Business Planning For The Owners, Managers And Team Builders (Book Review)

As the title indicates, this planning tutorial is aimed at brokerage owners, managers and team builders. Here's the brief synopsis of the product from the Cross web site: "Do you have a business plan that protects you from shifting markets? If not, or if your current plan just isn't working, you need one now! Carla Cross, CRB, MA, created this planning system from over two decades of work with owners like you.

In fact, it is the only planning system endorsed by the Managers Council of the National Association or Realtors (CRB). The package consists of a 188-page resource guide as well as three audio CDs and a Document CD. You can get extensive information on the entire product by visiting the website. When you do, you will need to click the Products link and then to the title of this specific product. I don't completely agree with the adage "any plan is better than no plan", but I did recently came across an old saying that does relate well to these two products: "They didn't plan to fail, They
failed to plan."

The Business Planning System For The Real Estate Professional (Book Review)

In good times and bad the failure rate among real estate professionals is discouragingly high. That's particularly true among newly licensed agents. Statistics vary from state to state and from time to time, but frequently well over fifty percent of licensees fail to renew their initial license. There are a number of reasons for this distressing fact of real estate career life.

Several years ago, in doing research for my real estate career book, I did a survey of managing brokers around the country. The purpose of the survey was to get their opinion on why the failure rate of new agents was so high. Near the top of the list of reasons they identified was: "inability to plan and to manage time." To oversimplify a very complex issue, many folks who enter our profession simply do not realize that, no matter how supportive the real estate brokerage with which they affiliate is, they are, in fact, a one person business operation.

Success or failure will depend almost entirely on their realization of that fact and their ability to adapt. This educational package by Carla Cross is aimed directly at real estate professionals operating in the trenches. You'll recognize Carla as a long time contributing columnist to the Real Estate Professional. You can get detailed information about this product and many others at www.carlacross.com.

Here's a brief description of this package from her web site: "In a more challenging, competitive market, you've got to have a plan! But, here's much more than just forms to fill in. This is a comprehensive strategic planning system, suitable for the multimillion dollar producer as well as the agent with one year in the business.

Carla Cross, CRB, MA, gives you a complete 'tutorial' on 2 audio CDs on how to make a business plan to reach your real estate goals. Who better to advise you? After all, she wrote the only internationally published book on planning, wrote the CRB (Certified Real Estate Broker) course to teach managers how to coach agents in their plan and taught Strategic Planning for CRB for 12 years. As I was reviewing and interacting with this product I put myself in the place of a real estate professional attempting to get a handle on how to plan my career to achieve long term success. I was very positively impressed.

Suceeding (2nd Ed.) - How T Choose The Right Goals And Increase Your Chances Of Achieving Them (Book Review)

If you've followed our Book Review Column over the years you'll recognize the name of the author of this book, John T. Reed. He is a prolific author, mainly of books that relate to real estate investing. He also produces the extremely informative Real Estate Investor's Monthly Newsletter, to which I've subscribed for several years. You can get detailed information on all of his products, including this book, by visiting his website at www.johntreed.com.

You'll also get access t a variety of free articles relating mostly to real estate. One of my favorites is his "B.S. Artist Detection Checklist - 55 Ways to Detect a B.S. Artist." That's not to imply that we have any of those artists in the real estate profession, of course. As I was reading this book I kept thinking that an appropriate title might also be "How To Succeed In Life By Really Trying".

Reed covers just about every challenge an individual is likely to face in life, along with down to earth (sometimes earthy) guidance on how to attain success. While it's not specific to challenges we face in the real estate profession, it's clear that if an individual cannot set life enhancing goals and establish effective means of accomplishing them, it really doesn't make that much difference what the person's occupation might be.

It would be useful up front to describe in brief Reed's credentials, since one is not likely to take very seriously an author on this topic who has not faced an array of personal and economic challenges. For example, while I admire many of her traits, I doubt I would recommend a book on this subject written by Paris Hilton. Here is just a portion of the book's "About the Author" summary.

He was a real estate investor for 23 years. He also worked as a bartender, property manager, real estate salesman, banker, football coach, baseball coach, and volleyball
coach. He has been married since 1975 and has three sons. He was an Army officer in the U.S. and in Vietnam and graduated from Army Airborne (paratrooper) and Ranger schools. Mr. Reed holds a Bachelor of Science degree from West Point and a Master of Business Administration degree from Harvard Business School.

Country singer legend, the late Hank Williams, is quoted as saying: "You've got to have smelt a lot of horse manure to be able ro sing like a hillbilly." I think you'll agree that Reed meets that qualification for writing a book on this topic. I'II mention just two examples of the type of guidance Reed offers. In his chapter "Saving", the advice is the common sense "live beneath your means." Common sense, yes. Commonly done? No. It requires discipline and long term commitment.

In his chapter "Sobriety", his message is, as you might suspect, "don't drink, smoke, or use drugs". Early in my Air Force career I was the "Adjutant" of a small Air Force unit. One of my jobs was to counsel enlisted troops who were in trouble. The root cause in most of the cases was related to the use of alcohol or drugs. While I highly recommend this book for readers of all ages, if I were leaching a high school freshman class in any subject, I would make it a mandatory text. Their final exam would likely come much later in life.

Can He Do It?

We are embarking on a significant period of American history. The election of Barack Obama has accomplished three major things:

• America has its first African-American president
• The psychological depression that increasingly gripped the country during the Bush administration is over
• A new feeling of confidence and the dawn of a new era is palpable

Now comes the hard part. Obama comes into office facing worldwide recession and a badly broken financial system. It is as daunting a task that has faced any president since John Kennedy faced an increasingly militant and bellicose Soviet Union. And while Americans seem to expect great things from an Obama administration, the question still looms: Will he succeed in solving these crises?

FACTS OF THE CASE

Before I give my opinions here, let' s be clear on the facts of the case. First of all, we are not facing a rerun of the Great Depression. Rather, we are in the midst of a pretty average recession. During this one, we should reach an unemployment rate of about 8.5 percent and GOP will probably contract by 3-4 percent. These numbers track the average recession undergone by the United States economy since World War II.

This one feels worse because the last two recessions we had in 1990 and 2000, were short and mild. If you look back at 1982 however, you can see a much worse recession. So, in a sense, this recession is terra in cognita for most of us and the unknown is always more scary than the known. Like all recessions, this one will run its course and shouldn't last more than a year.

Second, the bigger problem is the financial sector: it's broken. It is clear that the cowboys of finance have been playing fast and loose with other people's money, creating and trading extremely risky financial instruments that evaded the regulatory net. Using a booming housing sector as collateral, they shattered fortunes large and small, and more importantly destroyed the confidence of the American people. Yet, here, too, there is a precedent. In the late Eighties, the collapse of the thrift sector followed pretty much the same pattern, although at about one-tenth the scale. We lived through that one.

NO, HE CAN'T

The biggest roadblock to the success of the Obama administration in solving these problems lies in the fact that the president is not Commander-in-Chief of the economy. Daily marketplace decisions made by thousands of individuals and companies, none of which is under the control of the president, shape the course of events and create booms and busts. Even in the area of economic policy, the president must rely on the Congress to implement his ideas.

I think we all realize how shortsighted and irresponsible the Congress has been; just look at the pork that was added to the bailout bill. Moreover, everyone now believes that Federal handouts are a right. In the case of the auto makers, to cite one example, this belief has seemingly relieved them of any responsibility to run their businesses in a rational manner.

Finally, we already have such a large budget deficit, it will be difficult to fund the programs needed to cure the recession. For all these reasons, one can conclude that this administration will fail in its attempt to right the economy and rebuild the financial system.

YES, HE CAN

But, this is no ordinary president. He has shown over the past two years his skill as a businessman. During that time, he has been CEO of a multi-million dollar company that achieved its strategic goals and gained the majority of market share. He has also assembled a strong and intelligent economic team and has shown the ability to channel talent to achieve his goals.

Above all this is the simultaneous short and long term focus of his policy ideas. If the Obama administration had been in office last winter, the stimulus package that provided small checks to taxpayers would have been cast as a grants program to state and local governments to rebuild infrastructure. It would have had a far more powerful and direct impact on job creation and would have been an investment in the future.

This type of thinking in a politician is impressive. I think you will sec from the Obama administration an aggressive, well thought out, long term policy that will do everything possible to revive the economy and heal the financial sector. For real estate, this will be a good thing, since jobs lead to commercial occupancy and home sales and an efficient financial system reduces financing costs. So, can he do it? Yes, he can.

"Slow Start Realty" May Not Be Optimum For You

No real estate company would create a "slow start" model on purpose. Yet, they predictably and routinely take actions or positions that almost guarantee they have low producers and high turnover. Let's contrast how Slow Start Realty and Fast Start Realty treat their new agents. Of the hundreds of agents I've interviewed over my two decades as a manager, I can't remember when an agent said he wanted to start slow.

The vast majority want to make a sale in a month (See the survey in Become Tomorrow 's Mega-Agent Today... 49% of the hundreds of new agents surveyed expected to make their first sale in their first month in the business!) Unfortunately though, most agents start their careers slowly. No wonder there's a huge drop-out rate! How would you feel if you didn't make a sale for months? Deflated, demotivated, and disillusioned about the business.

HOW SLOW START REALTY GETS AGENTS STARTED NICE AND SLOW

• No preview in the interview of what successful start-up looks like.
• No urgency or expectations of early success.
• No business-producing actions required or monitored.

I. ) NO PREVIEW
In the interview, Slow Start Realty doesn't, provide a preview of their startup plan (they probably don't even use a start-up plan). Why no preview? Slow Start wants everyone to join. They're afraid that if they are honest about the work it takes to make a sale "early", agents won' t join. After all, they want to give everyone a chance - to fail.

From Slow to Fast Start:
Introduce your start-up plan in the interview and get a written commitment to start the plan.

2.) NO URGENCY
Even though the new agent (or transferred agent) at Slow Start wants to make a sale fast, Slow Start believes that it takes months or years for agents to get sales. So, they don't put the agent to work that first week. In fact, it could be months (or never) when the slow start agent is introduced to a start-up plan.

From Slow to Fast Start:
Put the agents to work in that startup plan their first week in the business, so they have a fighting chance to get that first sale in a month.

3.) NO ACTION
Slow Start believes that, if an agent has lots of training, the agent will do well. So, Slow Start doesn't coach the agent into business-producing actions immediately. Instead, they let the agent immerse themselves in training course after training course. Agents conclude that sitting in class for days or even weeks is how you start a business. Slow Start doesn't realize that they are enabling failure.

From Slow to Fast Start:
Stop letting the agent off the hook by offering training with no actions required. Make your focus on business producing actions and use training only to provide the agent what the agent needs to know or be able to do, to complete that action.

SLOW START REALTY BELIEVES IT'S AN ACCIDENTAL BUSINESS

At Slow Start Realty, sales happen as accidents. Well, they did happen quite often in an "on fire" market. However, now that the market is not as giving. those sales accidents just aren't happening. Slow Start is stymied. Their business model is stuck in neutral. They're hoping that the market will catch fire soon, and take them out of their predicament.

THE DIFFERENT MODEL AT FAST START REALTY

We just finished our Up and Running Small Group Coaching program with our three scholarship winners (See my website at www.carlacrosscoaching.com for more results and information). We carefully screened our scholarship winners, all in the business less than one year. We gave them an accurate preview of the program and got a commitment to do the work. We provided urgency through coaching them weekly to an aggressive start-up plan. We got them into action the first week of the program. Result; Each of the three winners averaged eight transactions during the 90-day program and listed an average of 6.33 properties.

A FAST START RECRUITMENT STRATEGY

Do you think any agent who wants to do well would want to go to Slow Start Realty or Fast Start Realty? The Slow Start model predicts failure or, at best success by accident. The Fast Start model predicts fast success on purpose. Think of what a fast start strategy would do for your recruiting and retention, and retool your model to coach future Olympians of sales, not amateur accidental agents.

Real Estate Company Caters To Client With New Office Design

RE/MAX Crossroads Properties owner, Dennis Steed, like all real estate professionals and business owners, always looked for ways to develop his business, increase sales, develop a clientele and increase the overall effectiveness of his sales approach. Just as Steed saw the economy changing, he also saw a change in his clients' tastes, needs and expectations, which he believed presented an opportunity for a new approach.

With the growing popularity of open air shopping centers and recent developments in the suburban Cleveland area surrounding his business. Steed could see that comfort, convenience and a certain high-quality, customer experience were the sales techniques local retail businesses were implementing and making work.

With a changing market, Steed, ABR, CRB, GRI, knew he hold to change his approach and cater to that new set of ideals in order to maintain a competitive edge. However, he realized his current offices in Westlake, Ohio, would not accommodate the convenient, yet trendy, at-home environment for which he was aiming. Although Steed knew any drastic change had a potential risk, he stuck with the most important objective, providing his clientele and agents with a convenient space that did not feel like a real estate office.

Looking for an easily accessible, higher profile location that could meet his needs, Steed came upon an open retail space in a new development. Located in the affluent community of Rocky River, Ohio, not far from his current offices, Beachcliff Market Square was an upscale, trendy shopping center. Upon viewing the space, Steed already could see that the shopping center was the perfect space to meet the new expectations of his clientele, who were seeking a relaxed, comfortable space in which to do business.

But finding the retail storefront was only half the battle. Steed knew when he needed to make his business work, but wasn't sure how to bring his idea to fruition and create an office space that fit into the surrounding retail environment, all
on a set budget.

ARCHITECTS, DESIGNERS

With this in mind. he reached out to Vocon, a leading architecture and interior design firm based in Cleveland. Working with designer Michelle Thompson, Steed explained his need for a high-profile location in the new retail space that was easy for both clients and agents to access. After learning about his vision, Thompson knew
exactly the look and feel that he desired.

Thompsonm, was then faced with a challenge of her own. The space was a storefront within a shopping square instead of a standalone location and hold limited access to natural light. The space was also extremely long and narrow, creating restrictions for space planning and design implementation. Although Steed' s plan was well-thought-out, it did not take into consideration how the layout and design of the space would merge to meet his clients' needs.

Therefore, Thompson and her Vocon team were tasked with creating a bright, well-lit office space with a modern high end feel and an open gathering area, such as coffee shop or cafe, under the current conditions and within a limited budget. Thompson remedied these challenges by keeping the tall and narrow store-front an open space and allowing natural light from the window to transmit throughout the interior, which opened up the space.

Instead of a small kitchen toward the back of the offices, Thompson used Steed's coffee-shop vision to create a combined kitchen and coffee bar in one. This not only opened up the space, but created the relaxed public area Steed was looking for. Thompson and Vocon chose the option of built-in custom millwork to eliminate the need for furniture. This created continuity throughout the office space, from the architectural finishes to the furniture finishes that would have otherwise been mismatched with existing furniture.

With the lobby and kitchen up front, Steed and Thompson opted to have the tech center and work stations toward the back of the space, to provide agents with privacy and easy access to designated parking areas. Keeping RE/MAX's corporate colors of red, white and blue, Thompson kept the space bright in color while choosing finishes that were clean and contemporary in style, in tune with
Steed's overall objective.

Although Steed knew of the potential risk with this unique approach, he continues to see the success of his approach combined with Vocon's design. Clients and employees are more comfortable and relaxed in the new space, while his business continues to grow steadily even with the challenges of the real estate market.

Increasing Sales Production Through The Quality Of Your Prospects

When you break a real estate agent's business down, there are only four ways to increase production; four proven avenues toward increased gross revenue. They are:

• Number of contacts
• Method of contacts
• Quality of the prospect
• Quality of the presentation

In this article, we'll focus on the quality of the prospect. When you begin working on any one of these, you have taken the step to becoming a Champion Agent. Once you have raised your level of the performance in each of these areas, you can call yourself a Champion!

QUALITY OF THE PROSPECT

The quality of the prospect is an area that really separates non-champion performers from Champion Performers. Our ability to separate the wheat from the chaff will lead to a dramatic increase of our value per hour, gross income, low frustration level, better clients and more and better referrals. The natural tendency for most sales people is to work with leads, rather than prospect for new leads. Most sales people, in real estate especially, do primarily lead follow-up, rather than prospecting or lead creation. The problem with that approach is what happens if your leads aren't any good. Most agents have a group of bad leads they are trying to convince to be good leads, so they don't have to prospect.

Let me give you a hint; you can be the greatest salesperson in the world, and you will rarely convince a bad lead to convert to a good lead. You are far better off investing your time to find better leads. We hold onto these marginal or bad leads, so we can avoid prospecting. We know that if we don't have enough leads, we will be forced to prospect. It also takes less effort, time, emotion, and frustration to convert and serve high quality leads.

MOTIVATION FACTOR

The question is how do we determine whether the prospect we just created is a high quality lead? I frequently ask agents that question. I get a variety of answers including asking prospects qualifying questions. evaluating the source of the lead, and many others. The Champion's technique is to ask them for a face-to-face appointment. By asking them for an appointment, you cut through the smoke to see if they are real.

The last place on earth a low-motivation prospect wants to be is in front of a salesperson. If you didn't have a reasonable level of motivation to purchase a car, what is the last place you would want to be? Correct, at a car dealership, getting "hot boxed" by a salesperson and their sales manager. The same is true with a real estate prospect. The best way to determine quality and motivation of the lead is to ask for an appointment.

What I just described will be the choke point for your buyers agents. Their ability to drive prospects to face-to-face presentations will be the biggest determining factor of their success. The buyer's agents who do that will sell three to four homes a month or more. The ones who are ineffective will sell one or two homes a month. There will be an increase of 100% in sales when using the same quality of leads.

There are many prospects whose sales resistance goes up in direct proportion to the length of your litany of pre-qualifying questions goes up. Questions, even well scripted and directed ones, can lead to sales resistance problems. I am not saying don't ask questions; we need to use them to keep the discussion flowing, so you can ask for an appointment again in a minute or two. The most efficient way to determine the viability of the prospect is their willingness to meet with you.

THE 80/20 RULE

There is an age-old rule that governs success and people. This rule was created in 1895 by a man in Italy named Wilfred Pareto. He observed, at that time, that most people had little influence, power or money in the marketplace. He called this group of people the "trivial many". He decided that these people made up about 80% of the population. He then theorized that the remaining 20% had all of the influence, power and capital of society.

He called them the "vital few". He created the 80/20 Rule that has governed success for more than 100 years. The 80/20 Rule applies to your prospects, as well. 80% of the prospects you work with will create 20% of your income. The amount of time, effort, and energy is disproportionately not in your favor. The odds of becoming a Champion Agent when working with this group are long indeed. The devastating part of working with this group is that you spend 80% of your time, capital, effort, energy and emotion to create a 20% return on investment.

The numbers are not in line with a successful business. A Champion works with the elite 20% of the population that creates an 80% return on investment because they gain an added return or unequal return on their investment. This elite 20% doesn't mean that you have to work only with those who would be defined as the upper crust of society. Although, working with high priced buyers and sellers certainly can have a positive effect on your income.

In evaluating the quality of the prospect, we determine their level of motivation, financial capacity, ease to work with, realistic expectations of service and what they can purchase. I have met high priced buyers and sellers who were also high maintenance; I fairly placed them in the 80% category, not the 20% category. The question you must wrestle with quickly is does this prospect fit into the 80% or the 20%?

RESOURCES TO INVEST

You have limited resources to invest in terms of your time, effort, energy, emotions and dollars spent. Our objective is to select clients who utilize low levels of resources with high levels of return. That is what a 20% prospect allows us to do. The common school of thought in real estate sales is that sales is a volume game; if we raise the volume of production, we raise the income.

I believe that school of thought is poorly conceived and simplistic thinking for a sales-oriented business. One of my competitors, who is a "magic marketing" guy, has a saying; "You can't go broke making money"· He is absolutely wrong. Many successful companies and real estate agents have gone broke making money. Gross sales volume-increase has merit but not at the expense of cost of sale and net profit.

FOCUS ON SALES MARGINS

What we must focus on is the sales margins, not just the sales volume. Our objective is to enhance or expand the margin between the resources we expend and the return we get. When working with a team, your expenses are higher. You might create more sales, but those sales have a higher cost because you'll have to pay the buyer's agents to create them.

One way to influence the margins is by selecting better prospects to serve. We must reduce the resources of our time, effort, energy, emotion, and dollars we invest against the return of money, job satisfaction and future revenue in the form of referrals and repeat business. Better prospects create better margins. Don't be fooled by the sales volume game. The margins in business and life are what really count. The quality of the prospect dramatically influences your margins in your business.

Use The Power Magic Showing Moment

Recently, I had an "Aha! Moment" - one of those times when the light bulb flashed and my understanding of something clicked to a new level. Here's what happened. A ballroom full of luxury real estate professionals had gathered at The Institute for Luxury Horne Marketing's Leaders in Luxury meeting to hear one of our speakers - the wonderfully outrageous South Florida home builder, Frank McKinney.

Just to set the stage for you... McKinney's personality is as big as the 60,000 + square foot mansions he builds. He bills himself as a real estate artist, and there is no doubt that he is the force beh nd some of the world's most interesting mansions. Currently he is nearing completion of two "green" homes.
Acqua Liana ($29 million) and Crysralil1a ($30 million) Another McKinney project is a $135 million spec home, The Manalapan Residence.

McKinney, who designs his homes in a tree house office, is a master of creativity. On each property home page, you'll find a countdown-to-completion clock ticking away. His new homes have theatrical "unveilings" (rather than grand openings) and draw hundreds of invitees who pay to preview the properties.

POWERFUL SELLING EXPERIENCE

Here's the light bulb that went on for me. We all know the importance of effective staging. But McKinney's marketing approach moves past staging and aims at creating a desire to live in the home from the time the prospect pulls up in front. He works to take staging and showing and turn it into a powerful selling experience. First, he considers when and how the prospect will arrive at the house.

He tries to schedule showings at a time when the home will show to best advantage. If sunset is spectacular from the poolside terraces, he wants the prospects to experience those views. Then, with the use of strategically placed cones, he influences exactly where the prospect and agent will park. He blocks the drive so they are forced to approach the home in the most desirable way.

The prospect sees the full expanse of the front yard, takes in the dramatic architecture, sees the guest house which appears to be floating in a lagoon, smells the freshly cut grass and feels the marble pavers underfoot. Anticipation heightens with the approach. When the door opens, a memorable front door experience begins. While McKinney builds-in many of his front door WOWS (including Acqua Liana's first ever glass "waterfloor" that curves into an arched aquarium wet bar with exotic fish overhead), with some creativity, you can stage your own memorable front door openings.

It's the concept that's important. McKinney carefully furnishes and stages the home so there is a pleasant surprise or positive feature around every corner. He appeals to multiple senses using music and scent. He has chocolate and champagne waiting. Prospects are qualified in advance, so McKinney has even been known to hand them the keys and suggest they spend the evening at the house (giving new meaning to the old puppy dog close!). His goal is to open "the window of desire" for the home and close the deal. What's sitting by the front door on departure? A contract.

TURBO-CHARGED STAGING

McKinney's sales track record would indicate that this works. He tells the story of meeting buyers after closing to walk them though their new multi-million home and demonstrate all the features. His buyers asked: "Can we see the upstairs now, Frank?" They had purchased based on only seeing the main floor.

In short, McKinney's showings are designed to be memorable experiences that result in sales. How can you do that with your listings? Your homes don't have to be mu lti-million dollar extravaganzas for you and your sellers to make every showing a memorable experience. This is turbo-charged staging. Think about the questions McKinney must ask himself with every property.

What times of day does the home show best? How can I take advantage of that? What approach to the house is most favorable? How can I enhance that approach? Where should prospects park? Can you create a WOW the moment the front door opens? How can you keep the positive impressions happening? What about sound and scent? How can you stage to best highlight the lifestyle(s) the home represents? Then, there's the question of how you get the buy-in and cooperation of your seller.

The reality of today' s market is that some homes are selling. Successful sales are generally the homes at the very top of the inventory based on three things -proper pricing, effective staging and creative marketing. If your seller understands this and you can create magic showing moments, the probability of sales success rises.

Although McKinney builds new dream mansions, he lives with his family in an historic 3000 square foot home, offices in a 150 sq. ft. tree house and is committed to his Caring House Project Foundation, a non-profit organization dedicated to creating self-sufficiency by providing housing, food, water, medical support and opportunity for the desperately poor and homeless around the world.

A Timely Designation For Today's Market

Ask the average real estate agent today. "How is your business?" You may find these common answers: "Could be better", "Tough", "Business is not good" and on and on. Then ask a top producing real estate agent how their business is and you may hear them respond with: "Business is great", "Fantastic", "Although the market is down, my business is up", I am certain we can agree that we would all like to be in the second category.

If we probe these top producing agents further and inquire why it is that they are so successful in this and any market, several responses will be given. We may hear these agents telling us that they focus on past clients, their database and working on obtaining referrals. They may respond by telling us that they are constantly farming and prospecting in their marketplace. Additionally, we may find out that they are consistently focused on continued education, business development and obtaining professional designations.

INDUSTRY DESIGNATIONS

Perhaps one of the most powerful ways in which an agent can achieve peak performance is by obtaining and maintaining professional designations. Such industry designations assist agents in targeting niche markets, providing the best possible service by implementing what they've learned and earning superior commissions and income. According to the National Association of Realtors, over 428.000 members holds at last one professional designation.

This is more than one third of its overall membership and an increase of over 21,000 from the past year. According to a recent survey commissioned by the New Jersey Association of Realtors, Realtors who have obtained a professional designation have increased by 8% from the previous year. These recent statistics are staggering, especially considering the decline in business that the real estate industry has seen over the past few years.

It should certainly be a telling sign of the positive direction that agents are taking for personal and professional development. With that in mind, we'd like to introduce you to one of the most exciting, powerful and value packed designations available today. Multi-FamiIy Specialist (MFS) is a professional real estate designation offered by the Council of Investment Specialists. This independent designation course trains agents on all aspects of multi-family properties.

In this constantly changing and volatile real estate market, agents are yearning for a niche that will set them apart and increase their business and productivity. These agents are turning to Multi-Family Specialist for the necessary training in this expanding field. Surveyed agents indicated that 95% of their business is that of single Family residential sales, with many targeting condo and townhouse sales.

Multi-Family Specialist trains agents on how to expand their market penetration to include multi-family properties as a means of offsetting their recent decreased sales, while also increasing their potential for growth by learning a new industry field. A key fact is that when the overall real estate market is down, residential rental prices increase. This is important because in most cases the prices of multi-family properties are predicated on the rental income.

As rents increase so do values for multi-family properties. This means that agents can tap into a marketplace that is virtually unaffected by the trends of the downturn in the overall marketplace.

CONVENIENCE TO AGENTS

Unlike most professional designations, agents can earn the MFS designation online from the comfort of their home or office. To cam this powerful designation, agents simply log onto www.MFSpecialist.com and click "Earn the MFS Designation". At their own pace, agents will be guided through the course curriculum. Unique to MFS, agents will follow along with a corresponding video for each section of the course. The course is designed with agents (and their often hectic schedules) in mind. The course allows agents to view and review any segment with video before taking the online exam at the conclusion.

CORE FOCUS OF MFS

Multi-Family Specialist is a dynamic and unique real estate professional designation that can be earned by real estate agents. This designation propels agents as the premier real estate professionals in their community, specializing in the market of multi-family properties. Different from any commercial real estate professional designation, MFS targets only multi-family properties ranging from two family homes to large apartment buildings

Choosing to earn this powerful designation is a smart decision. Our agents utilize this designation as a great tool to educate their investor clients regarding many topics. These top-producing and well-educated agents are able to intelligently represent both buyers and sellers of multifamily properties, while differentiating themselves from their competition. Additionally, a Multi-Family Specialist will create a powerful marketing plan to sell their multi-family properties or work aggressively with a multi-family buyer to find them a profitable property.

MFS COURSE CURRICULUM

Agents who earn the MFS designation will enjoy the variety of course subjects. The extensive "Topics of Expertise" that are covered will educate agents on all aspects of multi-family properties. Over 30 informative sections are covered in this important designation training. Several of these include:

1.) Determining for yourself and your clients if a property is truly profitable.
2.) Learning the key investment calculations to make sense of a multi-family investment property.
3.) How to read and create a strong and informative profit and loss statement.
4.)The steps to take in order to build the value of a multi-family property.
5.)The basic steps of a 1031 Tax Deferred Exchange.

BENEFITS OF EARNING AND MAINTAINING THE MFS DESIGNATION

Agents who earn the MFS designation and maintain their annual member renewal will find that there are many benefits to our membership. An important feature for our members is that they can upload their multi-family listings and their agent profile to the www.MFSpeeialist.com website at no additional cost to them. Here is just a sample of benefits to MFS designees:

1.) Distinguish yourself as the expert in your marketplace for all multi-family investment properties.
2.) Gain private access to the agent log-in area of the MFS website.
3.) Website benefits include the ability to:

a.) Upload up to 10 multi-family properties (per agent) to include:
- 3 properly photos
- Up to 2 documents (PDF,Word, Excel...) such as a survey, site map, profit and loss statement, and so forth.
- Give a description of the property to include up to 1,000 characters with a template design for each listing to include:
a. Price
b. MLS number(if applicable)
c. State
d. County
e. N umber of un its in property
f. Gross Income of the property
g. Gross Expenses on property
h. Net Operating Income of the property
i. Capitalization rate

b.) Agent contact information with a template to include:
• Agent name
• Agency name
• Office phone
• Cellular phone
• Email
• Website
c. Modify or delete listings
d. Search through the database of available properties from all MFS members
e. Participate in the member -'Forum" to share information within the MFS network
f. Utilize the "Key Calculations" tab where agents can simply enter the subject property financial information into the appropriate corresponding fields and the computer will calculate the results for them.
g. Access the "Document Search " tub to find customizable forms. newspaper articles and multi-family property tools

4.) As a MFS· designation holder. you can advertise the designation on all materials such as business cards, web sites, newspapers and mailings, thus empowering you as the multi-family expert in your marketplace.

DIFFERENTIATING FACTORS

Multi-Family Specialist- designees have the ability to differentiate themselves in this very competitive market. This is due to the fact that agents who previously only focused on single family sales can now confidently approach and target multi-family property owners and display the array of knowledge that they have in this specialized field. Additionally, MFS members can effectively demonstrate to investor purchasers their ability to translate facts and figures from an investment property to determine the true appeal of the subject property.

Only until the introduction of this informative designation, many agents have avoided the multi-family. By earning MFS designation adding this additional niche to their sales portfolio, agents are increasing their income dramatically. Earn the MFS designation by logging onto www.MFSpecialist.com and begin to tackle this untapped market today!

What To Do Until The Rebound Comes

I can't trace the source of the following quote, which I encountered in the earliest stages of my real estate career (yes kiddies, when the earth was still cooling), and have used often ever since: "Find a need and fill it and you can make a living, but find a problem and solve it and you can make a fortune!" Like all good formulas for success, it rings true in good times or bad and, like the best of them, it requires some modification.

For example, practice does, indeed, make perfect, but only if one practices perfect habits: otherwise, practice merely makes consistent. Thus it is that doing things right is only effective if one is doing the right things. In today's market, you're either meeting your goals or you're not. If you're doing so, you need to read on only to make a good situation better. If you're not, however, hitting your marks and moving ahead, the following thoughts may lead you down a more progressive path.

Be fore warned though, that you will probably learn nothing new. Chances are that, at Column's end, you'll mutter, "heck (or something stronger). I knew all that!" But only if you can also say that you do all that should you have stopped reading a few lines ago.

BOLD STEPS NEEDED

Encountering needs in today's real estate market is slightly less difficult than falling out of bed, so merely finding them is not necessarily a bold first step
toward success. To be useful to you, those needs must be presently unmet. Aside: No human need is more critical than breathable air, but because it is generally free and abundant, you can only make a buck by selling it to specialty users, such as scuba divers.

Even if an identified need is unmet in your business environment, the reasons why must be known and you must provide workable solutions in order to pursue that fortune. Truth to tell, many of the unmet needs in today's real estate world are simply not "meetable" and therefore, do not figure into your formula for success. Most prominent in this category are so-called buyers and sellers who are unable to act by reason of the insurmountable obstacles they confront.

While the hopelessness of their situations is obvious, their desperate hopes consume far too much of the time and talent of real estate professionals, as well as souring the statistical scene in the marketplace. Those whose needs simply can't be met and whose problems can't be solved deserve nothing more than your sympathy and an absolute minimum of your attention until their circumstances change and/or the market rebounds (i.e. returns to normalcy) which it will do, as it always has in the past.

THE "COULD-HE'S" LURK

Just as damaging to your time management are those who are able to buy or sell, but are either unready or unwilling to do so. Only those prospects who really want to buy and who are both willing and able to pay what they have to pay to get what they want are really buyers: only they are deserving of your services. This automatically excludes bottom feeders who see a bottomless market, regardless of the upside potential of the bargains at hand.

They see opportunities as being merely gateways to even bigger "steals" and have an abiding fear of not milking each downtum to its historical limit. Evidence is mounting that for them, these trying limes will prove to be the "good old days" of the future, but they have no place in your present. Similarly, only would-be sellers who could be sellers belong in your work plan.

Those "could-be's" must be both willing and able to accept the best price obtainable from the best buyer available in the current market, however shy that prospect might be of the owner's ideal. Eliminating from the market those "pseudo-sellers" who don't fit that narrow definition would almost instantly convert today's surplus of listings to a near shortage. (Suggestion: Check www.joeklock.com for in-depth information on "The Facts Of Life For Home Sellers.")

ANOTHER PITHY PRINCIPLE

I'm at a loss to remember the author of yet another pithy principle: "The difference between success and failure in business is often an inability to distinguish between the difficult and the unattainable." Never has this been a more useful guideline for real estate professionals than right now. Finding those with "meetable" needs and solvable problems is difficult, as is getting them to acknowledge their status and bite the necessary bullets.

However, distinguishing between the difficult and unattainable solutions that swirl around you daily is, in fact, the difference between success and failure - and between making a living or making a fortune. You knew all that, of course ... but will you do all that as well?

Growth Leader: Innovative Tool Helps Prospects From Contact To Close

The real estate marketing and technology company Market Leader Inc. has introduced an innovative new tool for real estate brokers and agents that allows them to see at a glance what's going on with all of their online prospects and help them decide what
needs to be done next to tum those prospects into clients. While the technology is fascinating and pervasive, what's best about the system is that it's easy to understand and use.

Intuitively, the Growth Leader product can even offer insights into whether a prospect has changed his preferences about his future home. The product was introduced at the NAR Annual Conference and Trade Show in Orlando and already has proven to be a leap forward in what technology can do to help build an individual
broker's or agent's business.

While the typical agent Web site may convert only a few visitors into registered
users, Growth Leader is converting around 10 percent of its visitors - visitors
who are willing to register at the agent's site. Once that registration is received, the real estate professional is able to bring into play an array of helpful tools that will guide the prospect toward a home purchase and help that real estate professional get a competitive edge in earning their business.

HOW IT WORKS

According to John Gallagher. Market Leader's senior director of marketing, the company employs its national advertising buying power and years of expertise to help real estate agents generate a steady stream of prospects. The company also has business relationships with the major search engines, including Google. Yahoo and others, to make sure its customers come up high in consumer searches.

"We don't sell leads to real estate brokers and agents:' Gallagher said, "Instead we advertise them in a way that enables them to generate visitors to their own site. And we give them the tools they need to convert these prospects into clients. That's what Growth Leader is all about". From there, Growth Leader tracks the prospect every time they return to the site. "The system knows that the prospect has looked at 18 houses and has saved 6 as favorites."

Gallagher said: "The system identifies for the agent the average price of those homes and the amenities, all of which helps the broker or agent focus on what that potential buyer is looking at." The system knows when the prospect comes back to the agent's site - whether it's a few days later or a few months. It will note whether the prospect is starting to look at more properties and spending longer looking at each one - an indication that the buyer's search is intensifying.

The system even picks up on when the prospect's preferences change. "Let's say the buyer has been looking for condos in the city, but suddenly starts looking at houses in the suburbs. The system notes that change and tells the broker or agent so he or she can follow up with a phone call or email to the prospect," Gallagher said.

The system also maintains e-mails sent between agents and prospects and provides a space for agents to take personal notes on conversations - such as the prospect comments on specific listings. And because most agents are out and about working with clients, the system can be accessed via mobile phones as well.

ANALYSIS

The Growth Leader system can analyze the homes the prospect has looked at and identify other listings that the prospect hasn't seen but might be interested in. Those additional listings, however, are not pushed to the prospect - but are sent to the agent to filter before being forwarded to the consumer. The system is intuitive, much like Amazon.com's automated analysis of how book buyers use that site.

(A consumer looking for Harlen Coben's latest mystery thriller "Hold Tight" not only sees that book, but also gels a recommendation to take a look at David Balducci's " Whole Truth.") "The difference is that the alternative homes aren't sent to the prospect directly, they are shown to the agent," Gallagher said. "Then the agent decides which ones to forward to the prospect. That way the contact is personal and positions the agent as the neighborhood expert."

All of these features are designed to give Growth Leader customers a competitive edge in keeping prospects engaged. and in converting them into new clients.

PRICING

The Growth Leader system is priced at $175 per month on a month-to-month basis but can be as low a $99 per month when purchased with an annual subscription. When agents first sign up for the system, a Growth Leader associate will discuss the agent's objectives, figure out how many prospects they would like to generate each month, and then decide how much additional advertising they would like Market Leader to do on their behalf.

While the cost of driving prospects to a broker or agent's site varies area to area, Market Leader is able to help agents attract new clients at rates far lower than they could do on their own because of their volume relationships and decade of buying expertise. "We encourage brokers and agents to buy advertising - it can be really cost effective, we can pass savings on to agents," said Gallagher.

Gallagher freely admits that Growth Leader is geared to the broker and agent who is working with buyers. but says it also is a good listing tool. "The agent is able to show sellers the kind of technology that is available to him and the kind of interest that can be generated in a property. It's a powerful listing tool," he said.
For information on Growth Leader, go to www.MarketLeader.com or ca1l 877-732-9521.

How You Can Identify And Avoid Mortgage Fraud

On February 6. 2004. CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting " epidemic" of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of investigation have been forced to create an entirely new category for tracking these cases.

According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime.

CRIME AND PUNISHMENT

The primary focus of these investigators appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws.

However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents.

A violation of the federal mortgage fraud law (18 U.S.C. §1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine.

MORTGAGE FRAUD SCHEMES

The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: "fraud for housing" and "fraud for profit". Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home.

These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.

FRAUD FOR HOUSING

Income Fraud - This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of "stated income" or "no-doc liar loans" has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income Statements, savings accounts and tax returns, can be produced on demand.

Employment Fraud - In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds.

Failure to Disclose Liabilities - The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower's eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios.

Occupancy Fraud - This generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment properly.

FRAUD FOR PROFIT

Equity Skimming and Cash-Back Schemes - A straw buyer is typically implemented as the buyer of the property due to his or her credit worthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income.

After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments. Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property's value, a dishonest seller who intentionally inflates the selling price, and a dishonest settlement officer who makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default.

Appraisal Fraud or Price Inflation - This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance.

The New Appraisal Fraud: Price Deflation - When done legitimately, a short sale occurs when a borrower who owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference.

A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker' s price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit.

Identity Theft Identity theft fraud occurs when a victim's identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing.

The Buy and Bail - This completely new scheme is perpetrated by a homeowner who cannot sell the home because more is owed on the property than it's worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased. the owner "bails" on the original home and fails to make any further mortgage payments.

AVOIDING AND PREVENTING FRAUD

Mortgage fraud frequently emanates from groups that complete an abnormal
amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller.

It is equally important to remember that agents owe a very strict fiduciary
duty to act in their clients' best interests. So before reporting a client to your local authorities, you need to speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don't constitute a breach of your fiduciary duty to your client.

Real estate agents are in a unique position that enables them to identify and even prevent the occurrence or fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.

How To Re-Energize Home Sales

Long ago I was a part owner of a company that produced dual-fuel vehicles -they could run on either gasoline or propane with the flip of a switch. We did a lot of fleet conversions and we even supplied fuel for a number of apartment buildings. I also used to write about energy and have been lucky enough to visit an underground uranium mine in New Mexico, live on an off-shore oil production platform south of Louisiana, see coal mining sites in Kansas and Colorado, visit a nuclear fuel fabrication plant in California, see shale oil in Colorado, look at experimental nuclear reactors (they're sort of like deep hot tubs), and so forth.

ENERGY PRODUCING PROPERTIES

I bring up this history for a simple reason: We need to re-start the American
economy. One step among many would be to make every house, apartment, building and office structure not just energy efficient, but energy producing. The technology is out there today to do just that. Instead of massive projects, think smaller and in terms of millions of installations.

We could employ a lot of people in every state and in every community. At the same time we could also increase the value of our housing stock, do a lot of good for the economy and also cut our dependence on foreign oil - a dependence which drains our bank accounts and demolishes our political independence.

WHAT CAN BE DONE

Newer homes - and retro-filled older ones-give some sense for what can be done. As one example, our 40-year-old furnace finally gave out. The new sytem will cut our healing and air conditioning bill by about a third. No less important, it's better. We now have a programmable thermostat. The temperature moves up and down during the day as our needs change.

When the temperature in the house needs to be adjusted the system doesn't just go full blast, it instead selects the most energy efficient approach to get the job done. Add in better insulation, modern windows and doors, fuel-efficient appliances and more efficient toilets and you not only cut energy bills and water usage, you reduce the need to build new power plants.

Saving energy ought t0 be encouraged but it's only half the equation. The other half is this: Every home, apartment building and office complex should be seen as a source of energy production. We already have a number of homes where owners have installed various devices which allow them to lower electric usage and in some cases to feed energy back to the power grid.

We need to go further and make these pioneering efforts commonplace. A smart example of what can be done comes from Brookfield Homes. It has properties available right now, today, that benefit from solar, geothermal and wind energy. (See: http://www.
brookfieldblue.com ). Heat from the sun can be used to heat water (a huge energy cost) and also to convert it into electricity. Geothermal power to heat and cool a property can be extracted from the ground.

A simple and small turbine can produce electricity from wind. No less important, the time has come to recognize that vast homes with more square footage than a polo field are out. Times change. No one is making cars with fins. TVs with tubes or telephones with dials.

With better designs and more efficiency, smaller homes, say 1,200 to 1,600 square feet, can make great sense, especially since they're most likely to comply with Miller's First Rule of Real Estate: Never buy a home you don't want to clean.

It costs money to install or retro-lit energy generation systems, but it also costs money if you don't. As our newly elected President says, we need new ways of doing business and that includes real estate.

BROKER SUPPORT

Brokers ought to support the move not just to green homes, but to energy generating homes. The reason? Better inventory to sell. A new reason to stoke demand.

• Homes which are objectively better for the country.
• Homes which will lower gas prices by reducing overall energy demand.
• Homes which sell because they're cool, sexy, in, green and politically correct.

Look toward the future and think about the new generation of cars being produced. Some experimental models are now getting 100 MPG. That's done by combining gasoline engines with electric generators and batteries. We'll be using gasoline for decades because the distribution infrastructure is already in place. But so is the distribution infrastructure for electricity. A car that gets 100 miles per gallon is great, a car that gets 100 miles per gallon and uses free fuel from home is a technology that's long overdue.

MONEY WELL SPENT

While few of us have the ability to dig an oil well in our backyard, it's a fairly simple matter to hook up a small wind turbine or to add a few solar cells. Given the benefits, it's money well spent.

Tax Time Looms And You Have The Power To File With Ease

This article will focus on how to prepare your business and personal tax returns once tax time actually arrives. Issues discussed will include how to efficiently file your tax returns, how to avoid audit triggers and important filing issues. If you stayed organized throughout the year, tax time should be a breeze. Do not panic if you were less than diligent with your record keeping and organization: just make it a point to change your habits this year.

Make sure you have all of your documents

Gather all relevant information including reporting documents, bank/brokerage statements and available deductions. Review your prior year tax returns to make sure you have all of the documents that you had in the past and may have overlooked. This step is important to save time and to ensure that you do not have to file an amended return with information you forgot the first time. A complimentary checklist of common items you need to include on your tax return is available on our website: www.bergersontax.com, under the Income Tax Organizer tab.

Separate your expenses into categories

As a real estate professional you assuredly have many expenses from operating your business. It is very important that you do not lump all of your expenses together. but rather separate them into different categories. If you use accounting software you will be able to print out a statement that has your expenses broken down into different categories already. You will find if you have folders for each category of expense and separate and ledger your receipts throughout the year, you will save yourself time when you go to file your taxes.

If you just threw all of your receipts in a box, you will need to categorize your
expenses now. As an example of how to categorize your expenses, look at the chart titled "Deductible Business Expense Worksheet". By having your expenses separated into different categories you can easily transpose your numbers onto the tax return. If you hire a tax professional you will make his or her job easier and save money on tax preparation fees.

File on time

No matter what type of business return you are required to file, make sure to file by the appropriate deadline. April 15th is the deadline for filling your individual income tax return, unless it is pushed back a day or two as it has been in recent years. Your return is considered filed timely if the envelope is properly addressed and postmarked no later than April 15. If you use a fiscal year (which is a year ending on the last day of any month other than December), your return is due on or before the 15th day of the fourth month after the close of your fiscal year.

If you cannot file by the due date of your return, then you can request an extension of time to rile. However, an extension of time to file is not an extension of time to pay. You will owe interest on any past-due tax and you may be subject to a late-payment penalty if payment is not made timely. To receive an automatic 6-month extension of time to file your return, file Form 4868 by the due date of your rerum.

Do not include items on your tax return that will raise RED FLAGS

When preparing your tax return it is important to avoid including any items that might draw extra attention to your return. Below are a few items I have found attract extra attention from the IRS. A complete list of audit triggers can be found in The Audit Angel 2009: Income Tax Organizer and Mileage log available at www.bergersontax.com.

Unusually high itemized deductions

If you claim large deductions for someone in your income category the IRS might decide to examine your return. Do not be afraid to claim all of your deductions if they are legitimate, just be able to validate them. If you are interested, take a look at the IRS statistics from Income Bulletin, Spring 2008 News Release IR·2008-720of average deductions claimed for income categories. Compare your itemized deductions with the national average to see if your deductions would be considered high.

Losses from self-employment

As a real estate professional you most likely are considered self-employed and have to file a tax return for your business. The IRS audit rates are already higher for taxpayers who are self-employed, but the item that really raises RED FLAGS is if an individual claims losses from their self-employment year after year. When claiming losses every year the IRS wonders if you have a legitimate business and are making a real attempt to make a profit or if you are participating as a hobby.

Under the "hobby loss" rules you can deduct expenses only to the extent of income from the activity. In my experience, I have generally found the IRS starts questioning if a profit is not achieved between three to five years. As a self-employed individual myself, I know how difficult it is to achieve a profit, especially in the first several years of business.

If you do not earn a profit for many years, make sure you can show you are attempting to have a successful business and have a legitimate motive to make a profit. Things you can do to demonstrate that include: having a business plan, setting up a business account at a bank or having a business credit card, having a registered name, produce marketing materials and having a completed mileage log with appointments or meetings.

Do not report all round numbers

You might laugh at this one, but I assure you individuals do it all the time. Although you are required to round off your income and deductions to the nearest dollar. do not report everything rounded to the nearest zero. When all of your deductions are $50, $100, $1,000, it appears to the IRS that you are guesstimating your figures and not reporting the actual amounts. Actually several years back I had a client bring me his Deductible Business Expenses Worksheet filled out with all numbers rounded to the nearest hundred. Needless to say, I sent him back home to find the exact figures and thus solved him an unpleasant meeting with the IRS.

Get good advice

It is very important that you have a tax professional to consult throughout the year and to help you complete your income tax return at year end. Keep in mind when I say a tax professional I mean someone who is qualified, has ample experience, and is willing to speak with you personally to explore your individual tax situation to best maximize your deductions. The main reason to hire a tax professional is that chances are you do not keep up with current tax law.

Congress is constantly passing new laws, the IRS comes out with new rulings and judges make new decisions all the time, all of which directly affect your tax situation. How many of you have the ability to read about all these decisions in the newspaper as well as research them thoroughly to see how they affect your individual tax situation? Tax professionals subscribe to newsletters, press release and alert services that keep them abreast of every changing tax law. In addition, tax professionals attend tax education courses throughout the year and learn about changes from IRS agents and state officials.

Keep tax returns and records for at least three years

Your tax return and records should be kept for at least three years: since the IRS generally has three years from the date your return is filed to audit your return. Keep in mind, however, the IRS can go back as far as six years to question a return where income has not been reported or indefinitely where fraud is suspected. Records of transaction relating to the basis of property should be kept for as long as they are important in figuring the basis of the original or replacement property.

An example would be keeping records of the purchase of rental property or capital improvements to that property for as long as you own the property. The keys to a smooth income tax filing are to make sure you have all the correct documents, categorize your expenses, avoid audit triggers, file on time, and get good advice. If you follow the steps in this article and prepare properly throughout the year, your income tax preparation experience should be painless.

If you have not been very organized in the past, make it your New Year's resolution to start keeping detailed records of your business expenses. You will likely find that you have more deductions than you thought and you will also be protected in the case of an audit. The more organized you stay throughout the year the easier tax time will be.

REBAC's Exciting Entrance Into 2009

I understand that today's market presents unique challenges for all of us, which only strengthens my commitment developing new REBAC member benefits and reaching out to consumers looking to buy. Normally, I take the time in this Column to write about general topics, and not promote REBAC per se.

But I thought I would be remiss if I didn't share with you how strong Our organization is and how it benefits you. If you are a member of REBAC, thank you and please enjoy this overview. If you are not a member, I want to invite you to become a part of the largest member organization dedicated to representing buyer-clients in the residential real estate transaction.

In 2009, you won't see the REBAC staff slowing down or lessening our member support. You have my word that we are working tirelessly to increase your benefits, help you find clients and raise consumer awareness. So, please permit me to share with you what we have done and what we plan for members of REBAC and those that have earned the Accredited Buyer's Representative Designation.

YOUR WEB SITE: REBAC.NET

After conducting focus group research with members and consumers alike, we revamped www.rcbac.net. The site is as easy to navigate and has excellent tools for our members. Knowing that knowledge is power we placed these tools in the password protected "for members" section of the site.

o View all past issues of Today's Buyer's Rep online in the members section of
www.REBAC.net. many of which also include articles that will be valuable to consumers. Feel free to use these issues to brush up on your skills, share with your clients or use for prospecting tools. Just make sure you aren't violating copyright protections when you reproduce content from another source. If you want to use any REBAC materials, simply drop us a note at REBAC@realtors.org. We'll walk you through our simple process for securing reprint permission.

o Save time and money by using the REBAC Print Shop where we've developed professionally designed postcards and flyers that you can customize, geared toward first-time homebuyers, in addition to several other audiences, such as growing families, relocating buyers, vacation homeowners, move-up buyers, retirees and more. All you need to do is check your personal contact information and, if you like, add your photo. You can even upload your mailing list and let the Print Shop send your postcards for you.

o I strongly encourage members with real estate questions to try our new "Ask an Expert" feature, Here you can submit questions for a real estate lawyer, a mortgage broker, another buyer's rep or other real estate professionals. Your questions, as well as all answers, will be posted on the site, so all members can benefit from this expert advice. Don't worry about asking a question that seems too basic, we won't list names on the site.

o In addition to hiring the quantity and quality of online member benefits, the new web site is loaded with valuable information for homebuyers, including many great tips and insights into the importance of working with an ABR. That information, coupled with a stepped-up online advertising campaign, should result in strong traffic from consumers to generate even more referrals for REBAC members.


LEARNlNG AND EDUCATION

On more than one occasion, members have asked me why REBAC doesn't have a continuing education requirement for members. My reply is simple-we provide such a wealth of on-going information that members receive education all the time. Members get this fine magazine, weekly email updates and our monthly newsletter - Today 's Buyer Rep. Also, we will continue our REBAC Connection webinar covering a wide range of topics of particular interest to buyer's reps.

The introductory sessions have received very high marks from the members who have participated in to them. There is no charge for these webinar; - it's part of your member benefits package. These are just some of the things that REBAC is doing for its members. Don't forget that we have other incredible tools for you such as REBAC's online guide to Successful Homebuyer Seminars, which walks you through each step in the process and offers numerous helpful shortcuts.

Also REBAC's Homebuyer's Toolkit; an excellent resource you can provide to prospective buyers for a comprehensive quick-reference guide to buying a home. And in 2009 we will be going full-force into creating social media outlets for you to network with peers, find prospects and continue to learn. While the media and others are painting complete gloom and doom, I firmly believe that REBAC members, and especially those who have already earned their ABR designation, are uniquely positioned for greater success this coming year than other real estate professionals.

Also, we've witnessed an ongoing trend over the years, in terms of buyers becoming increasingly informed about the many different purchasing decisions they make. This trend has been fueled in large part by easy access to information over the Internet. I say this is great! The more educated the buyers are, the more they will see the benefit in using someone with additional training and accreditation as it relates to the buy-side of the residential transaction.

Now, more than ever, homebuyers want to make sure they're making smart choices, both in terms of the homes they buy and in terms of who they will work with to complete their transaction. As buyers sort through their options -including learning about the benefits of buyer representation -it will undoubtedly become clear to them that their interests are best served when they're served by an Accredited Buyer's Representative.

It's About Time

Let's face it - the real estate industry had a tough year in 2008. The mortgage crisis, declining prices, lower buyer confidence, slower sales rates and myriad other factors contributed to a year many of us are glad to be done with. But although most experts agree that any rebound in 2009 will be slow and
deliberate rather than sudden and extreme, the new year, along with a new administration and outlook, provides each of us with a fresh start of sorts-and some time to think about the industry and our place within it.

TIME FOR STIMULUS

The housing industry is the primary focus in any discussion of getting the U.S. economy back on track. In fact, by the time you read this, one of several stimulus packages might already have been adopted. The act of making housing a national priority and implementing a plan is a vital step in the recovery process. The move should aim to increase demand (through means such as tax incentives and/or interest
rate buydowns), curb foreclosures, eliminate problematic mortgages, assist homeowners and restore consumer confidence.

And while no one forecasts a smooth residential ride this year, some local markets are already showing signs of turnaround while others seem capable of doing so with the proper stimulus. Buyers are out there, despite considerable challenges in terms of oversupply and general economic turmoil, the combination of attractive interest rates, sound lending practices and attractive prices should bring people back into the market.

TIME FOR GREEN

While the economy and the election rightfully dominated headlines over the past year, another transformative social shift also will have a vast impact on our industry. "Goinggreen" is far from a new concept, but the scope to which it has grown shouldn't be underestimated. The days of $4 gasoline may have disappeared for now, but the national focus on energy efficiency has not.

For real estate agents, this requires a deeper understanding of the green paradigm.
Are you able, for instance, to articulate to your clients the significance of LEED. Energy Star and other rating systems? Are you properly versed in sustainable communities, smart growth, new urbanism and the latest trends in conservation? Are you prepared to deliver professional advice on the green merits or lack thereof - of a particular property?

Fortunately, there are excellent ways to learn. The new Green Designation program unveiled at the National Association of Realtors Convention in November, for example, can provide you with a solid foundation of skills, knowledge and credibility. The curriculum consists of a two-day core course and one of three one-day electives. This might be the ideal time to complete the training and add the designation to your toolbox.

TIME FOR TECHNOLOGY

In Denver, where I live, we're on the verge of losing the city' s oldest newspaper, The Rocky Mountain News, which was first published in 1859. Other venerable newspapers, from the Miami Herald to the Chicago Tribune, also face troubling situations. These longtime media giants are struggling for a variety of reasons, but the tidal shift in classified advertising is cause No. 1. Quite simply, more and more readers now use the Web to find things - such as home listings - that they used to see in the newspaper.

Paraphrasing an old saying, the best time for a real estate professional to fully engage online advertising and lead generation is five years ago. The second-best time is today. If you aren't, on the first or second page of results when someone Googles real estate in your city; if you haven't investigated which Search Engine Optimization techniques will drive traffic to you; if you haven't explored the many venues that can promote your listings and generate leads for free or at little cost; if you're unclear about podcasts, virtual tours, blogs or digital photos: or if you' re reluctant to network with colleagues and/or consumers on any number of social media sites, then the time for you to make a shift in your online approach to business is right now.

TIME FOR ACTION

Under any conditions, we all remain empowered to approach each day with the energy and motivation required of successful people. No matter what sort or trouble brews, the age-old adage still holds true: Nothing beats hard work. In sales, that translates to maximizing the time you spend on activities resulting in business. It's vital to have systems that cultivate leads, process contacts and serve clients in the most efficient manner possible.

Whether through team members or automation or other means, you need to deftly complete the day-to-day tasks that connect you with prospects and transform them into clients and customers. Then you must deliver the type of expert service that creates advocates and additional referrals. There' s simply no substitute for this. It's easy to forget that promotion, reputation, visibility, efficiency, knowledge, skill and sheer professionalism are permanent cornerstones in the success of the very best real estate agents. But make no mistake: Strength in those areas will see you through - even in the hardest of times.