7 reasons why now is the best time to get started in real estate

1. Real estate is a cyclical business. Although it’s never easy to predict, real estate has always cycled up and down. Over the last few years there has been a great deal of pent-up buying where uncertainty has kept the market soft. The fact remains, everyone needs to live somewhere and Americans want to own where they live. It won't take long and it won’t take much to turn a sour market sweet. It's going to come back and real estate professionals will reap the benefits.

2. Buyers and sellers need real estate professionals especially in a soft market. Even the language has changed. We're hearing words we've never heard before like short sales, REO properties, and foreclosures. If you’re a seller today you definitely need a professional to get a property sold. If you’re a buyer, the choices are overwhelming and you need guidance from a pro.

3. Easy mortgage financing is a thing of the past. Today the consumer needs direction, help, and assurance that financing is available. An important role that the professional real estate agent plays is guiding their clients to the right source of financing. People today need good real estate agents to help them through the complicated home loan process.

4. The license laws in Illinois are changing and the educational bar is about to be raised quite a bit ... right now you can enter the real estate business with 45 hours of pre-license education. Early next year that education requirement becomes 120 hours. It will never be easier or more economical than it is right now to get started in real estate.

5. Complete job security. There’s no downsizing ... your job can’t be sent overseas ... no boss is going to hand you a pink slip and no one is going to force you to retire. You’ll work as an independent contractor and the only "boss" you’ll have are your clients.

6. Technology has taken a lot of the drudgery out of the business. The Multiple Listing Service is no longer just a source of property searches. Today's MLS makes checking property tax records easy and mappings software and GPS has made getting from property to property easy. Today an agent can put a buyer's wants and needs into the system and new properties will automatically appear in the client's e-mail. Digital cameras, smart phones, laptops and notebook computers have changed the way agents work.

7. Help wanted. Because the real estate market has been soft, many less serious agents have left the business creating a tremendous need for good, professional, qualified real estate agents. When this market rebounds there will be an abundance of prospects and clients and you’ll reap the harvest.

A true real estate professional can earn a good living when the real estate market is good or bad. Agents who stay well informed and educated change with the business climate. Regardless of the market, consumers need confidence that only comes from skilled professional guidance.

The New License Law

We're all in store for a lot of changes. The major change, everyone is talking about, is the elimination of the "Salesperson" license. By April 30, 2012, all salespersons must become brokers. The exact educational requirements are not yet certain because they are set by "Rule" and the administrative rules have not yet been written.

Those of us with brokers licenses or those currently enrolled in a broker course have no concern. There is a window of opportunity right now for agents to get their brokers license and avoid the rush ... and the unknown.

We have a broker license course starting March 17th in Lake Zurich. If you want to get done now ... give us a call and we'll get you enrolled.

ANOTHER POINT ...

The education requirements for obtaining a real estate license will more than double next year. If you know anyone who would like to consider entering the real estate business please have them call. They can still obtain a license with the current 45 hour requirement but that will be over soon.

Vince DePaulPrudential Starck RealtorsSchool Office630-307-3467

Gov. Quinn signs the new Real Estate License Act

Gov. Pat Quinn has signed the rewrite of the Illinois Real Estate License Act of 2000 which took effect January 1, 2010. Nothing like waiting until the last minute, hey, Governor.


The new license law is much the same as the old law but does include changes to the license categories that we've all heard about. But, don't panic. Those changes will be implemented over the next two years (through April 30, 2012) giving licensees plenty of time to make the transition.



Under the new law, “salespersons” will become “brokers” and existing “managing brokers” (office managers) will transition into the new category of “managing brokers.” If you already have a brokers license or are currently working on obtaining it, you don't have to do anything.


Some parts of the new law do take affect immediately such as new forms and amended language to some old forms. Be sure to check with your managing broker or you can find those new and amended forms at http://www.iarlicenselaw.org/.


The license law rewrite brings a lot of changes ... and let's face it change is not always easy. However, we're professionals and we will all adapt. Just keep you checkbook handy ... IAR stands to make a lot of coin from this new law.

Where Are the Youngsters?

Just noticed that the average age of real estate agents is now 51. While that's not old given today's aging population, it made me wonder why more recent college and highschool graduates are not entering this field and pulling the average age down a bit? We've had a great ride in this career and it will rebound (I think big time) soon. If you're looking at alternatives, take a look at prudentcareers.com for some additional information about a career in Illinois real estate sales.
That being said, if you happen to be an older person (like me) thinking of entering a second or third career, we'd be happy to welcome you also.

Value of Career Nights

Most of the students I've asked have been reticent to attend so called "Career Nights," expressing concerns about being pressured (similar to condo sales events, I guess) to join a company. The reality, at least with our career nights, could not be further from the truth. We want people interested in the real estate career to be able to ask questions, meet active agents, listen to experts, and gain enough insight into the business that they're able to make an informed decision (or guess) as to whether to pursue this as a serious career or move in another direction. The last thing we intend or try to do is pressure someone into the business which is an almost direct road to failure.

Illinois Real Estate License Exam Review

Passing the Illinois real estate license exam just might be easier for you if you read and memorize the review we've written and posted to prudentcareers.com. Here's a excerpt:

General Concepts: Types of real property include residential, commercial, industrial, agricultural, special purpose. The most critical economic characteristic of land is area preference: location, location, location. Physical characteristics are immobility, indestructibility, and uniqueness. Real property includes air rights and mineral rights and the bundle of legal rights: possession, control, enjoyment, exclusion and right to sell.
What distinguishes personal property (or chattels) from fixtures is that personal property is moveable and by removing it the property would not be damaged. A fixture is personal property that has become part of the real estate by attachment, like a light fixture. Tests of a fixture include intent and method of attachment.When you own a home, mortgage interest and property taxes are deductible expenses; principal paid, insurance premiums and private mortgage insurance are not deductible items.

License Law Passes House and Senate from IAR

License law rewrite clears Illinois House and Senate; now headed to governor. IAR’s Real Estate License Law rewrite (SB 1894) was approved on Oct. 15 by the House and on Oct. 29 by the Senate. The bill now goes to the Gov. Quinn for his approval. In terms of timing, the legislature has a maximum of 30 days to transmit the bill to the Governor, and then the Governor has 60 days to act on the bill. However, IAR anticipates that the bill will be acted upon relatively quickly. If approved, the section of the bill containing the Real Estate License Act is effective December 31, 2009. The bill gives licensees until April 30, 2012 to go through the proficiency exam or coursework requirements. Read IAR's License Law talking points and Q&A to help clear up any misconceptions about the proposal.

A Message From Andy Starck

For almost fifty years Prudential Starck,Realtors® has helped usher new licensees into the exciting world of real estate sales. Long known for our training, we are one of the very few companies that continues to employ a full-time career development person to train and coach new associates. That training is new and unique for the times and vastly different from methods of the past. Further, our two powerful brands, Prudential and Bank of America, and our lead generation capability also help to insure you will have the best possible chance for success. Real estate sales is all about relationships, it's a simple business,but it's not an easy business. You must bring a strong desire to succeed and a high energy level, be trainable and be a self-starter. Anyone can do it, but not everyone will do it. At Prudential Starck, you will increase your odds of carving out a new, successful and rewarding career for yourself."

Message from Your House Academy

No news from Springfield yet about the revised license law ... but it's coming. The salesperson's license category will be eliminated and all agents will need to be either Brokers or Managing Brokers. Now's the time to get your broker license ... before the rush.We're starting a new broker workshop series in October in Arlington Heights during the day and offering a special reduced tuition. I've attached a flyer and a registration form. Please call with questions or to register. Your call is always welcome at your school office.
Vince DePaul Prudential Starck Realtors School Office630-307-3467

FREE REAL ESTATE CAREER SEMINAR IN OCTOBER

The real estate market place is dynamic and always changing. Right now it looks like it's changing for the better. With the encouraging reports in the media recently, and the $8,000.00 first time buyer tax incentive, more and more people are buying and selling homes today, and they're looking for guidance from real estate sales professionals. A career in real estate is potentially more rewarding now than ever before.

Men and women interested in exploring the possibility of starting a career in the real estate industry are invited to a free Real Estate Career Seminar, Tuesday evening October 6, 2009 at 7:00 PM at the Prudential Starck Realtors office, 1218 E. Main Street (Rt.64) in St. Charles.

The seminar is called "A Night of Questions and Answers" and will focus on requirements for licensing, qualifications and exams along with questions about earning potential, training and what it takes to get started.

Refreshments will be served. Reservations are requested and can be made by calling 800-375-7032. For more information call or go to YourHouseAcademy.com.

Consumers Want Real Estate Agents

A few years ago I heard a report from the man who supposedly "brought down the travel agency business" by developing on-line reservations systems for airline tickets, hotel reservations, car rentals, etc. ... all the things that were typically handled by travel agents. He turned his focus to the real estate business and created Zillow with the goal of "bringing down the real estate agency business." Lots of people outside the real estate industry thought that he could do it. People inside the real estate industry knew that it was just more "hog wash."

Real estate professionals know that there's something they provide that the internet can't and people really value that "something."

Consumers want a low price and discounts and rebates make sense in many industries, particularly the retail industry. However, one of the first things a real estate license student learns is the difference between "Real Property" and "Personal Property" and viva la difference. Real estate (real property) is just not sold the same way as personal property (i.e. airline tickets, hotel rooms). So far the internet has done little to sway a big percentage of housing consumers away from brokers.

Today, with the huge number of foreclosures and short sales, people, both buyers and sellers, need agents more than ever just to navigate through all the mine fields that these kinds of properties bring to the game.

Does anyone really think the role of the real estate professional will be diminished? We'll be challenged by the competition the internet brings, which is a good thing. But real estate agents are here to stay and our numbers will increase.

Agents should not be concerned. Those who think there’s some easy way to replace the service we provide are wrong ... at least that's what the consumers have concluded so far. The services we provide are just too valuable to walk away from. Perhaps consumers really want something more than just a low price.

Questions About Appraisal Careers

As residential real estate agents we are not (normally) licensed as appraisers: it's a totally different, though related, field. We use an appraisal approach called the Market Data Approach, when trying to determine the best price at which to list a home: it's our "best guess" as to the price our Seller's home could bring based on what similar homes in the neighborhood have recently sold for. Appraisers typically use three approaches to value and reconcile the values to arrive at their "best guess." While I found doing actual appraisal work pretty boring, several friends have made long and successful careers in the field. If you'd like to learn more go to
http://www.appraisalinstitute.org/ . The Appraisal Institute is located in Chicago.

New Careers Site is Launched

The new Illinois real estate career web site is now up and running. There you will be able to find information on a career with Prudential Starck Realtors®, links and information about our partner real estate school, Your House Academy, web links to sites we've discovered, material on prelicense course work, the State of Illinois exam, the new format for the Illinois broker exam, some general information about working in real estate, and we'll be adding content frequently. You'll find the site under the old URL of prudentcareers.com. Let us know what you think.

Lenders Are Terrible Sellers

It's been said time and again ... As soon as we get rid of this inventory of foreclosed and short sale properties, the market will be back on track. Well, anyone who's been actively involved in the residential sales market lately can easily see where the real problem comes from ... it's the fact that BANKS JUST DON'T KNOW HOW TO BE SELLERS ... They're just awful!

An agent in my office put it this way ... "It's like the Wild West. There are no rules, no common courtesies and nobody cares who gets hurt!"

The lenders are taking weeks and often months to respond to an offer to purchase a foreclosure property ... and much longer if it's a short sale.

The banks are "stacking" offers and seem to be waiting for a better one even though there are good and honest contacts that have already been presented. They just don't seem to be in any hurry ... and why should they be? They got billions of dollars in government bail out money and they really don't care how long this mess hangs around. They don't care about the property and they don't take care of the property ... driving the values ever lower because of their neglect.

As a result of all the nonsense, we even have middle men who, for a fee, will expedite the transaction. Expedite the transaction!? I thought that's what agents and brokers are supposed to be doing.

There's been lots of blame thrown around since this whole mess began ... greedy lenders, dumb buyers, poor economy, and on and on. But right now, the blame is squarely on the lenders. Someone should give them all a good lesson on how to simply be a good seller.

New Careers Web Site

Prudential Starck Realtors® will soon have a new site dedicated to providing information to both new and experienced agents. Obviously, the focus will be on attracting agents to our company, but we sincerely hope the information will prove valuable to all. The site will gather information from various news sources, Realtor® groups, our partner real estate school (Your House Academy), and articles by licensed instructors. It is right now a work in progress, stay tuned.

Simple Math?

A math type question often seen on school finals as well as the State exam, involves calculating a purchase price given a loan amount and down payment percentage. The question may be slightly compounded by stating that the purchaser paid points amounting to some amount without giving the loan figure. Take a question like, "The buyer paid two points totalling $1,400 and had an 80% loan to value ratio. What was the purchase price?" Well, since we know that one point is 1% of the loan amount, we can calculate that the loan was equal to $70,000. Now since the buyer put down 20%, we would want to add that amount to the $70,000. This is done by dividing the loan amount by .80. In other words, if you want to add a percentage to something, divide by the residual. Another typical example is, "A seller tells an agent he wants to gross $100,000 after the brokerage fee. What selling price would be needed?" If the brokerage fee was 6%, you would need to divide $100,000 by .94 to add the .06 to it.

How to Calculate Property Size from Legal - The Easy Way

Suppose you have a legal description reading something like "...the S 1/2 of the NW 1/4 of the S 1/2 of the NE 1/2 ....of Section 17, T12N, R3E..." and the State exam asks you to calculate the size of that piece of property. Well, you DO know that a section has 640 acres, right? So, instead of drawing out the problem just divide backwards, in other words, 640 divided by 2, divided by 2, divided by 4, divided by 2, and you'll have the answer: 20 acres. The only catch is that if the description you get has an "and" in it, you need to calculate two amounts and add them. So, S 1/2 of the NW 1/4 and the S 1/2 of the NE 1/2 would be much larger and amount to 240 acres (640 divided by 2, divided by 2 plus 640 divided by 2 divided by 4).

Capitalization Approach to Value

Several of our students have been having problems understanding the cap rate, or capitalization approach, to estimating value of an income producing property. If you remember that the higher the net income produced by a property (or investment), the higher the value, it follows that a property returning 3% income is worth less that one returning 7%, all other things being equal and not considering radical changes in the properties' economic environment. By researching the sold statistics of income producing properties, an agent can calculate the rate of return investors are after. In other words, if most of the sold properties show a net income of around 5% (not considering cost of financing), then it is probably safe to estimate that the property you're trying to value should use 5%, or perhaps more, as a benchmark for estimated market value. Using the formula of Income (net after expenses) over Rate (in this case .05), estimated value can be calculated. So, if the subject property produced a net income of $35,000 and we know that figure should be around 5% of the value for investors to be interested, we can simply divide income by rate and suggest a market price of $700,000.

YourHouseAcademy.com

Your House Real Estate Academy is now offering online courses and has links on the site to the bookstore and Mr. Real Estate's Illinois Exam review, a series of CD's. They have also posted a series of informative articles designed to give a prospective real estate agent some additional information and advice. Here at Prudential Starck Realtors our Saturday morning course continues to crank out folks ready to sit for the Illinois exam: we had another 3 students pass the course final during the last session. If time is at a premium for you and you're not too far from Palatine give us a call about the workshop.

Prepare Differently for Broker License Exam

In February 2009 the multiple choice testing format for the broker license exam was changed to a scenario, information gathering, and decision making Simulation format. Whatever the reason, we now have an exam that is absolutely different from anything we've seen before and real estate educators are scrambling to figure out how to prepare broker students to pass this new test.

It's obvious that we cannot use the same teaching methods used in the past for the multiple choice test. The abysmal 35% passing rate for the first 3 months proves that. Our current textbooks are not designed for this type of testing. Many of the questions and situations in the new exam and not covered in the standard texts. That being said, the Simulation exam is not necessarily harder than the old multiple choice test: it's just different.

As before, the exam is given in 2 parts; the national portion and the state specific portion. There are still 40 state specific multiple choice questions. The national portion consists of 10 Simulation questions of which 8 are scored. The other 2 are questions that the testing service is evaluating. Each Simulation question consists of 5 to 8 different segments. After presenting the scenario, the information gathering segments will ask , "SELECT AS MANY AS YOU CONSIDER APPROPRIATE." The decision making segments will ask, "CHOOSE ONLY ONE ITEM IN THIS SECTION."

Real Estate agents are taught risk reduction techniques that require agents to ask numerous questions so that all bases are covered. The Simulation exam, however, awards points for proper responses and subtracts points for improper responses. Therefore it's important to know which are best. Fewer are selections are sometimes better than more. There are no math problems on the Simulation portion of the exam. Fifty percent of the Simulations concern residential real estate, 33% commercial simulations and 17% property management. Also, there's no going back. Answers cannot be changed.

The new test does not use branching. Branching is a testing model that brings the student to a different question based on the previous answer. There are 3 free sample Simulations at http://www.goamp.com/repSimTests.aspx. They're only designed, however, to give you an idea of what the exam looks like. They're not to be used as a learning tool. The questions are not Illinois specific and do not truly reflect the type of question you might see. The testing service does sell a sample exam on goamp.com that can be a good learning tool.

For more information contact Vince DePaul at http://www.blogger.com/Vince@YourHouseAcademy.com