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COVER FEATURE: The List Issue 2007 “My problem lies in reconciling my gross habits with my net income.”
— Errol Flynn
SAVE TIME & MONEY
8 easy ways to save money (that you can start today) Can’t figure out why your bank account isn’t bigger? Perhaps you need to reevaluate how you manage your money. Here are some places to start: 1. Sweat the small stuff. Many people think spending $5 here and $10 there is no big deal. But if you saved that amount every day, it could add up to a very large pot of dough through compounding. For instance, saving $5 per day can mean saving $1,825 a year, which, with a 5 percent return, will turn into more than $20,000 in 10 years and more than $60,000 in 20 years. 2. Don’t pay bills early. Whether you’re paying personal or business invoices, keep your money earning interest in your own account as long as possible by paying bills when they’re due, not early. 3. Don’t pay bills late. Set up a system to pay recurring bills mortgage, utilities, and credit cards on time. If you’re getting hit with late fees for silly things like movie rentals, sign up with an online movie delivery service that doesn’t charge late fees. 4. Take advantage of trade show discounts. Scour exhibitor information to learn which exhibitors offer discounts during the show. Consider holding off making purchases until the last day of the show for possibly bigger discounts. Exhibitors might be more willing to offer price cuts to meet sales goals or avoid shipping products back home. 5. Make smart choices about insurance. Take the time to shop around for all your insurance policies, especially business, auto, medical, and home insurance. Raise your deductibles, bundle policies with the same insurer to get bigger discounts, and ask about discounts for such things as adding a security system. Also, keep a clean credit record because more and more insurers are using your credit information to price home owners’ policies. Learn about special insurance offers through NATIONAL ASSOCIATION OF REALTORS®’ REALTOR BenefitssmProgram
partners, including Geo. F. Brown & Sons, Liberty Mutual, and Marsh Affinity Group Services.
6. Ask your vendors for discounts. Many vendors, such as your printer, might agree to discount their services if you agree to pay early or in cash.
7. Recycle printer cartridges. Printer cartridges are expensive. Typically, when you bring your used cartridge to the supplier, you get a discount on the purchase of a replacement. Check your phone book for a local recycled printer cartridge supplier.
8. Think before you sign up. Join only business organizations that can bring you business. Also, if you’re just starting out in the business, many organizations will allow you to join at a reduced rate or allow you to pay dues each month rather than in a lump sum.
Sources: Michael Fischer, author of Saving and Investing: Financial Knowledge and Financial Literacy That Everyone Needs and Deserves to Have! (AuthorHouse UK DS, 2005); American Express Small Business (www.americanexpress.com); Entrepreneur.com, Insurance Information Institute (www.iii.org); BusinessTown.comLLC
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Get a higher commission split
If you want to increase your commission split, and your broker offers only one plan, you’d better be ready to negotiate. David Cocks, managing partner of CompensationMaster LLC
(www.compensationmaster.com) in Charlotte, N.C., offers this advice on how to prepare:
- Be ready to show how much money you’ve actually produced. Rather than sales volume, a broker will be more interested in the gross commission generated, because that will indicate how much money the office received.
- Have a plan to increase your productivity. The plan should include your sales goals and the specific steps such as marketing programs, networking, and new technology you’re going to use to reach your objectives.
- Show your broker your tech tools and how you use them. Then show how those are helping your broker’s bottom line. Estimate the hours and money you’ve been saving your company.
If your broker is still hesitant, suggest a new commission split on a six month trial basis and commit to bringing in X amount of business. Then say to your broker, "If after six months I don’t meet my production goal, we’ll return to the old split."
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6 ways to go home earlier tonight
Tired of working too many hours a day? One or more of these tips will help you go home at a more reasonable hour.
1. Think of e-mail as meals. Check your e-mail only three times a day: morning (breakfast), midday (lunch), and late afternoon (dinner). That way, you’re less tempted to fiddle with e-mail that’s not crucial.
2. Use your cell phone’s voice mail as a virtual assistant. Your outgoing message should let callers know when you’ll return phone calls. If you’re in a seminar or on appointments, include that info in your message. Consumers will appreciate your attention to detail and know when to expect your call.
3. Program your e-mail to go directly into folders. In your e-mail system’s setup function, create rules to identify where e-mail goes. For example, send all e-mail from anybody in your address book to a “hot” folder, and check that folder often. Send all e-mail from real estate services, such as your MLS or association, to a “whenever” folder, and review them when you can. Finally, send all e-mail from unknown senders to a “later” folder, and skim them on weekends or during downtime.
4. Organize your forms to avoid time wasting searches. Place copies of every form you use in a three ring binder with tabs that identify each category of form. That way, you can quickly find the right one.
5. Streamline your e-mail. When appropriate, insert “No reply needed” in the subject line or opening of your e-mail to reduce the number of responses you receive. Also, use pre-written responses for answering frequently asked questions or requests for information, such as directions.
6. Plan for interruptions. It’s impossible to avoid unexpected calls or visits. Leave two 30-minute intervals of time unscheduled every day and use them to catch up or treat yourself to a little personal time.
Sources: Jennifer Cleveland, Century 21 Jim Dunfee Realty, South Bend, Ind.; Candace Deshe, RE/MAX Professionals, Duluth, Ga.; Mike Hunter, ABR®, SRES, Coldwell Banker Residential Brokerage, Sudbury, Mass.; Elizabeth A. Nelson, Keller Williams Realty East Portland, Portland, Ore.; Yvonne K. Scarlett, Exit Realty Professionals Elite, Davenport, Fla.; Peter Turla, The National Management Institute, Flower Mound, Texas
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Planning for retirement
There’s no time like the present to start a retirement savings program. Consider these options, and remember to consult a financial planning, tax, or legal expert to ensure that you understand the details, rules, and restrictions.
IRA (Traditional) People 50 or older by the end of a calendar year can contribute an additional $1,000. There’s no deduction phase out if neither the individual nor spouse is covered by an employer-sponsored plan. Contributions for 2006 can be made until April 16, 2007.
Contribution limits: $4,000 for a single person or $8,000 for a couple filing jointly (same for 2007)
IRA (Spousal) If your spouse participates in a retirement plan through work, you receive a full tax deduction on your contribution to your own IRA if your joint adjusted gross income is less than $150,000. The deduction is phased out gradually up to $160,000 in joint adjusted gross income. You can contribute an additional $1,000 if you’re age 50 or older by the end of a calendar year. Contributions for 2006 can be made until April 16, 2007.
Contribution limits: $4,000 (same for 2007)
Simplified Employee Pension Plan These plans are simple to set up and administer, making them very popular with independent contractors. SEPs work like a traditional IRA but have higher contribution limits. Employers offering a SEP don’t have to include employees in the plan for their first three years of employment.
Contribution limits: 20% of self-employment income or 25% of compensation for employees, up to $220,000 in income ($225,000 for 2007)
Solo 401(k) These plans apply only to independent contractors with no employees. The main benefit is the high level of tax-deductible contributions allowed. You can also borrow up to 50 percent or $50,000 of the plan’s assets, but the loan has to be repaid within five years.
Contribution limits:The first $14,000 of income, plus 20% of any additional income up to $220,000 in 2006. (The limits are $15,000 and $225,000, respectively, for 2007.)
Keogh Plan These plans can be set up as a profit-sharing plan or defined-benefit plan, which uses a formula (based on salary and years of service) to determine a participant’s annual retirement income. These plans aren’t very popular because they require a professional to set up and administer thanks to the additional IRS filings involved. Employers must cover all employees immediately.
Contribution limits: 20% of self-employment income or 25% of compensation for employees, up to $220,000 in income in 2006 ($225,000 for 2007)
Source:Marc Jacobson, Marc Jacobson & Associates, Northbrook, Ill.
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Cut your car costs
At a time when owning a car is costly, you’ve probably already reduced your expenses by raising the deductible on your insurance policy and taking advantage of discounts offered by your insurer (safe driver, multiple policy). Another area ripe with potential savings is gasoline costs. Some ways to improve your mileage:
- Slow down. Even a five mile per hour decrease in speed can affect gas mileage.
- Keep tires properly inflated. Under inflated tires can cut fuel economy by 0.5 percent per pound of pressure below recommended levels.
- Give your car a tune up. A poorly tuned engine can increase fuel use by up to 50 percent or more. Include a regular oil and filter change. Check with your dealer or a trusted auto mechanic for the recommended frequency of oil and filter changes.
- Don’t idle. Unnecessary idling can consume as much as a gallon of gas per hour. It also wastes more fuel than restarting the engine.
- Maintain a consistent speed. Accelerate gently, brake gradually, and avoid sudden stops.
- Plan errands. Combine outings into one trip as often as possible to spend less time on the road.
- Pare extra weight. The excess weight of car top carriers and trailers causes engines to work harder and burn more gas.
Source: AAA-Chicago Motor Club
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Get the most from your NAR dues
As an NAR member, you have access to a wide range of discounts, promotions, services, and resources. Your Membership Kit explains all the benefits available to REALTORS® from NAR. The 2007 kits will be mailed in June. In the meantime, here are some ways to get the most from your membership:
- Take advantage of the Realtor BenefitssmProgram. This NAR program entitles you to special offers and discounts from vendors providing practical solutions to your everyday personal and professional needs. As an added bonus, using Realtor Benefitssm Program partners generates revenue for NAR and helps keep your membership dues low.
- Check out the free software available from NAR’s Center for REALTOR® Technology. ezRETS, for example, lets you easily transfer information from your MLS to desktop applications like Word and Excel. For more information on ezRETS and other free resources, visit the CRT site at www.crt.REALTORS.org.
- Leverage the REALTOR® brand with consumers. Independent research confirms that NAR’s Public Awareness Campaign has had a positive impact on consumers’ perception of the value Realtors® bring to a transaction. Take advantage of that strength by placing the REALTOR® logo on your business card, wearing your Realtor® pin, and showing your membership card with pride.
- Keep learning. By pursuing an NAR-endorsed designation program, you can improve your proficiency, skills, marketability, and income. A good place to start learning about designation programs and other educational offerings is at Realtor® University. Also, visit REALTOR.org/store for a variety of books, guides, and brochures. And check out titles electronically from NAR’s ebooks.REALTOR.org.
- Be informed. You’ll be in the know when you read REALTOR® Magazine, the business tool for real estate professionals, and visit its cyber sister at REALTOR.org/realtormag. REALTOR.org offers resources, stats, business tools, field guides, products, and services to improve your business.
- Attend a convention. A convention is a great place to compare products and services, attend seminars, and network with colleagues. The 2007 Midyear Legislative Meetings & Trade Expo in Washington, D.C., will be held May 14–19, and the 2007 REALTORS® Conference & Expo in Las Vegas will be Nov. 13–16. Read more at REALTOR.org/meetingsandexpo.
Source: NAR
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5 business functions to automate
Technology is a great time saving tool, but only if you use it. Here are five tasks you can automate:
1. Distributing listing data. Use syndication software, such as Point2Agent’s
(http://agent.point2.com) Point2 Exposure Engine, to automatically push listing data to multiple real estate Web sites. You enter the data once, and the software does the rest.
2. Replying to e-mail. Use the auto response function on your e-mail program to send consumers an instant reply. Although most people think of this function as their “vacation response,” you can also use the message field to convey important information, such as your phone number, office location, and the time the sender can expect a personal response.
3. Forwarding important e-mail. As long as you’re tinkering with your e-mail settings, take advantage of the system’s filters to automatically forward important e-mail to your cell phone or mobile device. Create parameters for what’s sent for example, any e-mail with a subject line that contains the phrase info request and you’ll be instantly notified when a message meeting those criteria arrives.
4. Gathering news and information. An RSS (really simple syndication) reader pulls syndicated content from the Web sites you visit regularly, eliminating the need to visit and scan each site individually. You can then read the information in your RSS reader. Examples of readers include Bloglines (www.bloglines.com) and Google Reader (www.google.com/reader).
5. Backing up information. Set up your computer to automatically back up the data on your hard drive to an external drive each night.
Source:NAR’s Center for REALTOR® Technology
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10 ways to get more from your personal assistant
Assistants are there to help you, not add to your workload. Anna Baron, cofounder of the International Real Estate Assistants Association in Mineola, Texas, offers these suggestions for getting the most from the relationship.
1. Communicate your needs. Create task lists detailing what you need done, along with the time frame in which you expect them to be done. Baron recommends that you create two lists one for tasks you expect the assistant to accomplish daily and the other for tasks the assistant should accomplish over the long term to help you meet your annual goals.
2. Stay out of the weeds. Once you’ve told your assistant what you need, get out of the way. “You have to assign a project with a very clear expectation of your goals, but then you have to let go,” says Baron.
3. Don’t treat your assistant like “the help.” Show your appreciation and loyalty by investing in your assistant’s education and training.
4. Evaluate priorities. Set priorities, which are often dictated by the market, says Baron. For instance, as use of the Internet grows, search engine optimization is becoming more important to ensure that your site is appearing in the top 10 search results. Or a goal may be to update your marketing materials. “Set long-range goals, and then sit down with your assistant every quarter to reevaluate,” says Baron.
5. Provide scripts. Scripts help your assistant handle consumer questions, especially the frequently asked ones. But your assistant doesn’t need to deliver them verbatim. “Your assistant should study them so that the delivery sounds natural to potential clients over the phone,” Baron says.
6. Provide training for the tools you buy. Baron says practitioners are often happy to buy tools to help assistants improve office efficiency, but they sometimes fail to get assistants the training needed to use the tools.
7. Get your assistant involved right away. Ask your assistant for help on projects right from the beginning. A big complaint Baron hears from assistants is that many practitioners try to handle everything themselves, then ask for help at the last minute. “That creates a huge rush to get things done immediately and turns the office upside down,” she says.
8. Give your assistant more responsibility. “Most practitioners should be using assistants for a whole lot more,” says Baron. “Delegation helps you organize, and it lowers the blood pressure in the office.”
9. Meet regularly. Sit down quarterly with your assistant to discuss short and long term goals and projects. Allow your assistant to provide feedback on which tasks should be done more or less frequently.
10. Provide feedback. Regularly review your assistant’s performance to provide input on which areas need improvement and to allow your assistant to tell you where you can improve. “Both people have to understand each other and work together to build and maintain a successful business,” says Baron.
Source: International Real Estate Assistants Association (www.ireaa.com), Mineola, Texas
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Create a disaster-preparedness plan for your finances
Do you have a disaster-preparedness plan for your finances? This six-step plan will help keep your finances in order in case of a disaster.
1. Make a copy of everything in your wallet. Store the copies on a memory stick or CD-ROM in a vault or with a trusted family member in another location.
2. Sign up for electronic payment of critical bills, such as your health insurance and mortgage. Talk with your broker or office manager about direct deposit of your pay.
3. Sign up for online banking and online access to your investment accounts, including IRAs, mutual funds, and CDs.
4. Make sure more than one family member has access to all investment accounts and insurance policies.
5. Prepare a fireproof, waterproof to go box that you can grab quickly in case of an emergency. The box should contain family and friend contact information, recent account statements, a financial service providers contact list, mortgage and insurance statements, and a small supply of cash.
6. Get an ATM card, even if you don’t use it, so that you can access funds if you’re displaced to another city.
Source: NACHAThe Electronic Payments Association (www.nacha.org), Herndon, Va.
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