Monday, March 5, 2012

Assignment 1: Informational Interview of a Real Estate Entrepreneur

Olivia Thomas

I interviewed Patrice Page. She is a Real Estate Consultant at Missouri Development and Real Estate, Inc located in Stockton, CA. She has been in the real estate industry for eight years.

What education do you need to be successful in your position?
As far as traditional education, you have to take three basic classes to get your license. It is an ongoing educational process. The industry is always is changing. You need continuing education classes to keep up. A college degree is optimal.
What’s a typical day like for you?
I normally spend a couple hours each work day checking leads for listing as well as returning emails and phone calls. Depending on how many clients I have it could take anywhere between 30 minutes to 4 hours doing this type of administrative work. Once a property is listed for sale, clients are given weekly updates. Buyers get 10 to 30 listing to review. They are asked to pick their top 5. If working with I’m working with multiple buyers showing properties can take a couple hours. I also have to check on our listings to make sure that signs are up and that the property looks appealing. Sometimes I go to the escrow office with clients. Everything depends on the amount of the clients we are working with. I am always doing marketing. It is crucial to getting more clients. I send letters and postcards. I also make phone calls to people in my sphere of influence. I also send cold advertisements to areas where I would like to work in. My workday can be anywhere from as short as 3 hours to as long as 12 to 15 hours. This is because everything you do is based around the client’s schedule.
What’s unique or differentiating about your company?
The most unique and differentiating thing about my company is that it is a small independent firm that is run by someone who has been in the real estate industry his whole life. We have the flexibility to work with clients that we might by prohibited from working with if we were part of a franchised office. For instance, I have commercial property listed for sale. In a franchised firm that listing would have been turned over to someone who specializes in commercial real estate. [Missouri Development and Real Estate] clients get to work with who they came to the company to work with. Someone else in the office would help you get the transaction done, but you still keep the listing. This gives consultants the opportunity to work in sectors that they have never worked in before to get experience in those areas.
What do you like most about what you do, and what would you change if you could?
I enjoy helping the people. I enjoy working with first time homebuyers even though it can be stressful because they do not have a lot of experience with real estate. The information we give clients is for them to make their best decision. Not for us to make a profit. If I could change anything I would make provisions […] in the government programs that are available to try to help people stay in their homes. I would make it a requirement that banks work more with small independent firms. They tend to want to work with large franchises because they feel like they can service the property over a broader distance […] the point is that you’re still not working with the same office. For example, the PMZ office (a real estate firm) in Stockton that is listing a office is different from the office in Fresno that is going to be listing the same office. They (the banks) still are not working with one point of contact. The independent brokers who stayed in business throughout this obviously are taking care of their customers and doing something right. So they need to look more at the experience of the office and less at the size.
What are best types of real estate jobs to go into locally and in the real estate industry in general right now?
That is a tough question because all sectors are stagnant right now. In general, for someone who is intelligent, I would encourage them to go into commercial real estate. Its an area that I’m thinking about trying to break into more myself. The hours are going to be better because you are working with people during a normal work day and the range of opportunity to earn income is greater with commercial real estate. You not only list and sell property, but you list and sell business opportunities. For instance, if I sold a property to a client I could turn around and get paid to negotiate the lease of that space to other people and get paid for doing that. That’s more of a property manager type of responsibility without having the responsibility of actually having to manage the property. You basically negotiate the terms of the lease and get compensated for doing that. People are often afraid of commercial because it looks like it’s harder, but I don’t know that that’s the truth. The properties that you’re going to be dealing with are bigger and the commissions typically are higher. I wouldn’t rule out residential, I would go for both, but I would focus more on commercial.
     How do you think the multifamily real estate market in Stockton       is doing right now?
When it’s a good price, very well, because with the prices are lows and rents are stable enough for you to cover your costs. It is the time to buy. The problem is that it is taking a bit longer to rent them out. Once they are rented people are tending to stay. They may not always pay their rent on-time, but they’re choosing to not to move. A lot of people are having challenges with their credit and other financial issues. Saving the money and having the credit to move are difficult. Especially if you’re working with a property manager who is recording their late rent. Then it shows to other property owners that they pay/have paid their rent late.
What does a typical career path look like in your industry? Would it be easy to transition from being an agent to property manager?
There are specific classes that are required to be a designated as a property manager. The transaction from one to another is not difficult. There are many agents that, during this economic downturn, have turned to property management as a way to supplement their income.  It is relatively easy to go from an agent to a broker. With a brokers license you typically will have a split on your commission, even if you are working under another broker because you have more expertise to bring to the office. Typically you’ll see, especially in a franchise office, multiple managing brokers working for an owner broker. Managing brokers have a specific amount of agents working under them. It is difficult for brokers right now because so many agents are leaving the market.
How does location influence real estate decision making?
The three most important things in real estate are location, location, location. It determines the value, desirability, profitability and marketability. If I know things about a certain area and historically I can show clients that the values have not appreciated and there are other areas that are more appealing I will always let my client know that an area is not raising in value as fast as other areas. Location in real estate is everything.
What are some of the biggest challenges facing your company and the real estate industry today?
The economic problems the biggest challenge the industry is facing right now. The small amount of money for people to borrow restricts buyers and sellers. It is also a challenge dealing with banks that want to continue to keep their earnings high, which is understandable, but it makes everyone else suffer too.
Are there any professional or trade associations I should connect with?
Property managers have an organization that would be good for you to look into. CAR is something that you definitely need to be a part of because they keep informed of laws, what has changed, what is innovative in the industry. They also lobby on behalf of California real estate professionals in Washington to make sure that the things they are doing are not going to destroy our profession.
What do you read — in print and online — to keep up with developments in the real estate field?
As a member of CAR I get a monthly magazine that has articles with updated on information on real estate. For example, one of my clients may have gotten bad information on real estate based on information provided to by the CAR magazine. They send out weekly emails as well.
How do you see the real estate industry changing in the next 10 years? Are there any emerging trends that you see?
At one point, it was questionable as to whether people were going to use real estate agents with the introduction of internet sites such as realtor.com. If something happens you need someone with expertise to help. There is a lot of liability when it comes to proper disclosures. As a real estate agents we know how to do disclosure forms and how to protect clients with that type of recourse. People are working with agents because they want to be sure that their interests are protected. Most people look online before they even call a real estate agent. Often times they are disappointed because they are looking at properties they cannot afford. People often do not realize that the first thing they need to do is make sure that they are qualified and able to get a loan. There many things other than your credit score that can keep you from getting your property. They do not understand that they need to be preapproved for a loan.
If you were just getting involved in the real estate industry now, where would you put yourself?
I would look into doing commercial transactions as opposed to residential. All the residential area is our area is depressed right now. This does not mean that you cannot be successful. There are always opportunities. For many people this is the best time to buy.
How do you conduct a market analysis?
When you become an agent you join a multiple listing area service. It means that you can work on any MLS listing in California. As a member you have tools for you to perform market analysis. For example, we listed a property last week. We went on the site to check similar properties in the area to see what they sold for. You can pull together a property profile for a specific geographic area at a specific time. Selling prices in the area are what people most look at to determine current value. If the trends and sales are up, we know the seller is going to want a full price or almost full price offer. There is no exact science. The only thing we can say for certain is that the market is going to decide what a property is going to go for.


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