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Real estate is a vast field with many exciting opportunities to achieve extraordinary financial goals. Like in most businesses, success in real estate takes diligence, persistence, and luck. Remember, real estate career will require large amounts of your time, subject you to considerable financial risk, force you to engage in the generally unpleasant task of dealing with tenants, government agencies and maybe employees and builders, and saddle you with significant responsibilities. If you still want to do this, set specific goals & start studying real estate. Once you have made an informed decision that you really want a career in real estate in order to achieve sensible financial goals, it's time to narrow your focus and to study the details of the real estate markets.
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In the United States, every State and the District of Columbia require real estate brokers and sales agents to be licensed. Prospective agents must be high school graduates, at least 18 years old, and pass a written test. The examination—more comprehensive for brokers than for agents—includes questions on basic real estate transactions and laws affecting the sale of property. Most States require candidates for the general sales license to complete between 30 and 90 hours of classroom instruction. Those seeking a broker’s license need between 60 and 90 hours of formal training and a specific amount of experience selling real estate, usually 1 to 3 years. Some States waive the experience requirements for the broker’s license for applicants who have a bachelor’s degree in real estate.
State licenses typically must be renewed every 1 or 2 years, usually without having to take an examination. However, many States require continuing education for license renewals. Prospective agents and brokers should contact the real estate licensing commission of the State in which they wish to work in order to verify exact licensing requirements.
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As real estate transactions have become more legally complex, many firms have turned to college graduates to fill positions. A large number of agents and brokers have some college training. College courses in real estate, finance, business administration, statistics, economics, law, and English are helpful. For those who intend to start their own company, business courses such as marketing and accounting are as important as those in real estate or finance.
Personality traits are equally as important as academic background. Brokers look for applicants who possess a pleasant personality, are honest, and present a neat appearance. Maturity, tact, trustworthiness, and enthusiasm for the job are required in order to motivate prospective customers in this highly competitive field. Agents should be well organized, be detail oriented, and have a good memory for names, faces, and business particulars.
Those interested in jobs as real estate agents often begin in their own communities. Their knowledge of local neighborhoods is a clear advantage. Under the direction of an experienced agent, beginners learn the practical aspects of the job, including the use of computers to locate or list available properties and identify sources of financing.
Many firms offer formal training programs for both beginners and experienced agents. Larger firms usually offer more extensive programs than smaller firms. More than a thousand universities, colleges, and junior colleges offer courses in real estate. At some, a student can earn an associate’s or bachelor’s degree with a major in real estate; several offer advanced degrees. Many local real estate associations that are members of the National Association of Realtors sponsor courses covering the fundamentals and legal aspects of the field. Advanced courses in mortgage financing, property development and management, and other subjects also are available through various affiliates of the National Association of Realtors.
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Advancement opportunities for agents may take the form of higher rates of commission. As agents gain knowledge and expertise, they become more efficient in closing a greater number of transactions and increase their earnings. In many large firms, experienced agents can advance to sales manager or general manager. Persons who have received their broker’s license may open their own offices. Others with experience and training in estimating property value may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling.
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Most employers prefer to hire college graduates for property management positions. Entrants with degrees in business administration, accounting, finance, real estate, public administration, or related fields are preferred, but those with degrees in the liberal arts also may qualify. Good speaking, writing, computer, and financial skills, as well as an ability to tactfully deal with people, are essential in all areas of property management.
Many people enter property management as onsite managers of apartment buildings, office complexes, or community associations, or as employees of property management firms or community association management companies. As they acquire experience working under the direction of a property manager, they may advance to positions with greater responsibility at larger properties. Those who excel as onsite managers often transfer to assistant property manager positions in which they can acquire experience handling a broad range of property management responsibilities.
Previous employment as a real estate sales agent may be an asset to onsite managers because it provides experience useful in showing apartments or office space. In the past, those with backgrounds in building maintenance have advanced to onsite manager positions on the strength of their knowledge of building mechanical systems, but this is becoming less common as employers place greater emphasis on administrative, financial, and communication abilities for managerial jobs.
Although many people entering jobs such as assistant property manager do so by having previously gained onsite management experience, employers increasingly hire inexperienced college graduates with bachelors or master’s degrees in business administration, accounting, finance, or real estate for these positions. Assistants work closely with a property manager and learn how to prepare budgets, analyze insurance coverage and risk options, market property to prospective tenants, and collect overdue rent payments. In time, many assistants advance to property manager positions.
The responsibilities and compensation of property, real estate, and community association managers increase as they manage more and larger properties. Most property managers are responsible for several properties at a time. As their careers advance, they gradually are entrusted with larger properties that are more complex to manage. Many specialize in the management of one type of property, such as apartments, office buildings, condominiums, cooperatives, homeowner associations, or retail properties. Managers who excel at marketing properties to tenants may specialize in managing new properties, while those who are particularly knowledgeable about buildings and their mechanical systems might specialize in the management of older properties requiring renovation or more frequent repairs. Some experienced managers open their own property management firms.
Persons most commonly enter real estate asset manager jobs by transferring from positions as property managers or real estate brokers. Real estate asset managers must be good negotiators; adept at persuading and handling people, and good at analyzing data in order to assess the fair market value of property or its development potential. Resourcefulness and creativity in arranging financing are essential for managers who specialize in land development.
Many employers encourage attendance at short-term formal training programs conducted by various professional and trade associations active in the real estate field. Employers send managers to these programs to improve their management skills and expand their knowledge of specialized subjects, such as the operation and maintenance of building mechanical systems, enhancement of property values, insurance and risk management, personnel management, business and real estate law, community association risks and liabilities, tenant relations, communications, and accounting and financial concepts. Managers also participate in these programs to prepare themselves for positions of greater responsibility in property management. The Completion of these programs, related job experience, and a satisfactory score on a written examination may lead to certification, or the formal award of a professional designation, by the sponsoring association. In addition to these qualifications, some associations require their members to adhere to a specific code of ethics. In some States, community association managers must be licensed.
Managers of public housing subsidized by the Federal Government are required to be certified, but many property, real estate, and community association managers, who work with all types of property, choose to earn a professional designation voluntarily because it represents formal recognition of their achievements and status in the occupation. Real estate asset managers who buy or sell property are required to be licensed by the State in which they practice.
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Market Conditions
The price you pay for your home will be affected by prevailing economic (market) conditions. Changes in market conditions can have an immediate and significant effect on property values. For this reason, it's important to be aware of current conditions.
The price of real estate is affected by the supply and demand for credit and real property. The supply of capital is finite. Capital available for lending is shared among government, business, consumer, mortgage and other borrowers. If capital is in relatively short supply, the cost of capital rises. When capital is in relatively great supply, the cost of capital declines.
The supply of money and credit in the economy is regulated by the Federal Reserve Bank. If The Fed makes too little credit available, demand for money can cause interest rates to increase. Borrowing, investing and sales decrease as interest rates rise, which can lead to an economic decline. Alternatively, if there is too much available credit, interest rates can fall. When interest rates are low, price levels for goods and services can increase as people are willing to pay more and more for them, which can potentially lead to inflation. It's The Fed's job to use monetary policy to achieve a growing yet stable economy.
The price you pay for your home can be affected by interest rate levels. Interest rates can change relatively quickly. Conversely, the supply of housing changes slowly. In the short run, the housing supply can be considered fixed.
Consider what can happen in the housing market when interest rates are relatively low. Low interest rates allow a larger number of home buyers (borrowers) to enter the housing market. More buyers competing for a fixed supply of housing can cause the price of housing to increase. This type of market is sometimes referred to as a seller's market . In a seller's market, properties sell quickly, multiple offers are common and property values may be increasing. When interest rates rise, many would-be buyers no longer qualify for mortgages and leave the housing market. This type of market is referred to as a buyer's market. In a buyer's market, property values may be level or decreasing as sellers compete to attract buyers.
As a home buyer, your buying behavior can be influenced by market conditions. If you're in a seller's market, you may feel pressure to act quickly and offer top-dollar for a property. In a buyer's market, you may feel less hurried, more in control of the situation and inclined to offer relatively less for a home.
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