ANS Realty Plan of Action

RES 497 Week 5 Final Paper

Strategic Management of the Real Estate Enterprise

Thanks to the growth of technology, the landscape of Real Estate has changed. From how we buy and sell Real Estate, to how we use the real estate we own. The market crash of 2008 has opened the door for new ways to conduct business in the real estate world, mostly to never find ourselves in such a predicament again.

Technology in the Real Estate Sector has its pros and cons. The primary advantage is that the sales process can move a lot faster than it ever had before. But there are cons; the number one con is being coned. I have found that with the right angle, a photo or video can be deceptive when it comes to room layout and size. In an article written by Ericson, the author states that the “National Association of Realtors report that 90 percent of home searches start online.” (Ericson, 2014) The second benefit in virtual tours is that the existing resident now does not have to be inconvenienced by open houses week after week.

Every New Real Estate office should have a goal, a plan, or a mission for getting involved in this industry. So many people got involved in the industry for the sole purpose of making as much many as possible, even if that meant being dishonest. And I believe that these were the people that were the biggest culprits of deception. They would open a shop get as many deals done as possible before their reputation burned them and then they would close those doors and open a new shop with a new name and start all over again. A company that plans to be successful and around for a long time will need a clear mission and a clear vision.

Mission Statement

ANS REALTY’s mission is to improve the experience of buying and selling real estate by fostering a spirit of innovation and integrity.

ANS REALTY’s promotes a culture of partnership in which all clients are represented in a collaborative environment by all its agents, thereby ensuring its clients have a competitive edge.

ANS REALTY’s envisions itself as more than just a real estate brokerage; it is a lifestyle company committed to informing and connecting global communities.

Vision statement

The vision of ANS REALTY is to produce the highest possible standards of the real estate market while building our agency as the premier and preferred real estate company in Newport Beach and its surrounding areas.

The satisfaction of our customers is the main priority of ANS REALTY. Our goal is to be a point of reference in everything related to Real Estate “if we cannot provide the service, we can find the people that will do it” setting ourselves apart. ANS REALTY continually explores new ideas and technology, to make the selling and buying of real estate faster, less costly, and more manageable.

Real estate is a complicated industry. Besides saving time and hiring for expertise, often the primary reason why people choose agents to act on their behalf is out of legal necessity by the state. Starting a real estate brokerage requires a lot of training, time, and work. While the laws of each state differ, starting a real estate business can be done in three steps and can take up to two years without an adequate degree.

In most states, including California and Texas, the entity must have a licensed real estate broker as the named managing officer in the business once you form your company entity, such as a limited liability company.

There are Pros and Cons of Independent vs. Franchise Brokers. Franchise brokers pay dues in exchange for support to their parent franchisor, whereas independent brokers have more autonomy with fewer resources.

Independent vs. Franchise Real Estate Broker

Real estate transactions involve several moving parts, including loans, large sums of cash, contracts, contingencies, and liens — to name a few. States want to make sure home buyers and sellers are protected from fraud. Depending on the state, there are specific requirements for who is allowed to handle specific parts of the transaction. The most common player in the real estate transaction is the broker.

Codes and regulations governing real estate change so often that the real estate industry is built around the brokerage model. Brokers are real estate agents that have completed additional hours of continuing education beyond the standard requirement. A broker is allowed to act as a single-agent business; however, due to increased workloads and legal complexities, real estate brokers usually have agents working under them.

Although it may be difficult to visualize at brokerages with hundreds of agents, all real estate agents act on behalf of the broker who represents home buyers and sellers. But not every brokerage is built the same! You may have heard of brands like Coldwell Banker, Sotheby’s, or RE/MAX, but what are differences between these franchise brands and your local independent broker? In this article, you’ll discover the unique strengths and weakness between a franchise and independent brokers. Armed with this knowledge, you’ll have a better idea of how to choose the right broker.

Franchise Brokerage Strengths and Challenges

Although a single broker is allowed to practice alone, they often employ agents to work under them to handle heavy workloads. Starting a brokerage is not easy, so oftentimes brokers will open a franchise brokerage and pay dues in exchange for support to their parent franchisor.

Clout.

One of the biggest strengths of a franchise broker is brand recognition and an established track record. National franchises like Coldwell Banker are household brand names with the combined strength of hundreds of agents, coaches, title officers, and industry partners.

Support.

With a franchise broker, you can expect the luxury of an extensive referral network. A franchise broker can access a national database of mortgage officers, home inspectors, and attorneys, to name a few.

Agents.

Franchise brokers have a unique edge: They have a more extensive support system to train their agents with formalized and structured training. In addition to a refined onboarding process, newer agents have access to more listings, sales training, technology, and marketing tools.

Technology.

On the customer side, an agent’s technology tools at their disposal may not seem like a strength, but better access to tools and support can mean the difference between a smooth transaction and poor customer experience.

Leading Real Estate Companies is a nationwide network of independent and franchised firms. LeadingRE members uphold some of the strictest standards in real estate practices to retain membership.

Independent Brokerage Strengths and Challenges

Sometimes seasoned broker-agents will break out and launch their own independent brokerage. This often happens when multiple independent brokers come together to share experience, resources, and referrals. Independent brokers have several unique advantages.

Individuality.

With corporate structures come branding guidelines. Franchise brokers are limited on how they operate, brand, and market themselves. Independent brokers have the freedom and flexibility to run their own business, develop their own voice, and grant their agents more autonomy.

Education.

Franchisees experiment less compared to their independent counterparts. Corporate rigidity means less freedom to put dollars behind newer customer experience initiatives like free first-time homebuyer seminars, which independent brokers routinely host.

Commitment.

Whereas franchise brokers have higher overhead and may be less flexible when negotiating their commission, an independent broker may want to ensure the best possible chance for repeat business (even if it means working off-the-clock!).

Market knowledge.

Homebuyers and sellers may feel franchise brands are not “community-oriented” since franchise brokers often answer to out-of-market (and even out-of-state) franchisors. Independent brokers have the in-depth market knowledge and are more likely to be active in their communities.

Start your search with NRT, the largest real estate conglomerate that owns most major residential and commercial franchises in the U.S., But NRT also has plenty of independent residential brokerages in their portfolio.

Franchise and Independent Brokerage Commonalities

Much like national banks versus local credit unions, franchise and independent brokers have differences as well as commonalities. Whether you choose to hire an agent from a national brand or your local brokerage, you can expect a few similarities.

Access.

Every broker has access to the MLS. Although pocket listings are often shared within the specific office, any agent can access the same databases of listings as the other agents down the street.

Professionalism.

Brokerages and even specific offices are not cut-throat competitors. Regardless of their affiliation, agents and brokers are professionals and communicate regularly with other brokerages.

Compliance.

Brokers take their legal responsibilities seriously. Although some agents may have an ‘aggressive’ sales style, rest assured that their broker is holding them accountable for their actions.

Growth.

Agents are always looking to perfect their craft. Brokers will often pay for coaching and training sessions for their agents, and agents will regularly attend conferences and expos to learn about the latest technology.

Associations.

Although the National Association of REALTORS® (NAR) is not a brokerage, about half of all REALTORS® work for independent brokers. You can expect agents at either type of brokerage to be active members of a professional real estate association.

Although a single broker-agent is allowed to practice alone, they often employ agents to work under them to handle heavy workloads, represent other transactions, or simply cover for other busy agents. Starting your own brokerage is not easy, so oftentimes broker-agents will open a franchise brokerage and pay dues in exchange for support to their parent franchisor. Sometimes seasoned broker-agents will break out and launch their own independent brokerage.

Despite the fact that their more massive support structure and agent-onboarding process built on best practices, franchise brokers face a few challenges, including higher overhead and less individuality. Yet what makes an independent broker unique is also one of their biggest hurdles. They have fewer resources, and agents may not use the latest technology solutions to manage their business.

Startup Costs

Franchise Fees $250K

MLS fees- $375mo

Association fees-CAR $100

Errors and Omissions insurance- $1500

Broker License fee-$300

Office Space – $1000-$6500 (depending on size)

Taxes-30%

Health insurance-$1500 – $3300 (depending on size of company and how many enrolled

Office supplies-$1000

Office Equipment- $50,000

Internet and phone service-$3000

Technology products and services-$1000

Operating expenses of the business for the first two

Franchise Fees -6% of gross receipts

MLS fees- $9000

Association fees-CAR $2400

Errors and Omissions insurance- $36000

Broker License fee-$300

Office Space – $24,000-$156,000 (depending on size)

Taxes-30%

Health insurance-$36,000 – $80,000 (depending on size of company and how many enrolled

Office supplies-$24,000

Office Equipment- $5000 (monthly maintenance)

Internet and phone service-$12,000

Technology products and services-$2000

The benefits of starting a franchise are that you have a plan that has a proven track record, and therefore, financing will be reasonably straightforward. I plan to take out a business loan as close to $500,000 as I can. With my excellent credit and a sound business plan, I should be able to get at least 90% of that. The rest will come from my savings. I can also adjust my variables for staffing if I do not get my goal amount.

Environmental Scan

“The general environment is composed of trends in the broader society that influence an industry and the firms in it.” (“Understanding Business Strategy Concepts Plus,” n.d.) Conditions in the global environment are outside the firm’s direct control; no firm can control demographic trends. They are essential for the company to consider in deciding on its strategy. Firms must pay attention to seven factors in the general environment: economic, political/legal, sociocultural, technological, global, and physical trends.

Competitive Advantage

After identifying entrepreneurial opportunities, entrepreneurs turn their attention to developing capabilities that will be the basis of the competitive advantages required to make a profit from pursuing the possibilities. I believe that as an entrepreneur, we need to pull on all our talents to make our business successful. The more diverse you are, the better.

I have a lot of strengths, but the one that is mentioned the most would be my organizational skills. I am incredibly organized; I believe everything has a place, and everything should be in its place. I find being organized extremely useful when dealing with multiple files and clients. I am a multitasker by nature; I can juggle many things at once. This skill is also valuable when wearing various hats, as you are often due in an assistant position. I am a problem solver by nature. I like to figure things out, which can be useful in the Real Estate industry as every deal is different. Every lender, client, and home is different, which is what I like about the industry. I will never get bored learning something new. I’ve also been told I am an excellent trainer.

Working in the Mortgage Industry both pre-mortgage bubble and post-mortgage bubble, I have seen a significate amount of transactions. With that being said, I know that every purchase is different, and requires someone or several someone’s to wear multiple hats. So, my plan and goal are to be as helpful as possible by providing a single location to take care of the complete transaction and have one point of contact. By being the sales agent, the mortgage broker, and the signing agent, we can hold the hand of our buyer from beginning to end. And ensure the most transparent transaction for the customer.

Most people find the home buying process complicated and confusing. And having someone walk them through the processes step by step would be useful and welcomed. I believe that lenders should be required to provide loan documents in lamens terms. But since that would often stop individuals from signing the loan documents, I strongly doubt that will ever happen. So, I see security in my business goals.

 Market Segmentation

Every opportunity is open to me within the real estate industry besides Appraisal, because it requires additional focused education and training. The one-stop-shop is a trend we could you take advantage of. Buyers and sellers don’t want to have to worry about running to multiple companies to get deals done. They want one place where they can get everything, like Walmart. The fact that I have first-hand experience with lenders, banks, and how they work makes me a benefit and a useful tool in any opportunity.

Financial Analysis

Real estate is a complicated industry. Besides saving time and hiring for expertise, often the primary reason why people choose agents to act on behalf is out of legal necessity by the state. Starting a real estate brokerage requires a lot of training, time, and work. While the laws of each state differ, starting a real estate business can be done in three steps and can take up to two years without an adequate degree.

In most states, including California and Texas, the entity must have a licensed real estate broker as the named managing officer in the business once you form your company entity, such as a limited liability company.There are Pros and Cons of Independent vs. Franchise Brokers. Franchise brokers pay dues in exchange for support to their parent franchisor, whereas independent brokers have more autonomy with fewer resources.

Real estate transactions involve several moving parts, including loans, large sums of cash, contracts, contingencies, and liens — to name a few. States want to make sure home buyers and sellers are protected from fraud. Depending on the state, there are specific requirements for who is allowed to handle specific parts of the transaction. The most common player in the real estate transaction is the broker.

Codes and regulations governing real estate change so often that the real estate industry is built around the brokerage model. Brokers are real estate agents that have completed additional hours of continuing education beyond the standard requirement. A broker is allowed to act as a single-agent business; however, due to increased workloads and legal complexities, real estate brokers usually have agents working under them.

Although it may be difficult to visualize at brokerages with hundreds of agents, all real estate agents act on behalf of the broker who represents home buyers and sellers. But not every brokerage is built the same! You may have heard of brands like Coldwell Banker, Sotheby’s, or RE/MAX, but what are differences between these franchise brands and your local independent broker? In this article, you’ll discover the unique strengths and weakness between a franchise and independent brokers. Armed with this knowledge, you’ll have a better idea of how to choose the right broker.

Internal Controls

In the Real Estate Industry, several places need internal controls. But the two areas that spring to mind are Sub-Prime Mortgage Lenders and Appraisers. I hold them both primarily responsible for the 2008 crash. Had they been more regulated, we may not have seen such a deep decline in the market, and thus, the economic bubble may not have burst. Regulations and some type of oversight would be ideal. Or at least require the loan programs that are not standard to have to be reviewed by some third-party community.

In the Real Estate Industry, several places need internal controls. But the two areas that spring to mind are Sub-Prime Mortgage Lenders and Appraisers. I hold them both primarily responsible for the 2008 crash. Had they been more regulated, we may not have seen such a deep decline in the market, and thus, the economic bubble may not have burst.

Hedge funds, lenders, and insurance companies caused the subprime mortgage crisis. They created mortgage-backed securities that the insurance companies covered them with credit default swaps (Pajarskas & Jočienė, 2014). The subprime mortgage crisis was also caused by deregulation. Many lenders spent millions of dollars to lobby state legislatures to relax laws. Those laws would have protected borrowers from taking on mortgages they really couldn’t afford (Amadeo, 2019).

Because of this, we need better Regulations, and some type of oversight would be ideal. Or at least require the loan programs that are not standard to have to be reviewed by some third-party community. I believe the controls need in this industry start with disclosures. I will require additional disclosures that outline the ins and outs of every loan we offer in laymen’s terms. The borrower client will sign the disclosures in front of the agent or witness, and each critical point will require initials by each vital fact.

References

Amadeo, K. (2019). The Causes of the Subprime Mortgage Crisis, Retrieved from https://www.thebalance.com/what-caused-the-subprime-mortgage-crisis-3305696

Bainbridge, R. E. (2014). The Stormy Future of Retail Real Estate. Appraisal Journal, 82(2), 155–160. Retrieved from http://search.ebscohost.com.proxy-library.ashford.edu/login.aspx?direct=true&AuthType=ip,cpid&custid=s8856897&db=bsh&AN=96451935&site=ehost-live

Ericson, C. (2014, March 27). PTCVoice: From drones to 3-D imagery, four ways tech is revolutionizing real estate. Forbes. Retrieved from http://www.forbes.com/sites/ptc/2014/03/27/from-drones-to-3-d-imagery-4-ways-tech-is-revolutionizing-real-estate/ (Links to an external site.)

Ferguson, M. (2010). The “catastrophic change” in the U.S. real estate market (Links to an external site.). The Market Oracle. Retrieved from http://www.marketoracle.co.uk/Article22925.html

Goodman, N. (2012). How successful leaders balance skepticism and openness (Links to an external site.). Entrepreneur. Retrieved from http://www.entrepreneur.com/blog/224942

Pajarskas, V., & Jočienė, A. (2014). Subprime Mortgage Crisis in the United States in 2007-2008: Causes and Consequences (Part I). Ekonomika / Economics, 93(4), 85–118. Retrieved from http://search.ebscohost.com.proxy-library.ashford.edu/login.aspx?direct=true&db=bsh&AN=100189372&site=eds-live&scope=site

Thorsby, D. (2018, September 28). The Future Of Real Estate – With Fewer Agents. U.S. News. Retrieved from https://realestate.usnews.com/real-estate/articles/the-future-of-real-estate-with-fewer-agents

U.S. Bureau of Labor Statistics (2012). Real estate brokers and sales agents (Links to an external site.). Retrieved from http://www.bls.gov/ooh/sales/real-estate-brokers-and-sales-agents.html

Weinstein, M., & Worzala, E. (2008). Graduate Real Estate Programs: An Analysis of the Past and Present and Trends for the Future. Journal of Real Estate Literature, 16(3), 387–413. https://doi-org.proxy-library.ashford.edu/http://aresjournals.org/loi/rees