericksburg 1931 Plank Road, Suite 201 Fredericksburg, VA 22401 Local Phone: 540-373-2000 Toll Free: 800-704-0048 800-997-1121 Waldorf 3292 Crain Highway, Waldorf, MD 20603 Local Phone: 301-870-8400 Production Coach/Registration Contact: Adriene Pessel adriene.pessel@c21nm.com
  28. 28. 5FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW Help Desk Information (866) 837-8181 nmhelpdesk@c21nm.com Call Criteria: • If you encounter any problem with software required to do real estate business on any computer, whether it belongs to you or the company, call for assistance if you can’t resolve the issue yourself. • If you encounter any problem with computer related hardware (computer, printer, fax, etc.) that belongs to the company, call for assistance. • If you are unsure about what to do...call! Road map to Success: • Have a business and life plan. • Show the public that you have the KNOWLEDGE, can be TRUSTED and you CARE about them. TASKS: • Meet as many people as you can. SMILE, BE KIND, BE HELPFUL AND BE SINCERE. • Have a minimum of 250 in SOI/ refresh by adding 3-5 per week (use a contact management system) • WRITE 3-5 PERSONAL NOTES PER DAY • Know your market, keep yourself update with real estate trends. • Know your contracts, agreements and the addenda • Understand the lending process
  29. 29. 6 FIRE - NEW AGENT TRAINING MANUAL - TAB - 1 OVERVIEW
  30. 30. 11FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A Career in Real Estate FLAT RENT MULTI-FAMILY HOUSE REAL ESTATE BROKER MOBILE HOME
  31. 31. 2 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE
  32. 32. 3FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  33. 33. 4 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  34. 34. 5FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  35. 35. 6 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  36. 36. 7FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  37. 37. 8 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  38. 38. 9FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________
  39. 39. 10 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE Staying on Track Building a Smart Calendar
  40. 40. 11FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE PLAN YOUR DAY/ WEEK /MONTH/ YEAR • Generate ___________ all leads per month • Follow up on all leads in a timely manner • Email listings to prospective buyers • Email market updates to sellers • Newsletter sent monthly • Egreetings sent quarterly • Financial articles posted weekly on fan page & emailed • Choose_____________ prospects to make a personal touch with each week • Choose_____________ prospects to personally call each week. • Create and maintain an ongoing social media campaign/ BLOG/ Twitter/ Facebook • Seminars: Buyer /Seller. Credit • Open house _______________ per month • FSBO/ EXPIRED ___________ per week • Add______________________ people to my SOI each week • THANK YOU NOTES EVERYDAY
  41. 41. 12 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE USE A CALENDAR/ SCHEDULE YOUR DAY • Understanding the Scheduling Process • Use a color coded system • Reengineer your week. Use “aha” moments. Learn and Go • Smart Numbers and what they mean • Scheduling appointments • Time off • Prospecting time • Call back • Schedule Flex Time • Color Coding • Real estate support • Real estate with people • Personal time 1. ATTITUDE / APPROACH TO TIME MANAGEMENT: a. Value time. Time is money. Don’t just talk about it – demonstrate it. b. There is a direct correlation between your attitude about time management and achieving effective time management. There is a direct correlation between effective time management and success. Therefore, it is a top priority all day long. c. You must control your environment or it will control you. 2. KEYS TO SUCCESS: a. Develop and maintain a good “relationship” with your calendar = MUST SPEND TIME • JUST DO IT • Get into a rhythm: plan, execute & record results / plan, execute & record results / plan, execute & record results b. Set priorities and then stick with them – adjust them when needed c. Continually ask: “Am I making the highest & best use of my time?” If not, start doing it. d. Stay out of the weeds and take care of the “big stuff” (big rocks in the jar concept). e. Honor the two week rule. f. Build & use “tools” to maximize / save time.
  42. 42. 13FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE 3. Build & work your CALENDAR (Techniques to Build a “Balanced” Calendar) a. Build “SMART WEEK” color code system (see attached “Edit Labels” example): *** Calendar toolbar > calendar coloring > edit labels • Green = PRI #1: PROSPECTING / CLIENT TIME (talking to someone about Real Estate etc. = prospecting calls / show homes / listing appt) • Yellow = PRI #2: RETENTION (coaching / training, etc) • Orange = PRI #3: LEAD GENERATION (Mail-Call-See Campaign support / Social Networking, etc. = Lead Router / Facebook / Linkedin) etc.) • Red = FIRES / Admin • Blue = Branch Event (A Team Mtng / Branch Bus Mtng / etc.) • Purple = Personal Time (Family Time / vacations / lunch etc.) » Grey = DID NOT CONDUCT (when recording results) • Branch Events (Blue): » Bi-weekly Bus Mtng » Monthly A-Team Webex » Monthly Lunch & Learn » Friday Social » Etc. = any other Branch Related event f. Build “self-imposed” events in sequence based on priorities to ensure initial “deconfliction”: • PRI #1 = PROSPECTING / CLIENT TIME (Green) Events: » Prospecting = 2 hr x / day (10:00 - 11:00 am & 7:00 - 8:00 pm daily) » Show Homes / Listing Appts (1:00 - 6:00 daily) » Etc = Talking to Someone About Real Estate • PRI #2 = RETENTION (Yellow) Events: » Monthly / QTRLY Coaching Sessions (set same day each month = 1st Thurs of each month 1:00-1:30) » Monthly Team Meeting (set same day each month = 1st Tues of each month 11:00 - 12:00) » Weekly Team Huddle (set same day each week = every Thurs 9:30 - 10:00) » Etc. = Any Training Event • PRI #3 = LEAD GENERATION (Orange) Events: » “Mail-Call-See Campaign” Admin Support (9:00 - 10:00 am daily) » CARTUS Updates » Lead Router Analysis = daily » Social Networking (Facebook / Linkedin etc = 8:30 - 9:00 min daily) » Etc. = Generating Business but not talking to someone about Real Estate. • FIRES / Admin Events (Red) • Personal Events (Purple)
  43. 43. 14 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE » Personal Time (5:30 - 7:30 & 8:00 - 11:00 pm) » Vacations & other Family related events (TBD) g. DECONFLICT / “CLEAN-UP” • Conflict = de-conflict / delete • Take notes to reschedule h. “Work” your Calendar and maintain the relationship (EXECUTE & RECORD RESULTS) • Conflict = de-conflict / delete • Take notes to reschedule » Annually - build your Yearly Calendar / match Master Calendar » Monthly - lock in at least one month out [mid-month prior] / match Master Calendar » Weekly - lock in two weeks out = “TWO WEEK RULE”. » Daily - validate daily calendar every AM or PM prior to departure » Hourly - adjust accordingly as needed and RECORD RESULTS when an event is completed / not completed • YES / conducted = leave color coded • NO / did not conduct = color grey NOTE: get into a “DAILY RHYTHM” working your calendar. Team up with someone for accountability purposes. DAILY ACTIVITIES TIME ALLOTED REVIEW SOI 25 Minutes MRIS - MARKET ANALYSIS 60 Minutes FACE BOOK - MARKETING 20 Minutes UPDATE CALENDAR 10 Minutes PLAN FOR NEXT WEEK 10 Minutes MAKE CALLS 30 Minutes LUNCH 30 Minutes LOOK AT OPEN HOUSES 60 Minutes CENTURY 21 WEB 10 Minutes NAR SYSTEM 10 Minutes E MAILS 20 Minutes FARMING 60 Minutes FLYERS AND NEWSLETTER 40 Minutes
  44. 44. 15FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE Monday Tuesday Wednesday Thursday Friday Saturday Sunday PROSPECTING / CLIENT TIME (Talking to someone about Real Estate) 10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting 10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting 10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting 10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting 10:00-11:00 am Prospecting 1:00-6:00 Show Homes / Listing Appt 7:00-8:00 pm Prospecting 11:00-12:00 Prospecting 1:00-6:00 Show Homes / Listing Appt 12:00-5;00 pm Open House RETENTION (Coaching / Training) TBD: Any TNG (PL/ CE Credit) Team Meeting (2d Tues Monthly) 9:30 3:00 e (Weekly) LEAD GENERATION (Mail - Call - See Campaign: Admin SUPPORT) 8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generation Update 8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generations Update 8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generation Update 8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generation Update 8:30-9:00 Lead Router / Facebook / Linkedin 9:00-10:00 Lead Generation Update BRANCH RELATED EVENTS 9:00-10:00 “A TEAM” Mtng (1st Tues) 10:00-11:00 Bus Mtng (1st & 3rd Tues) 12:00-1:00 FCM Lunch & Learn 2:30 Friday Social ADMIN 8:00-8:30 Admin #1 12:30-1:00 Admin #2 8:00-8:30 Admin #1 12:30-1:00 Admin #2 8:00-8:30 Admin #1 12:30-1:00 Admin #2 8:00-8:30 Admin #1 12:30-1:00 Admin #2 8:00-8:30 Admin #1 12:30-1:00 Admin #2 PERSONAL 5:30-7:30am Personal Time 12:00-12:30 Lunch 8:00-11:00pm Personal Time 5:30-7:30am Personal Time 12:00-12:30 Lunch 8:00-11:00pm Personal Time TBD (VACATION / OTHER FAMILY EVENTS) 5:30-7:30am Personal Time 12:00-12:30 Lunch 8:00-11:00pm Personal Time 5:30-7:30am Personal Time 12:00-12:30 Lunch 8:00-11:00pm Personal Time 10:00-11:30 worsship
  45. 45. 16 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE Step 1 Year at Glance 1. Block out dates that are your NON-WORKING DAYS. 2. What are peak times for showing? Block them out. 3. Weekly previewing new and resale homes. 4. Plug in open house dates. 5. Plug in charity events. 6. Plug in seminar dates. 7. Season touch base. 8. Dates for post cards / newsletter and quartery mail out. 9. Mail outs dated. E-greetings, Newsletters, Postcards, Charity Events, Open Houses, Buyer & Seller Seminars, Credit Advice Seminars, Seasonal Touch Bases, Market Statistics, Quarterly Market Statistics, HUD Mail Outs, VACATION
  46. 46. 17FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE Step 2 Take each MAIL/ CALL/ SEE, and administration task and write all tasks that it takes to prepare for it. EXAMPLES: • Open house • Ask agents from your office for open houses to hold (14 days out), preview them, and select a house. • Complete a CMA for the community for the area, preview 5 “spin off” houses (10 days out) • Check MRIS for past rentals or rental complexes for potential buyers to invite, get addresses or phone numbers for neighbors (10 days out) • START your Mail/Call/See campaign for open house invitees (7 days prior to open date) • Ask your First County Loan Officer for a rate sheet for that property to assist potential buyers. • Do an update on market statistics for the neighborhood (2 days prior) • Use Toolkit to create “ buyers book” for spin off houses. • Get signs 2 days prior/ scout out where signs should be placed • Determine if fresh flowers or snacks are needed? (1 day prior) • Place signs out morning of Open. (3 hrs prior) • Open House directional signs should be removed promptly after the Open is completed. • Write THANK YOU Notes and follow up note. (Next day)
  47. 47. 18 FIRE - NEW AGENT TRAINING MANUAL - TAB - 2 A CAREER IN REAL ESTATE
  48. 48. 11FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 Financing, Goal Setting / Business Planning, Tell 21
  49. 49. 2 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Definitions and Terms Front and Back Ratios: Criteria the lender uses to determine the purchaser’s buying power. Front and back ratios are expressed as percentages, for example 36%/41% or simply 36/41. In this example, the Front Ratio equals a maximum PITI of 36% of gross monthly income. The Back Ration equals the purchaser’s maximum PITI plus all debts, which can not exceed 41% of their gross monthly income. LTV: Loan to Value. The percent of the value of the home that the loan represents. For example, a 95 LTV means that the purchaser has borrowed 95% of the lesser of the appraised value of the home or the sales price. PITI: Principal + Interest + Taxes + Insurance expressed as a monthly total (1/12 of the total annual cost). Escrow: Monies held by another party (lender/attorney) on behalf of another party, normally the purchaser. Earnest Money: The purchaser’s good faith money. This money is held in escrow until settlement. All principals to the contract must agree regarding disbursement, otherwise a court will decide. Down Payment: A percentage of the agreed upon sales price that the purchaser provides towards the purchase of the house, normally from their own funds. Mortgage Insurance: Protects the lender when the purchaser has a LTV greater than 80%. If the purchaser defaults on their loan, mortgage insurance provides a means for the lender to recoup their loses. Mortgage insurance is paid monthly as part of the purchaser’s PITI. Under certain conditions, the purchaser can petition of have the mortgage insurance requirement removed, typically when the property has appreciated and the loan principal has been paid down so that the LTV is less than 80%. Title Insurance: The lender requires that the purchaser obtain and pay for this insurance to protect the lender (purchaser coverage is optional), in case title issues are discovered after settlement. Title insurance is charged and paid in full at settlement. If the purchaser refinances their loan, a lesser fee may be charged for “bringing down title”. Hazard/Homeowner Insurance: The lender requires that proof of payment of hazard/homeowner insurance be provided at or before settlement, with adequate coverage for the property being purchased. Hazard/homeowner insurance normally protects both the homeowner and the lender from damage to the property from fire, vandalism, and other catastrophic events. Most hazard/homeowner policies don’t provide flood insurance, which must be purchased separately. This insurance is paid annually, with one year’s premium paid at or before settlement. Thereafter, 1/12th of the annual premium is included as part of the
  50. 50. 3FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 purchaser’s PITI. These monies are held in escrow until payment is due to the insurance company. Contract Date: The date the contract was written. Ratification Date: The date when all parties agree with the terms and conditions of the contract, and all parties have received fully signed and initialed copies of the contract. Settlement Date: The day ownership of the property is transferred. How Much House Can Your Homebuyer Afford? Calculating Ratios and Rules The following information and formulas are used to calculate the ratios that will allow you to estimate the loan amount and sales price for which your home buyer will be able to apply. Information Your Home Buyer Needs to Provide • Area in which the home buyer would like to purchase • Length and type of mortgage program desired • Amount of desired down payment • Monthly Income • Monthly Debt Calculating Ratios Ratios represent a comparison between your home buyer’s gross monthly income and his or her monthly debt. Front Ratio = total housing payment + gross monthly income Back Ratio = total monthly debt (including housing payment) + gross monthly income Rules: With a down payment of less than 10%, conventional financing typically allows homebuyers to obtain maximum financing with an allowable front ratio of 28% and back ratio of 36%. If the down payment is more than 10%, ratios can be stretched up to 33% front, 38% back. Higher ratios may be available on other conventional programs. FHA Financing allows your home buyers to obtain maximum financing with allowable ratios of 29% front, 41% back. VA Financing allows home buyers to obtain maximum financing with allowable total ratios of up to 41%, both front and back. MORTGAGE SERVICES Field Qualifying (for approximate payment amount only) Interest Rate Factors for a 30 Year Term (per 1,000) 4.0 % = 4.77 5.0 % = 5.37
  51. 51. 4 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Interest Rate Factors for a 30 Year Term (per 1,000) 5.5 % = 5.68 6.0 % = 6.0 6.5% = 6.32 7.0 % = 6.65 7.5 % = 6.99 Monthly Payment at 6% Interest Rate (Principal + Interest Only) (P&I) Loan Amount (P&I) $25,000 150 $50,000 300 $100,000 600 $200,000 1,200 $400,000 2,400 Monthly Payment at 6% Interest Rate (Principal + Interest Only) (P&I) $500,000 3,000 Fairfax County Taxes: $1.085 per $100 (check your local jurisdiction for their amount) House Value* Annual Tax Monthly Taxes $50,000 $500 $41.66 $100,000 $1,000 $83.33 $200,000 $2,000 $166.67 $300,000 $3,000 $250.00 $400,000 $4,000 $333.33 $500,000 $5,000 $416.67 * Tax assessment value and market value are not usually the same. The assessed value is usually less!
  52. 52. 5FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Hazard Insurance: varies depending on coverage and deductible. An average cost is about $2.50 per $1,000, based on sales price. House Value Annual Premium Monthly Premium $100,000 $250 ≈ $20.83 $200,000 $500 ≈ $42 $300,000 $750 ≈ $65 $400,000 $1,000 ≈ $85 $500,000 $1,250 ≈ $105 Field Qualifying Summary 600 P&I @ 6 % +80 Taxes +20 Hazard Ins $700 (per 100,000) 350 = 50K loan 700 = 100K loan 1400 = 200K loan 2100 = 300K loan 2450 = 350K loan 2800 = 400K loan Real Estate taxes vary among counties and cities. Confirm the tax rate using the on-line tax record if possible. The rates below are $ per 100: Fairfax County 1.09 Charles County 1.2 Anne Arundel County 1.07 St. Mary’s County 0.969 Calvert County 0.892 Prince George’s County 0.96 Arlington County 0.958 Fauquier County 0.97 Loudoun County 1.285 Prince William County 1.204
  53. 53. 6 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 INTEREST RATE FACTOR TABLE Factors per $1,000 Interest Rate 15 Year 30 Year Interest Rate 15 Year 30 Year 4 7.40 4.77 8 9.56 7.34 4 1/8 7.46 4.85 8 1/8 9.63 7.34 4 1/4 7.52 4.92 8 1/4 9.70 7.51 4 3/8 7.59 4.99 8 3/8 9.77 7.60 4 1/2 7.65 5.07 8 1/2 9.85 7.69 4 5/8 7.71 5.14 8 5/8 9.92 7.78 4 3/4 7.78 5.22 8 3/4 9.99 7.87 4 7/8 7.84 5.29 8 7/8 10.07 7.96 5 7.91 5.37 9 10.14 8.05 5 1/8 7.97 5.44 9 1/8 10.22 8.14 5 1/4 8.04 5.52 9 1/4 10.29 8.23 5 3/8 8.10 5.60 9 3/8 10.37 8.32 5 1/2 8.17 5.68 9 1/2 10.44 8.41 5 5/8 8.24 5.76 9 5/8 10.52 8.50 5 3/4 8.30 5.84 9 3/4 10.59 8.59 5 7/8 8.37 5.92 9 7/8 10.67 8.68 6 8.44 6.00 10 10.75 8.77 6 1/8 8.51 6.08 10 1/8 10.82 8.87 6 1/4 8.57 6.16 10 1/4 10.90 8.96 6 3/8 8.64 6.24 10 3/8 10.98 9.05 6 1/2 8.71 6.32 10 1/2 11.05 9.15 6 5/8 8.78 6.40 10 5/8 11.13 9.24 6 3/4 8.85 6.48 10 3/4 11.21 9.33 6 7/8 8.92 6.57 10 7/8 11.29 9.43 7 8.99 6.65 11 11.36 9.52 7 1/8 9.06 6.74 11 1/8 11.44 9.62 7 1/4 9.13 6.82 11 1/4 11.52 9.71 7 3/8 9.20 6.91 11 3/8 11.60 9.81 7 1/2 9.27 6.99 11 1/2 11.68 9.90 7 5/8 9.34 7.08 11 5/8 11.76 10.00 7 3/4 9.41 7.16 11 3/4 11.84 10.09 7 7/8 9.48 7.25 11 7/8 11.92 10.19
  54. 54. 7FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Rent vs. Buy Processing Rentals
  55. 55. 8 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Rental listing 1. Transaction /Case Worksheet 2. Exclusive Right to Lease Agreement 3. Copy of MRIS print out and public record 4. Agency Disclosure 5. Affiliated Business Arrangement Disclosure 6. CMA (Signed by Sellers) 7. Property Disclosure/Disclaimer 8. Lead Based Paint Addendum (If applicable) 9. Landlord’s Authorization/Waiver for photographic services 10. Photos of home Potential Tenant Application: Application should be made using listing company or management company forms. $50.00 processing fee for each adult applicant – Certified Funds Non Refundable. Earnest Money Deposit equal to one full month’s rent. Upon approval such funds become all/part of tenant’s security deposit. Refundable if not approved. Other terms/ conditions are outlined on rental application Pet deposit (if applicable) based on listing instruction. Deposit checks can be combined. Please be sure that processing fees are kept separate. All checks must be made payable either to listing company, management company or owner. Processing time: 1-3 days. The rental application should outline ways to help expedite the processing procedure. When your listing is rented 1. Rental Case sheet 2. MRIS Full listing 3. MRIS tax record 4. Rental Application 5. Copy of check(s) 6. Lease
  56. 56. 9FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21
  57. 57. 10 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 CREDIT SCORES 760 - 850 EXCELLENT 700 - 759 VERY GOOD 723 MEDIAN FICO SCORE 660 - 699 GOOD 687 AVERAGE FICO SCORE 620 - 659 NOT GOOD 580 - 619 POOR 500 - 579 VERY POOR Rent to Income Landlords typically require that your annual income is at least 40 times the monthly rent. For example, if you and your roommate are looking at a $3,000 per month apartment, the landlord would require a combined income of $3,000 × 40, which equals $120,000. To determine how much rent you (and your potential roommates) can afford, simply divide your combined annual incomes by 40. How Much Rent is Affordable? You might have also heard that you should spend no more than 30% of your annual income on rent. Spending 30% of your yearly income on rent is widely believed to be an affordable amount, leaving enough money for all your other expenses. What’s the difference between 30% and 40 times the monthly rent? Absolutely nothing, they’re just two different ways of deriving the same number. The 40x trick is just easier to calculate. For example, let’s take $120,000 of income. 1. 30% of $120,000 = $36,000. 2. $36,000 ÷ 12 months = $3,000 per month. But to make the calculation easier, just divide $120,000 by 40. 1. $120,000 ÷ 40 = $3,000 per month. Voila! Math Magic! Again, to determine how much rent you (and your potential roommates) can afford, simply divide your combined annual incomes by 40. Don’t have a calculator handy? Use the following table to look up your maximum rent.
  58. 58. 11FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Combined Annual Income Maximum Monthly $40,000 $1,000 $44,000 $1,100 $48,000 $1,200 $52,000 $1,300 $56,000 $1,400 $60,000 $1,500 $72,000 $1,800 $76,000 $1,900 $80,000 $2,000 $88,000 $2,200 $92,000 $2,300 $100,000 $2,500 $116,000 $2,900 $120,000 $3,000 $128,000 $3,200 $136,000 $3,400 $140,000 $3,500 $152,000 $3,800 $160,000 $4,000 $176,000 $4,400 $180,000 $4,500 $192,000 $4,800 $200,000 $5,000 $204,000 $5,100 $228,000 $5,700 $236,000 $5,900 $240,000 $6,000 $252,000 $6,300
  59. 59. 12 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Rental Guidelines Below is a synopsis of our guidelines for approving/declining a rental application. Income: • Only the incomes of two applicants will be considered. In the event there are more than two applicants, the lowest two incomes will be counted. • Only applicant income will be considered for qualification. Co-signers may not be used. • Income must be verifiable to be considered. • Self-employed / commissioned applicants must submit copies of Schedule C or tax returns for the past two years. • Applicants paid hourly must submit copies of their W2s for the past two years. • Applicant’s monthly income must equal / exceed 3.5 times the rent (3.25 for military personnel). Assets and Liabilities: • Monthly income times .45 must be greater than monthly rent plus all long term debts. • Applicants must have sufficient cash in bank to pay deposit, first months rent, moving expenses and a reserve for emergencies. Credit: • A credit report will be run on all applicants and all adults will be considered as applicants. • Lack of credit history is a valid reason for not approving an application. • 3 or more late payments (30 days late) within the past 36 months will not be accepted. An applicant with any 60+ days late in the past 36 months will be turned down. • Applicants with liens, judgments, collections or bankruptcies within the past 5 years will not be accepted. If applicant has declared bankruptcy more than 5 years ago, ALL credit established after the bankruptcy must be good (no late payments). If there has been a lien, collection or judgment more than 5 years ago, the debt must be paid in full in order to consider the application. Job History: • Applicant needs to have maintained stable employment for the past 3 years and there should be some assurance of continued employment. If employment cannot be verified, applicant may be turned down. Landlord References: • Applicant must have a good reference from current and former landlord. This includes paying rent on time, leaving property in good condition, giving adequate notice of moving, etc. • Not having a current or previous landlord
  60. 60. 13FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 or being unable to contact current or previous landlord may cause the application to be turned down. Other: • All adults on the application will have their credit checked and if approved will be put on the lease. If the applicants are married or have a significant other, both people must be listed on the application. • Applicant must meet all other requirements of the landlord or agent, including, but not limited to, pet restrictions, smoking restrictions, possession restrictions, etc. Making an application contingent upon repairs/redecoration that an owner is not willing to do will cause the application to be turned down. • Multiple applications are processed simultaneously and the most qualified (if any) accepted. • Processing will begin AFTER receipt of funds. • Processing time is typically 2-3 business days.
  61. 61. 14 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 FINANCING FACTS & FIGURES Ask your loan officer these questions if you don’t know the answers. 1. What is “conventional” financing? 2. How do you determine loan to value (LTV)? 3. How much down payment do VA loans require? 4. Name a type of home ineligible for VA financing. 5. What is PITI? 6. Define a fixed rate mortgage. 7. What is a ratio? 8. The maximum allowable buydown for an FHA loan is _________. 9. To determine a “self employed” person’s income, the lender averages _________ years of income. 10. True - False: VA approval is required on new construction. 11. True - False: If not on public water and sewer, the lender requires a clean septic and well certificate.
  62. 62. 15FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21
  63. 63. 16 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 MORTGAGE FINANCNG TERMS Abstract A concise summary of information made by a title examiner based on his examination of available land records. Acceleration The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgagor (borrower), or by using the right vested in the Due-on-Sale Clause. Adjustable Rate Mortgage (ARM) A mortgage in which the interest rate is adjusted periodically based upon a pre-selected index. Also known as the re-negotiable rate mortgage, the variable rate mortgage, or the Canadian rollover mortgage. Adjustment Interval On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three, or five years, depending on the index. Amortized Loans Loans on which the borrower agrees to make regular payments on principal as well as interest to pay off the debt at the end of a fixed period. Annual Percentage Rate (APR) An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account discount points and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan. Appraisal An estimate of the value of a property, made by a qualified professional called an “appraiser”. Assessment A local tax levied against a property for a specific purpose, such as a sewer or street lights. Assumption The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing costs, and new, probably higher, market-rate interest charges will apply. Balloon (Payment) Mortgage Usually a short term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract. Bankruptcy
  64. 64. 17FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 A provision of Federal Law whereby a debtor surrenders his assets to the Bankruptcy Court and is relieved of the future obligation to repay his unsecured debts. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor. Blanket Mortgage A mortgage covering at least two pieces of real estate as security for the same mortgage. Borrower (Mortgagor) One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full. Bridge Loan A short-term loan made by an individual or lending institution to “bridge” the gap between receiving the cash from equity in the present home and making the down payment on the new home. Broker An individual in the business of assisting in arranging funding or negotiating contracts for a client but who does not loan money himself. Brokers usually charge a fee or receive a commission for their services. Buydown When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. Caps (Interest) Consumer safeguards, which limit the not to exceed amount of the interest rate on an adjustable rate mortgage. The mortgage may change per year and/or over the life of the loan. Caps (Payment) Consumer safeguards, which limit the maximum amount of the monthly payment. These may change on an adjustable rate mortgage. Cash Flow The amount of cash derived over a certain period of time from an income producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.). Cash Out Receiving money back when refinancing your present mortgage. Caveat Emptor “Let the buyer beware.” The buyer should inspect the property and be satisfied that it is what he wants. The seller is not obligated to disclose defects, but may not conceal a known defect or lie if asked about it.
  65. 65. 18 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Ceiling The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage. Certificate of Eligibility The document given to qualified veterans, which entitles them to VA guaranteed loans for homes, businesses, and mobile homes. Certificates of eligibility may be obtained by sending DD Form 214 (Separation Document) to the local VA office with VA Form 1880 (Request for Certificate of Eligibility). Certificate of Reasonable Value (CRV) An appraisal issued by the VA showing the property’s current market value. Certificate of Veteran Status The document given to veterans or reservists who have served 90 days of continuous active duty (including training time). It may be obtained by sending DD Form 214 to the local VA office with VA Form 26-8261a (Request for Certificate of Veteran Status). This document enables veterans to obtain lower down payments on certain FHA insured loans). Clear Title A title to a property that is free of legal challenges to ownership. Closing The meeting between the buyer, seller, and the lender or their agents where the property and funds legally change hands. Also called settlement. Closing Costs These usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report change and other costs assessed at settlement. The cost of closing is usually about 4% - 8% of the mortgage amount. COFI An adjustable rate mortgage with a rate that adjusts based on a cost of funds index, often the 11th District Cost of Funds. Collateral Any property pledged to secure a loan. Commitment A promise by a lender to make a loan on specific terms or conditions to a borrower or builder. A promise by an investor to purchase mortgages from a lender with specific terms or conditions. An agreement, often in writing, between a lender and a borrower to loan money at a future date subject to the completion of paperwork or compliance with state conditions. Condominium A system of individual fee simple ownership of portions (units) in a multi-unit structure, combined with joint ownership of
  66. 66. 19FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 common areas. Each individual may sell or encumber his own unit. Conforming Loan Generally, a mortgage loan under a set amount. Qualifying ratios and underwriting methods are standardized to a large degree. Construction Loan A short-term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he progresses with construction. Contract Sale or Deed A contract between purchaser and a seller of real estate to convey title after certain conditions have been met. It is a form of installment sale. Conventional Loan Amortized mortgage loans that are neither FHA insured nor VA guaranteed. Co-Signer A person who assumes joint liability for a loan. The co-signer of a loan agreement is not always a co-owner. Credit Limit The maximum amount that may be borrowed under a home equity plan. Credit Report A report documenting the credit history and current status of a borrower’s credit standing (fee charged by lender. Debt-to-Income Ratio The ratio, expressed as a percentage, which results when a borrower’s monthly payment obligation on long-term debts is divided by his or her gross monthly income Debt Service The total amount of credit card, vehicle, mortgage or other debt upon which you must pay. Deed The written document conveying the real property. The deed must be signed, witnessed, and delivered to the grantee. Once a deed is recorded at a courthouse, it is no longer necessary to convey the title. Deed of Trust In many states, this document is used in place of a mortgage to secure the payment of a note. Default Failure to fulfill a contractual obligation when it comes due such as the failure to make a timely payment on a mortgage loan. Deferred Interest When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. Delinquency Failure to make payments on time. This can lead to foreclosure.
  67. 67. 20 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Department of Veterans Affairs (VA) An independent agency of the federal government, which guarantees long-term, low or no down payment mortgages to eligible veterans. Discount Point See Points. Down Payment The difference between the purchase price and that portion of the purchase price being financed. Most lenders require the down payment to be paid from the buyer’s own funds. Gifts from related parties are sometimes acceptable, and must be disclosed to the lender. Earnest Money Money given by a buyer to a seller as part of the purchase price to bind the transaction or assure payment. Easement The right to use someone else’s land for a specific limited purpose. They can be either MORTGAGE FINANCNG TERMS permanent or temporary, and may include such things as utility lines, driveways, and ingress and egress. Eminent Domain The power of the state to take private property for public use upon payment of just compensation. Encroachment Anything belonging to one landowner that extends onto an adjacent landowner’s property is considered an encroachment. A storage building that is a few inches over the property line is an example of an encroachment. Encumbrance A claim against a property by another party, which usually affects the ability to transfer ownership of the property. Entitlement The VA home loan benefit is called entitlement. Entitlement for a VA guaranteed home loan may also be called VA eligibility. Equal Credit Opportunity Act (ECOA) Is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age , sex, marital status or receipt of income from public assistance programs. Equity The difference between the fair market value and current indebtedness, also referred to as the owner’s interest. The value an owner has in real estate over and above the obligation against the property.
  68. 68. 21FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Escrow An account held by the lender into which the home buyer pays money for tax or insurance payments. Also earnest deposits held pending loan closing. Fannie Mae See Federal National Mortgage Association Farmers Home Administration (FmHA) Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere. Federal Home Loan Bank Board (FHLBB) The former name for the regulatory and supervisory agency for federally charted savings institutions. It evaluates applications for federal charters and also establishes MORTGAGE FINANCNG TERMS liquidity requirements for its members. This agency is now called the Office of Thrift pervision. Federal Home Loan Mortgage Corporation (FHLMC) A quasi-governmental agency that provides a secondary market for conventional mortgage loans written by insured depository institutions and HUD-approved mortgage bankers. Federal Housing Administration (FHA) A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also set standards for underwriting mortgages. Federal National Mortgage Association (FNMA) (also known as Fannie Mae) A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by the FHA or guaranteed by the VA. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable. FHA Loan Sometimes called FHA Insured Loan. A loan for which the Federal Housing Administration insures the lender against losses the lender may incur due to the borrower’s default. Open to all qualified home buyers. FHA Mortgage Insurance Requires a fee (up to 2.25% of the loan amount) paid at closing to insure the loan with the FHA. In addition, FHA mortgage insurance requires an annual fee of up to 0.5% of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid.
  69. 69. 22 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 FHLMC The Federal Home Loan Mortgage Corporation provides a secondary market for savings and loans by purchasing their conventional loans. Also known as Freddie Mac. Firm Commitment A promise by the FHA to insure a mortgage loan for a specified property and borrower. A promise from a lender to make a mortgage loan. First Mortgage A mortgage which is in first lien position, taking priority over all other liens (which are financial encumbrances). Fixed Rate Mortgage The mortgage interest rate will remain the same on these mortgages throughout the term of the mortgage for the original borrower. Payments are also fixed at one amount Flood Insurance A form of hazard insurance than may be required by the lender as a condition of making the loan. May not cover personal property. FNMA The Federal National Mortgage Association is a secondary mortgage institution which is the largest single holder of home mortgages in the United States. FNMA buys VA, FHA, and conventional mortgages from primary lenders. Also known as Fannie Mae. Foreclosure A legal process by which the lender or the seller forces a sale of mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of the property. Freddie Mac See Federal Home Loan Mortgage Corporation Ginnie Mae See Government National Mortgage Association Good Faith Estimate A written estimate of closing costs which a lender must provide within three days of the borrower submitting an application. Government National Mortgage Association (GNMA) Also known as Ginnie Mae, this is a federally controlled and operated corporation that supports the secondary market. It purchases and sells residential government mortgages (FHA, VA). Grace Period A period of time during which a loan payment may be paid after its due date, but not incur a late penalty. Such late payments may be reported on the borrower’s credit report.
  70. 70. 23FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Graduated Payment Mortgage (GPM) A type of flexible payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it. Gross Income The income of the borrower before taxes or expenses is deducted, for qualifying purposes. Guaranty A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract. Hazard Insurance A form of insurance in which the insurance company protects the buyer from loss of property due to hazards such as fire, hail damage, wind, etc. for a premium. Home Equity Line of Credit A loan providing the buyer with the ability to borrow funds up to the maximum credit limit for which they have qualified. Repayment is secured by the equity in the home. Simple interest (interest only payments on the outstanding balance) is usually tax deductible. This is usually used for home improvements, major purchases or expenses, and debt consolidation. Home Equity Loan A fixed or adjustable rate loan obtained for many purposes, secured by the equity in the home. Interest paid is usually tax deductible. Often used for home improvements or investment in other real estate. Recommended by many to replace or substitute consumer loans, the interest of which is not tax deductible. Housing and Urban Development, Department of (HUD) This department, created in 1965, has a wide range of responsibilities including the regulation of the Federal Housing Administration and the Government National Mortgage Association. Housing Expenses to Income Ratio The ratio, expressed as a percentage, which results when a borrower’s housing expenses are divided by his/her gross monthly income. See debt to income ratio. HUD-1 Settlement Statement A form utilized at loan closing to itemize the costs associated with purchasing the property. Universally used to meet HUD regulatory requirements. Impound That portion of a borrower’s monthly payments held by the lender or servicing organization to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.
  71. 71. 24 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Indemnity A protection against actual loss or damage, compensation for same. Indexed Rate The sum of the published index plus the margin. If the index was *% and the margin was 2.25%, the indexed rate would be 10.25%. Lenders often charge less than the indexed rate for the first year of an adjustable rate loan. Ingress and Egress The right to go in and out over a piece of property, but does not include the right to park on it, as applied to easements. Interest Rate The basic price that equates to the demand for and the supply of funds in the financial markets. The quoted interest rate for any type of loan is a combination of several factors. Part of it is a fee for the administrative costs of making a loan, and another part is a premium for the risk involved in making the loan. The remainder is a payment for the use of the money itself. Interim Financing A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion. Investor A money source for a lender. Joint Ownership Agreement An agreement between owners defining their rights, ownership, monetary obligations and responsibilities. This could be between an investor and an occupant or between the occupants. If an investor is involved, the investor does not take deprecation deductions and none of the occupant’s payment is deemed rent for tax purposes. Joint Tenancy Two or more persons own a property. Joint tenants with the common law Right of Survivorship means that the survivor inherits the property without reference to the decedent’s will. Creditors may sue to have the property divided to settle claims against one of the owners. Judgment An unpaid court ordered monetary order against a property owner. Jumbo Loan A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate. Lien A claim upon a piece of property for the payment or satisfaction of a debt or obligation.
  72. 72. 25FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Loan to Value Ratio The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage. Lock or Lock-In A commitment obtained from the lender to “lock’ or assure a particular interest rate and discount points for a definite time period. This is a protection against rising interest rates between the time of loan application and the time of closing. Margin The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate. Market Value The highest price that a buyer would pay and the lowest price that a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a give time. Mechanic’s Lien Any payment owed to a contractor for work done on the property. MIP (Mortgage Insurance Premium) Insurance from FHA to the lender against incurring a loss because the borrower defaults. Mortgage Backed Securities Securities backed by pools of mortgages. In the case of Ginnie Mae, the securities are issued by private institutions that Ginnie Mae approves. The mortgages are insured by the Federal Housing Administration (FHA), or guaranteed by the Veterans Administration (VA) or by the Rural Housing Service (RHS), formerly Farmers Home Administration (FmHA). Mortgage Banker Originates mortgage loans, lending their funds and closing loans in their name. Mortgage Broker Similar to a mortgage banker, in that they take loan applications and process the paperwork, but brokers do not fund the loan with their own money. They work for several investors, such as mortgage bankers, S & L’s, banks, etc. Mortgage Insurance Money paid to insure the mortgage when the down payment is less than 20%. See Private Mortgage Insurance and FHA Mortgage Insurance. Mortgage Loan A loan using real estate as security or collateral to provide for repayment in case of default. The mortgage or Deed of Trust is the agreement used to pledge the home or other real estate as security. Mortgagee The lender in a mortgage loan transaction.
  73. 73. 26 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Mortgagor The borrower in a mortgage loan transaction. Negative Amortization Occurs when the monthly loan payments are not sufficient enough to satisfy all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan. Net Effective Income The borrower’s gross income, minus federal income tax. Non-Assumption Clause A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note The signed obligation to pay a debt, as a mortgage note. Office of Thrift Supervision (OTS) The regulatory and supervisory agency for federally charted savings institutions. Formerly known as the Federal Home Loan Bank Board. Origination Fee The fee charged by a lender to prepare loan documents, make credit checks, inspect and sometimes appraise a property, usually computed as a percentage of the face value of the loan. Owner’s Title Policy An insurance premium charged by the title company to insure the buyer that the title is free from defects up to the date the conveying instrument is recorded. The buyer is the beneficiary. Permanent Loan A long term mortgage, usually ten years or more. Also called an “end loan.” PITI Principal, Interest, Taxes and Insurance. Also called monthly housing expense. Plat A map showing all of a property’s boundaries. Pledged Account Mortgage (PAM) Money is placed in a pledged savings account and this fund, plus earned interest, is gradually used to reduce mortgage payments. Points (loan discount points) Prepaid interest assessed at closing by the lender. Each point is equal to 1% of the loan amount (i.e. two points on a $100,000 mortgage would equal $2,000).
  74. 74. 27FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Power of Attorney A legal document authorizing one person to act on behalf of another. Pre-approval A process by which a potential home buyer secures a guaranteed mortgage approval before making an offer on a property. The lender guarantees in writing to grant the loan in a specific amount. Pre-paid Expenses Necessary to create an escrow account or to adjust the seller’s existing escrow account. Can include taxes, hazard insurance, private mortgage insurance, and special assessments. Prepayment A privilege in a mortgage permitting the borrower to make payments in advance of their due date. Prepayment Penalty Money charged for an early repayment of debt. Prepayment penalties are allowed in some form (but not necessarily imposed) in many states. Primary Mortgage Market The market where the origination or creation of new mortgages is carried out by the mortgage lenders such as savings and loan associations, commercial banks, and mortgage companies. These lenders sometimes sell their mortgages into the secondary mortgage markets such as to Fannie Mae or Freddie Mac. Principal The amount of debt, excluding interest, left on a loan. Private Mortgage Insurance In the event that the borrower does not have personal funds for a 20% down payment, lenders will allow a smaller down payment - as low as 5% in some cases. With the smaller down payment loans however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on the loan’s structure. Qualifying Ratios Comparisons of a borrower’s debt and gross monthly income. Quitclaim Deed A deed releasing whatever interest a person may hold on a property but making no warranty whatsoever. REALTOR® A real estate broker or an associate holding active membership in a local real estate board affiliated with the National Association of REALTORS®. Rescission The cancellation of a contract. With respect to mortgage refinancing, the law that gives the homeowner three days to cancel a contract, in some cases, once it is signed if the transaction uses equity in the
  75. 75. 28 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 home as security. (Also known as “Right of Rescission”). Re-conveyance/Satisfaction A fee charged by the lender to execute the Deed of Re-conveyance, or Satisfaction, when an existing note is paid off. Recording Fees Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public record. Refinance Obtaining a new mortgage loan on a property already owned. Often used to replace the existing loan(s) on a property, usually for a lower interest rate. RESPA Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information about known or estimated settlement costs once after application and once prior to or at settlement. The law requires lenders to furnish the information after application only. Reverse Annuity Mortgage (RAM) A form of mortgage in which the lender makes periodic payments to the borrower using the borrower’s equity in the home as Satisfaction of Mortgage. The document issued by the mortgagee loan is paid in full. Also called a “release of mortgage.” Right of First Refusal A prior agreement that grants a certain prospective buyer the first right to purchase a home, given certain conditions. Second Mortgage A mortgage made subsequent to another mortgage and subordinate to the first one. Secondary Mortgage Market The market where mortgage loans can be resold by lenders, thus providing liquidity to the mortgage market. Security Interest An interest that a lender takes in the borrower’s property to assure repayment of a debt. Servicing All the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections, etc. Settlement/Settlement Costs See Closing/Closing Costs. Shared Appreciation Mortgage (SAM) A mortgage in which a borrower receives a below market interest rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to a mortgage where the borrowers share the monthly principal and interest payments with another party in exchange for part of the appreciation.
  76. 76. 29FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Simple Interest Interest which is computed only on the principal balance. Survey A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any buildings. Sweat Equity Equity created by a purchaser personally performing work/improvements on a property they are purchasing. Title The written evidence that proves the right of ownership of a specific piece of property. Title Insurance A policy, usually issued by a title insurance company, used as a protection for lenders or home owners against financial loss resulting from legal defects in the title. The cost of the policy is often borne by the purchaser and/or the seller. Title Search An examination of municipal records to determine the legal ownership of property, usually performed by the title company. Truth in Lending Also known as Regulation Z of the Truth in Lending section of the Consumer Credit Protection Act. It regulates the disclosure of consumer credit costs and also garnishment procedures, and prohibits exorbitant credit transactions. Its purpose is to make consumers aware of the cost of credit and to enable them to compare the costs of alternate forms of credit. Two-Step Mortgage A mortgage in which the borrower receives a below market interest rate for a specified number of years (most often 7 or 10), and then receives a new interest rate adjusted (within certain limits) to market conditions at that time. The lender sometimes has the option to call the loan due with 30 days notice at the end of 7 or 10 years. Also called a “Super Seven” or “Premier” mortgage. Underwriting The decision whether to make a loan to a potential home buyer based on credit, employment, assets, and other factors and the matching of this risk to an appropriate rate and term or loan amount. Usury Interest charged in excess of the legal rate established by law.
  77. 77. 30 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 VA Loan A mortgage where a portion of an eligible veteran’s loan is guaranteed in terms of repayment to the lender by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements. VA Mortgage Funding Fee A premium depending on the size of the down payment, paid on a VA backed loan. either paid at closing or added to the amount financed. Variable Rate Mortgage (VRM) See Adjustable Rate Mortgage. Verification of Deposit (VOD) A document signed by the borrower’s financial institution verifying the status and balance of his/her financial amounts. Verification of Employment (VOE) A document signed by the borrower’s employer verifying his/her position and salary Warehouse Fee Many mortgage firms must borrow funds on a short term basis in order to originate loans which are to be sold later in the secondary mortgage market (or to investors). When the prime rate of interest is higher on short term loans than on mortgage loans, the mortgage firm has an economic loss which is offset by changing a warehouse fee. Wraparound Mortgage Results when an existing assumable loan is combined with a new loan, resulting in an interest rate somewhere between the old rate and the current market rate.
  78. 78. 31FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Goal Setting / Business Planning Harvard Goal Study This study was completed using Harvard alumni ten years after they graduated from that institution. • 84% had no specific goals, just “growing generalities” • 13% had specific goals, but not in writing • 3% had very specific and written goals The 13% with specific goals earned on the average 2x more than those with no specific goals. The 3% with specific goals earned on the average 10X more than those with no specific goals. SMART Goal Worksheet Specific Measurable Attainable Results Orientated and Relevant Time-bound
  79. 79. 32 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21BUSINESS PLANNING “Anyone can figure out why not to do something. It’s too cold, I’m too busy, I’m tired, or it will just take too long to complete. All of us want spectacular results; the problem is that getting spectacular results requires effort. We see other people doing what we wish we could do and then we fall back into either criticizing them for their success or being envious of how lucky they are. If we listen carefully to their stories, we will see that they are probably no better off than we were. All they did was follow the step-by-step process that helped them arrive at the destination they desired.” Stefan J. M. Swanepoel RealSure.com Do not confuse business planning with goal setting. Anyone in real estate can set goals, but professional owners, brokers, managers and agents build real plans. Business planning is the road map that calculates how many transactions you must close, what your total overhead cost per transaction is, and how many activities you must complete to meet your income goal. Most real estate professionals recognize that working in real estate brokerage is a business, not a hobby. But few apply basic business principles to their real estate business. Even agents and brokers who value setting goals and defining specific objectives for their business often lack the time and expertise to develop a comprehensive budget and business plan. In summary, real estate business plans outline and evaluate all aspects of your real estate business venture. They provide you with a specific road map and process about how to achieve your goals. A good business plan starts with your “wish list” (i.e. how much you wish to earn), and then guides you through the process of examining the key aspects of generating positive income. Your business plan should include the following key elements: FOCUS CLARITY DIRECTION ACCOUNTABILITY
  80. 80. 33FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 201GAMEPLANAgent NameAsOf: 1.Business SettleUnits 2.Financial3.Personal 4.Family5.Spiritual MEASUREMENTS: PRIORITIES: AgentNamehere12/08/2015 3rdQTR“Mail-Call-SeeCampaign” #SettledTransactionspermonth___________ #Referralspermonth____________________ #Callsperday_________________________ #Notesperweek_______________________ #Visitsperweek_______________________ #Mailingspermonth____________________ 2016Goals AgentGenerated________________________ CompanyGenerated_____________________ Avg.CommissionPerSide________________ ListingsTaken__________________________ ListingConversion%_____________________ ListingSold____________________________ Avg.SalesPrice________________________ 1stCountyMortgageLoans_______________ BayCountyTitlePolicies_________________ Friends&FamilyPlaced___________________ YourtextaboutyourFinancialgoalshereYourtextaboutyourPersonalgoalshere YourtextaboutyourFamilygoalshereYourtextaboutyourSpiritualgoalshere -QuarterlyBLCoachingSessions -ResultsfromQUARTERLY“Mail-Call-SeeCampaign” -Century21AwardPacesetterTracking 1.SetGoals2.Mail-Call-SeeCampaign3.TimeManagement(Calendar)
  81. 81. 34 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Mail/Call/See / SOI • List of all names and numbers • Attach this to your Outlook • Each SOI assigned a number • Decide how many each day • Use Tracking form Schedule • Schedule time to track down numbers • Schedule time prior to calling expireds for overall market research. (MRIS) • Schedule time to write Thank You notes • Schedule time to stop by with more information Value Packages • Letter of Introduction • Resume, references, office location • Relocation “Friends and Family” flyer • MRIS statistics • Buyer chart / Seller chart • Rent vs. Buy Analysis • What your agent should do • Sample sales contract • What to look out for RECAP: • Create an action list for each event • How long does each task take? • What is the lead time needed for each task? • What materials/ supplies do I need for each task? • Re-engineer if necessary • Start with the end in mind, and then work backwards, does the date work? BUSINESS PLANNING
  82. 82. 35FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Financial Planning Worksheet Monthly Totals Personal Expenses (housing, food, vehicle, clothing, utilities, entertainment, dining, household, credit cards, gifts, etc.) $ 3050 Business Expenses (dues, MRIS fees, fuel, vehicle maintenance, E&O insurance, advertising, mailings, supplies, training, conventions, telephone) + $ 1250 Savings Goal (retirement, college tuition, vehicle, pay off credit cards, travel, fun, hobbies) + $ 1000 Subtotal = $ 5300 Taxes Divide by .75 = /75 Total Monthly Income Needed = $7066 Deduct other income (if any) - $ 0 Total Monthly Net Income Needed $ 7066 x 12 Annual Income 85,000 What does retirement look like for me? _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________
  83. 83. 36 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Financial Planning Worksheet Monthly Totals Personal Expenses (housing, food, vehicle, clothing, utilities, entertainment, dining, household, credit cards, gifts, etc.) Business Expenses (dues, MRIS fees, fuel, vehicle maintenance, E&O insurance, advertising, mailings, supplies, training, conventions, telephone) + Savings Goal (retirement, college tuition, vehicle, pay off credit cards, travel, fun, hobbies) + Subtotal = Taxes Divide by .75 = Total Monthly Income Needed = Deduct other income (if any) - Total Monthly Net Income Needed x 12 Annual Income What does retirement look like for me? _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________
  84. 84. 37FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 The Prospecting Success Formula SAMPLE CALCULATION Average sales price for your market $ 400,000 Multiplied by the average brokerage rate received by your company in co-brokerage transactions (i.e. 0284%) x .0284 Equals the average brokerage fee = $11,360 Multiplied by your personal commission split (i.e. 50%) x .50 Equals your average commission income per transaction = $5,680 Your Annual Income Expectation $85,000 Divided by your average commission income per transaction ÷ $5,680 Equals the number of transactions that you need in the year (round up to the next higher number) 15 Multiplied by 300 x 300 Equals the number of contacts that you need in the year = 4,500 Divided by the number of working weeks in the year ÷ 47 Equals the number of weekly contacts that you need to make (round up to the next higher number) = 96 Divided by 5 days per week ÷ 5 Equals the number of daily contacts that you need to make (round up to the next higher number) = 20 The total transactions needed in the year 15 Multiplied by 2 x 2 Equals the number of listing/buyer agreements needed = 30 Multiplied by 3 x 3 Equals the number of appointments needed = 90 Divided by the number of working weeks in the year ÷ 47 Equals the number of appointments needed per week (round up to the next higher number) = 2
  85. 85. 38 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 The Prospecting Success Formula Average sales price for your market $ _______ Multiplied by the average brokerage rate received by your company in co-brokerage transactions (i.e. 0284%) x _______% Equals the average brokerage fee = $______ Multiplied by your personal commission split (i.e. 50%) x ______% Equals your average commission income per transaction = $______ Your Annual Income Expectation $______ Divided by your average commission income per transaction ÷ $______ Equals the number of transactions that you need in the year (round up to the next higher number) _______ Multiplied by 300 x 300 Equals the number of contacts that you need in the year = _______ Divided by the number of working weeks in the year ÷ 47 Equals the number of weekly contacts that you need to make (round up to the next higher number) = _______ Divided by 5 days per week ÷ 5 Equals the number of daily contacts that you need to make (round up to the next higher number) = _______ The total transactions needed in the year _______ Multiplied by 2 x 2 Equals the number of listing/buyer agreements needed = _______ Multiplied by 3 x 3 Equals the number of appointments needed = _______ Divided by the number of working weeks in the year ÷ 47 Equals the number of appointments needed per week (round up to the next higher number) = _______
  86. 86. 39FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 What is your expected sales price and the amount of money you make per transaction? What is the number of contacts per day? Break it all down. The Numbers Average sales price _____ $ per transaction _______ Transaction _____ Annual income _______ 1st quarter 17.2% _____ ________+/- 2nd quarter 29.4% _____ _______-+/- 3rd quarter 30.1% _____ ________+/- 4th quarter 23.9% _____ _______+/- TOTAL Daily Contacts _______________________________________ SOI Expires Upcoming events SOI growth: __________ Business cards Other *Thank you notes _____ * Thank you notes are not part of daily contacts
  87. 87. 40 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 What is your expected sales price and the amount of money you make per transaction? What is the number of contacts per day? Break it all down. The Numbers Average sales price $400,000 $ per transaction 5680 Transaction 15 Annual income 85,000 1st quarter 17.2% 3 14,600 +/- 2nd quarter 29.4% 4 25,000 -+/- 3rd quarter 30.1% 5 25,600 +/- 4th quarter 23.9% 4 29,400 +/- TOTAL Daily Contacts 20 SOI 5 Expires 5 Upcoming events 10 SOI growth: 5 Business cards Other *Thank you notes _____ * Thank you notes are not part of daily contacts
  88. 88. 41FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 DAILY PLAN
  89. 89. 42 FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 A recent Natonal Association of REALTORS®’s study suggests that to be successful today, a real estate professional must: 1. Develop a close personal relationship with both buyer and seller prospects, not just the agent’s past clients. 2. Build a saleable “Book of Business.” 3. Possess “world class selling skills.” 1. Prospects A. Develop multiple referral sources B. Concentrate on Listings Prospect Sources Prospecting requires time, money, and energy. Concentrate on those prospects that require the least of all three. 2. Build a saleable book of business that has value. Set up a database that enables you to mail something to your SOI/BOB each month, call three times a year, and visit your customers and clients at least once each year. 3. Schedule your week one week in advance to create balance in your life. 4. Develop top selling skills that allow you to control situations. “Customer satisfaction is worthless. Customer loyalty is priceless.” Jeffrey Gitomer d h sources Platinum Book of Business Book of Business FSBO Expired Listings Open House Just Listed/Just Sold Opportunity Time Farming (geographic) RELATIONAL
  90. 90. 43FIRE - NEW AGENT TRAINING MANUAL - TAB - 3 FINANCING, GOAL SETTING / BUSINESS PLANNING, TELL 21 Definitions: 1. Contact: Someone with whom you have had a conversation about real estate. This can be by phone or in person. 2. Lead: Someone who has a possible real estate need. 3. Referred lead: Someone who has a possible real estate need, and has been referred to you. For example, your friend Joe tells you that Mark, the manager of the local grocery store, may be moving. 4. Prospect: Someone with a definite real estate need, an admitted need. An example would be a FSBO. 5. Referred prospect: Someone who has a definite real estate need, and has been referred to you. For example, you visit the grocery store and introduce yourself to Mark, who confirms that he is indeed moving prior to the end of the year. 6. Validated referred prospect: This occurs when Joe contacts Mark and advises Mark that you are the best person to help him with his real estate needs. Joe actually refers Mark to you. He validates your expertise. Joe actually contacts Mark and advises Mark that you will be contacting him. 7. Book of Business (BOB/SOI): A list of 250 people with whom you have relationships. 8. Platinum Book of Business: A list of the top people in your BOB/SOI. These people are the source of multiple referrals. These are people who know people, and have told you that they would refer people to you. They have also said that it is OK for you to stay in touch with them. Your job is to find five new Platinum BOB/SOI’s each week! 9. Client: Someone with whom you already have a real estate agency relationship.

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