Sunday, February 27, 2011

Chapter 6 Questions

The Real Estate Market establishes prices to:

A. Inform real estate investment decisions
B. Stimulate or discourage real estate development
C. Allocate space among competing land uses and establish land patterns
D. All of the above

ANSWER - D (page 124)

A private corporation created by an act of Congress to stimulate and maintain the residential secondary mortgage market is known as

A. Government Subsidized Entity
B. Government Sponsored Enterprise
C. Government Sponsored Entity
D. Governing Secondary Mortgage Market

ANSWER – B (page 136)

True/False – Perfect Knowledge is NOT a characteristic of a perfectly competitive market.
ANSWER – False (page 127)

True/False – The use by which the market prices the property is the highest and best use.
ANSWER – True (page 131)

True/False – Market inefficiencies and imperfections cause frictions that require professional interventions such as appraisers.
ANSWER – True (page 131)

True/False – The secondary mortgage market is where mortgages are created between lenders and borrowers.
ANSWER – False (page 135)

True/False – Maturity Mismatch typically occurs in periods of unanticipated inflation when income adjustments fail to keep up with the rising cost of borrowing.
ANSWER – True (page 139)

Multiple Choice/True False Questions

Thanks for posting the multiple choice and true-false questions as we cover the material.  This is must better than waiting until the last minute before the exam.  Good work posters.

Thursday, February 24, 2011

Chapter 6 Questions

Chapter #6 Multiple Choice and True/False Questions
By: Kent Sakamoto

1. A measure of how much information a market has to transmit and how quickly and cheaply it transmits the available information, is an example of

A) Extraordinary Returns
B) Efficiency (p. 124)
C) Positive Supply
D) Inverse Demand

2. Real estate and perfectly competitive markets include which characteristic(s)?

A) Critical Mass of Market Participants
B) Free Market
C) Product and Input Mobility
D) All of the above (p. 127)

3. Real estate markets establish prices to:

A) Inform Real Estate Investment Decisions
B) Stimulate Real Estate development
C) Allocate Space among competing Land Uses
D) Establish Land Use Patterns
E) All of the above (p. 124)

4. Qualities that give real estate value in the space market are called economic fundamentals?


True (p.132)

5. An investment challenge that arises when long-term investments are funded by short-term liabilities is called disintermediation?


False (p. 139) Maturity Mismatch

6. Subprime market is the name for that market serving residential mortgage borrowers who do not qualify for standard prime mortgages?


True (p.140)

7. Appraisers are hired to estimate the calue of a home when it is being refinanced or purchased with borrowed capital?


True (p. 148)

8. The basic idea of a mortgage securitization is to bring together a large group of similar mortgages, and use this pool of mortgages as collateral against various types of securities that are then sold to investors.


True (p. 142)

Wednesday, February 23, 2011

Interview with Broker

Interview with Melba Baquero, Broker with Platinum Funding
1.) What is one major reason why you enjoy your line of work?
A: I love working with numbers. My brain seems to look at everything as a puzzle, like having to match income with bank guidelines.
2.) How long have you been working as a broker?
A: I started about 8 years ago.
3.) What sparked your interest to pursue a career in this field of work?
A: The thing that I really wanted was a flexible schedule that I was able to make really good money.
4.) What measures did you take to pursue this line of work?
A: I did a little research on the field and asked a relative who was working as a loan officer if I could spend some time working with him on his files then I shadowed him for a little
5.) How did you go about landing your first job?
A: I was taking a call for my cousin and it ended up being the broker, he spoke to for a bit then asked me if I was interested in working with the company so I started off as a loan officer.
6.) What were you doing to generate leads?
A: I started off like most other folks by working on some loans with family then I started meeting more people and then I started working with those individuals. I also connected with a realtor.
7.) How did the downfall of the economy affect business in the valley?
A: I believe it weeded out the people who should not have been in the business.
8.) During that time what did you do to generate leads?
A: I just tried to go back and help any individuals get out of bad loans they were put into.
9.) Were you able to find other methods to keep existing clients?
A: yes, I got into doing loan modifications for people I knew and had done business with in the past.
10.) What do you believe the downfall of the market was due to?
A: I believe it was due to the lack of regulations and corporate greed. There were a lot of people who were not following the laws and getting away with it.
11.) In your opinion where do you believe the real estate market is headed in the next 5 years?
A: I think it’s going to be a slow crawl back up to the top, it will be better, but never like it was.
12.) Have you worked in any other area than loans and brokerage?
A: No, I enjoy this area of the field and wouldn’t do anything else
13.) What do you use to stay informed about the market?
A: through emails my corporate office sends out. Now with the new MLS guidelines we have to have training and tests every year.
14.) What kind of projects are you currently working on?
A: I am just working on residential properties. I am also looking into other cities down south like Temecula, CA.
15.) In this business what do you think are important traits or skills to have?
A: Networking is very crucial in this line of work, it is a people and business and communication is key in being successful in this career.

Chapter 6

1) Additional demand causes a shift of the demand curve to the right.

True / False

2) As with rising prices supply increases, the supply curve has always a downgrade slope.

True / False

3) With increasing supply the equilibrium point shifts to the right and the price is decreasing.

True / False

4) The unique location profile of a real estate site including the quality of its exposure and accessibility to neighboring activities and infrastructure is called situs.

True / False

5) Mortgages are created between lenders and borrowers on the primary mortgage market.

True / False

6) A private corporation created by an act of Congress to stimulate and maintain the residential secondary market.

a) Government owned enterprise (GOE)

b) Government sponsored enterprise (GSE)

c) Government controlled enterprise (GCO)

d) Government leaded enterprise (GLE)

7) What of the following is not one of the new residential mortgage business model?

a) Find someone willing to loan you lots of money.

b) Use this money to invest in real estate

c) Sell these new mortgage loans on the secondary mortgage market.

d) Use the proceeds from selling mortgages to pay off your big loan.

8) The name for that market serving residential mortgage borrowers who do not qualify for standard hence prime mortgages.

a) Money market

b) Primary market

c) Subprime market

d) Stock market


True, False, False, False, False, b), b), c)

Chapter 6 Multiple Choice Questions/T-F Questions

Chapter 6

Multiple Choice Questions:

An asset whose value is derived from the value of underlying assets that back it is called what?

a) Securities

b) Derivates

c) MBS


What term describes how quickly transaction prices within a market reflect relevant market information?

a) Effectiveness

b) Derivates

c) Efficiency

d) Situs

Which of the following is/are characteristics of a competitive market?

a) Perfect Knowledge

b) Critical Mass of Market Participants

c) Homogenous Product

d) all of the above

True/False Questions:

The product of every seller is identical to the product of every other seller is called heterogeneous.

- True

- False

The process of creating mortgage-backed securities is called mortgage securitization.

- True

- False

The equilibrium market price shows where supply and demand are not in balance.

- True

- False

The unique locational profile of a real estate site including the quality of its exposure and accessibility to neighboring activities and infrastructure is called Situs.

- True

- False

MBS are derivate assets.

- True

- False


b) c) d)

False, True, False, True, True

Chapter 6 Multiple Choice and True/False Questions

Multiple Choice

1) Which of these is not part of the new residential business model?
a) Use this money to buy and lease real estate
b) Use the proceeds from selling mortgages to pay off loan
c) Find someone willing to loan you lots of money
d) Use this money to make loans to people wanting to buy homes

2) A perfectly competitive market must contain all of the following except:
a) Free market
b) Equilibrium market price
c) Product and input mobility
d) Homogenous product

3) Who was most at fault for the Liquidity Crisis of 2008?
a) Loan originators
b) The Clintion Administration
c) The rating agencies
d) Wall Street

1) A market that operates outside of governmental control is known as a free market. T/F

2) The supply/demand conditions and property characteristics including physical qualities, capital improvements and situs that create real estate value in the market for space is known as product and input mobility. T/F

3) A private corporation created by an act of congress to stimulate and maintain the residential secondary mortgage market is known as a government sponsored enterprise (GSE). T/F

4) The popular name for that market serving residential mortgage borrowers who don't qualify for prime mortgages is known as the mortgage market. T/F

5) A derivative asset whose value is supported by a pool of mortgages and whose cash flow is derived from the debt service received from the mortgage pool. T/F

1) a
2) b
3) d

1) True
2) False, Economic Fundamentals
3) True
4) False, Sub-prime market
5) True

Informational Interview

This informational interview took place on Monday, February 21, 2011. I had the distinct pleasure of interviewing my aunt, Ruby Hardamon, who is a realtor and is currently employed with Guarantee Real Estate in their Fort Washington office. She was gracious enough to share her insights about the real estate industry along with how she got involved in the field. I would like to thank her for her generosity and time.

Q. How did you get started in the real estate field?

A. My real estate career actually began when I was 8 years old. My desire to live in a beautiful environment and the vacancy of a neighboring home was the beginning of my real estate career. I did make myself aquainted with the owner and facilitated the introduction of my father to him. I completed my first real estate transaction by delivering the money and receipt to my father. It was more than 30 years later that I attended real estate school. I did not take the test at that time, because I had a loss in my family that was devastating and I could not concentrate. I focused on my current business, which was a beauty college. It would be 25+ years before I returned to what was really my first love, real estate.

Q. What kind of background is best for a career in real estate?

A. Business, marketing, contract writing, and strong people skills are some of the most important areas to focus on.

Q. What are the major responsibilities associated with your career?

A. The major responsibility connected to real estate is selling real estate. No matter how educated you are, the bottom-line is sales. You are responsible for taking a client from either selling or buying a home and facilitating or helping them to get through the process. Which can include introducing them to a lender, preparing contracts, ordering home inspections, pest reports, roof certification and interfacing with title and escrow officers. The key word here is CLOSE.

Q. What is the most rewarding aspect of your career?

A. Helping other people realize their dream of home ownership is the most rewarding thing for me.

Q. What obligations does your work put on you outside of the actual job? What are some lifestyle considerations for this type of career?

A. The main obligation is making sure my client is protected and happy with the home that they choose. You have to get involved with every client personally, because in order to help them, you have to get to know them. You are essentially involved in their personal business and finances.

Q. Would you choose this career again?

A. Yes, only sooner than I did.

Q. What is a "typical" day like for you?

A. A typical day for me involves checking my email, making necessary phone calls to clients, banks, lenders, title companies, appraisers or showing and/or emailing properties to potential buyers and preparing offers or listing presentations.

Q. What kind of individual is best suited for a career in real estate?

A. The position of real estate agent requires that you're able to get along with all ethnic groups comfortably, be well-groomed and have excellent writing and speaking skills. You have to be very patient but yet in control. You have to like people as well.

Q. What is the future outlook for this career? What are the areas of potential growth and decline? How do you see jobs changing in the future?

A. The future outlook for real estate is excellent. The areas for potential growth investment right now, because property is very cheap. It is also a great time to buy. I believe the decline of the market based on statistics is almost over. I see new opportunities for job openings as well.

Informational Interview

I interviewed my Aunt Marianne Lane who covers the Blacksburg, Virginia area. As you will find out she works for Wells Fargo and is a home mortgage consultant. My reasoning for interviewing my Aunt was to get to know a little more about what she does and to understand a bit more about the mortgaging business. I always knew the basic concept of home mortgaging but knowing just the basic always left me with more questions than answers I hope this helps others to understand it a bit more also.
1. What is the name of the company that you are currently employed with?
“Wells Fargo”
2. What is your job title?
“Home Mortgage Consultant”
3. What is the favorite part of your job?
“My favorite part is when all the work is done and the client gets the keys to the home and has a smile on their face.”
4. How did you get started in this industry, what made you want to do it?
“I wanted to have a job where I could utilize my analytical skills and also my social skills. With this work I am able to do both every day all day. I had a few friends who were mortgage loan officers and they both encouraged me to make the move.”
5. How difficult was it when you first started?
“It was very difficult. I had to learn a whole new industry, a new job and generate my own business.”
6. Do you think real estate is a people business?
“Without a doubt, you must love to deal with all different kinds and levels of people to gain success in any position related to real estate. Financing a home is an area where most people have little or no knowledge so it often triggers high-emotion.”
7. What is the most difficult part of your job?
“The most difficult part of my job is time management. It is easy to lose yourself in a task when there are quite a few other and different types of tasks that need to be done to be successful.”
8. Did you go to college with the intention of going into this business or did you happen into it?
“My college major was Journalism.”
9. If you happened into it than how?
“I knew people who were working as mortgage loan officers and they felt I had the skill set needed for the job and encouraged me at the beginning and along the way.”
10. What advice would you give to someone who wants to break into the industry?
“Find a good mentor who can help them avoids the common mistakes, and have perseverance- it often takes a while to get your momentum.”
11. Does this job spill into your personal life at all or is it easy to distinguish between work and personal life?
“My work is not a nine-to-five job. When my children were little this was an advantage because I could participate in their school activities but, there are many working evenings and weekends, and my work cell phone rings at almost any given time with a potential lead or a client with a question.”
As you can tell this is not any easy job but also is a rewarding job you need to be a people person to do this job since you are primarily dealing with the client who is trying to get a home which is a high emotion activity. However, with this job your work will spill into your personal life and you have to be willing to accept that. I learned a lot about what my Aunt does and I hope you do to. Thank you for taking the time to do this for me Aunt Marianne.

Informational Interview with Mr. Harlan Anderson

David Mueller-Flores
FIN 180 - MW @ 2
Dr. Hansz

The following is an informational interview that took place on February 16, 2011 at Realty World Sweeney Anderson. The sole owner, Mr. Harlan Anderson, was gracious enough to allow me to pick his brain for valuable information regarding his company and the real estate industry as well as valuable information for any student studying real estate with interest in joining the industry. Realty World Sweeney Anderson is located in Hanford, California and primarily provides services in Kings County. Over the course of the interview Mr. Anderson describes his company, his path to becoming a broker, recommendations for students interested in becoming a real estate salesperson/broker, as well as how the real estate industry really is a “people’s business.” I would like to thank Mr. Anderson for his time and the valuable information he was willing to provide.

Q: What is Realty Worlds operational territory and do you deal in commercial or residential real estate or a combination?

A: Realty World is a franchise that has had various levels of dominance, success, and then going down and coming back up again. Right now, there are actually two Realty World entities in the world, if you will. One of them and it is completely separate from the other one is the one I’m in and it is Realty World of Northern California and Northern Nevada. It is a franchise with all of the training and other benefits that you get from a franchise. The Northern California and Northern Nevada extends from just about here in Kings County as the southern tip to the Oregon border to the ocean on into Nevada, meaning Reno, Sparks, Carson City, that part of Nevada. The rest of the world is Realty World America. In fact, I was just recently off Florida on a cruise and in fact I saw a Realty World office in Fort Lauderdale, Florida so it is out there quite a little bit. As far as the second part of the question the commercial or residential; we do commercial but we specialists in residential so I’d say 90 – 95% of the transactions we facilitate are in residential real estate. Mostly single family, and then also on into the duplexes, triplexes, even up into the apartment complexes.

Q: What was your educational and work experience path to your career as a real estate broker?

A: Ok, after high school I attended the University of Minnesota; and went through four years and graduated in 1968 couldn’t make up my mind so I ended up with a double major in Biology and Psychology. Just due to circumstances, especially the Vietnam War and getting drafted and those kinds of things that a lot of people were facing; as soon as I graduated I taught junior and senior high school up in northern Minnesota for a year. Then, I spent four years in the Air Force. Got out of the Air Force and spent about 14 years in various aspects of both juvenile and adult corrections. How did I get into this end of things becoming a real estate broker? Well, I won’t get too far into it right now but I got burnt out frankly on corrections I couldn’t put my finger on anything that I had for sure accomplished in that field. You got a paycheck so you knew you knew you were doing something but you couldn’t put your finger on I manufactured this widget, I facilitated this transaction, I did that. I just got burnt out on the corrections and just ended up in Real Estate for that reason. It is very rewarding you do more than just get a paycheck you also get a ton of job satisfaction.

Q: What attracted you to real estate as a career?

A: Well I touched on it in a response to the last question but I had been working here in California for about a year in Child Protective Services for Tulare County and I was getting very frustrated with that I think it was just an extension of the burn out that I was experiencing with corrections. I was just thinking on the way home from work that wouldn’t it be nice, I wonder if there is a profession out there where you work with people who actually wanted your services not where your services were hoisted on people but where people actually wanted to work with you in your profession because that wasn’t the way it was with corrections. Corrections it’s a service that is, well, they did it to themselves but again your services were mandated by the courts and real estate has been the exact opposite of that, you work with people who very much want your services and it is very rewarding in that regard.

Q: What do you enjoy most about the real estate industry?

A: Working with people on all levels. I do very little listing and selling myself anymore. In fact, since I am the sole owner of the company what I pretty much concentrate on is supporting my agents with what they need. It’s really an enjoyable field in that you know that you’re doing something for somebody and they are appreciating it whether they are another one of my agents or they are a buyer or a seller.

Q: Which aspects of real estate have you found to be the most and least rewarding and why?

A: It tends to be much more positive reward than negative but on occasion and maybe we tend to forget, as real estate brokers and agents, how stressful the purchase or sale of a property can be for someone. Lots of times the least rewarding part of it is when clients misdirect their frustrations and stress and start to shoot the messenger, if you will; start to get blamed for things that you have absolutely no way of controlling. You always do your best and the longer you’ve been in the field and the longer you’ve been doing it the more things you learn about how to avoid pitfalls in various aspects of transactions but some things can either really happen or are perceived to have happened by a client and they just splatter on you and sometimes that gets to be very unrewarding. Again, you have to realize that a real estate transaction is possibly of the largest financial commitment a person will ever make in their whole life is buying or selling their own home and some people get stressed and splatter on people. Most of the time it doesn’t happen but when it does its frustrating and it keeps you awake at nights.

Q: As a result of the current recession and the housing market decline; what has your company Realty World done to insure its survival during this rough time?

A: Realty World is, I am one of 360 companies in northern California northern Nevada, so let’s talk specifically about my company, which is Realty World Sweeney Anderson. What have we done to ensure our survival? Well, we tried to get a little bit more creative in attracting clients to us and our product and what we do as opposed to probably our biggest competition is other franchisees from other companies, such as Century 21 or Coldwell Banker. A lot of what we do is so personal that our success hinges on our individual agents the people that they know and the people they work with on an individual basis all adds up to having the company itself be a success or surviving even if you will. It’s such an individual, hands on, people to person to person, people to people relationship that has to be formed during a transaction that everything is just going to depend on how an agent handles the tough times that are always going to happen in this field.

Q: What do you believe needs to happen in order for the residential housing market to return to how it used to be?

A: Well, Looking back you can certainly see as a real estate person that is full time in real estate you can almost look back five to eight years ago and could’ve almost predicted that this is ultimately what would happen. The government, quasi-government entities out there, Fannie Mae and Freddie Mac, softened and softened, and loosened and loosened requirements to get into owning property versus renting. That they were almost if you could fog a mirror and had a pulse you would be able to get into a home. They made it so easy that they almost would pay you to get into a home. There was a period of time back when, five to eight years ago, where out of pocket you could quite easily buy a home out of pocket for less money that to get into that same house as a rental. Meaning, to rent it you’d have to pay your first full month’s rent and probably a security deposit equal to about that amount. So that if you were going to get into a house that was renting for 1200, you’d probably need about 2500 total to get into that rental. You could actually get into a house by that same property with less money out of pocket than to get into a rental. It just made it so easy; the government made it so easy. How do we get out of this? Well, I’m just going to make a blanket statement. The government has to get the devil out and just let things happen the way free enterprise and capitalism would dictate. And we’re going to be fine. Quit trying to tell us and force things and just let things happen and we’ll adjust to them.

Q: Is there any particular region, state, or neighborhood that has caught your interest in possibly in doing business there and why?

A: Well, I’m going to guess that the way to respond to this question is that first of all every person who is in real estate is licensed to do real estate in one particular state. I’m guessing that people that maybe live on a border of a state might have gotten their license in both North Dakota and South Dakota, for instance. If they are real close to the border and would be doing business in both areas they’d go through the licensing process in both states. But there is no reciprocity between states, so therefore even if I were interested in doing real estate in Wyoming, I couldn’t without starting all over and getting a real estate license of some form in that area. I have enjoyed working in Kings County, California in real estate during the ups and downs, hills, valleys, cliffs, everything; in that, our prices have tended to have fallen off the edge of the cliff but not as bad as some of our neighboring communities; even the bigger communities. In fact, our prices tend to be higher, more solid than Fresno, Clovis, or Visalia, I don’t know why. We have tended to not drop as much as some of those other areas and in fact if you could manufacture the same house in the same neighborhood in each one of these communities. Hanford, Lemoore versus Fresno versus Clovis versus Visalia, the house in Hanford, the house in Kings County would be a little higher.

Q: What is currently the extent of the region in which your company, Realty World, is involved and what aspects of this area do you like or dislike?

A: Realty World in general, northern California northern Nevada, I’ve already said what part of the world is but Realty World Sweeney Anderson tends to be Kings County, stressing Hanford, Armona, Lemoore, we do a lot of business in Corcoran we do some business in Avenal. We also extend beyond county lines in some areas, and this Realty World Sweeney Anderson now just this office, we tend to go up into Laton, we tend to go on up into Fresno County at Riverdale, we do some business in Coalinga, but beyond that we don’t do a whole lot. We end up in the neighboring communities in Visalia and Tulare once in a great while; but mostly Kings County.

Q: What is the level of education you recommend for a student who is interested in Real Estate as a career?

A: To get to where I would like a person to be, in fact there are quite a few people in here with bachelor degrees, not necessarily bachelor degrees in business/real estate. But bachelor degrees in everything else you can think of. Mine again I said it earlier is Biology and Psychology were my two areas in college. I like to have a bachelor’s degree, I really do, in terms of people I like to train and work with and bring along in the field of Real Estate.

Q: Based on your personal experience is there a particular field of study that you feel would be advantageous for the student to focus on?

A: I know that in this area, Fresno state has bachelor’s maybe even Master’s degrees in business with emphasis in real estate. I’ve known a person or two that I think when they have gone through that and gotten their bachelor degrees in business/real estate. That you can’t do any better than that in terms of focusing on this field and I think it probably gives you a good real basic understanding of everything you’re going to eventually need to know. Now, having said that, the business aspect of it. Another way of approaching real estate since it is a contact sport, you have to have contacts with other people and be able to communicate and form relationships with other people is in the social sciences would be a second place, sociology and psychology, those kinds of things.

Q: What do you feel are key characteristics and attributes of a successful real estate salesperson/broker?

A: The personality characteristics, people either have got to not be shy around people they’re just meeting. In other words, be able to form quick relationships and kind of facilitate the formation of a relationship. Shy people tend to have to really work at that. Other people who really enjoy meeting new people and providing whatever services to those new people are going to be a step ahead. I don’t care how well you know the field of real estate. If you don’t know people and you don’t know what it’s going to take or you’re not comfortable forming relationships with new people, you’re going to be the smartest person on the island. But the trouble is you’re going to be the only person on the island too. So it doesn’t help to know all this stuff really, really well without knowing how to form relationships and develop a relationship, trusting back and forth between yourself and a wide variety of different personality types just out there in the community. So you just got to work with a lot of people that’s the key to being successful in real estate. On the flip side of that is you got to know a lot of stuff so you have a lot to offer those people. Somebody brand new in real estate doesn’t have nearly as much to offer because they don’t have the body of knowledge in their heads that they can draw on to do a really good job for people. However, a new person sometimes is the very best person because they don’t have forty different families they’re dealing with right now. Their new client may be the only client they have and they can spend eight hours a day, seven days a week just on helping that one client. It kind of balances out but to be successful ultimately you got to work with a lot of people and form a lot of relationships and have excellent people skills. Even more important than what you know is effectively who you know.

Q: What expectations do you have of your staff?

A: What I expect from my staff is something that we tend to do when we are initially meeting someone and we are disclosing our relationship and our role with them in this transaction. And that is that we are to put that client’s best interests ahead of everyone else’s including our own. So if something would be good for me, it’s going to maybe make me a lot of money versus going to make you a lot of money as the client. I’m going to forget about what’s going to happen with my pocket book ultimately that is the way for long term success in the business. We find ourselves on occasion where we talk someone out of selling their house because we just say in this market, under these conditions, keep it. Wait and see what the market does over the next two to three years. And the way to keep it is you can rent it out for a period of time. In other words, give people their alternatives, all of the alternatives we’re going to be giving them hopefully are going to be in the best interest of the client. We have a fiduciary duty to our clients and basically that’s it. Their best interest within the bounds of fairness and honesty. But their best interest ahead of everyone’s best interest including our own.

Q: What is the typical career path of someone who is joining the real estate industry?

A: There is none. There is no typical career path really because I’ve seen everyone from someone and she was a good agent; she got married real young, back in Arkansas or somewhere, and had never graduated from high school. I think she just barely had a G.E.D. She developed a very good way of dealing with people being a bartender. By the time she hit the real estate industry she was probably about 35 and was just an excellent counselor, which you learn to be as a bartender. So weird, but she turned into being a very good real estate agent and you can just imagine everything from there on up to someone with a master’s degree or whatever. Usually in social sciences make very good real estate agents. The best real estate agent in the county in the last five years was a person whose background was in music but excellent, excellent people skills, very intelligent, and everything just worked for her.

Q: What kind of strategy would you recommend for someone interested in joining the real estate industry and searching for a job?

A: Well, First of all, typically a person who gets their license and wants to get into real estate. In Kings County, anyway, and probably throughout California and maybe even beyond you’re going to have no problem finding a broker who wants to take you on as a potential agent. It isn’t going to be like the 500 people lined up outside a store with their job applications and the store is filling three positions. It’s not going to be like that at all you’re going to be in demand so there won’t be a great deal of searching for the job. You’re probably going to be wanting to search for the broker and/or the company that best suites you rather than thinking that you’re going to have to wander around for six months interviewing, it’s just not going to be that way. The strategy, what you need to do is you need to get your license. The license is you have to have three courses. And you’re probably well aware of this/ you have to have real estate principles successfully completed and passed that, real estate practice successfully completed and passed that, and then one other broker course, which can be about another ten different courses out there that all satisfy the requirement. Then, you have to study for and pass the state exam. That is the tough part, it is not easy. It’s something you have to do. Once you have those two things out of the way, the courses and the passing of the state exam, then you have to apply for your license. It takes about, depending on how you do it, two to about eight weeks to wait for the license. Once you got those things done you’re done, you are licensed and ready to begin. There are some other expenses you have to anticipate that is normally most offices are realtor offices, which means you have to become a member of the National Association of Realtors, the California Association of Realtors, and then your local board or association of realtors. You also will have another expense in joining and maintaining a multiple listing service, so that you can do your job effectively. So it costs about a thousand dollars, beginning to end, from the time you start until you are fully licensed and ready to go.

Q: Our class has discussed how real estate is a “people’s business” can you please describe the importance of networking as well as customer relationships management?

A: Real estate definitely is a people business. You have to, in fact I emphasize to agents at the very beginning when they’re first getting started, when you’re first making contact with your first potential clients and customers. You have to meet, greet, and establish report. If you forget to do that or shortcut any of those things chances are you’re going to have difficulties forming a professional, working relationship. They’re not going to know or trust you and you’re not necessarily going to know and trust them. And you’ve got to spend a lot of time meeting them, greeting them and establishing report. That is the people business and how to get things started. There are kind of two categories of people who are new in real estate at any time in history; and those are people that are from here and people who are not from here. And the people who are from here have a head up whether they realize it or not, whether they utilize it or not. They have what we call a sphere of influence and people who they graduated from high school with, went to college with, played pee-wee baseball with, go to church with, go to whatever other kind of organizations they might have gotten themselves into. In other words, people from here have a bunch of people who already know them and that’s really the way the place they should start. People who are not from here don’t have that advantage and have to join the Kiwanis club or join something to start to develop a sphere of influence. And then the way to be successful in the industry is this; you take every single client you end up with very, very seriously and you want to give them the best service, and the most time, and the most respect, the most information you can possibly give them. And just develop, you start with meeting, greeting, and establish report, and you continue to develop the relationship during and throughout their entire transaction and you just work on everything from there. What do you do at the very end after they’re happily in their new house or after they have happily sold their old house and are in their new house. Is you ask them for referrals, you got to otherwise your business is going to be very stagnant and you don’t be crass in asking for referrals. But you say, “Now, you know I’ve really enjoyed working with you through this transaction, Mr. and Mrs. Jones, here’s the thing I thrive on clients; I need more, I need more. Do you have any friends or family that you know of that are thinking about buying or selling real estate now or in the near future?” And you just ask for referrals, and you have got to do that because if you don’t you’re really impinging the growth of your business.

I would like to thank Mr. Anderson again for allowing me the opportunity to conduct this informational interview with him. The information he provided me with has reinforced everything that I have been studying with real world perspective. I particularly enjoyed learning about Mr. Anderson’s career path as well as his perspective on how real estate is a “people’s business.” Mr. Anderson allowed me to video record him during the interview; However, because of the length of the video it would not upload to either this blog or to YouTube. I will provide Dr. Hansz a copy of the DVD for anyone that may be interested in seeing this interview.

Informational Interview with Ronald Patterson

Ronald Patterson, has been a licensed Real estate broker for 33years. He is also a licensed general contractor, and specializes in redevelopment projects. He was appointed by major Autry to serve on the downtown revitalization committee. And currently serves on the board of directors for the downtown PBID. PBID, the downtown property owners, are working toward the downtown revitalization. Mr. Patterson has been very successful during his real estate career and I was very fortunate to be able to interview him.

Q. What made you decide to get into real estate?

A.   After purchasing my first house, I realized that selling real estate for a living would be a good occupation for my wife. I encouraged her to get her license and I tagged along to help her show houses and sell them. Soon after I realized that I enjoyed the process and decided I should get licensed too.

Q. What was your first job working in the Real Estate industry?

A.   After obtaining my license in 1978 I began working part-time as a salesman for Cal Real Realtors and then moved to Allstate Realtors

Q. What are your Day to Day responsibilities?

A.   I am a full-time investor/developer/contractor. I oversee several ongoing developments while at the same time search for new projects. I am responsible for running a small construction company that works only on our own projects. I work daily with my project managers to ensure completion of the projects. I guide the architects and engineers to design and implement projects based on my future vision and use of the property. I am responsible for acquisition, design, financing, rent up, property management and sales.


Q. How did you get started investing?

A.   I began buying semi-custom homes that were sitting vacant, not selling and were built by small builders who couldn't afford to sit on them any longer. We moved into the houses, decorated them and I landscaped them so they would show well to prospective buyers. I'd raise the price and live there till we sold the house at a nice profit.

Q. Are you currently working on any major projects? If so, what?

A.   We have three major projects we are working on currently. They are as follows:

      1.  Shaw/33 development in Firebaugh, CA. A 10 lot development consisting on 21 acres subdivided into 10 parcels with 4 buildings totaling 40,000 square feet of warehousing.

      2.  The Valley Animal Center expansion. The expansion will include a dog training and exercise park with doggy swimming pools. A perpetual care cat facility and feral cat housing facility.

      3.  The redevelopment of the Madera Air Force Radar Base. The project consists of the remodel of 28 buildings and subdividing into 29 parcels in an industrial park. Located in the

           Complex will be 3 wineries, a chocolate factory, wedding chapel, banquet hall, amphitheater and much more. Plans are still being developed for additional businesses.

Q. What is the most challenging and rewarding aspects of your job?

A.   The most challenging aspect is to find lenders who can see your vision and actually fund the projects. The most rewarding is the flexibility that redevelopment of existing projects give you. Every project if different although the basics are still the basics on every project, each project is unique and so it allows you to use some creativity that I wouldn't see if I just did cookie cutter type home building.

Q. What skills must an individual develop to be successful in real estate?

A.   You must lose the fear of failing! Everyone fails from time to time. If you fear failing it will stop you from moving forward in life and prevent you from making real money. Other knowledge you must gain is an understanding of current market trends, a thorough understanding of real estate financing and sources, taxation and property management. It also helps to know a lot about marketing and advertising.


Q. What real estate data base do you use as a broker to search for commercial investment properties?

A.   I use a combination of the MLS (Multiple Listing Service),, CoStar Group,,, DataQuick and National Council of Exchangers (NCE). Each of them offers a variety of information. It is also important to network with other real estate brokers, exchangers, investors and property managers.

Q. Do you feel commercial real estate was hit as hard as residential during the economic downturn? How has that affected your ability to invest?

A.   It has not hit the commercial market as hard as the residential market but it isn't over yet. Some sources predict waves of commercial foreclosures are still on the horizon. The current market is ripe for investment. I always do better in a down market because many investors become afraid of the market and that means fewer investors in the market competing for more inventory so prices go down which means more opportunity, especially in trouble properties (the type I generally buy).


Q. How did new loan regulations affect your ability to get financing today?

A.   Financing becomes the biggest hurdle since the banks generally tighten up their lending policies. Private lenders become pickier and more expensive, but with financing the way it is they are a viable alternative. Lending regulations in the commercial arena has not changed much, it's primarily in the residential that you see the changes but still it is more difficult than before.

Q. Was it easier to get financing 5-10 years ago? What has changed?

A.   During the real estate bubble it became increasingly easier to get a loan. Money was flowing into the real estate market because everyone was making tons of money but the deals were leaner. You paid more for the property and had a smaller down payment. When the market crashed, the "illusion" of equity was wiped out. All prices dropped 20% or more so it wiped out the premiums that developers and builders were getting for their products, then came the foreclosures and subsequent liquidation. Due to financing requirements of an appraisal based on historical sales and 60 day liquidation, appraisal evaluations became lower and lower thereby lowering property appraisals and thus making it more difficult to get get adequate financing at reasonable rates and terms.

 I would like to thank Ron Patterson for taking the time out of his very busy schedule to allow me to interview him. Ron is very knowledgeable and experienced when it comes to the real estate industry. I appreciate him passing along experiences that may help any young people become successful in Real Estate.

By Jackie Perkins

An interview with Real Estate Broker for the Sparkassen-Immobilien, Andreas Becker

Interview by: Roman Schilzow

Sparkassen-Immobilien is a department in Sparkassen-Finanzgruppe which is one of the biggest public banks in Germany. With Mr. Becker, the head of Sparkassen-Immobilien in the region of Calw, in the southwestern Germany, I got the opportunity to talk with him about the real estate market in Germany, especially in the region of Calw, where he is doing business for over 15 years.

Q: How did you get into the business of real estate?

A: “It was actually more of a coincidence that I got into real estate. After my apprenticeship as a bank advisor for the Sparkasse, I took break to take of our child as my wife operated her own kindergarten. During those two years, as I spent a lot of time at this place visiting my wife, I got the chance to speak to a lot of parents who were looking for a bigger house. As I knew a lot of people who were trying to sell their houses from the job I had before, I helped to sign four contracts within half a year. Of course I wasn’t paid, which made me to start working as a free broker for a small company in Nagold. It was a great time , as I could work whenever I wanted. After the break I decided not to go back to my old job, instead I got my broker license and stayed at the new job, which I liked so much more. After 7 years I went back to the Sparkasse, but this time not as a bank advisor but as a real estate broker”.

Q: What are your major responsibilities today as the head of the Sparkassen-Immobilien, Calw?

A: “My tasks vary today mainly from valuating properties we own due to bankruptcy of mortgage borrowers, managing these properties, dealing with Investors and real estate borrowers from the industrial sector, to looking for new investments which might be interesting for the Sparkassen-Immobilien”.

Q: When did you get this position and what will be the next aim you would like to reach?

A: “I have been working here for almost eight years and I got this position one and a half years ago. So far I am really satisfied with the position I have right now. If I would like to move up, I will have to leave Sparkassen-Immobilien and probably the region of Calw, too. As I love this region so much, that won’t happen soon”.

Q: What are the educational requirements for the job as a broker?

A: “To work as a real estate broker it is enough to have a general certificate of secondary school. To get the license though, you have to prove certain years of experience. This is possible either through working in this field, making an apprenticeship at a real estate broker or study with real estate as the major. We at Sparkassen-Immobilien also require experience in finance, as we act not only as brokers but also as lenders. Therefore, our employees have to have knowledge in this sector too”.

Q: Is everybody able to this job?

A: “Unfortunately I have to say no! In this job it is very important to be open to other people. Also you have to be able to present yourself as you are the one who is presenting the property, too. I use to say that a property is only as good as you are presenting it. Therefore it is very important to use proper language to express yourself. Of course not everybody has to have the same skills, but as for this job it is probably one of the most important things, it is required. That’s why not everybody is able to this job.

Q: What is the most important aspect why you are doing this job?

I think I like the part being together with other people most. To be honest, I couldn’t imagine to work all day in an office behind a computer. I need the contact to other people, as I have e.g. to my customers. I do not only talk about business with them, I also get to know their families, their predilections for certain things, hobbies etc. This is of course part of the business, too, but still way more personal than in other businesses. Also the fact that I can help those people to find something what will last for a long time, is very rewarding”.

Q: Are there also aspects about this job which you do not like?

A: I heard from so many people that they are not happy with what they are doing. I think I can say that I like my job. The only thing what makes me sometimes worry about it is, when I fail to find the right thing. I cannot always tell what what’s reason for that. But it last usually till the next success.

Q: Many People say, that real estate is a people business, what do you think about it?

A: “I would totally agree. I think if I hadn’t known that many people from my first job as a bank advisor, where people were not only my customers and I their bank advisor but rather some friends who could also talk to me about private things such as their properties and the plans they had with them, I wouldn’t have had this job today”.

Q: The American real estate market crashed dramatically during the financial crisis. How did the market in Germany or rather in the region of Calw react to this?

A: “Actually quite well. Sure we also had decrease in the values of the properties, but compared to the US market, our properties were not as overvalued. Also the number of default mortgages increased insignificantly in our region. Furthermore, during 2008 and 2009 the prices rose again and also the business itself”

Q: I know some people who are looking for an investment in Nagold, Calw for quite a long time without much success. What is the reason for that?

A: “There are mainly three reasons for that. First of all, after the financial crisis and the shock from the stock markets, many people came back to invest in real value, such as real estate which drove property prices higher, as just mentioned. Secondly, the Land of Baden-W├╝rttemberg designated Nagold as a growing city which makes it more interesting for investors who expect even higher prices in the future. Also responsible for the scarceness of available properties is the new planned railroad, which will connect the state capital Stuttgart to Nagold. Due to these three reasons, even though it is a small city, Nagold became very attractive for investors in the past two years which lead to a sort of buy out of real estate which makes it so difficult to find something what fits their requirements”.

Q: When do you think this situation will change again?

A: “I think it might last for another two or three years. This will probably be the time when the new railroad will be finished and residential and industrial properties will be built in the areas the city council has been designated as growing areas. I guess during this time most of the bigger investors will try to realize their profits.”

Q: What is a big success you have achieved recently?

A: I found an investor for a factory. The original owner couldn’t sell this property for almost two years”.

Q: Is there anything you would change, if you had a second chance?

A: “Yes, if I had known before, that I would have had three children, I would have built a bigger house”.

Q: What could you suggest a young person who just started in this field?

A: I would suggest to read the book “How to Stop Worrying and Start Living” by Dale Carnegie. I think this book helped me to stay focused on what I was doing. I also connect with this phrase the skill not to give up even though the situation makes you really worry about. This is not only important for the real estate business but also for the life itself”.

Q: If you had to instruct a broker for yourself, what question would you ask him first?

A: What will you do exactly for me and my property?

First of all I would to thank to Mr. Becker who gave some of his time to tell me about the German real estate market. As he is working as a broker in the region of Calw, he could give a very interesting insight about the market in this particular region. I also learned how the German real estate market compared to the US market reacted on the financial crisis. I wish Mr. Becker and his family all the best and I expect him to continue his successful path in the real estate business.

Tuesday, February 22, 2011

Jose Aranzazu

Fin 180

Informational Interview

I decided to do my informational interview with Antonio Gonzalez. He dose not work for a Real Estate company but, he has knowledge on the construction fields and designing projects. Mr. Gonzalez works for a small business called Unique Designz. The small company is located here in Fresno CA. Mr. Gonzalez is a Project Manager for Unique Designz; he also works as a designer. He has done small projects around Fresno and other areas near by.

Q: What made you choose this profession?

A: My father has always worked in the construction industry; and as a youth I would assist him in numerous tasks from the different trades. When I expressed my desire to him about continuing in the field he encourage me to follow my desire, however he suggested that I should work smarter not harder. Therefore instead of performing labor intensive task, he encourages me to pursue a profession design or construction management.

Q: How many years have you been in the business?

A: My title is Designer/Project manager and I have worked in the Industry since October of 2001.

Q. What are some of the negative and positive aspect about this profession?

A: There many aspects on both sides of the spectrum; however in effort to make things simple the most positive aspect of my profession is seeing the structures I design come to life when they are erected and constructed. The negative aspect would be the fact that in some instances I am limited due to cost, design guidelines, or an owners/developers perspective.

Q: What do you enjoy mostly about being a Designer?

A: The fact that I have the freedom to work on whatever job I see fit for me and the option to pursue particular jobs

Q: What is your educational background?

A: My background is High School, Community College, and University courses in Architectural Design, Drafting, and Construction Management.

Q: What were some of the classes that were helpful to you?

A: Courses that were beneficial and I feel are vital are: Management, Business Practices, and Finance.

Q: Would these classes help anyone who is interested in this profession?

A: Yes they definitely would along with your regular construction trade courses. It’s important to know how to build, however many things you will learn on the job and you will have to reference. Know how to research, ask questions and be able to find out for yourself not depend on others and verify to ensure you have facts.

Q: Where there other jobs you had before becoming a Designer?

A: Yes, clerk in a grocery clerk, sales men in a hardware store.

Q: Did your previous jobs contribute a lot toward your career?

A: Yes: Customer service, and knowledge of building materials, and tools of the trade.

Q: Do you recommend this profession to anyone?

A: Everyone who has a desire to be their own boss, see direct profits, has the ability to work alone while also depending on others, and has the knowledge base or the ability to acquire knowledge. Also you have to be very ambitious.

I would like to thank Mr. Gonzalez for giving me the opportunity to meet with him and tell me a bit about his life. Also, for making time in his schedule to meet with me, I know he’s always busy and I really appreciate it.

Informational Interview with Cynthia Haydock

Mrs. Cynthia Haydock, Realtor

Keller-Williams Realty

Interview by: Jonathan Kappler

After the financial crises in 2008 the real estate sector in the United States became a very tough business. Many real estate agents had to leave the field due to the market decline. Under these circumstances it seemed very interesting how to get a career started in the real estate sector. I was fortune to interview Mrs. Haydock who is working as a realtor for Keller-Williams Realty in Fresno. Mrs. Haydock offered an interesting insight in the life of a real estate realtor and how to get started in this field.

Q: What was your educational background before you started working in the real estate sector?

A: “I attended Cuesta Community College and then Cal Poly San Luis Obispo, pursuing a degree in liberal studies with a minor in music.”

Q: What made you decide to work as a realtor in the real estate sector?

A: “At the age of 40, after 15 years out of the workforce, as a stay at home mom, I decided to get my real estate license because of an interest in homes and real estate and the appeal of the flexibility of work hours.”

Q: Would you choose the career as a realtor again?

A: “Yes.”

Q: What does a typical workday look like for you, including, duties and responsibilities?

A: “One of the things that I enjoy about real estate is the variety of tasks and duties I do in the course of a work week. My duties are a little more specific than some realtor’s because I work with a partner. As a team, we each have areas of our business on which we focus. My partner focuses mostly on lead generation. My responsibilities focus on administration, contracts, transaction coordination, and marketing. In a typical day, I manage any open escrows. This includes working with escrow officers, lenders, and clients to assure the transaction is proceeding on schedule and that all required documents are in the file. I maintain and service our listing inventory which includes monitoring the signs, marketing through advertisements and websites, and communicating with sellers. I also prepare listing contracts for new listings, review any offers on our listings that are received, and write any offers that our clients want to make.”

Q: What is the most important personality characteristic a person working in real estate should have, and why?

A: “I think integrity is the most important characteristic in real estate or any profession. Being self motivated is also absolutely necessary. In California, realtors are independent contractors. So, while we must be “under” a licensed broker, we set our own hours and work strictly on commission. A successful agent is disciplined and works regularly.”

Q: What educational background and skills are required to start a career as a realtor as well as succeed in the real estate field?

A: “In California it is necessary to complete Department of Real Estate (DRE) coursework and pass an exam to earn a real estate salesperson license. At the time of licensing a background check is conducted by the DRE and a live scan fingerprint must be submitted. In the first 18 months of being licensed the realtor must complete 15 units of additional coursework. After that the license is renewed every four years. Completion of 45 hours of approved coursework is required for the renewal.

There are several skills that are very important to the success of a realtor. The first is sales abilities. Lead generation and conversion is necessary to build a client base. In addition to being a skilled salesperson it is important for a realtor to communicate clearly. Realtors must be able to review and explain contacts and disclosures to buyer and sellers. Because of the amount of paperwork and the numerous components to a successfully closed escrow it is very helpful for a realtor to be detail oriented and organized.”

Q: What have been the most challenging part and the most enjoyable part of your position?

A: “For me, the most challenging part of real estate has been lead generation. Sales ability is not one of my primary strengths, so that aspect of the business has been the most difficult and least enjoyable. The contracts and paperwork, or files, is the part of the business that I enjoy the most and that I am best at handling. Because of that being my strength I have partnered with an agent whose strengths as a lead generator complement my administrative strengths. One of the advantages of working as independent contractors is that we have the freedom to structure our business in ways that can maximize our strengths.”

Q: What is the most rewarding aspect of your career?

A: “I personally gain great satisfaction in doing a job well, so simply successfully closing an escrow is very satisfying. But the most rewarding part of my job is opening a home and handing over the keys to a buyer who has just taken ownership of the home. That is a great moment because it is the culmination of hours of viewing homes, an accepted offer, an approved mortgage, completed inspections, and a closed escrow.”

Q: What are some lifestyle considerations for a career as a realtor?

A: “Because real estate is a commission based industry it is helpful if a realtor has the resources to market and meet expenses (dues, signs, office fees) while building their business. While flexibility of hours is a benefit of the career, it is also necessary to be available evening and weekends to meet with clients, show homes, and host open houses.”

Q: Keller Williams Realty was ranked as one of the top 2010 workplaces – what makes it so special to work for Keller Williams Realty in your opinion?

A: “Keller Williams follows a slightly different business model than some real estate brokers. Each franchise is locally owned and operated, benefits from a wealth of resources (educational, motivational, and technological) provided by the national organization, and offers profit sharing to every agent.”

Q: How did the decline in the real estate markets affect your job and your life?

A: “Fortunately, my career path and opportunities have not suffered in relation to the market. Because I have focused on and pursued work in my area of strength, I have partnered with sales oriented realtors who were seeking the assistance of an agent with my skill set. Many agents have actually left the business over the last few years as a result of the market decline. Although business may slow in a difficult market, there will always be people who need to sell or buy a home due to life changes such as job relocation or divorce. The key, for me, has been to find a place in the market where I can put my skills and abilities to use. For some realtors, the current market has provided new areas of specialization and opportunity such as working with banks to sell foreclosed homes, and helping facilitate short sales.”

Q: What does the current situation in Fresno look like, particularly after the decline in the real estate markets in 2008?

A: “The market in the Fresno area is depressed. We have a large percentage of home owners that are ‘upside down’ on their mortgages, or in default. Because of that there has been a large inventory of foreclosed, or distressed, homes on the market in the last few years. There are also a large number of listings that are short sales. The current home values are very low. The upside of that is that homes are more affordable - particularly with interest rates as low as they have been. The general consensus is that the market has probably ‘bottomed out’ and will not improve very quickly or very soon.”

Q: What is the most expensive and demanded area in Fresno?

A: “The most demanded area in Fresno is Northeast and Clovis if we open the question to include the Fresno area. The area North of Herndon and East of the 41 is the area commonly considered Northeast Fresno.”

Q: Why is this location so expensive and what are the components that create this desirable and expensive location?

A: “The major factor in the desirability of Northeast Fresno is that it belongs to the Clovis Unified School District. Because Clovis Unified is highly acclaimed and enjoys a strong positive reputation for academics, athletics, and safety most families choose to buy in areas in that district. Because of the demand for those areas many new housing developments were built in the late 90’s through 2005, so many of the homes are relatively new. In addition, much commercial growth has taken place in that area, providing those neighborhoods with appealing shopping, dining, and entertainment opportunities.”

Q: Where do you see yourself in 10 years?

A: “It is my goal to continue in my current partnership. We are currently in the process of adding a buyer’s agent to our team to meet the demands of our current client base. We expect to continue growing our team as need dictates. In 10 years I intend to be continuing in an administrative and managerial role as we meet the real estate needs of our clients in the Fresno area.”

First of all, I would like to thank Cynthia Haydock for taking time out of her busy working day. The answers of Mrs. Haydock to my questions gave me a very interesting insight in the working life of a real estate realtor. The motivation and enthusiasm she reflected in her answers showed me that she is really into it and is enjoying her duties and working in this field. It was very interesting to see how the current market situation in Fresno/Clovis looks like and what skills are required to get a career started in this field. All in all, the interview helped me to get a very different but positive perspective about working in the real estate sector in the United States.