1 / 130

Real Estate Office Administration

Learn how to plan, establish an office, develop administrative systems, and market your real estate brokerage. Set clear goals and attract, manage, and motivate agents effectively.

mmartha
Download Presentation

Real Estate Office Administration

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Real Estate Office Administration Real Estate Brokers’ Program Barbara Grodaes

  2. What to do to Start a Brokerage? • Plan a Real Estate Brokerage • Establish an office • Plan Administrative Systems • Market and Promote the Real Estate Brokerage • Plan for your Financial RecordsDo all this and you have Office Administration at work!

  3. Your Personal Goals • Why do you want to start up a brokerage? • Will developing and managing a brokerage meet your personal and professional needs? • Do you have the necessary skills to attract, manage, train and motivate others? • Do you have the necessary finances to start and maintain a brokerage?

  4. Identify you! • Personal Strengths? • Personal Weaknesses? • Determine what you want to achieve. • Are business and personal goals compatible? • Where are you on your career path? • When do you hope to retire? • How will a brokerage help you fulfill your retirement plans?

  5. Business Plan • Blueprint for planning and building. • Set clear goals and objectives. • Success is based on planning and organization. • Share your goals with your agents and employees. • Plan includes every essential detail that is necessary to consider. • Put the plan on paper.

  6. Make your plan concrete • This plan determines whom you hire, your budget, sources of working capital, the legal structure of your brokerage, office set-up, equipment, financial record system, and marketing plan. • Recording this plan in one document helps you focus and starts you on your way to success.

  7. Categories to address • Business Profile • Financing Needs • Business Financial Statements • Personal Financial Statement • Market Research • Brokerage Specialization • Brokerage Style • Ownership Decisions

  8. Brokerage Specialization • Residential Real Estate • Rural Real Estate • Commercial Real Estate • Property Management Real Estate • Seller Brokerage • Buyer BrokerageAlberta trend is toward increased specialization. Best strategy is to limit to your area of experience.

  9. Brokerage Style • Styles can be adapted to suit your particular needs. • Different styles will have different concerns. • Franchise vs. independent brokerage have various pros and cons for each. • Do a cost/benefit analysis when considering the several different styles.

  10. Ownership Decisions • Sole Proprietorship • Partnership • Corporation • Start New Brokerage or Buy an Existing OneThere are advantages and disadvantages for each form of ownership and you need to consider all perspectives.

  11. Evaluate Compensation Packages • Effective packages accomplish 3 things: • Attract qualified applicants resulting in increased productivity. • Retain good employees. • Motivate employees to perform at higher levels of production or sales.

  12. Examples of Compensation • Straight Salary • Straight Commission • Combination Salary and Commission • Bonuses • Commission Plans • Related to sales volume • Sliding commission • Shared commission • Monthly Fee • Transaction Fee

  13. Choose a Visual Identity • There are many benefits of brand-name awareness. • Choose special colours, a logo, mascot, and slogan. • Adopt a visual identity to represent your brokerage in the community. • Carefully choose this identity and be consistent to attract attention over the long term to become linked with your brokerage in the public eye.

  14. Assessing Success • Your brokerage’s goals are the benchmarks by which you can measure your success. • Choose goals that can be measured. • Underlying goals may direct the day-to-day activities of the brokerage. • Adapt to changing circumstances. • Create a Plan B. • Review goals regularly.

  15. Mission Statement • A concise declaration of the brokerage’s overall purpose and direction. • Should embody and promote the corporate values of the organization. • Provides a central reference point for the development of specific operating objectives. • Should show what your goals are and how you plan to achieve them.

  16. Recruiting Agents • Each brokerage has something unique to provide agents with the edge to compete successfully. • Current trend is one-stop shopping. • Brokerages are distinguished from each other in 4 ways: • Physical environment • Management • Image and marketing tools • Compensation.

  17. Recruiting, Recruiting • Each brokerage develops its own personality based on its plan. • The business plan helps define your hiring criteria. • Hire the right people from the beginning for your reputation. • Do what is necessary to keep them. • Agents will stay with a brokerage with respect, recognition and compensation.

  18. On-going Recruitment • Assume that 10 to 20% of people will leave every year. • Plan to recruit on an ongoing basis and allocate a monthly budget for it. • Recruiting is as important to a broker as prospecting is to an agent. • Achieve a balance between how many agents are needed to maintain the budget and how many the brokerage can afford to carry.

  19. Financial Projections • Face-to-face research with bankers, loans officers, financial planners, and accountants. • Set up a good accounting system from the beginning. • Use proper budgeting and forecasting techniques yearly with a review every 6 months. • Compare budget to actual every month for control/correctives.

  20. Contingency Plans • Minimize negative cash flow by cutting expenses, increasing revenue or both. • Plan for what to do if things do not work out the way you intend. • This will lessen stress resulting from unforeseen problems. • Prepare for unforeseen financial crises.

  21. Financial Reporting Systems • Success depends on accurate and timely accounting and management. • Choose an accountant and an ongoing financial reporting system that is most useful to you. • Legislation requires some reporting. • You may choose other reports suited to your needs and interests. • Do monthly reports, quarterly reports and annual reports.

  22. Sources of Working Capital • Sources of funding include: • Personal financial resources • Institutional financing • Outside sources such as partners, investors, family shares, co-operatives and syndicates. • Any outside sources of funds will involve personal guarantees and caveats.

  23. Relationships • The greatest asset to your relationship with a financial institution is “trust”. • Get to know what credit rating and financial information the institution prefers and structure your business plan around that. • Put full disclosure of financial status and credit in your business plan. • Plan ahead.

  24. Lending Options • Research as many as 5 financial institutions and pursue further detail with 3 (detailed investigations). • The strength of your business plan and your credit rating have a major impact on the decisions of financial institutions. • Some institutions are lenient, some may have seasonal quotas, some specific lending ratios – find out!

  25. Establish a Brokerage Office • Understand how the Real Estate Act, administered by RECA, determines the legal requirements of a brokerage (provides framework). • Location, location, location! • Determine the equipment and furniture needs of your brokerage. • Should you lease or own? • Periodic review for continuance.

  26. Location, Location, Location • Most applicable when choosing the location of your office. • Type of business and cost factors govern the location best suited. • Costs vary with location and type of structure. • Consider the amount of space you will need. • Consider the ease of access and parking.

  27. Office Space • Review all your options before you decide whether to lease or to own. • There are many issues to consider for either owning or leasing. • Whatever you decide, you will likely have to make improvements to the space for the right look and feel. • You will need equipment and furniture.

  28. “Need to Haves” • Desks, chairs, filing cabinets, round table • Photocopier • Fax machine(s) • Computer equipment and software • Telephone system • Paging systemCompare your options of cost for owning vs. leasing equipment.

  29. Financial Records • Accounting and financial management are among the most important areas because they form the foundation on which the business structure stands. • Set up: • Assess the needs of the system. • Research available systems/methods. • Select/implement a system. • Spend time considering your needs.

  30. Accounting Records • Reasons for Accounting Records: • Government compliance • Internal monitoring • Requirements of the Real Estate Act • Getting started: • Decide what form the business will be. • Set a year-end (unincorporated 12/31). • Assess software packages. • Register the business. • Find Accountant that is good match.

  31. Elements of a Good System • Be simple. • Provides accurate information. • Is timely. • Provides a proper audit trail. • Meets regulatory requirements. • Provides for retention of records. • Get a good accounting system, set it up properly and run and maintain it.

  32. Basic Accounting Cycle • After chart of accounts established: • Source documents (originals) • Entered into journals (posting) • Journal totals transferred to G/Ledger Accounts (final posting) • Trial Balance (listing of final accounts – starting point for accountants’ work) • Financial Statements

  33. Financial Statements • 3 basic statements: • Income Statement – shows all revenues and expenses for a specific time period (profit/loss). • Balance Sheet – photograph of assets and liabilities at a specific date (Assets=Liabilities+Equity). • Cash Flow Statement – reports cash received and spent – statement reconciles the Income Statement. • The idea is to obtain timely and accurate information that is useful in managing the business.

  34. Other Accounting Topics • Income Tax – reporting income for tax purposes. • GST – a “flow through” tax for business. • Real Estate Trust Accounting – brokerage MUST have at least 2 accounts (Trust/General). • Brokerage assumes great responsibility to handle trust monies.

  35. Trust Deposits/Disbursements • All money received in trust MUST be deposited within 2 banking days. • Funds can be disbursed ONLY in accordance with the terms of the trust. 4 possible permissions: • Amount of Commission • Disbursement to seller’s lawyer • Return of the Deposit to the Buyers • Payments to other brokerages. • Withdrawals made by cheque or bank transfers under signature.

  36. Trust Accounts • The trust control account and subsidiary trust accounts MUST always balance. • Bank Reconciliation statement MUST be prepared within 30 days of the prior month’s bank statement and MUST be signed and dated. • Postings are made to trust control account and also to an individual (subsidiary) ledger sheet.

  37. Real Estate General Account • The general bank account reflects ALL banking activities of the brokerage EXCEPT those in trust. • General account uses ‘cash receipt journal’ and the ‘cash disbursement journal’. These two journals record ALL activities of the account. • Monthly reconciliation is imperative.

  38. Trade Record Sheet • Every trade MUST have a fully completed trade record sheet. • Trade record sheet MUST be completed AS SOON AS a purchase contract is accepted / deposit made. • Provides the following source info: • Commissions • Trust account – details re deposit • Buyer’s brokerage – details of how much should be collected/received.

  39. Monitoring Accounting System • Monthly basis, monitor: • Bank Reconciliations noting outstanding deposits and outstanding cheques • Internally generated financials • Detailed listings of receivables and payables • Current budget vs. actual figures. • An effective and efficient system is VITAL. Continually review!

  40. Noted Definitions • Current Asset – something you sell and get money for it. • Fixed Asset – something required to make your operation happen. • Fixed Expenses – happens every month regardless of a sale. • Variable Expenses – changes based on productivity.

  41. NEED TO KNOW DR CR B/S ASSETS LIABILITIES I/S EXPENSE REVENUE

  42. COOL THING TO KNOW 70/30 E.G. – BREAK EVEN FORMULA PROFIT - $ 60,000 FIXED - $ 50,000 14% $110,000 VARIABLE - 16% of gross income14% x gross income = $110,000

  43. Administrative Systems • Develop office operations manual. • Develop office policy and procedures manual. • These ensure each agent is aware of the policies required to remain active within the brokerage. • Implementing effective policies will help the office maintain and stay consistent.

  44. Common Sections for Inclusion • Welcome, Mission Statement • Real Estate Act and the Rules • Code of Ethics, Code of Conduct • Brokerage Policies & Procedures • Office Facilities • Administrative Support • Office Meetings and/or Training • Working with Principals • Advertising and Marketing material

  45. Common Sections, continued… • Expenses • Professional Conduct • Commissions, Remuneration, etc. • Confidentiality • Insurance • Policies, including Keys and Lock Box, Legal Action & Representation, Office Co-operation and Referrals, Personal Selling and/or Buying

  46. Common Sections, continued… • Transaction Documents • Trust Account Deposits Policies • Unlicensed Assistants • Awards and Contests • Vacation Time • Resignations / Terminations • NOTE: Property Management Office Operations Manual contains a few others, see page 66

  47. Performance Appraisals • Schedule regular ongoing performance appraisals to ensure policies and procedures are followed ethically and that agents and staff meet their productivity requirements. • Regularly schedule appraisals to help improve weaknesses and develop strengths. • Agent/Associate Broker appraisals to ensure compliance with legislated standards and office policies.

  48. Labour Law • You must comply with relevant labour law affecting agents and support staff. • Labour laws do not affect anyone deemed to be an independent contractor (usually agent). • You must always comply with current regulations.

  49. Commissions paid to Corporation • The following must be kept in agent personnel file: • A current GST number • A letter stating to which company the agent wishes to be paid • A copy of the Certificate of Incorporation • The documents of incorporation, especially the shareholders and the percentage of the company that they own (at least 50%).

  50. Criteria for Support Staff • Labour laws do not affect contract labour when: • Less than 80% of income comes from the company. • Provides own equipment on which to work. • Chooses own work hours instead of the company dictating. • All other employees must be paid as either salaries or paid-hourly and CPP, EI and income tax is deducted.

More Related