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REAL ESTATE BROKERAGE MANAGEMENT

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REAL ESTATE BROKERAGE MANAGEMENT Prepared for the Georgia Real Estate Association by Gail Lyons, ABR, CCIM, C-CREC, CIPS, CRB, CRS, DREI, QSC, SRES – PowerPoint PPT presentation

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Title: REAL ESTATE BROKERAGE MANAGEMENT


1
REAL ESTATE BROKERAGE MANAGEMENT
  • Prepared for the
  • Georgia Real Estate Association
  • by
  • Gail Lyons,
  • ABR, CCIM, C-CREC, CIPS, CRB, CRS, DREI, QSC,
    SRES

2
Goal
  • To understand and develop an Action Plan for the
    practical operation of a real estate office

3
Overview
  • 1. Definition of management the management
    process
  • Bridging the transition into management
  • Recognizing management leadership
    characteristics
  • Identifying and utilizing your resources
  • Designing accounting systems to manage for profit
  • Understanding your staff
  • Marketing and statistical reports
  • Building a successful management plan for your
    firm

4
Class Survey
  • Please complete the survey (handout 1)
  • Survey Results
  • Years in business ___1-, ___2-5, ___6
  • Job function ____ Owner, ____Manager, _____
    Sales Person, ____ Not in Real Estate
  • Size of Real Estate office __ 5-, __ 6-15, ___
    16-25, ___ 26-50, ___ 50
  • Number of branch offices
  • What did you do before real estate?

5
Workshop A
  • Move into small groups (about 4-6 people).
  • List all the jobs in a real estate office.
  • 1. 7.
  • 2. 8.
  • 3. 9.
  • 4. 10.
  • 5. 11.
  • 6. 12.

6
The Management Decision Should You or Shouldnt
You?
  • Hard work, not as glamorous as it may appear
  • Can be agonizing, lonely, emotionally draining
  • Not everyone is cut out to be a manager
  • Its OK to be a sales person
  • Do you really want to manage?

7
Management Responsibilities Necessary Resources
  • Time allocate between must, should, could
    and dont do jobs (handout 2)
  • Systems information records, forms, reports,
    policies
  • People seek, select, train retain the best
    sales support staff
  • Money personal assets, investors, bankers, lines
    of credit
  • Equipment office furniture, machinery, signs

8
Management Responsibilities What jobs does a
manager do?
  • A. Planning/Goal Setting
  • Define your market find the need
  • Establish company goals based on filling the need
  • a. Short term (survival) goals
  • b. Profit goals
  • c. Growth goals when?, where?
  • d. Perpetuation/regeneration/continuity goals

9
Management Responsibilities What Jobs Does a
Manager Do?
  • B. Organizing People to Produce
  • Establish an organizational chart
  • a. Everyone should know his/her own
    accountability reporting responsibilities
  • b. Everyone should know everyone elses
    accountability reporting responsibilities
  • 2. Delegate

10
Management Responsibilities What Jobs Does a
Manager Do?
  • C. Keys to Managing Your Time
  • Schedule yourself (handout 2)
  • Delegate to lowest paid competent staff
  • Pay for good clerical help
  • Help sales people solve their own problems
  • Upgrade sales staff
  • Replace yourself hire assistant manager(s)
  • Close your door when youre not MBWA

11
Management Responsibilities What Jobs Does a
Manager Do?
  • Staffing
  • Selecting the Sales Team
  • a. Application (handout 3)
  • b. Interviewing Process (handout 4)
  • Selecting the support team (handout 5)
  • Your success in achieving your goals depends
    largely on your ability to motivate the staff on
    both a group and individual level

12
Management Responsibilities Workshop B
  • Complete the Office Task Analysis Chart (handout
    6)
  • If nobody is doing a particular job, leave blank
  • If two or more persons are doing/supervising a
    job, note that fact
  • Compare these tasks with your list from Workshop
    A what are the differences? Why?

13
Management Responsibilities Workshop C
  1. What are my strengths?
  2. What are my weaknesses?
  3. Which jobs am I most skilled at?
  4. Which jobs am I least skilled at?
  5. Which jobs should I delegate?

14
MEASURING RESULTS Your goals are meaningless
unless you keep score!
15
Discussion Review
  • Form small groups discuss the resources (see
    slide 7) youll need to
  • a. plan,
  • b. organize,
  • c. manage,
  • d. staff your company
  • 2. Appoint a leader to report to the class

16
Company Income
  • Accounting system a true method of reporting and
    controlling your money
  • The funds remaining from gross income after all
    sales listing commissions, including those to
    co-brokerage firms, have been distributed.
  • Success measured by gross sales volume is
    meaningless
  • Number is very useful in mergers acquisitions

17
Company Income Variables Percentages
  • Variables include
  • size of operation
  • high/low periods of business activities
  • proximity to large metropolitan area
  • efficiency of operations
  • expansion of programs
  • local customs
  • Percentages used are averages of offices surveyed
    by the National Association of REALTORS (NAR)

18
Average Expense Percentages
19
Company Income Desk/Associate Costs
  • Needed to determine minimum production necessary
    from each sales person in order to break even
  • Desk cost annual expense of operation
  • number of available desks
  • exclusive of commissions paid on sales
  • whether occupied or not
  • Per associate cost used when some or all
    salespeople are home officed divide by
    salespeople
  • Homework Calculate your desk/associate cost,
    bring to class tomorrow

20
Budgeting to Manage Company Income
  • Consider seasonal variations, business cycles,
    growth plans
  • Include all expenses that can be anticipated
    which gross income needed to pay expenses and
    desired profit
  • Prepare budget minimum of 1 year in advance
  • Primary responsibility of management is
    controlling expenses income

21
Real Estate Income Common Commission Options
  • Split commissions
  • a. 50/50, 60/40, 90/10
  • b. split between salesperson company
  • c. as salesperson earns more, split increases
  • 100 commissions
  • a. salesperson receives 100
  • b. salespeople pay desk cost, most or all of
    business expenses
  • 3. Salary or salary plus commission

22
Establishing Your Budget
  • What gross income can you expect?
  • 1. Total of sales associates goals (handout
    7) adjusted to reality
  • 2. Convert to gross commission income
  • ( closings x average price x commission )
  • B. What commission plan will you use?
  • C. Expenses for a real estate office (handout
    8) one time start-up and monthly

23
Establishing Your Budget
  • What are your company objectives?
  • a. break-even/survival?
  • b. expansion, growth?
  • E. Company income
  • a. If you split commissions, what split will be
    necessary to break-even?
  • b. If you use 100, what desk costs will be
    necessary?

24
Establishing Your Budget
  • What will your net profit be? (company income
    expenses)
  • Is it worth the liabilities?
  • If not, make adjustments
  • a. cut expenses
  • b. increase productivity
  • c. add sales personnel

25
Budgeting Suggestions
  1. Be conservative in forecasting income
  2. Be realistic in forecasting expenses
  3. Allow flexibility until you have a track record
  4. Prepare a contingency budget for a worse or
    better year than expected
  5. Compare actuals with budget every month
  6. Let staff help get their suggestions
  7. Compare your budget with industry standards

26
Managing People Types Salespeople
  1. Employee A person hired to perform services for
    another who is subject to the others
    control.
  2. Independent contractor A person who contracts to
    do something for another who is not subject to
    the others control.

27
Managing People Nature of Sales Agents
  • Character capable of independent thought
    action, aggressive, competitive, creative,
    enterprising, self-confident, self-motivated
  • Security irregular hours, no salary guaranty
  • Earnings based on individual effort hours
  • Other jobs most have had other jobs
  • Reality in spite of all the rules brokers set
    up, agents do what they want when they want

28
Managing People Management Styles
  1. Control employs rules procedures that
    provide close control over subordinates
    reduces sense of freedom, tends to treat people
    as objects, minimizes personal incentives
  2. Leadership management by example
    uses participative decision making results in
    improved morale, high production, increased
    retention

29
Developing Your Sales Agents GOAL SETTING
  • Sales agents base goals on their needs
  • Managers goals are based on agents goals
  • Managers role guidance follow-up
  • 4. Goals must be written and be a commitment
  • 5. Goals must be realistic, specific, measurable

30
Goal Setting Suggestions
  • Quarterly one-on-one performance reviews by
    manager (handout 9)
  • Bulletin board showing individual and company
    progress toward goals
  • Voluntary public commitment by agents to goals
  • Encourage agents to relate money goals to number
    of sales, listings, contract necessary to meet
    goals (use handout 7)

31
The Skills Desires of Good Managers A
Self-Test
  • WORKSHOP D (handout 10)
  • Please complete this self-evaluation without
    discussing answers with others
  • Move into a small group discuss
  • a. What is the easiest thing to do?
  • b. What is the hardest thing to do?

32
Matching Your Skills Desires with the Job of
Management
  • If your skills desires dont match, find
    someone else to manage!
  • If your skills desires generally match,
    delegate where you have shortcomings

33
The Jobs of Management Motivating
  • Creating an atmosphere in which agents can
    develop to the limits of their capabilities
  • Know each agents needs desires
  • Motivators education setting a good
    example fear opportunities reco
    gnition rewards

34
The Jobs of Management Training
  • Opportunities orientation, regular sales
    meetings, one-on-one
  • Include field training a mentor system
  • Include role-playing, audio-visual aids
  • Include individual counseling at least monthly
  • Budget time money for training

35
The Jobs of Management Training Subjects
  1. Listing procedures
  2. Selling procedures
  3. Forms systems
  4. Financing
  5. Showing techniques
  6. Open houses
  7. Closing techniques
  8. Negotiating
  1. Presenting the offer
  2. Ethics
  3. Disclosure
  4. Agency duties
  5. Market analysis
  6. Staging
  7. Advertising
  8. Government regulations

36
The Jobs of Management Knowing Top Consumer
Complaints (U.S)
  1. Failure to disclose property defects
  2. Lot size and lot line problems
  3. Misrepresentation
  4. Errors in contract language
  5. Deep pockets!
  • Failure to clarify agency relationships
  • Failure to explain financing
  • Poor communication follow-up
  • Property management
  • Sewer septic problems

37
The Jobs of Management Teach Agents Liability
Reduction
  1. Document statements events
  2. Watch out for red flags
  3. Answer specific questions carefully
  4. Encourage use of other professionals
  5. Avoid predicting the future

38
Data Collection Analysis Why Do You Need It?
  • Determine if how your plans are working
  • Show where business is coming from
  • Basis for setting goals, plans, budget
  • Use for training, guidance, counseling of agents
  • Basis for money planning, cash flow projections
  • Show growth patterns, strengths, weaknesses
  • This months/years actual records become next
    months/years guide to management action

39
Data Collection Analysis Listing Data
  • Market share
  • Source of business
  • Geographic area of influence/area trends
  • Sales price ratio sales divided by list price
  • Life of listing in days (list to contract date)
  • Number of listings per sales agent
  • Percentage of listings sold, expired, withdrawn
  • Determine trends by monthly comparisons

40
Data Collection Analysis Listing Control
Systems
  1. Competitive Market Analysis (CMA) (handout 11)
  2. Form for recording information during initial
    property inspection (handout 12)
  3. Complete listing files all notes, forms,
    documents
  4. Listing follow-up procedure

41
Data Collection Analysis Advertising Control
System
  1. Record source, time nature of every inquiry
    that results from advertising
  2. Determine media effectiveness based on 1
  3. Cost of ad call cost of advertisement
    number of consumer calls
  4. Conversion rate of consumer calls of
    appointments made
  5. Use data to increase effectiveness of ads

42
Data Collection Analysis Sales Data
  1. Source of buyers
  2. Buyer profiles
  3. Average sales price
  4. Average buyers per sales agent
  5. Percentage who actually buy
  6. Market share
  7. Determine trends by monthly comparisons

43
Data Collection Analysis Sales Agent Production
  • Schedule quarterly goal review sessions with each
    agent
  • (use handout 9)
  • Measure results against goals
  • Adjust goals as needed
  • Review Satisfaction Survey results (handout 13)

44
Data Collection Analysis Keeping Records
  • Who lowest paid competent staff
  • Time reduction use forms
  • Management by gut feel may work in exceptional
    markets but its devastating in sophisticated
    markets in which everyone else is using computers!

45
Data Collection Analysis Decisions Based on
Data
  1. Planning budgets goals
  2. Where to spend money
  3. Where to save money
  4. Directing sales agents
  5. Sources of business
  6. Growth patterns trends
  7. Strengths weaknesses

46
A successful real estate company is always based
on good management!
47
GOOD MANAGEMENT Requires
  • Management leadership skills/competencies
  • Desire to be a good manager
  • Sufficient resources
  • Written, realistic measurable goals
  • Accounting systems ( and data) to manage for
    profit
  • Marketing statistical reports
  • Understanding both sales agents staff

48
We hope youve enjoyed this class. We hope it
will increase your success. Ive certainly
enjoyed being with you and have learned from
you. ???????, ???????? ! Gail Lyons
International Real Property Foundation
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