Course 5 - Getting Started - Humber Real Estate Education [7 ed.]

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©2019 Real Estate Council of Ontario

Module 1: Obtaining and Maintaining Your Registration and Insurance Disclaimer: This is a reference document which contains pages from the Accessible eLearning module. You should complete the eLearning module to proceed to the next step. Please note that the accessible module on the LMS only contains the interactive pages and you need to go through the content of this document thoroughly to attempt the interactive activities in the module. Please use Adobe Acrobat Reader (Recommended version 9 or above) to navigate through this PDF. Real Estate Salesperson Program ©2020 Real Estate Council of Ontario. All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or in any means – by electronic, mechanical, photocopying, recording or otherwise without prior written permission, except for the personal use of the Real Estate Salesperson Program learner.

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Module 1: Obtaining and Maintaining Your Registration and Insurance Getting Started in Real Estate Congratulations! You are about to start the last course, which consists of two modules, of the Pre-Registration phase of the Real Estate Salesperson Program. Completing the last two modules of this program is an important accomplishment; one that moves you one step closer to realizing your dream and becoming a real estate professional. In this module, you will learn what is required to register as a salesperson with the Real Estate Council of Ontario (RECO) and how to maintain your registration in good standing. The module also provides an overview of the RECO Insurance Program, including the types of insurance coverage provided and the policy limits and deductibles. Finally, the module describes how RECO processes complaints, and conducts inspections and investigations to ensure compliance with the Real Estate and Business Brokers Act (REBBA) and the Code of Ethics. You also need to navigate through the online version of this module to move further in the course. While navigating through the online module, click the Legislation button to view laws and regulations related to this module. While navigating through the online module, click the KMS button to access the Knowledge Management System or visit the Module Resources to find the list of all the KMS assets for this module. ©2020 Real Estate Council of Ontario

The contents of the thumbnail this Accessible PDF.

and References from the module are added to support your learning throughout

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Menu: Obtaining and Maintaining Your Registration and Insurance Number of Lessons Lesson Number Lesson 1 Lesson 2 Lesson 3 Lesson 4

5 Lessons Lesson Name Obtaining Your RECO Registration Maintaining Your RECO Registration The RECO Insurance Program How RECO Enforces REBBA Module Summary

©2020 Real Estate Council of Ontario

Lesson 1 | Page 1 of 14

Lesson 1: Obtaining Your RECO Registration

This lesson highlights the requirements and standards used when applying to RECO for registration as a real estate salesperson, including the disclosures and fitness criteria. The lesson also describes how the application for registration is processed by RECO and summarizes the requirements related to the certificate of registration once it is issued.

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Lesson 1 | Page 2 of 14

This lesson outlines the steps you must complete to obtain your registration with the Real Estate Council of Ontario (RECO). You will learn about what is required of all applicants, the application process, and your obligation to ensure the accuracy of pertinent information on the application form. Upon completion of this lesson, you will be able to: • Identify the education criteria to become registered as a salesperson • Identify the requirements and standards for applying for registration, including disclosures and fitness criteria • Describe the application process (once an application for registration is received) • Identify the requirements to be notified for registration and for carrying the certificate of registration

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Lesson 1 | Page 3 of 14

By now you have successfully completed all exams, Simulation Sessions, and all but the last two eLearning modules of the final course of the Real Estate Salesperson Program. In your studies, you learned what is required to be a successful real estate salesperson working with clients and customers to purchase, sell, or lease a variety of property types. Once you have completed your last two eLearning modules, you are ready to move on to the next stage of obtaining registration. This topic presents an overview of the requirements to become registered as a new salesperson.

©2020 Real Estate Council of Ontario

Lesson 1 | Page 4 of 14

Education Verification To apply for registration, you must provide verification to RECO that you have successfully completed each of the courses and exams in the Real Estate Salesperson Program. An education record from Humber College will verify details of your academic record. You can print a copy of your education record by accessing the My Enrollment History tab in the learner portal. In accordance with college policy, education records will not be issued if you have an outstanding balance in your account.

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Lesson 1 | Page 5 of 14

Employment by a Brokerage In addition to successfully completing the Real Estate Salesperson Program, you must also be employed at a registered real estate brokerage before applying for registration with RECO. A broker of record must review and approve your application for registration. In the next module, you will learn about gaining employment by a brokerage.

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Lesson 1 | Page 6 of 14

Registration Application Once you meet the education and employment requirements, you are ready to complete and submit an application for New Salesperson. The application, which is available for online completion and submission, is located on the RECO website and must be submitted within twelve months of completing the Real Estate Salesperson Program. On the application you are required to provide the following personal information: • Hiring brokerage: The brokerage name, registration number, and details of the official authorized to approve your application • Contact information: Your full legal name, trade name (if applicable), residential address, address for service (if applicable), and other contact details • Employment history: Details of the last two years of employment including any time in which you were not employed You will also be asked to give RECO consent to collect additional information as necessary to determine your eligibility for registration.

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Lesson 1 | Page 7 of 14

Disclosure Information The application form also requires you to make certain disclosures. To the best of your knowledge, the disclosures must be truthful, accurate, and complete in every detail. Providing false or incomplete information is a serious offence. Failing to disclose pertinent information could lead to a refusal of registration or even charges under REBBA. You may also be required to provide supporting documentation and an explanation of the circumstances leading up to a disclosed event.

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Lesson 1 | Page 8 of 14

Disclosure Requirements The disclosure requirements in the application cover a range of areas. The following six sections contain information on the nature of the disclosure requirements.

Other occupations

In order to identify the potential for a conflict with the requirements under REBBA, you must disclose details of any other occupation you are engaged in, even if it is not related to real estate. These details include: • Legal name and nature of the business • All positions held by you in the company and your duties and responsibilities

Other business interests

If the other occupation is on behalf of a company fully or partially owned by you, this must be disclosed in the section related to other business interests. You must disclose business interests including partial or full personal ownership of any active or inactive company or business that trades in residential or commercial properties. This disclosure requirement also applies to companies that provide property management or other property-related services. Details of the business interests must be provided including: • Nature of the business • Your ownership interests • Your duties and responsibilities on behalf of the company

Insolvency

If you have ownership in real property for the purposes of selling or renting, you must disclose any trading activities you are engaged in, on your own behalf or the company’s behalf. You must report any existing proceedings you are engaged in relating to the Bankruptcy and Insolvency Act. ©2020 Real Estate Council of Ontario

In the case of a filing of bankruptcy, you must include: • Copy of the complete assignment in bankruptcy • List of creditors • Statement of assets, liabilities, and expenses • Certificate of discharge, if applicable • Signed and dated statement providing full particulars of the events leading up to the filing

Outstanding judgements

License or registration suspensions or terminations

You must provide sufficient details for the situation to be reviewed fully by the Registrar. A filing under the Bankruptcy and Insolvency Act will not necessarily disqualify you from obtaining registration. Each application is assessed on an individual, case-bycase basis. You must disclose any outstanding debt that is in default including: • Court-ordered garnishment of wages due to unpaid debts resulting from civil cases or Family Responsibility Office judgements • Liens • Canada Revenue Agency Requirement to Pay or garnishment • Tax arrears (income and HST) • Debts that have been sent to a collection agency You do not have to disclose outstanding debts on credit cards, mortgages, or financing, if those debts are not in default. You must disclose if you have had a prior refusal, suspension, revocation, or cancellation of any license, registration, or professional status. This includes personal licenses (e.g., driver’s license) and professional licenses (e.g., license to act as a mortgage broker) that have been forfeited through a disciplinary process. You do not have to disclose a license or registration that has lapsed due to nonrenewal.

©2020 Real Estate Council of Ontario

Criminal record or pending charges

You must include an original Criminal Record and Judicial Matters Check dated within six months of applying for registration. If you have received any criminal charges or convictions, you must disclose them, regardless of when they occurred or what dispositions took place. Full details of the circumstances leading up to the event(s) must be submitted in a signed and dated letter so an informed decision can be made by the Registrar. You must also disclose if you were granted a record suspension (formerly a pardon) and include a copy of the record suspension with the application. Full details of any charges, convictions, or suspensions must accompany the application. If additional information is required, a RECO representative will contact you. A criminal record or pending charges do not necessarily disqualify you from obtaining registration.

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Lesson 1 | Page 9 of 14

Once you have gathered the necessary documents and completed the application for registration, you are ready to submit it to RECO for consideration. This topic describes the steps RECO follows when reviewing your application.

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Lesson 1 | Page 10 of 14

Application Processing at RECO Once your application and registration application fee are received, it will be reviewed by a RECO representative. Provided your application is complete and no additional supporting documentation is required, it can typically be processed within ten business days. If your application is incomplete or requires additional review due to a disclosure, the ten-day time frame will not apply. Information on registration application fees are available from the RECO website. If there are deficiencies in your application, the issues will be clearly communicated to you. Examples of issues that can lead to a delay in processing are an incomplete application, missing or insufficient supporting documentation, missing Criminal Record and Judicial Matters Check, and a declined or missing registration fee payment. Applications requiring review due to disclosures will be assessed by a member of the Registration team to determine fitness for registration. If additional information is required, you will be notified and once the information is received, the application review process will resume. ©2020 Real Estate Council of Ontario

Lesson 1 | Page 11 of 14

Requirement to Pay Insurance Premium Once your application for registration is approved, you are obligated to pay the RECO Insurance Program premium. All salespersons and brokers in Ontario must be enrolled in the insurance program. It protects you and clients and customers by providing errors and omissions insurance, consumer deposit insurance, and commission protection insurance. If you trade without being registered or insured, you can be charged under REBBA. You will learn more about the RECO Insurance Program later in the module.

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Lesson 1 | Page 12 of 14

Communicating Changes to the Registrar If there are any changes in the personal information you provided on the application such as to your name or your residential or service address, you must inform the Registrar in writing within five days. Similarly, changes to any disclosure information must be reported within five days. These include changes in a second occupation or a business interest. If after you apply, you experience an insolvency filing, outstanding judgement, licence or registration suspension, or criminal record charge – you must report it within five days.

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Lesson 1 | Page 13 of 14

Proof of Registration Once you pay the RECO Insurance Program premium, your registration is complete and your two-year registration cycle begins. In accordance with REBBA, before you engage in trading activities you must receive confirmation of your registration from the Registrar. The Code of Ethics requires you to be able to present proof of registration at all times when trading in real estate. Effective June 1, 2022, RECO will only be issuing registration certificates electronically. Going paperless is part of RECO’s continued efforts to leverage technology and reduce their carbon footprint. You can access your registration certificate through the MyRECOCertificate app that will display your current registration status. Once you are registered, open the MyRECO Certificate Mobile App, select “Get Certificate”, and enter your MyWeb login username and password. To access an electronic version of your RECO registration certificate on your mobile device select the “View Certificate” tab. This allows you to provide proof of registration even if your mobile device is not connected to the internet. ©2020 Real Estate Council of Ontario

Lesson 1 | Page 14 of 14

Congratulations, you have completed the lesson! There are four sections on this page with a summary of the key topics that were discussed in this lesson.

Education requirements Application requirements

Application process

Registration certificate

The Real Estate Salesperson Program, which includes courses, exams, and simulation sessions, must be successfully completed prior to applying to RECO for registration. An application for registration must be supported by proof of employment with a registered real estate brokerage. The application requires you to disclose a range of personal information. An original Canada-wide Criminal Record and Judicial Matters Check completed within the previous six months must also be submitted with the application. An application for registration as a salesperson must be submitted to RECO within 12 months of completing the education requirements. Once an application is received by RECO, it is assigned to a representative for review. Provided there are no deficiencies in the application, it can typically be processed within 10 business days. Applications requiring review due to disclosures made are referred to the Registration team to determine fitness for registration. Once the application for registration has been approved and the RECO Insurance Program premium is paid, the application is finalized and a two-year RECO registration cycle begins. A salesperson must be able to provide proof of registration at all times when trading in real estate. A current registration certificate can be downloaded via the MyRECO Certificate app and displayed on a mobile device at any time.

©2020 Real Estate Council of Ontario

Lesson 2 | Page 1 of 7

Lesson 2: Maintaining Your RECO Registration This lesson describes the ongoing educational and procedural responsibilities that you, as a salesperson, must adhere to in order to maintain registration with RECO.

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Lesson 2 | Page 2 of 7

Once you are registered with RECO, you have ongoing responsibilities in order to maintain your registration in good standing. There are educational requirements and an obligation to renew your registration and insurance regularly. And, you must promptly update the Registrar in the event of any material changes in the information provided for registration. In this lesson, you will learn what is required to maintain your registration as a salesperson. Upon completion of this lesson, you will be able to: • Describe the educational and procedural requirements for maintaining registration as a salesperson

©2020 Real Estate Council of Ontario

Lesson 2 | Page 3 of 7

Post-Registration Phase Education Requirements In your first two years of registration, you are required to complete the Post-Registration phase of the Real Estate Salesperson Program through Humber College. Successful completion of the program is mandatory to be eligible to renew your registration at the end of the initial two-year cycle. The following three sections contain information on the Post-Registration phase of the Real Estate Salesperson Program and the related educational requirements.

Elective courses

This mandatory eLearning course provides you with a thorough review of a salesperson’s regulatory and compliance obligations, including: • How REBBA affects careers in real estate • Compliance requirements during all the stages of a trade • How non-compliance and complaints are addressed by the Registrar In addition to the compliance course, you must complete two elective eLearning courses from among the following: • Working in Real Estate: Rural, Recreational, Waterfront Properties • Working in Real Estate: Ownership Alternatives and Complexities • Real Estate as an Investment Strategy: Residential Properties • Real Estate as an Investment Strategy: Commercial Properties - Fundamentals • Real Estate as an Investment Strategy: Commercial Properties - Advanced

Wrap-up session

Successful completion of the Real Estate as an Investment Strategy: Commercial Properties - Fundamentals is a prerequisite to registering for Real Estate as an Investment Strategy: Commercial Properties - Advanced. You must complete a classroom-based review session, in which you will practice core activities related to compliance with an experienced real estate professional acting as a coach. This is an opportunity to apply the knowledge and skills gained from the eLearning courses in realistic simulated interactions.

Compliance course

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Lesson 2 | Page 4 of 7

Required Continuing Education All real estate salespersons, regardless of the length of time they have been trading, must complete Mandatory Continuing Education (MCE) courses in order to renew their RECO registration. After you have successfully completed the post-registration phase of the Real Estate Salesperson Program, you are required to complete the MCE courses within every two-year registration cycle. Presently, the MCE program provides you the option to complete either a residential update course or a commercial update course in addition to completing two elective courses. RECO will transition from launching one update course every two years to releasing shorter update courses annually every January. The two annual update courses will come into effect when the new MCE program is introduced on January 1, 2023. The first group of salespersons and brokers who will need to complete two annual update courses will be those who have a registration cycle that starts after January 1, 2023 and expires after January 1, 2025. ©2020 Real Estate Council of Ontario

For example, if your registration cycle starts on May 10, 2023 and expires on May 10, 2025, you will need to complete two annual update courses. The first annual update course will be available January 1, 2023 and the second annual update course will be available January 1, 2024. Salespersons and brokers will no longer have the option to choose between the residential update course and the commercial update course. The new annual update course will contain content of interest to all salespersons and brokers. RECO will continue to develop MCE electives that focus on either residential or commercial topics. The Update Course content focuses on consumer protection, regulatory matters, and current industry issues. It is your responsibility to ensure you have sufficient time to complete the MCE courses prior to renew your registration. Credits for these courses cannot be carried forward into the next registration cycle.

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Lesson 2 | Page 5 of 7

Annual Insurance Premiums In the Post-Registration Phase and for all subsequent years, you are responsible for paying your insurance premium annually. In accordance with REBBA, a salesperson cannot trade in real estate unless they are insured, and suspensions are imposed on salespersons who do not meet the insurance requirement. You will learn more about the RECO Insurance Program later in the module.

©2020 Real Estate Council of Ontario

Lesson 2 | Page 6 of 7

Renewing Registration Before the end of the initial two-year registration cycle and every two years subsequently, you must renew your registration with RECO. The application for renewal, fee payment, and any required supporting documentation must be submitted before the current registration period expires. You can confirm your registration expiry date using the MyRECO Certificate App or MyWeb on the RECO website. You can also use the MyWeb online portal to apply to renew your RECO registration. Your broker of record will receive an email advising them of the renewal application. They will verify and confirm the application information via MyWeb and submit it to RECO for review and approval. If a broker of record does not confirm your application due to missing documentation, you can provide the information via MyWeb and resubmit the application for the broker’s approval. Once the renewal is approved, a registration certificate is mailed to the brokerage. An electronic version of the renewed certificate is available to you in real time using the MyRECO Certificate App. If changes occur to the information on your application for renewal, you must provide details of the changes to the Registrar within five days of the event. Failure to do so could result in charges under REBBA. ©2020 Real Estate Council of Ontario

Lesson 2 | Page 7 of 7

Congratulations, you have completed the lesson! There are three sections on this page with a summary of the key topics that were discussed in this lesson.

Post-Registration Phase educational requirements Mandatory Continuing Education

Within the first two years following registration, it is mandatory to complete the Post-Registration phase of the Real Estate Salesperson Program. The education requirements include a mandatory course on compliance, two elective courses, and a wrap-up session. After you have successfully completed the post-registration phase of the Real Estate Salesperson Program, you are required to complete the MCE courses within every two-year registration cycle. Presently, the MCE program provides you the option to complete either a residential update course or a commercial update course in addition to completing two elective courses. RECO will transition from launching one update course every two years to releasing shorter update courses annually every January. The two annual update courses will come into effect when the new MCE program is introduced on January 1, 2023. The first group of salespersons and brokers who will need to complete two annual update courses will be those who have a registration cycle that starts after January 1, 2023 and expires after January 1, 2025.

Procedural requirements

In order to maintain RECO registration, it is necessary to renew registration every two years before the current registration period expires, pay insurance premiums every year, and advise the Registrar of any pertinent changes to the information provided in support of registration.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 1 of 15

Lesson 3: The RECO Insurance Program

This lesson presents an overview of the mandatory RECO Insurance Program including the types of insurance coverage provided and the policy limits and deductibles for each type. The lesson also defines claims and circumstances and describes a salesperson’s obligation to report these events. The lesson identifies actions that you as a salesperson can take to reduce risk and other actions that can void your coverage under the program.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 2 of 15

As you have already learned, all salespersons and brokers in Ontario are required to participate in the RECO Insurance Program. The program protects you as a salesperson by providing errors and omissions and commission protection insurance. It also protects consumers through consumer deposit insurance. This lesson presents an overview of the RECO Insurance Program. Upon completion of this lesson, you will be able to: • Identify the requirement for insurance • Identify the types of insurance coverage provided through the RECO Insurance Program • Identify the policy limits and deductibles for the insurances provided by RECO • Recognize a claim or circumstance and a salesperson’s obligation to report it • Identify actions of a salesperson that may negate coverage, reduce risk, and additional insurances and coverage to consider

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Lesson 3 | Page 3 of 15

This topic provides an overview of the RECO Insurance Program including the types of coverage provided and policy limits and deductibles.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 4 of 15

Mandatory Insurance In accordance with REBBA, all salespersons must participate in the RECO Insurance Program as a condition of registration. RECO takes an ongoing active role in the insurance program to ensure the program is operating effectively in the best interests of consumers and salespersons. RECO continuously reviews claims data, policy wordings, and program administration. The policy terms and conditions, including premiums, are negotiated with insurance service providers on an annual basis. As a salesperson, if your policy premium is not paid on time, the Registrar can suspend registration pending payment of the premium.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 5 of 15

Coverage Considerations The following considerations apply to the RECO Insurance Program. • Any claim or circumstance must be reported in a timely manner - forms are available at reco-claims.ca • All relevant documentation must be submitted when reporting or submitting claims • Salespersons and insurers have certain responsibilities to uphold, as outlined in the conditions section of the policy • No claims can be made for acts of terrorism or nuclear incidents As with any insurance policy, endorsements can change or alter coverage, so it is important to be familiar with the most recent policy endorsements.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 6 of 15

Consumer Deposit Insurance The RECO Insurance Program offers coverage for both consumers and salespersons. The consumer deposit protection insurance policy applies to clients and customers. It provides coverage for deposits received from consumers that are held in trust by the brokerage for real estate trades. The policy protects consumer deposits for up to $200,000 for any single claim. If multiple claims arising from one occurrence exceed $4,000,000, the amount recoverable by each consumer may be pro-rated. There is no deductible on claims. Consumer deposit coverage offers consumers protection in the event of brokerage insolvency or bankruptcy, theft or fraud, misappropriation of funds, wrongful conversion of money or property, or social engineering fraud. The coverage also benefits salespersons by preventing claims against them for the loss of consumer deposits in pending real estate trades, as a result of an insurable occurrence. Consumer deposit protection and remuneration protection claims often result from the same event. ©2020 Real Estate Council of Ontario

Lesson 3 | Page 7 of 15

Commission Protection Insurance Commission protection insurance covers you from the loss of remuneration due to occurrences at the brokerage to a limit of $2,000,000 per claim, with a maximum of $4,000,000 per occurrence. Remuneration protection covers brokerage insolvency or bankruptcy, theft or fraud, misappropriation of funds, wrongful conversion of money or property, or social engineering fraud. A $250 deductible applies per claim or real estate trade. For example, if you are owed unpaid remuneration for three trades from an insolvent brokerage, your deductible on each of the three trades would be $250, for a total of $750. Commission protection insurance coverage limits and deductible amounts are subject to change.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 8 of 15

Errors and Omissions Insurance Errors and omissions insurance protects salespersons against claims of inadequate work or negligent actions. The policy has a limit of $1,000,000 per claim, with a maximum of $3,000,000 for all claims made within a policy year, and a $2,500 graduated deductible. If the insurer pays compensation to a claimant on your behalf, you are responsible for a $2,500 deductible. If you have more than one claim settled on your behalf in any three-year period, a graduated deductible applies. The deductible for each additional claim will be increased by $2,500. There is no maximum graduated deductible value. The policy provides continuing coverage for professional liability claims, following your retirement or leaving the business for any reason except for disciplinary action by RECO. There is no additional cost for the continuing coverage, and it is subject to the terms and conditions of the master policy.

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Lesson 3 | Page 9 of 15

Exclusions Exclusions are circumstances or situations that are not insured by an insurance policy. The RECO Insurance Program exclusions policy is applied to the circumstances of each claim to determine if it qualifies for coverage. The following four sections contain information on exclusions.

Fraudulent or dishonest acts

Fraudulent or dishonest acts are not covered by the program. However, if such allegations are proven false, then the insurance program will pay for defense costs. A lawsuit could name a salesperson, the broker of record, and/or brokerage for whom the salesperson works.

Property management

Claims arising from property management services are not covered by the insurance program in situations where property management revenues of the insured person or firm exceeds 35 per cent of the total gross revenue. If total gross revenue for property management exceeds 35 per cent, it is best to purchase a separate policy.

Appraisals for financing purposes

The insurance program’s coverage for appraisal services is limited. The definition of “Real Estate Appraisal Services” is the provision of a market value opinion by an insured salesperson in the course of providing “Professional Services”. Any salesperson who provides market value opinions for the purpose of financing and who wishes coverage for this service must purchase separate insurance.

Mortgage brokering

Salespersons acting as mortgage brokers are not covered under the policy. However, if a salesperson directs a borrower to a source of funding for a fee, the exclusion does not apply.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 10 of 15

As a salesperson, you are responsible for recognizing an insurance claim or circumstance, and you have an obligation to report it to the insurer. This topic outlines your responsibilities in order to ensure your continued insurance coverage.

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Lesson 3 | Page 11 of 15

Recognizing Insurance Claims or Circumstances A claim is an oral or written demand for damages, or a lawsuit seeking compensation for errors and omissions. A circumstance is an incident, situation, or event involving actions that you should reasonably foresee that could result in a claim. Examples of potential circumstances include statements by the seller about the functionality of a well or the state of a septic system, the history of water ingress in a basement, the presence of easements on a property, the availability of legal parking, or the functionality of the air conditioning system. As a salesperson, you should be able to recognize a claim or a circumstance, and you are obligated to report them. The RECO Insurance Program coverage is on a claims-made basis. You should make certain that the insurer is informed as soon as possible after you become aware of a problem that it is a claim or a potential claim. Reporting a claim or a potential claim does not mean that you are responsible or liable for negligence, or that you have done anything wrong. By making the report, you are complying with the reporting condition contained in the policy. This ensures that the insurer can investigate the claim and determine the best way to proceed to protect your interests. ©2020 Real Estate Council of Ontario

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Insurance Coverage Exclusions There are several potential actions by a salesperson that could result in exclusions and loss of coverage under the RECO Insurance Program, including: • Fraudulent, dishonest, criminal, or malicious acts • Fines, penalties, and claims or circumstances that are not related to professional services • Breach of anti-spam legislation • Prejudicing the insurer by making your own settlement and expecting the insurer to pay for it, or by admitting liability which should not have been admitted • Offering appraisals for financing purposes • Operating as a property management service, if that service exceeds 35 per cent of the individual’s or company’s total gross revenue • Acting as a mortgage broker - a salesperson directing a borrower to a mortgage funder for a fee is not excluded from insurance coverage

©2020 Real Estate Council of Ontario

Lesson 3 | Page 13 of 15

Lowering Exposure to Claims As a salesperson, you can reduce the likelihood of insurance claims by lowering your exposure to risk and liability. Errors in disclosure and miscommunication are often the source of liability claims. It is important that you disclose any interest, multiple representation, and any material facts relevant to providing a fair and honest transaction. Other claims based on errors in property descriptions or underestimating structural issues can be the outcome of a salesperson’s lack of due diligence. Referrals to experts such as lawyers, contractors, engineers, or inspectors mean that you can provide competent service without exposing yourself to the liability of providing advice, which is beyond your scope of expertise. When referring consumers to a third-party service provider, a leading practice is to provide a minimum of three options. In the event a claim is made, it is essential that you cooperate with the insurer. This means complying with requests for documentation on all aspects of a trade and attending appointments, meetings, and court proceedings, if necessary. You should retain all relevant documents about the trade, which may include trade record sheets, payment reports, and bank account statements. As a salesperson, you must refrain from admitting any liability for a negligent act. ©2020 Real Estate Council of Ontario

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Additional Insurance Coverage In addition to the RECO Insurance Program, you may want to purchase other types of coverage. For example, you may want coverage for the business use of a personal vehicle to drive clients to listings or an extended homeowner’s liability policy if clients visit your home office. If you are operating a home office, it may also be useful to carry insurance to protect home office equipment. Brokerages are typically responsible for the following additional coverages: commercial general liability, property or premises, cyber crime, directors and officer’s liability, and coverage for other business activities, such as property management. You should also confirm whether your brokerage has coverage for general liability while you are off the premises of the brokerage, such as while conducting showings or open houses.

©2020 Real Estate Council of Ontario

Lesson 3 | Page 15 of 15

Congratulations, you have completed the lesson! There are three sections on this page with a summary of the key topics that were discussed in this lesson.

RECO Insurance Program

It is mandatory that all salespersons in Ontario participate in the RECO Insurance Program. It offers, subject to policy limits, deductibles, and exclusions, coverage for errors and omissions, commission protection for salespersons, and deposit protection for consumers.

Salesperson’s responsibilities for claims or circumstances

As a salesperson, you have a responsibility to recognize and report to the insurer any claims (oral or written demands for damages, or a lawsuit seeking compensation) and circumstances (actions that you should reasonably foresee that could result in a claim).

Reducing risk and additional insurance coverage

You can take steps to reduce the risk of claims, including making sure you follow best practices on disclosure of interest and material facts. Always refer to a thirdparty service provider when a consideration is beyond your scope of expertise. Purchasing alternative types of insurance, such as car, homeowner, or cyber security coverage, will also reduce your exposure.

©2020 Real Estate Council of Ontario

Lesson 4 | Page 1 of 15

Lesson 4: How RECO Enforces REBBA

This lesson highlights how RECO enforces the Real Estate and Business Brokers Act (REBBA) including how a complaint about a salesperson is processed by RECO. The lesson also identifies the types of inspections and investigations conducted by RECO to promote compliance with REBBA. The lesson concludes with two scenarios designed to demonstrate how a salesperson remains compliant with REBBA and the Code of Ethics while trading in real estate.

©2020 Real Estate Council of Ontario

Lesson 4 | Page 2 of 15

In the event of a complaint about a salesperson being made to RECO, an established review process sets out the appropriate steps for inquiries with the aim of arriving at a fair outcome. The Registrar has several options available to enforce the provisions outlined in REBBA. Upon completion of this lesson, you will be able to: • Describe the process when a complaint is received by RECO • Identify the importance of inspections and investigations in RECO’s mandate to protect the public interest through a fair, safe, and informed marketplace • Identify leading practices for remaining compliant with REBBA and the Code of Ethics

©2020 Real Estate Council of Ontario

Lesson 4 | Page 3 of 15

This topic outlines the process followed by RECO in the event a complaint is received concerning a salesperson.

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Lesson 4 | Page 4 of 15

Complaint Review Process RECO’s complaints process strives to ensure fair and flexible handling of complaints about the conduct of real estate registrants and those holding themselves out as such. With few exceptions, anyone trading in real estate in Ontario must be registered with RECO. Real estate registrants in Ontario are accountable for their conduct and competence. RECO’s complaints process provides a way for people to bring concerns about the conduct of those trading in real estate to their attention. The Registrar reviews all complaints and concerns, whether they originate from members of the public or registered salespersons. The Registrar assigns complaints to RECO staff for a detailed review. Depending on the outcome of the review, the Registrar has several options described later in the module. If the complaint is deemed outside the jurisdiction of the Registrar, the file is closed. The Registrar may also decide that the complaint warrants no further action if the allegations are not supported by the evidence and information available.

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REBBA provides that if the Registrar receives a complaint about a registrant, the Registrar may request information in relation to the complaint from that registrant. A request for information will indicate the nature of the complaint. A registrant who receives a written request for information must provide the information to RECO as soon as practicable. They are entitled to seek legal advice and be represented by a lawyer, if so desired. They are also provided written notification of what action is being taken by the Registrar, along with an explanation or reasons for the action.

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Lesson 4 | Page 5 of 15

Registrar’s Options In the event of a complaint, the Registrar evaluates each complaint individually, and based on the specific circumstances, determines a course of action. When processing a complaint, RECO considers whether the real estate professional involved has a history of misconduct, which may escalate the chosen course of action and potential outcome. Pursuant to the provisions of the Provincial Offences Act, investigators appointed by and inspectors designated under the REBBA are designated as Provincial Offences Officers for the purpose of pursuing prosecutions in the Ontario Court of Justice system for violations of REBBA, of its regulations, excluding the Code of Ethics. The following seven sections contain information on the Registrar’s options.

Mediate or resolve

The Registrar may attempt to mediate or resolve the complaint.

Written warning

The Registrar may issue a written warning to the salesperson indicating that, if the conduct that led to the complaint continues, further action may be taken.

Undertakings, conditions, and meetings

The Registrar may accept an acknowledgement and undertaking by the salesperson, if appropriate. With consent, the Registrar may apply voluntary conditions to a salesperson’s registration. Conditions are considered on a case-by-case basis and vary, depending on the nature of the complaint. The Registrar may request a meeting with the salesperson to discuss the complaint. At the meeting, the salesperson may receive an informal educational reminder, advice, or caution.

Further education

The Registrar may require a salesperson to take further educational courses.

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Referral to the Discipline Committee

Matters involving alleged breaches of the Code of Ethics may be referred to the Discipline Committee. The chair of the committee generally assigns a panel, consisting of three members of the committee, to hold a hearing. A notice of hearing is given to the salesperson. Following the hearing, the discipline panel prepares a final decision, including reasons. If the discipline committee decides that a salesperson has failed to comply with the Code of Ethics, it may order the salesperson to take educational courses, pay a fine of up to $50,000. The discipline committee is required to publish a copy of its decisions, including reasons, on RECO’s website for a period of at least 60 months.

Immediate temporary suspension

In accordance with REBBA (Sections 13 & 14), the Registrar has the power to order an immediate temporary suspension of a registration where they believe it is in the public interest. Salespersons who are subject to such an order must immediately cease all trading activities in real estate.

Registrar’s proposal

The Registrar may propose to revoke, suspend or refuse to renew, a registration of any person, if the Registrar believes that the person cannot reasonably be expected to be financially responsible in the conduct of business, or the past conduct of the person affords reasonable grounds for belief that the person will not carry on business in accordance with law and with integrity and honesty, or if the person makes a false statement or provides a false statement in an application for registration or for renewal of registration under REBBA. In this case, the Registrar issues a notice of proposal, which sets out the reasons for the proposed action and states that the salesperson is entitled to appeal the proposal to the appropriate body within 15 days after service of the notice. If no request for an appeal is received, the Registrar will carry out the proposal.

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Lesson 4 | Page 6 of 15

A regular part of administering the regulatory requirements as set out in REBBA are brokerage inspections and investigation of complaints. This topic outlines the role these functions play in RECO’s duty to protect the public interest by ensuring a fair, safe, and informed marketplace.

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Lesson 4 | Page 7 of 15

Brokerage Inspections and Investigations One way that RECO regulates the activity of trading in real estate is by conducting inspections of brokerages. These inspections are conducted to ensure compliance with REBBA, to ensure registrants remain entitled to registration, and in dealing with a complaint received by RECO. In investigating complaints, RECO has established a complaints process that ensures fair and flexible handling of complaints about the conduct of real estate registrants and those holding themselves out as such. Real estate registrants in Ontario are accountable for their conduct and competence. RECO’s complaints process provides a way to bring concerns about those trading in real estate to their attention. The inspection and complaint programs at RECO are vital to the regulation of the industry, protection of the public interest, and fostering consumer confidence.

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Lesson 4 | Page 8 of 15

Types of Inspections RECO has the authority to inspect the business premises of a registrant during reasonable hours. Inspectors have access to, amongst other things, all documents and records relevant to the inspection. An inspector may, in the course of an inspection, require a person to produce a document or record and to provide whatever assistance is reasonably necessary, including using any data storage, processing, or retrieval device or system to produce information that is relevant to the inspection and that is in any form. No person may obstruct an inspector in carrying out their duties. Inspectors typically focus on real estate records, such as trade contracts and related documentation, trust accounts, and proper accounting procedures. The following four sections contain information on the types of inspections.

Routine inspections

Routine inspections are conducted to ensure compliance with REBBA. Typically, inspectors randomly select brokerages for inspections. The brokerage is contacted, and a date is mutually agreed upon, which is usually at least one week away. In some instances, an inspection without notice may be conducted when circumstances warrant this action.

Complaint-initiated inspections

REBBA authorizes the Registrar, or any designated person, to conduct an inspection to ensure compliance with REBBA and regulations, deal with a complaint, or ensure that a registrant remains entitled to registration. The Registrar may also investigate complaints against those persons who are alleged to be trading in real estate without benefit of registration under REBBA.

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Courtesy inspections

Inspectors will conduct courtesy inspections by request. For example, the broker of record of a new brokerage may request an inspection to ensure that they are maintaining records in accordance with REBBA. Courtesy inspections can be very effective for both the broker of record and management staff to correct problems and improve reporting systems within the brokerage.

Reconciliation inspections

In addition to on-site inspections, randomly selected brokerages are asked to submit trust account reconciliations for a given period, so that the Office of the Registrar may review the reconciliations, ensuring compliance with REBBA and its regulations. Along with the trust account reconciliation, brokerages must include a copy of the bank/financial institution statement for the real estate trust account, a list of the pending trades that make up the trust liability of the brokerage, and a letter indicating that the broker of record has reviewed the submission and can attest to its authenticity.

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Lesson 4 | Page 9 of 15

This topic highlights practices that, when followed, ensure a salesperson’s compliance with REBBA and the Code of Ethics.

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Lesson 4 | Page 10 of 15

Remaining Compliant As a salesperson, there are many requirements that you must follow to ensure you remain compliant with REBBA and the Code of Ethics. The following four sections contain information on the selected topic.

Disclosure

To ensure a fair and transparent transaction, you are obligated to make certain disclosures. A few key ones in REBBA and the Code of Ethics are: • Any interest or benefit, direct or indirect, that you may gain—now or in the future—from a transaction, beyond fees or remuneration, must be disclosed in writing to all prospective parties to an agreement before any offer is made. • In the case of multiple representation, where two or more clients are represented by a brokerage in the same transaction, a salesperson must disclose and explain to the client any differences in disclosure of information or the services that the brokerage would provide. • A material fact is defined in REBBA as any information which could affect a purchasing decision. The Code of Ethics requires disclosure of pertinent facts both to clients and customers. For clients, the obligation is to take reasonable steps to determine and disclose such facts. With customers, the obligation is limited to disclosing those material facts that are known or should be known.

Competence in providing opinions, advice, or information

As a salesperson, you are obligated to provide conscientious service to clients and customers, and to demonstrate reasonable knowledge, skill, judgement, and competence in providing those services. This requires knowledge and continuing research on issues related to a trade, a trading area, or a market segment. You must also be able to recognize when matters are outside the scope of your expertise or experience and know how to refer clients to other professionals who can offer the advice they require.

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Competent recordkeeping

You are responsible for proper record-keeping. All documentation, correspondence, financial and property information, and other key information related to a transaction must be maintained in an orderly fashion.

Knowledge of REBBA and the Code of Ethics

You should be familiar with REBBA and the Code of Ethics and regularly review key sections to ensure you are aware of the obligations it places on all salespersons.

©2020 Real Estate Council of Ontario

Lesson 4 | Page 11 of 15

As a new salesperson starting a career in real estate, it can be challenging to understand how compliance affects your everyday work activities. This topic presents real world scenarios as examples that demonstrate how a salesperson remains compliant with REBBA and the Code of Ethics while trading in real estate.

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Lesson 4 | Page 12 of 15

Compliance Scenario 1 A salesperson is preparing a listing for a resale residential property. While interviewing the client and touring the property, the salesperson recorded many details about the property. The notes indicate the seller confirmed the house has a steel roof that was installed three years ago. The salesperson remembers seeing a few bare patches on the roof where the paint had worn off and doubts the roof is only a few years old as reported by the seller. In this case, the salesperson is obligated to ensure the listing is accurate and they should ask the seller for a copy of the invoice for the new roof to verify the age of the roof. If the listing declares the roof to be three years old or the same information is confirmed to an inquiring cooperating brokerage, there is a risk that the buyer will be misled into accepting this false assurance which could have legal repercussions. A salesperson should only make a representation that is verified and documented by way of records and receipts. This shows a reasonable level of diligence and competence as required by the Code of Ethics. Following leading practices such as this one, can help a salesperson remain compliant with REBBA and the Code of Ethics. ©2020 Real Estate Council of Ontario

Lesson 4 | Page 13 of 15

Compliance Scenario 2 As part of negotiating an offer, a salesperson agrees with a buyer to rebate 1 per cent of the purchase price to the buyer upon completion of the transaction. In accordance with leading practices, the salesperson has an obligation to fulfill the promised rebate. They also have a responsibility to clearly document all the terms and conditions that might alter the amount of the rebate to the buyer. Not documenting the details of the rebate in writing beforehand risks the buyer’s surprise at the final amount of the rebate. For example, the buyer might be surprised to discover the payment is a lot less than they expected due to deductions for income tax, brokerage and administrative fees, and HST. A written agreement specifying these details in advance would avoid the buyer’s unpleasant surprise. In this respect, by documenting all aspects of a transaction in writing the salesperson follows the leading practice which helps them remain compliant with REBBA and the Code of Ethics. ©2020 Real Estate Council of Ontario

Lesson 4 | Page 14 of 15

Compliance Summary A salesperson must be aware of practices for remaining compliant with REBBA and the Code of Ethics. The practices are suggested approaches to help a salesperson remain compliant with REBBA and the Code of Ethics. While no list is complete, the practices a salesperson should follow in every transaction include: • Disclose any interest, multiple representation, or any material facts relevant to the transaction • Demonstrate reasonable knowledge, skill, judgement and competence in providing opinions, advice, or information to those involved in a transaction • Research information relevant to the trade, trading area, and the market segment in order to be well informed • Recognize when matters are outside the scope of your expertise and refer clients to other professionals for expert advice • Maintain proper records related to the transaction including research documents, correspondence, financial records, and property information • Regularly review key sections of the Code of Ethics

©2020 Real Estate Council of Ontario

Lesson 4 | Page 15 of 15

Congratulations, you have completed the lesson! There are four sections on this page with a summary of the key topics that were discussed in this lesson.

Complaint review process Registrar’s options

RECO evaluates each complaint individually and based on the specific circumstances will determine an appropriate course of action.

Inspections and investigations

Brokerage inspections are a regular part of the process to administer the regulatory requirements set out in REBBA. Different types of inspections are conducted to ensure compliance with REBBA, whether they are routine, complaint-initiated, courtesy, or reconciliation inspections.

Remaining compliant

A salesperson must be aware of the requirements to remain compliant with REBBA and the Code of Ethics including disclosure obligations, competence in providing opinions, advice, or information to clients and customers, competent recordkeeping, and a sound knowledge of REBBA and the Code of Ethics.

Complaints may be handled in a number of ways ranging from a meeting or mediation, no action taken, a warning, educational requirement, referral to RECO’s Discipline Committee, Provincial Court prosecution, suspension or revocation.

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Module Summary | Page 1 of 3

Module Summary

This lesson provides a summary of concepts from the entire module.

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Module Summary | Page 2 of 3

Congratulations, you have completed this module! This lesson will present a summary of the Learning Objectives addressed in this module.

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Module Summary | Page 3 of 3

There are four sections on this page with a summary of the key topics that were discussed in this module.

Requirements for obtaining registration

To register as a salesperson, an individual must first complete all the required courses and exams in the Real Estate Salesperson Program. An application for registration must be submitted to RECO within 12 months. An individual must be employed by a brokerage and a broker of record must verify the details of the application. All pertinent information must be provided on alternative occupations, business interests, outstanding judgements, terminations of other professional status/license, or criminal charges/convictions. Once an application is received, it is assigned for review by a RECO representative. Provided the application is fully completed and no additional supporting documentation is required for disclosures made, it can typically be processed within 10 business days. If the application is incomplete or requires additional review due to a disclosure, it will take longer to process. Salespersons must be able at all times to verify their current registration status, if requested. Completion of this lesson has enabled you to: • Identify the education criteria to become registered as a salesperson • Identify the requirements and standards for applying for registration, including disclosures and fitness criteria • Describe the application process (once an application for registration is received) • Identify the requirements to be notified of registration and to make available the certificate of registration

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Requirements for maintaining registration

To maintain registration, a salesperson within the first two years of completing the Pre-Registration phase of the Real Estate Salesperson Program must complete the Post-Registration phase of the Real Estate Salesperson program. A salesperson must complete a course on compliance, in addition to two elective courses, and an in-class session to practice core activities and tasks related to compliance. After completing the initial two-year phase, all registered real estate brokers and salespersons, regardless of the length of time that they have been trading in real estate, must continue taking Mandatory Continuing Education (MCE) courses in order to maintain their registration. Every salesperson and broker must submit an application for renewal, fee payment, and supporting documentation prior to the expiry date of their current registration period. In addition to maintaining registration, a salesperson and broker is also responsible for the annual renewal of their insurance coverage. Completion of this lesson has enabled you to: • Describe the educational and procedural requirements for maintaining registration as a salesperson

RECO’s insurance program coverage

All salespersons and brokers in Ontario must participate in the RECO Insurance Program. Annual insurance premiums are due mid-August of each year. The policy period, beginning September 1, provides one year of insurance coverage. If the policy is not renewed, a salesperson’s registration can be suspended. Subject to exclusions, the RECO Insurance Program offers Consumer Deposit Protection, Commission Protection Insurance, and Errors and Omissions Protection. Salespersons are obligated to report claims or circumstances that relate to coverage promptly, and to take actions to lower their exposure to risk and liability. Completion of this lesson has enabled you to: • Identify the requirement for insurance • Identify the types of insurance coverage provided through RECO’s insurance program • Identify the policy limits and deductibles for the insurances provided by RECO • Recognize a claim or circumstance and a salesperson’s obligation to report it ©2020 Real Estate Council of Ontario

• Identify actions of a salesperson that may negate coverage, reduce risk, and additional insurances and coverage to consider

Enforcement of REBBA

In the event of a complaint made to RECO about a salesperson, a review process is initiated with the goal of arriving at a fair resolution. The Registrar has several options available to resolve the complaint. RECO also implements brokerage inspections to enhance the level of protection provided to consumers and salespersons. For their part, salespersons can adhere to several leading practices that help ensure they remain compliant with REBBA and the Code of Ethics. Completion of this lesson has enabled you to: • Describe the process when a complaint is received by RECO • Identify the importance of inspections and investigations in RECO’s mandate to protect the public interest through a fair, safe, and informed marketplace • Identify examples of remaining compliant with REBBA and the Code of Ethics

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V7.1

Module 2: Exploring Areas of Focus and Choosing a Brokerage Disclaimer: This is a reference document which contains pages from the Accessible eLearning module. You should complete the eLearning module to proceed to the next step. Please note that the accessible module on the LMS only contains the interactive pages and you need to go through the content of this document thoroughly to attempt the interactive activities in the module. Please use Adobe Acrobat Reader (Recommended version 9 or above) to navigate through this PDF. Real Estate Salesperson Program ©2020 Real Estate Council of Ontario. All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or in any means – by electronic, mechanical, photocopying, recording or otherwise without prior written permission, except for the personal use of the Real Estate Salesperson Program learner.

©2020 Real Estate Council of Ontario

Module 2: Exploring Areas of Focus and Choosing a Brokerage Congratulations, you are about to complete all the courses required for the Pre-Registration phase of the Real Estate Salesperson Program. This is a huge milestone and one important step towards becoming a real estate professional. In the previous module, you learned how to obtain and maintain your registration to trade in real estate and your requirements for insurance. In this module, you will begin by reassessing your progress made against the skills identified as contributing to a successful career in real estate. You originally encountered these skills in the first module of Course 1 of the Real Estate Salesperson Program. With this reassessment, you will update the action plans you started at the beginning of your learning journey and consolidate with any additional action plans made during your Simulation Sessions. In this module, you will also learn about the many resources available for your professional development, receive tips for choosing a career path/area of specialization in real estate and tips to assess whether a brokerage is the right fit for you. You will also prepare a first-year budget, as it’s important when starting out that you understand your expenses and set a realistic income goal. Recall, to be registered as a salesperson with the Real Estate Council of Ontario (RECO) and work in organized real estate, you must complete the following: • Join a brokerage after completing the Pre-Registration phase of the Real Estate Salesperson Program • Apply to RECO for your registration to trade in real estate

©2020 Real Estate Council of Ontario

• Join a local real estate board • Become a member of the Ontario Real Estate Association (OREA) and the Canadian Real Estate Association (CREA), which are mandatory associations for real estate salespersons working in organized real estate You also need to navigate through the online version of this module to move further in the course. While navigating through the online module, click the Legislation button to view laws and regulations related to this module. While navigating through the online module, click the KMS button to access the Knowledge Management System or visit the Module Resources to find the list of all the KMS assets for this module. The contents of the thumbnail throughout this Accessible PDF.

and References from the module are added to support your learning

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Menu: Exploring Areas of Focus and Choosing a Brokerage Number of Lessons

Lesson Number Lesson 1 Lesson 2 Lesson 3 Lesson 4

5 Lessons

Lesson Name Assessing Your Skills and Identifying Needed Support Selecting an Appropriate Career Path and Key Considerations to Assess when Selecting a Brokerage Selecting the Right Brokerage First Year as a Salesperson Module Summary

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Lesson 1 | Page 1 of 14

Lesson 1: Assessing Your Skills and Identifying Needed Support

This lesson begins by reviewing the skills identified as contributing to a successful career in real estate. The lesson revisits the Skills Self-Assessment and Action Planner encountered in the first module of Course 1 of the Real Estate Salesperson Program. This lesson also introduces the many resources available to you for your professional development.

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Lesson 1 | Page 2 of 14

As you learned in the first module of Course 1 of the Real Estate Salesperson Program, ongoing skills development for a salesperson is important. It helps you to stay relevant and reliable when providing real estate services. In this lesson, you will begin by reviewing the skills identified as contributing to a successful career in real estate and reassessing the action plan you completed at the beginning of the program. This lesson will also introduce you to the many readily available resources to help you develop the knowledge and skills needed to develop your career in real estate. Upon completion of this lesson, you will be able to: • Review and reassess the skills that contribute to establishing a career in real estate • Identify resources and opportunities for self-improvement

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Lesson 1 | Page 3 of 14

As a new salesperson, you must invest in your continued professional development if you want a successful career in real estate. Those salespersons who do make the effort tend to receive a return on their investment; they tend to earn more and tend to be more successful in terms of repeat business. For these reasons, you will want to continually reassess your skills and action plans to further your professional development.

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Lesson 1 | Page 4 of 14

Review: Skills that Contribute to a Successful Career in Real Estate Recall from the first module of Course 1 of the Real Estate Salesperson Program, the key skills that you, as a salesperson, will use in your real estate career include: • People skills required to gain trust and respect of sellers and buyers with the goal of establishing and maintaining strong relationships • Negotiating skills required to arrive at mutually agreeable terms when the parties involved have differing needs and preferences • Problem solving skills required to generate solutions to problems and decide on a course of action • Interviewing skills required to listen and ask the right questions to understand someone’s needs, wants, and motivations • Self-discipline required to motivate yourself to accomplish your goals and get things done • Research skills required to gather and analyze information to draw conclusions and make recommendations

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• Organization and planning required to work efficiently and proactively • Confidence and persistence required to demonstrate self-assurance in your own ideas, judgements, capabilities, and actions • Mathematical skills required to understand and perform basic math calculations • Computer literacy required to understand and use computer hardware and software, and other electronic devices • Technology proficiency required to incorporate technology into everyday activities Your skill set will naturally grow as you gain more experience. To be successful, you should continue to learn and further develop these skills. Knowing where your skill gaps are will help you to focus on the training that you need to be successful. Spend the time to identify your strengths and weaknesses. Work on developing the skills that are not your strength to become more well-rounded and effective in the real estate industry. Remember, investing the time in developing your skills will help you yield better business results.

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Lesson 1 | Page 5 of 14

Skills Self-Assessment and Action Planner Recall in the first module of Course 1 of the Real Estate Salesperson Program, you completed the Skills SelfAssessment and Action Planner. Refer to that document and take the time to see how far you have progressed. Recall from the Residential Real Estate and Commercial Real Estate Simulation Sessions, you also worked on action plans to identify areas for improvement. Now, consolidate your action plans and reassess your skills holistically. Note your proficiency and decide which two skills are your least developed. Once you have identified the skills you need to improve, find suitable resources to improve each one and revise/update your consolidated action plan to achieve your goals.

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Remember, the Skills Self-Assessment and Action Planner is a great tool that can be used to help focus your ongoing professional development. A blank Skills Self-Assessment and Action Planner has been included as a resource to use in your action plan consolidation. While navigating through the online module, click the KMS button in the Module Resources for tools and information on this topic.

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Lesson 1 | Page 6 of 14

Recall from earlier modules, the real estate business is also about continuous learning, which does not stop when you finish the Real Estate Salesperson Program. Your learning continues throughout your career and through various means, such as: • • • • • • •

Local real estate board training programs Provincial association professional development offerings Community college programs University programs Designation programs offered through professional associations Training programs offered through the brokerage Independent coaching and training seminars, conferences, and events

Once you start working for a brokerage, ask your manager and other salespersons in your brokerage which training and programs they would recommend. ©2020 Real Estate Council of Ontario

Lesson 1 | Page 7 of 14

Local Real Estate Board Training Programs Real estate boards run the local listing services. Each board runs training programs to help their members with skills such as: • • • • •

How to use their systems Selling techniques Time management skills Technology Social media training

Local real estate boards represent the industry in a city or group of cities. There are currently 38 local real estate boards within Ontario. You can find a listing of these boards on the Ontario Real Estate Association (OREA) website.

©2020 Real Estate Council of Ontario

Lesson 1 | Page 8 of 14

Provincial Association Professional Development Offerings The Ontario Real Estate Association (OREA), which is a provincial association, offers professional development offerings. OREA offers leadership courses, conferences, and volunteering opportunities. You can find out more on the OREA website (www.orea.com).

©2020 Real Estate Council of Ontario

Lesson 1 | Page 9 of 14

Community College Programs Community colleges offer courses designed to strengthen many different skills. A variety of course delivery options are available, many of them are part-time. Some courses may also be offered online, so you can take them from the convenience of home and on your own schedule. The variety of course delivery options available lets you balance learning and running your business. Courses that tie into real estate that should be considered for continuous learning include: • Business management • Finance • Entrepreneurship • Bookkeeping/accounting • Human resource management To find out what is available for a particular college, search their website for programs offered and continuing education calendars. ©2020 Real Estate Council of Ontario

Lesson 1 | Page 10 of 14

University Programs You can obtain advanced education in real estate through several of Ontario’s universities. The following universities offer programs for the real estate profession: • University of Toronto’s Rotman School of Management offers a Masters degree with a major in real estate • Toronto Metropolitan University School of Management offers a degree program in real estate management • University of Guelph offers a bachelor’s degree program in Real Estate and Housing University programs are constantly evolving. To learn more about what each university program involves and get up-to-date program information visit the university’s website.

©2020 Real Estate Council of Ontario

Lesson 1 | Page 11 of 14

Designation Programs Offered Through Professional Associations Real estate designations offered by various professional associations can make potential sellers and buyers more aware of your specific skills and expertise. To make the most of a designation or certification, choose a specialization consistent with your career goals. The following three sections contain information on three professional associations offering designations for real estate professionals.

Real Estate Institute of Canada The Real Estate Institute of Canada (REIC) is a not-forprofit membership organization offering education and designations for real estate professionals. REIC offers designation programs designed to build your expertise in these areas: • • • • • •

Sales Leasing Property Management Finance Reserve Fund Planning Investment

Having a specific designation can help to give you an advantage in a competitive field, as well as increase your profile and your earning potential by improving your skills. You can learn more about the specific program REIC offers on their website (www.reic.ca).

©2020 Real Estate Council of Ontario

National Association of REALTORS® The National Association of REALTORS® (NAR) is the largest trade real estate association in the Unites States of America with a membership composed of residential and commercial brokers, salespersons, property managers, appraisers, counselors, and others engaged in the real estate industry. Some of the designations and certifications offered through NAR, and valued by Canadian real estate professionals include: Accredited Buyer's Representative / ABR®, Accredited Land Consultant / ALC®, and Certified International Property Specialist / CIPS®. You can learn more about the specific programs NAR offers on their website (www.nar.realtor).

©2020 Real Estate Council of Ontario

Certified Commercial Investment Member Institute The Certified Commercial Investment Member Institute (CCIM Institute) is commercial real estate’s most influential professional organization, offering its members education programs led by established practitioners. CCIM Institute members are eligible to earn the CCIM designation, the industry’s most prestigious certification. You can learn more about the CCIM designation on their website (www.ccim.com).

©2020 Real Estate Council of Ontario

Lesson 1 | Page 12 of 14

Training Programs Offered Through the Brokerage A brokerage may be independent or part of a franchise. You will likely recognize the name of a franchise brokerage because they operate offices throughout Ontario and Canada. Sutton Group®, Century 21®, Royal LePage®, and RE/MAX® are some of the leading brands. A franchise brokerage can offer specific in-house training as well as corporate training that offers additional training beyond the franchise brokerage level. Independent brokerages offer training as well. Many brokerages offer training programs that help you start your real estate career on the right path. They may also help you with your business planning. After the initial training, they may also provide ongoing training. Training programs offered through the brokerage typically come in the following forms: ©2020 Real Estate Council of Ontario

Mentoring and coaching • A real estate mentor is an experienced salesperson who offers you advice when needed and who will coach and guide you. A coach works with you to identify your specific goals and helps you implement a plan to develop new skills, make changes, and reach your goals. Lunch and Learns • “Lunch and Learns" are voluntary informal training sessions that take place during lunch where people can collaborate and learn. Mastermind sessions • A mastermind session is a group of peers that meet to help members solve problems and hold each other accountable for their action plans. Webinars • A webinar is a seminar conducted over the Internet using specialized software, which you access from a computer. eLearning • Online learning is offered through a computer, which gives you the flexibility to access it from anywhere you have Internet access. Online learning is often self-paced. Group training sessions • Group training is training the brokerage provides to specific employees that usually have similar job functions. Office meetings • An office meeting is usually conducted by a manager or leader at the brokerage to share information. As a new salesperson starting out in your real estate career, the training you receive from the brokerage is vital in getting you started on the right path. The type and scope of training offered by a brokerage is a key consideration when you are choosing a brokerage to work for. When you are interviewing brokerages, be sure you ask whether they offer training, what the training consists of, and whether you can you sit through a session before you commit to the brokerage.

©2020 Real Estate Council of Ontario

Lesson 1 | Page 13 of 14

Independent Coaching and Training Seminars, Conferences, and Events Independent professional coaches and trainers offer training programs and sessions you pay for independently of your brokerage. If you are considering hiring a professional coach, meet with that person to find out whether their style and focus is a good fit for you. For example, one coach may focus on marketing to people you know (also known as sphere of influence marketing), while another coach may focus on marketing in a specific geographic location. Both are good approaches; they are just different. Knowing your strengths and aligning them to the right coach will help ensure you get the most from the training. Brokerages also have affiliations with groups and associations that offer seminars, conferences, and events for you to attend. These opportunities can be valuable for your ongoing learning and networking to grow your professional contacts.

©2020 Real Estate Council of Ontario

Lesson 1 | Page 14 of 14

Congratulations, you have completed the lesson! There are two sections on this page with a summary of the key topics that were discussed in this lesson.

Skills to be successful in real estate

Ongoing development of your skills is important to stay relevant and reliable when providing real estate services. Skills that are important to real estate professionals are: • • • • • • • • • • •

People skills Negotiating skills Problem solving skills Interviewing skills Self-discipline Research skills Organization and planning Confidence and persistence Mathematical skills Computer literacy Technology proficiency

Your skill set will naturally grow as you gain more experience. To be successful, you should reassess your skills and revise your action plan on a regular basis. In the real estate industry, ongoing learning will be essential to your success. A variety of Resources and training options are available for you, such as: opportunities for continuous learning • Local real estate board training programs • • • •

Provincial association professional development offerings Community college programs University programs Designation programs offered through professional associations ©2020 Real Estate Council of Ontario

• Training programs offered through the brokerage • Independent coaching and training seminars, conferences, and events Knowing which ongoing education and training opportunities are available will help you choose how to develop your skills as a real estate professional.

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Lesson 2 | Page 1 of 15

Lesson 2: Selecting an Appropriate Career Path and Key Considerations to Assess When Selecting a Brokerage This lesson highlights the importance of considering your skills and the type of real estate market you want to focus on when researching different brokerages. You will learn about different brokerage business models and services, so that you can make an informed decision when choosing the best brokerage for you.

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Lesson 2 | Page 2 of 15

In this lesson, you will consider your strengths, interests, and skills when researching different brokerages that you may be interested in working for. You will learn about different brokerage business models and service options within the industry so that you can make an informed decision when choosing the right brokerage for you. Upon completion of this lesson, you will be able to: • Discover how the opportunities for a career in real estate align with individual preferences • Identify key considerations to assess when selecting a brokerage

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Lesson 2 | Page 3 of 15

A career in real estate provides you with opportunities to work in different markets, from residential resale or new homes to office buildings and industrial multi-unit complexes. Each market has its advantages and disadvantages. To start your career, you will want to consider your skills, strengths, areas of interest, background and experience, and lifestyle preferences to identify the market you want to build your career in.

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Lesson 2 | Page 4 of 15

Opportunities for a Career in Real Estate and Individual Preferences As a registered salesperson, you are allowed to trade anywhere in Ontario. To be a successful salesperson, you need to demonstrate to people in a specific marketplace that you are the professional they should deal with. There are many different markets in real estate that you should understand before deciding on where you want to focus your new career. The following five sections contain information on the different markets or areas of focus available to new salespersons and how they may align to your individual preferences.

Residential resale market In the residential resale market, most successful salespersons are those who engage and interact well with people. To establish yourself in this market, you must do a great deal of marketing and face-to-face interactions. Consequently, having a strong ability to connect with people is beneficial. The advantages to working in this market are: • You can easily establish a geographical area to work in. • Residential sales are easier to break into compared to commercial sales. • Residential real estate may be an easier sell at first because of the familiarity you already have with homes. ©2020 Real Estate Council of Ontario

• You can achieve success in a relatively short period of time, for example, 90 days to six months. • The disadvantages to working in this market are: • Your working hours will be determined by your sellers and buyers, and so can involve nights and weekends. • Residential sales can be seasonal, so you will need to be prepared to budget and plan for the slower months.

Condominium market The skill set for condominium sales is similar to freehold sales. You may also see a blend of residential sales come into your business from people wanting to either downsize from a house to a condominium or move from a condominium to a house. The advantages to working in this market are: • You can easily establish a geographical area to work in. • You can become well-known in specific buildings and complexes, making prospecting easier. The disadvantages to working in this market are: • You will need additional experience and expertise in condominiums. • You will have to become familiar with the rules and regulations set by the condominium.

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• You must have knowledge of the Condominium Act and reserve funds; otherwise, you can expose yourself to litigation risk.

New homes market If you are customer service oriented, the new homes market may be a good focus for you. Generally, you are interacting at a sales and customer service level, as opposed to a sales and prospecting market level. In new homes sales, potential buyers have already chosen your product; now, you are servicing them, considering what they want in the property, what they need, and making them comfortable with the transaction. You will need to learn about elements unique to the new homes market, including architectural design, blueprint reading, site design, and construction methods and materials. The agreement of purchase and sale is generally a more complex document that you need to understand. This knowledge will enable you to help your buyers choose the best lot or make sure the construction drawings match the home they are expecting to be built. As a new homes salesperson, your duties range from detailed interactions with the builder to model home or condominium building representatives, working on professional brochures, and working varied sales office hours. Working with potential buyers, you will be ©2020 Real Estate Council of Ontario

discussing front elevation pictures, optional floor plans, builder’s samples, upgrades, incentives, development phases, base prices, prepackaged financing, sequential deposits, and standard schedules. The advantages to working in this market are: • You do not need to prospect; the builder does this for you. • You are working in a presentation centre and helping the people who come in. The disadvantages to working in this market are: • If you are working for a builder, on-site model home attendance is required. • Once the sales for the development are complete, you are done. You must either sell another development or find another builder to sell for.

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Rural, recreational, and agriculture sales market Rural, recreational, and agriculture sales are different from urban sales. This market can involve year-round homes on acreage, seasonal cottages, and farms. It requires a different level of knowledge than the urban market, which you have learned in previous modules. You must be able to market yourself well, and be visible in the community to build your business. The advantages to working in this market are: • Closing transactions with acreages and farmland can be more lucrative than selling urban houses. • Selling rural land can be rewarding because you get to help people realize their dream, for example building a house on a large piece of property. • Land sales can be a bit more straightforward than other properties. • If you enjoy the outdoors, you will be able to get out into the countryside. The disadvantages to working in this market are: • Recreational and agricultural sales are both industry specific. They have tight communities, so it is beneficial to have either come from that community or studied in it to understand the people and the area to establish trust. It is important to become a subject matter expert. • Many rural properties may take longer to sell than homes in urban areas.

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• When you get into rural settings, there are a lot of rural specific issues that you need to know about. • It is hard to get into this market without some knowledge, due to the unique risks, for example, rural septic systems, building permit issues, and conservation authority permissions.

Commercial market If your skill set is more focused on practical, analytical skills, then the business focus of the commercial sales market may be a good fit for you. The advantages to working in this market are: • Due to the nature of business, hours are generally weekdays although weekends might be involved if you are selling a store or commercial property that is open on Saturdays and/or Sundays. • Per-deal remuneration could be higher, because many properties are more expensive. • You will be working with highly skilled third-party professionals. The disadvantages to working in this market are: • Breaking into this market can be more difficult. Commercial real estate firms tend to have different hiring standards and expect candidates to be proficient in a wider range of business skills.

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• The commercial sales cycle may be slower. • Commercial sales take longer to close and if a transaction collapses, it can cause a lack of revenue. You must plan and budget your time and money differently in this market.

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Lesson 2 | Page 5 of 15

Opportunities for a Career in Real Estate and Individual Preferences – Continued It is a good idea to align your career in real estate not only with your strengths, but also with your personal areas of interest. If you are the type of person who enjoys small towns and nature, you can build a business that allows you to do that. You can live in a rural area, have a rural property, and develop a knowledge base of that market to enable that kind of lifestyle. The same can be said if you want to live in a city and have an urban lifestyle. With the exception of commercial real estate, you do not work a typical 9-to-5 job. Real estate sales allow you to set a daily schedule that works for you. Much of your time will be spent meeting people, socializing, and building relationships. However, having a flexible schedule means you have to be flexible to your clients’ needs. In real ©2020 Real Estate Council of Ontario

estate, you tend to work when everyone else is not, which includes weekends and holidays. If a client calls, you have to drop everything and be attentive to their needs. When real estate markets are booming, you can earn a healthy income. When markets are down, however, you will not have as many opportunities to make money. You will want to factor this income earning fluctuation in the market you choose. Regardless, you should have some money set aside for lean times. Successful salespersons are those who enjoy what they do for a living. You must have a passion to serve people by showing them the best properties within their budget. There are business focuses available in real estate that will allow you to live the way you want to. Think back to what you have learned so far in this program. Ask yourself these questions: • What topics appealed to me the most? • Which areas did I find a natural ability to apply my learned knowledge? • When thinking back over the education I have had, what aspects of real estate can I envision myself focusing on?

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Lesson 2 | Page 6 of 15

Finding a brokerage to work for, is a defining step in your career as a salesperson. You should not make a hasty decision and join just any brokerage. You should carefully weigh the pros and cons of different brokerages. Even if you already have an idea of which brokerage you might be joining, you should research all the available options in your area before deciding. The best place to start is by considering the following: • • • •

Your individual strengths, needs, and preferences – alignment to brokerage culture Various services the brokerage may offer to salespersons – marketing, administration, etc. Training programs provided by the brokerage Remuneration plan offered by the Brokerage – conventional, desk fee, and other variations

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• Type of brokerage based on their affiliation – franchise brokerage versus independent brokerage • Type of services provided by the brokerage to the public – full service and limited service • Primary sources of revenue for the brokerage – listing and selling Determine if the brokerage works within organized real estate versus non-organized real estate. Each of these considerations will be explored in greater detail over the following screens.

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Lesson 2 | Page 7 of 15

Brokerage Culture Once you have determined your strengths, needs, and preferences, and have aligned them with your preferred market or area of focus, you can begin the job of finding the right brokerage for you. When choosing a brokerage, the best place to start is to investigate culture and fit. You will be spending a lot of time with your new broker of record or manager, support staff, and other salespersons in the office. You need to ensure the brokerage culture aligns to your values, and the fit is right for you. To evaluate the brokerage’s culture, ask yourself these questions: • Is this the kind of place where I want to work? • How much support do I want from my coworkers? ©2020 Real Estate Council of Ontario

• Can I continue to learn and develop at this brokerage? • Do I want to work for a small brokerage with a family-like culture, or would I prefer a franchise brokerage that will have more of a corporate culture? • Do I want to work in a brokerage 15 to 20 minutes from where I live, or do I mind commuting a longer distance? • Where is the brokerage located in relation to the area I want to work in? The best way to learn about a brokerage’s culture is to attend a function or chat with salespersons who work there. The right brokerage will be the one with the resources to help you become established, and the experience to support the areas of focus you have chosen for yourself. Some brokerages will offer extensive mentoring, free training, and marketing materials. Others might offer occasional sales training classes or a monthly brokerage meeting. They will simply offer you a place to work from while you grow your business. Keep these considerations in mind when you do your research, complete your interviews, and ultimately select the brokerage that is right for you.

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Lesson 2 | Page 8 of 15

Brokerage Services A key consideration when selecting a brokerage to join is the types of services the brokerage provides to its salespersons. Services vary from brokerage to brokerage. You will want to prioritize which services are most valuable to you in meeting your real estate career goals. Keep in mind that the more services you receive from a brokerage, the more money the brokerage will need from you to cover their costs. The following six sections contain information on services a brokerage may offer.

Education and training As you learned earlier, many brokerages offer their salespersons’ training to keep their knowledge and skills up to date. This can include, but is not limited to: • New salesperson orientation sessions • Sales and business management training • Real estate–specific training and tips, such as advanced offer writing, listing drafting to ensure compliant documents, lockbox use, taking the best photos of the housing unit to promote a listing, or writing promotional material • Coaching, mentoring, and other individual support • Internal virtual meetings and seminars • Virtual webinar training • Training on technology used in real estate

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Business planning and support Planning is a key factor leading to success in real estate. To help you know how to plan and optimize your business and time, brokerages may offer support such as: • • • •

Business planning mentoring Business planning software New salesperson support systems Vacation support, in which salespersons in the office work together to provide time-off support

Office resources The office is a resource that you may want to leverage to meet with clients and customers. You might also use office resources such as marketing staff and equipment. Brokerages can offer a wide range of office services such as: • Branch offices available for use throughout an area • 24-hour office access • 24-hour answering service • Office space or desk time • Dedicated client meeting areas

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Transaction management With each real estate transaction, many tasks need to be done promptly with a high degree of accuracy. Some brokerages offer transactional support such as: • Booking and managing appointments • Phone support provided by the broker of record or a manager • Tracking the transaction • Reviewing the paperwork to ensure it is completed properly and accurately • Sending paperwork to lawyers • Recording the activity on listings and sale • Profit-sharing and residuals

Marketing support In real estate, marketing can be a big factor in generating business. If marketing is important to your focus, you may want to ask brokerages about the availability and cost of the following: • Referral program • Start-up packages which typically include some free signs, business cards, etc. • Printing and/or pre-designed advertisements • Websites and customized personal websites • Social media support

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You will also want to ask about supplies available to use such as: • Open house signs • Sold banners • Stickers for signs • Office supplies • Presentation folders, etc.

Technology and platforms Technology is important in real estate. Technologies are evolving quickly and a number are geared to the real estate market, which brokerages may make available to their salespersons. Here are a few technologies you should ask brokerages about: • Online listing and lead-generating systems • Virtual tours and photography • Tools to research information on properties • Customer relationship management software (CRM) • Online business builder and tracker • Digital signature software • Virtual meeting software • Digital phone system

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Lesson 2 | Page 9 of 15

Remuneration Plans Most real estate salespersons get paid on commission or some other form or remuneration, so when you are not selling, you are not getting paid. When you are selling, the brokerage will typically collect the remuneration and split it with you. Brokerages offer different remuneration structures, so you will need to have some idea of how the brokerage will pay you. Many brokers of record or managers might not get into the full remuneration in your first meeting, preferring to see if there is a fit first. You will want, however, to have some understanding of how they are handling remuneration. When it comes to a discussion about your remuneration, a brokerage will refer to their split. The split means how the overall remuneration earned is split between you and the brokerage. For example, a 70/30 split means the ©2020 Real Estate Council of Ontario

brokerage will pay you 70 per cent of the remuneration and keep 30 per cent. While it may seem easier to focus just on the remuneration split, it is important to consider the net dollar amount. You will want to understand what your net split is after all the fees and costs are considered. You will also want to consider the value of the services the brokerage is offering. The split the brokerage offers may be attractive, but the other fees added on can bring the actual dollar net down. Consider the services you will need and balance those fees against the percentage split the brokerage offers. REBBA requires the brokerage to collect the remuneration and pay the salesperson. The variations of remuneration plans are: • Conventional split is when, for example, a brokerage says they have a specific split such as 80/20, meaning 80 per cent to a salesperson and 20 per cent to the brokerage. A brokerage might also offer a 90/10 split and charge you an additional transaction fee. The conventional split percentages vary. • Desk fee structure is when a brokerage has little to no split; instead, they have desk fees. These fees are similar to rent, and represent a set amount you pay monthly regardless of sales made or remuneration generated to cover costs. • Other variations are combinations of desk fees, transaction fees (charges for each service), and remuneration splits. Example of how a remuneration split works Suppose you sell a $400,000 home and the average remuneration rate in your area is 5 per cent. That 5 per cent is first split between the selling and buying brokerage. Your share is now down to 2.5 per cent, which is $10,000. You will next have to share that $10,000 with your broker. If you are on a 60/40 remuneration split, you will be receiving 60 per cent of that $10,000, or $6,000. Keep in mind that $6,000 is before expenses and taxes. Also remember, if you are an independent contractor, HST will be added on to the remuneration. How good a remuneration split is, depends on a number of factors such as the business, your market, the brokerage’s support, and resources. When selecting a brokerage to work for, make sure you understand the split and how you might get a bigger percentage over time.

©2020 Real Estate Council of Ontario

Lesson 2 | Page 10 of 15

Independent Brokerage Versus Franchise Brokerage Certain types of brokerages, whether they are franchised or independent, offer different kinds of services. The key is to know what you need. Franchise brokerages Franchise brokerages bring with them an established reputation and larger market share through strong marketing. They also offer a structure and support system that is consistent no matter where their offices are. You may even have access to those offices as a salesperson. Franchise brokerages generally have training programs established and some have international networks you can leverage. A franchise brokerage, such as Century 21®, Royal LePage®, or RE/MAX®, will have an established brand and track record. These prominent brokerages have offices all over the country. Association with a recognized brand can be

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helpful when you are starting out, as clients may view you as skilled and trustworthy, based on the brand’s reputation. Support in the form of a large referral network is another advantage of a franchise brokerage. A franchise brokerage can access a database of mortgage officers, home inspectors, and lawyers. For example, support can also be in the form of increased leads, mentoring, and colleague support. Franchise brokerages can have a larger support system to train their salespersons with formalized and structured training. As well, they can have an onboarding process, provide newer salespersons with access to more listings, sales training, technology, and marketing tools. A franchise brokerage may offer proprietary software tools and marketing materials such as templates and logos. They may also offer mentoring and opportunities for office hours to gain access to walk-in clients. Another advantage is administration assistance for tasks such as maintaining files, sending paperwork, and processing remuneration cheques. A franchise brokerage does not offer their benefits for free. You will likely pay a monthly franchise fee and there could also be an annual and/or monthly advertising fee to the brokerage. Because the franchise brokerage fees can be substantial, many salespersons must recover their expenses by taking on a high volume of clients. Franchises tend to apply more control over their salespersons than independent brokerages. They will have stricter rules around the use of their brand (logo use, signage design, website, and templates for business cards and flyers), which do not allow creative licence for how salespersons build their business. The biggest drawback of working for a national franchise is their size. Some salespersons could feel that large franchises are more impersonal with a large number of salespersons in multiple branch offices. If you want the many resources a franchise offers, including marketing support and name recognition, a franchise brokerage may be a good fit for you. Independent brokerages A small, family-style independent brokerage might have been serving a single community for generations. Independent firms are usually locally based and consist of a small to mid-size team. The benefit of working for an independent broker is that you have more freedom to conduct your business the way you want to. Sometimes, seasoned broker-salespersons will come together to share experience, resources, and referrals, and launch their own independent brokerage. An independent brokerage can also have several branch offices and may be more well-known locally than a franchise in the area.

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Independent brokerages may offer more flexibility than franchise brokerages. Their brand guidelines may allow you to market yourself the way you want to. Their training programs may be more responsive, rather than template, and the remuneration structure may be more open to negotiation. If you want to focus on regional sales, independent brokerages tend to specialize in the areas they service, making it a better fit for you. If you dislike corporate culture and enjoy your independence, an independent brokerage may be a good fit for you.

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Lesson 2 | Page 11 of 15

Full-Service and Limited-Service Brokerages A different category of brokerage to consider is the full-service and limited-service brokerage. A full-service brokerage, also known as a traditional brokerage, offers virtually all services related to selling and buying a property, including marketing the property, reviewing contracts, negotiating, arranging appointments, etc. For these services, full-service brokerages and salespersons typically charge a single fee (the remuneration) that is often 4-5 per cent of the sale price of the property. Their higher remuneration fee reflect their services and are generally set at the industry standard. Limited-service brokerages may provide little to no property marketing or brokerage services, other than submitting the property listing to the local listing service. The seller will be obligated to pay fees for various added services they want, and as a result, the remuneration fee tend to be lower.

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Lesson 2 | Page 12 of 15

Sources of Revenue for a Brokerage It is good to consider where a brokerage gets the majority of its revenue. Most brokerages focus on clients who are either sellers or buyers. The brokerage training will focus on its client direction and prospecting for those clients. Listing brokerages focus on signing on individuals who are looking to sell their properties. The listing brokerage markets properties for the seller. The transaction is straight-forward, and remuneration income is easier to collect. The listing brokerage generally holds the deposit in their trust account. On closing, the listing brokerage deducts the remuneration from the deposit before paying the balance to the seller. If you are the selling brokerage, you are waiting to receive your portion of the remuneration from the listing brokerage. Most real estate boards have a time limit by which the remuneration to the selling brokerage must be paid. Selling brokerages focus on individuals who want to buy a property. This goal is harder to attain, since there needs to be a consistent effort to get individuals to sign a representation agreement. The selling brokerage helps buyers find properties. ©2020 Real Estate Council of Ontario

Lesson 2 | Page 13 of 15

Organized Real Estate Versus Non-Organized Real Estate Organized real estate is affiliated with real-estate boards and associations, and therefore, has access to a local listing service. In Ontario, organized real estate is made up of local boards, and provincial and federal real estate associations. The Real Estate Council of Ontario (RECO), which is not part of organized real estate, is the designated government authority that administers the Real Estate and Business Brokers Act (REBBA), and protects consumers and members through a fair, safe, and informed marketplace. At the local level, real estate boards, such as the Toronto Real Estate Board (TREB), represent brokers and salespersons, and are responsible for maintaining the local listing service. If you choose to join a real estate board, you automatically become a member of organized real estate and can call yourself a REALTOR®. ©2020 Real Estate Council of Ontario

At the provincial level, the Ontario Real Estate Association (OREA) represents REALTORS® from all the local real estate boards. OREA serves its members through publications, standard forms, and special services, such as resolving disputes between local real estate boards. OREA also acts as a liaison between its members and the Ontario government. At the national level, the Canadian Real Estate Association (CREA) oversees the interests of REALTORS® across Canada. CREA is responsible for national and international representation of the Canadian real estate industry, and the maintenance, protection, and standards for certification marks and trademarks, such as REALTOR®. The term organized real estate, then, refers to membership in a local listing board, OREA, and CREA. Once you become registered, you will most likely become a member of organized real estate which means joining a local real estate board and then becoming a member of OREA and CREA. Maintaining your registration, though, is not dependent on being a member.

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Lesson 2 | Page 14 of 15

Discovering Opportunities To recap, when choosing a brokerage, you will need to decide which real estate market you want to pursue. Each market has its advantages and disadvantages to consider. Choosing a brokerage also involves understanding the nature of a brokerage’s business, and how it fits with your personal preferences and goals. Brokerages will vary depending on their business model. The best way to learn about the available options and what appeals to you is to research different types of brokerages and interview with as many as you can. To help you with this process, use the Career Path and Brokerage Selection resource included with this lesson. While navigating through the online module, click the KMS button in the Module Resources for tools and information on this topic. ©2020 Real Estate Council of Ontario

Lesson 2 | Page 15 of 15

Congratulations, you have completed the lesson! There are two sections on this page with a summary of the key topics that were discussed in this lesson.

Opportunities for a As a salesperson, you are technically allowed to trade anywhere in Ontario. To be a career in real estate successful salesperson, you need to be the one who can demonstrate to people in a specific marketplace that you are the professional they should consult with.

There are a number of real estate markets that you can explore before making your decision. These include: • Residential resale market • Condominium market • New-homes market • Rural, recreational, and agriculture sales • Commercial sales Additional things you will want to consider while deciding to work in a real estate market is lifestyle, suitable skills, and personal areas of interest.

Key considerations when selecting a brokerage

Finding your first brokerage is a defining step in your career as a salesperson. You should not make a hasty decision and join just any brokerage. You should carefully weigh the pros and cons of different brokerages. Even if you already have an idea of which brokerage you might be joining, you should research all the available options in your area before deciding. The factors to consider are the following: • Your individual strengths, needs, and preferences – alignment to brokerage culture • Various services the brokerage may offer to salespersons – marketing, administration, etc. • Training programs provided by the brokerage • Remuneration plan offered by the brokerage – conventional, desk fee, and other variations ©2020 Real Estate Council of Ontario

• Type of brokerage based on their affiliation – franchise brokerage versus independent brokerage • Type of services provided by the brokerage to the public – full service and limited service • Primary sources of revenue for the brokerage – listing and selling • Determine the Brokerage working in organized real estate versus non-organized real estate

©2020 Real Estate Council of Ontario

Lesson 3 | Page 1 of 10

Lesson 3: Selecting the Right Brokerage

This lesson helps you to prepare when selecting brokerages to interview with. The lesson provides suggestions on choosing the questions you should ask and how to assess the brokerages you choose to interview with. You will also learn how to prepare for the interview, knowing that while you are assessing the brokerage, they are also assessing you as a potential employee.

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Lesson 3 | Page 2 of 10

This lesson will help you select brokerages of interest, prepare for interviews, and assess brokerages for fit. Upon completion of this lesson, you will be able to: • Identify the key considerations when preparing to meet with a brokerage • Identify recommended questions a salesperson should ask while selecting a brokerage

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Lesson 3 | Page 3 of 10

To this point, you have reassessed your skills and action plans, learned about the available training and education for your ongoing professional development, considered where you want to focus your career, and learned about considerations to assess when selecting a brokerage. Now it is time to select the brokerages you want to interview with, choose the questions you will ask them, and determine how you will assess them based on your interview.

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Lesson 3 | Page 4 of 10

Selecting Brokerages to Interview The brokerage you choose to start your career with will directly affect your business. You want to talk to more than one brokerage and gain a broad knowledge of what is available in the marketplace. Do your due diligence to check out a minimum of two or three brokerages. To select brokerages to interview, conduct an online search of different brokerages in your area and put together a list of potential candidates. Find out which brokerages are hiring new salespersons by calling, stopping into their offices, or visiting their websites. A successful brokerage will have an attractive website, activity on its social media accounts, and positive testimonials.

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You can find out which brokerages in your area handle the most listings using an online real estate listings site. Joining a larger established brokerage to start your career can help you gain the reputation and trustworthiness of the brokerage. To further assess their reputation, consider the brokerages in your area from a consumer’s perspective. Pay attention to companies you would contact if you were looking for a salesperson as a seller or buyer. To assess their level of professionalism, pay attention to their yard signs, advertisements, open houses, and social media presence. You might also drive by the brokerage’s office to assess its convenience of location and parking availability for your clients. To narrow down your choices, you might consider the type of brokerage you want to work for: franchise or independent, full-service or limited-service, listing or selling. Each type of brokerage will have its own pros and cons. Research brokerages on your list and get a sense of the nature of each brokerage. Determine the types of services they offer their salespersons, such as training programs, new salesperson support systems, mentoring, and coaching, to name a few. They will sometimes list this information for prospective salespersons on their website. Talk to real estate salespersons in your area to find out which companies are most desirable and why. You might also discuss different brokerages with other related professionals, such as mortgage lenders, appraisers, home inspectors, and lawyers. Who do they enjoy working with? If you want to work from home, consider real estate brokerages that operate through a virtual office. These brokerages usually offer lower remuneration rates. Look for places that have benefits such as online training and easily accessible mentors. Interview a minimum of two or three brokerages that interest you. The manager or the broker of record will likely interview you. The goal is to make a short list of brokerages to interview that could be a good fit.

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Lesson 3 | Page 5 of 10

Booking an Appointment with a Brokerage and Dressing for the Interview Schedule an interview with each brokerage you are interested in. You should not expect to drop into a brokerage and have someone to talk to you about it. You are best to call ahead and book an appointment for an interview. Most brokers will welcome the opportunity to talk to a potential new salesperson. Keep in mind that your appointment is like a job interview. Do your homework to prepare and dress the part to show professionalism. You will need to consider regional factors. If you are in a rural area, wearing formal business attire may be a little out of place. On the other hand, if you are interviewing with a commercial brokerage, formal business attire would be a must. Consider the brokerage, their business, the environment, and dress accordingly. Regardless of the environment, you want to appear well-groomed, prepared, and professional. Bring a briefcase or portfolio to carry your research and interview questions, writing pad, pen, and resume. If you bring your smart phone to avoid interruption, ensure it is on mute or vibrate during your interview.

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Lesson 3 | Page 6 of 10

Using Interviews to Assess Brokerages Once you have identified the brokerages in your area, learn more about what each one offers their sales staff and how they run their businesses. When interviewing, pay attention to the environment and the general state of the office. You want to get an idea of the office culture and brokerage personality. You want to see whether it is consistent with how the front desk staff greeted you when you arrived. You will also want to assess the brokerage based on criteria which are most important to you. Criteria to consider may include: ©2020 Real Estate Council of Ontario

Training and mentoring • Determine if the brokerage offers training or mentoring programs to help new salespersons get up to speed, help active salespersons sharpen skills, or attain new designations. Find out what type of training their real estate brand offers. Sales staff • Find out the number of salespersons working for the brokerage, their length of stay, experience levels, and areas of expertise. High turnover can indicate potential problems. Scheduling expectations • Some brokerages require salespersons to be in the office for a set number of hours or to handle open houses on behalf of others. If flexible hours are important to you, the brokerage scheduling expectations is an important area to investigate. Referrals and leads • Inquiries from potential customers can come from Internet listings, office visits, relocation companies, phone calls, and any number of other sources. Ask how the brokerage handles referrals and leads. Available technology • Consider what the brokerage might supply in the way of computer access, tablets, software, photocopiers, and other devices. Marketing • Find out what kind of marketing the brokerage does, whether you will be responsible for any marketing fees, and what the brokerage or brand can do to help you market yourself. Remuneration • You will want to know what percentage the brokerage pays to you and other fees it charges to its salespersons.

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Lesson 3 | Page 7 of 10

When you have booked an appointment to interview with an individual representing a brokerage, you will need to prepare for that meeting. Prepare a set of questions ahead of time to ensure you will gain the information you need to assess the brokerage. Having questions prepared also allows you some control over the interview process and shows you are interested, organized, and professional. As you conduct your brokerage research, make note of topics that you would like to ask about. Keep in the mind that the best questions are focused and open-ended. Avoid yes-or-no questions. You also do not want to stump the interviewer by asking questions that are so broad they are difficult to answer. The questions you will want to prepare will fall into these categories: ©2020 Real Estate Council of Ontario

• • • • •

Culture and fit Education and training Business planning and support Marketing support Office resources and technologies

There are an infinite number of questions you could ask during an interview. Do your homework, and create a list of questions to get the answers you need to assess the brokerage.

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Lesson 3 | Page 8 of 10

Interviewing You will most likely be interviewed by the brokerage’s broker of record or manager. The broker of record or manager will want to tell you about their business and convey their best image. You will receive lots of details, so taking notes is important so you can later review them and reflect on your options. It also shows you are interested in the brokerage, actively listening and demonstrating your attention to details. The interview should be a two-way exchange. This is the opportunity when you will ask your prepared questions that are critical to determine whether the brokerage is a good fit for you. You will have a limited amount of time to gain the information you need to make an assessment. ©2020 Real Estate Council of Ontario

You want to follow a logical flow when asking your questions, grouping topic questions together. A good practice is to ask the questions that are easier to answer first. The type of questions you choose to ask your interviewer should stem from what you need to evaluate the brokerage. This means the questions you choose to prioritize should be well thought out. You also want to personalize the questions for each brokerage you visit. Taking time to tailor your questions for each interview shows your interest and demonstrates your thoroughness. While navigating through the online module, click the KMS button in the Module Resources for tools and information on this topic.

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Lesson 3 | Page 9 of 10

Assessing the Results of an Interview Choosing a brokerage will shape your first year and possibly your entire career. You want to be confident in the choice you make. Ensure you talk to more than one brokerage. Take the time to review your notes, digest the information and assess how each interview went to make the best decision. The brokerage you choose can make a major difference in your lifestyle. A brokerage can offer many services to help get your business started. Real estate is a relationship-oriented business. A portion of a successful salesperson’s business can come from past clients and referrals, which you will not have starting out. During your first few years, you will have to earn your business through a lot of prospecting activities. These activities tend to take longer to pay off, and you can go months without remuneration. That is why it is so important to select the right brokerage to start with. ©2020 Real Estate Council of Ontario

Lesson 3 | Page 10 of 10

Congratulations, you have completed the lesson! There are two sections on this page with a summary of the key topics that were discussed in this lesson.

Key considerations when preparing to meet with a brokerage

The brokerage you choose to start your career with will directly affect your business. You want to talk to more than one brokerage and gain a broad understanding of what is available in the marketplace. Do your due diligence to check out a minimum of two or three brokerages. You shouldn’t expect to drop into a brokerage and have someone to talk to about the brokerage. It’s best to call ahead and book an appointment for an interview. When interviewing a brokerage, be prepared to assess them and their offerings. The brokerage may arrange for you to speak to one or two of their salespersons during your interview. Come prepared with questions that will help you select the brokerage that is the right fit for you. There will be a lot of detail shared during the interview and taking notes and having your own list of questions will ensure that you get the information you need to make a decision.

Recommended questions a salesperson should ask while selecting a brokerage

You want to pose personalized questions in each interview that will give you a clear picture of what they each offer. You want to ask questions about: • Culture and fit • Education and training • Business planning and support • Marketing support • Office resources and technologies

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Lesson 4 | Page 1 of 21

Lesson 4: First Year as a Salesperson

This lesson highlights many important considerations for estimating your first-year expenses and income. You will learn how to prepare an initial budget using estimated expenses and income. The lesson highlights tips for effective networking and relationship building, and introduces you to the technology used in the real estate business.

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Lesson 4 | Page 2 of 21

Knowing your cash flow is important to any real estate salesperson. In this lesson, you will learn how to estimate your first-year expenses and income, and prepare a budget. You will also need a business plan that incorporates your goals. Another key aspect to your success in real estate is your ability to obtain listings, which can generate other business. To succeed, you will need to use a variety of networking, prospecting, and relationship-building techniques. Your use of technology will also be key to your success as a salesperson. You will need to be aware of the tools and new technologies which are available. Upon completion of this lesson, you will be able to: • Identify important considerations when estimating the first-year expenses and income • Prepare an initial budget for the first year, considering the rough approximations for estimated expenses and income

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• Identify the importance and the key steps for effective networking, prospecting, and building relationships with sellers, buyers, third-party service providers, and other people in the community • Identify the importance of technology in the modern real-estate market

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In real estate, income fluctuates through different seasons of the year. You can prepare for a variable income by following some tips to manage your finances. Recall, REBBA requires that you must be employed by a brokerage. Most salespersons in real estate work as independent contractors. As an independent contractor, you are running a business and will be responsible for collecting and submitting HST. You are also responsible for submitting your income tax and making Canada Pension Plan (CPP) contributions to the Canada Revenue Agency (CRA), as the brokerage will not take care of these payments. Consequently, you must keep track of your income and expenses for income tax purposes. Having a budget, which includes your business and personal expenses, will also help you manage your finances.

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Useful Tips for Managing Your Finances in the Initial Years As a salesperson, you will want to put together your budget, which includes anticipated costs for running your business as well as your personal living expenses. This plan is a combination of a business budget and a personal budget in relation to your income. Real estate income is unpredictable. Income fluctuates through different seasons of the year. You need to be able to plan for these fluctuations. Be prudent in your financial affairs and consider the tips included in this section. The following four sections contain information on tips for managing your finances.

Business planning and income

A business plan defines your financial goals and expenses, and it is important you have one. As a salesperson, you will want to estimate a goal amount you would like to earn for the year. Your income goal will dictate some of your expenses such as the amount of money you spend on self-promotion, advertising properties, and training programs you take. When you are interviewing brokerages, ask whether the broker of record or manager will help you develop a business plan. Tips for business and income planning: • Set a realistic budget, estimating anticipated sales based on your business plan and understanding how your business will grow over time. • Set aside sufficient funds to be financially independent for a minimum of six months. Include both personal, and business start-up expenses that you will incur over that time period. • Keep a separate business account and credit card, if possible, to make bookkeeping simpler. • Determine your future cash flow on firm sales only.

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Budgeting and expenses

You need to be able to manage your expenses month to month. Here are some basic tips for budgeting and expenses: • Regulate your expenditures for an entire year, based on your budget, and stay within the budget, no matter how quickly you do business or receive remuneration. • Factor in all your expenses, including the business tools you will need such as office supplies and marketing, as well as personal items such as a car and phone. • Do not make any expenditures based on the potential of income. • Never spend all the remuneration you receive.

Preparing for lean months

Many brokerages coach salespersons to expect zero income in the first 60 to 90 days or more. Even if you sell a house today, the transaction will not close for a month or two. At least 60 days will have passed from the time the transaction is firm, and you receive the remuneration in your account. You must have money set aside to balance out the fact you will not receive any income at the beginning. Here are some tips to plan for lean months: • Have enough cash set aside to handle a possible lack of cash flow for three to six months. • Consider securing a line of credit to use as a buffer, should your revenue expectations not materialize as quickly as forecasted. • During the good months, reduce debt wherever possible.

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Setting aside taxes

In all your budgeting and planning, remember your tax liability. You will have HST and other remittances to make, since most brokerages do not deduct income tax, Canada Pension Plan (CPP), and employment insurance (EI). You will need to apply for an HST number. The manager of the brokerage you work for can help you with your HST application. Here are some tips for setting aside taxes: • Seek professional tax advice and ensure you understand your obligations. • Set aside funds from each transaction and make certain you make all remittances in full and on time. • Consider setting up a bank account for tax funds. • Know what you are allowed to claim as an expense. Develop a system to itemize and track your expenses. • If you begin to make a high revenue, consider paying your taxes quarterly.

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Lesson 4 | Page 5 of 21

Record Keeping as an Independent Contractor Being an independent contractor means you are responsible for your record keeping. Because you are working as a business, it is important to organize your financial records for income tax and business planning purposes. To stay on top of your record keeping, be organized from the start. You will need to keep track of your income and expenses to prepare your income tax. It is advisable to consult with an accountant to help you prepare your income tax return. Record keeping includes the financials and your status as an independent contractor. As you learned earlier, most salespersons are not employees of brokerages but independent contractors, which creates a difference for you under the Income Tax Act. You want to ensure you have a signed Independent Contract Agreement on file for the tax department. You will also want to ask a brokerage whether or not it complies with the Income Tax Act. With income, expenses, and remittances to keep track of, using a spreadsheet is a good idea. A spreadsheet will allow you to see the impact to your bottom line when your income and expenses change. Some salespersons use accounting software to keep track of their business finances as their income grows. ©2020 Real Estate Council of Ontario

Lesson 4 | Page 6 of 21

Typical Initial and First-Year Expenses As a new salesperson, you will have to invest time and money to get your business off the ground. As an independent contractor, you will need to define your income goals and factor in your expenses. The following two sections contain information on expenses.

Initial expenses

Ongoing expenses

As a salesperson, you will have set initial expenses associated with starting a real estate business. These costs include: • Post-registration education courses of the Salesperson Registration Education Program • RECO salesperson registration fee • RECO Insurance Program premiums. Insurance is mandatory for all brokerages, brokers, and salespersons • Start-up costs, such as a website, signage, business cards, and updating or purchasing the tools needed • Initiation fees for joining a local board and provincial and federal associations Ongoing expenses are part of doing business. You will want to factor in these expenses: • Additional education and professional development • RECO registration renewal every two years • Annual premium for the RECO Insurance Program • Real Estate Board or Association fees • Monthly brokerage fees, if applicable • Marketing and advertising expenses, such as updating your website, replenishing of supplies like signs and business cards • Networking dues and expenses • Telephone services and devices • Technology upgrades • Office and vehicle expenses • Supplies and miscellaneous ©2020 Real Estate Council of Ontario

Lesson 4 | Page 7 of 21

Your First Year Real Estate Income Calculating your expenses is not difficult, as you can find many of the costs online, for example, on the OREA, RECO, and real estate board websites. Predicting your personal income can be more challenging and will depend on market conditions, your connections, and prospecting efforts, and how well you are able to sell yourself. The amount of income you earn in your first year will be up to you. Set yourself a realistic goal of what you want to earn – an amount that is achievable but also challenges you. Speak to your manager to find out what would be a realistic income goal. You will want to factor in an amount of money, 10-15 per cent of your income is a guideline, toward self-promotion and marketing costs. As you get busier, you will likely have to spend more on self-promotion and marketing so your financial goal will increase. In addition, you will need to factor in your set fees such as registration fee, real estate board fee, OREA/CREA fee, RECO insurance, and any other fees set by your brokerage.

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Lesson 4 | Page 8 of 21

Preparing an Initial Budget for the First Year It is important when moving into a new career to fully understand your financial position, and what that position could look like one year into the future. You need to completely understand your expenses, all sources of income, and your savings. Simply stated, you need an initial budget. To help you gain a better sense of your expenses and income in your first year a budget planner has been included. You will need to do some research. Remember to factor in an amount for the professional development you identified in a previous lesson. Once you start making sales, you will want to review your budget at least annually. Real estate income is unpredictable. Careful financial management and sound budgeting are important aspects of your new career. Set ©2020 Real Estate Council of Ontario

aside some money to act as a buffer while you start out as a salesperson. You might also consider obtaining a line of credit. Avoid counting on the income from conditional sales. You want to calculate your income based on firm sales only, and remember that the income is not truly recognized until it has been paid to you. Last minute issues may delay or prevent payment of remuneration, even if it is firm. Working as an independent contractor means you are responsible for remitting HST and your income tax. Avoid spending all your remuneration. Be sure to set aside sufficient funds for your income tax. Consider opening a separate bank account and deposit a portion of your remuneration to be put towards interim income tax payments. While navigating through the online module, click the KMS button in the Module Resources for tools and information on this topic.

©2020 Real Estate Council of Ontario

Lesson 4 | Page 9 of 21

A key to your success in real estate is having marketable listings. Listings can generate other business; for example, potential buyers calling to inquire about a property or prospects visiting open houses can become clients. You will be better assured of a steady income when you have an inventory of salable listings. For these reasons, you will want to devote a large percentage of your time as a new salesperson to prospecting for listings.

©2020 Real Estate Council of Ontario

Lesson 4 | Page 10 of 21

Effective Networking and Building Relationships The next item to consider in your business planning is how you will generate leads to build relationships with potential sellers. You want to grow your network to ensure you have a healthy number of sales prospects. How you choose to proceed will depend greatly on your strengths and the approach you take. Steps you can consider include: Step 1: Focus on prospecting Step 2: Build listing sources from your sphere of influence Step 3: Select a geographic or social area to prospect Step 4: Put your prospecting plan into action Some brokerages will help you in this planning as a first-year salesperson. Be sure to keep this in mind as you plan your next steps. ©2020 Real Estate Council of Ontario

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Step 1: Focus on Prospecting To establish and build your business, you must get your name and services known in the community. You can prospect for sellers and buyers in a number of ways. Warm calling is contacting anyone who might recognize your name when you introduce yourself. As a new salesperson, you are best to focus on warm contacts. Cold calling, which involves contacting strangers, can be difficult when you are first building your career especially when limited by the Do Not Call List. The following five sections contain information on prospecting techniques.

Sphere-of-influence contacts Your sphere of influence consists of the people you know, which includes family, friends, people you do business with, school connections, fellow organization or club members, and so on. Create a list of people you know and make them aware of your entry into a real estate career. Since these people already know and trust you, they are a good starting point. Ask the people you know for referrals to anyone they know who is contemplating selling or buying. Having a referral to a potential seller or buyer from someone you know can help with prospecting. Ensure you have completed all required courses and are fully registered before introducing yourself as a salesperson in the industry.

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Open houses When you set up an open house to sell a property, you also have an opportunity to meet potential prospects who walk in the door. These potential sellers or buyers may not be working with a salesperson and would be open to having a salesperson help them find or sell a home. You will want to schedule open houses, perhaps attending with an experienced salesperson or having a mentor accompany you the first time. You can also offer to assist more established salespersons who might not have the time to provide open houses on all their listed properties. Remember, when you meet a potential prospect at an open house, make sure they are not working with another salesperson.

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Opportunity calling You can use listings on a street as a way to canvass other homes for listings. Use the opportunity to introduce yourself to neighbours of a house for sale and provide them with information about your services. Opportunity calling is also a way to get yourself known in your prospecting area. Even if a homeowner does not want to sell, they have an opportunity to meet you.

For sale by owner For sale by owner (FSBO) is a good opportunity for obtaining business because the homeowners are already trying to sell their home. However, be cautious, so as not to interfere with another brokerage’s contract that may be a mere posting. You will need to learn how to approach an FSBO owner with the right language for a successful conversion to clients. You will need to touch base with them multiple times to build the relationship and the trust. The idea is if they do not sell their house on their own, they may look for your help.

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Be prepared to handle objections and understand that this method takes time.

Cold calling Cold calling involves making unsolicited phone calls and neighbourhood door knocking, especially in your prospecting area, in search of potential business, or meeting someone who does not know you or without a prior appointment. Before you make any unsolicited phone calls, you should check the Do Not Call List, which identifies the telephone numbers you are not allowed to call. The Do Not Call List is available to brokerages that pay a monthly subscription fee to use the list. Companies like Telelisting provide the service for accessing the Do Not Call List. Cold calling is a prospecting technique that some salespersons use and depends on your skill set and comfort level. With cold calling, the volume of calls is important.

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Lesson 4 | Page 12 of 21

Step 2: Build Listing Sources From your Sphere of Influence To be successful in real estate, you will need to build your listing inventory. Having a good supply of listings, therefore, is key to a profitable career. People sell their properties for a variety of reasons, such as family, employment, financial status, and neighbourhood. To develop listing techniques, you will need to recognize these reasons, and develop a method of keeping in contact with owners who might sell and require your services or may refer you to someone they know who is thinking of selling or buying. As a salesperson, you should always be asking for referrals. Most salespersons use a variety of methods to obtain listings. Many sources of residential listings exist that can become part of your strategy:

©2020 Real Estate Council of Ontario

• • • • • • • • • • • • • • • • •

Email newsletters to potential and past clients Social media For Sale by Owner ads and signs Former buyers Neighbours of listings taken Expired listings that did not sell where the seller gives permission to be contacted Direct mail to a prospecting area Cold calling Advertising for specific properties Furniture for sale advertisements Builders of custom homes Social contacts and clubs News items regarding marriages and business changes Lawyers, estates, and foreclosures Mortgage and insurance companies, and lending institutions Legal notice column in the local newspaper Personnel officers in key industries

As you are prospecting, you will come across people who are not quite ready to buy or sell at that time. Keep track of these people using a Customer Relationship Management (CRM) tool or other method so you can follow up and keep in touch with them. You will also want to keep track of various listing sources so you can continue to grow your lead sources.

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Lesson 4 | Page 13 of 21

Step 3: Select a Geographic or Social Area to Prospect In real estate, a prospecting area refers to a target market where you position yourself as an expert in the minds of sellers and buyers in that market. Prospecting can be classified as geographical or social. Geographical prospecting targets a specific area or neighbourhood, which can be a postal code, apartment, or condominium building. Social prospecting is based on your relationships, interests, and hobbies; for example, people who belong to a specific club or are in a specific profession. Your sphere of influence would also be considered social prospecting. You are encouraged to keep your prospecting area small at first, as you will need to reach out seven to twelve times per year with your marketing material. A large area will be more difficult to budget for in the beginning. Most

©2020 Real Estate Council of Ontario

salespersons select a prospecting area they already know or live and would enjoy working in. Choose an area that has a good turnover of properties and the ability to expand as you become successful and known in the area. Your goal is to build your presence and reputation within the prospecting area. You will need to become acquainted with everyone who resides within the area, make a good impression, and become established as the person who offers real estate services. You will want to create a plan to regularly reach out to people living in that area using an organized, logical system. You can direct your marketing initiatives toward sellers and buyers inside your prospecting area. You will need to keep owners aware of what is happening in the local market, such as recent activity, price levels, and market conditions. Maintaining a regular program of contact with all owners in a prospecting area is essential for obtaining listings, referrals, and repeat business.

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Lesson 4 | Page 14 of 21

Step 4: Put Your Prospecting Plan into Action As a new salesperson, prospecting must be your top priority. Establish a goal of a specific number of people you will meet daily. Put your goals in writing and create action steps to achieve them. Your chances of success increase with the number of people you contact. Block time into your schedule for prospecting so it becomes part of your weekly work plan. Start your day early and get out to meet people. Take notes of your meetings and contacts, and follow up with a call, a note, email, newsletter, or personal visit. Hand out your business card routinely. Always remember that every person you speak to, or make contact with, during the day could be a potential client. Be creative with your prospecting. Attend social functions. Get out and meet people and be visible.

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Technology is a growing part of the real estate business. A number of tools are available to help you work more efficiently, market yourself, stay on top of leads, and manage your business. You do not have to pay for everything out of pocket. Some technologies are available through brokerages. As you begin to consider which brokerage you want to work with, consider the technologies you would like to use.

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Lesson 4 | Page 16 of 21

The Use of Technology in Real Estate The real estate market uses a number of hardware, software, and cloud-based tools to make running your real estate business easier and more effective. The following four sections contain information on technologies used in real estate.

Client Relationship Management software You will need to keep track of your leads. To do that, you want some form of Client Relationship Management (CRM) software. Many types of CRM programs are available, but the best one is the one you will use. Do your homework to find the right fit for you. Consider how you want to keep track of potential leads, follow up with clients, and keep track of marketing efforts. Look at how the CRM will scale as your business grows. You want to ensure that what you use will grow with you.

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Electronic forms Why use a paper-based system when there are electronic forms available to help you digitize your business? Electronic forms have the versatility and power to help you streamline tasks and get more work done. Electronic forms specifically for real estate come with clauses prewritten and ready for insertion. Automatically populating important categories cuts down on time and often eliminates the need for manual data entry.

Electronic signature software Electronic signature software cuts down on the time needed with paperwork. Digitally signing a document from any device and sending it without the need to scan can save you time. Electronic signatures can dramatically reduce contract reworking due to illegible handwriting and missed signatures. You will need to have sellers and buyers agree to use electronic software. Be mindful however, that not all clients may be electronically savvy to use the software and gaining electronic signatures does not absolve registrants from

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explaining and making sure clients understand what they are signing. Still, in the midst of time-saving technology nothing can substitute for a face-to-face meeting.

Cloud backup software The real estate industry, like many other industries, is making its way into the cloud. Cloud backup and archiving your transactions is a necessary practice for protecting valuable data. The shift toward real estate applications requires high levels of availability and disaster recovery. Using the cloud for secondary backups and data replication can help ensure your improved business continuity. Storing transactions in the cloud does not replace proper record keeping and submissions. It is a way to safeguard the information, should it need to be retrieved at a later date.

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Social Media Platforms Social media is a valuable marketing medium for real estate businesses. To use social media to your advantage, you will need to prioritize your time and focus on the platforms that are best suited for your market. According to research, the top three social media platforms for real estate salespersons are Facebook, LinkedIn, and Instagram. Facebook is a staple of marketing for real estate salespersons because its user demographics represent the target audience for any given real estate business, in any age or income group. Facebook allows you to be where your target audience is likely to hang out. The platform also has business features built in which allow businesses to publish listing-related updates and content, book appointments, communicate with customers, and curate reviews. Facebook ads also allow you to target users who have shown specific interest in buying property in your area. LinkedIn is a platform you can use to network with fellow salespersons and share your industry experience. Setting up a profile on LinkedIn serves as a digital resume, which is a way to increase your online presence.

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Instagram, which is a visual platform, is becoming popular for real estate businesses. Instagram Stories allow you to provide quick and personalized property updates. Regardless of the platform, you will need to post regular social media posts. Having a social media content calendar will help you plan and diversify the content you publish. To grow and engage your audience, you can post content such as: • Property photos • Success stories and client testimonials • Company milestones • Industry and market news • New listings and properties • Home tips and renovation ideas • Event coverage You will want to promote your social media account everywhere you can, for example, on your website homepage, in your email signature, and as social icons on your business card. Social media is not just about broadcasting, it is engaging. Use various platforms to share listings, find buyers, participate in real estate conversations, and join groups. Social media is an opportunity to showcase who you are and build credibility, so make sure your messaging complies with RECO advertising guidelines, REBBA and social media standards. If you are going to participate in these platforms, keep your profiles up to date and professional. Keep up the activity even when you are busy. The goal is to keep engaged and social, so you get the most from the platforms.

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Personal Websites Many buyers will search online for their home, so having a personal website can help you attract and engage online leads. Personalizing your website makes you stand out from other generic websites and can contribute to building your brand. To attract visitors and potential real estate clients, consider these features for your personal website: • About profile – An About page tells your website visitors who you are and what differentiates you from other real estate salespersons. You can use this page to highlight your background, experience, special skills, and achievements. • Client testimonials – Every potential seller or buyer who visits your website wants assurance of your ability to help them buy or sell a property. Using testimonials in text, video, or audio format provides some proof and helps build trust.

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• Links to your social media accounts – Social media exposes your brand to the many people who are active on at least one social media site daily. Linking your website to social media platforms, such as Facebook, LinkedIn, and Instagram, enables you to engage with potential clients and provide them with access to more information about your services. • Your listings and office listings – An Internet Data Exchange (IDX) listings platform allows you to create a “Featured Listings” page on your website that contains your listings and your office listings (updated daily). • IDX listings from your focus communities – A community profile page stocked with pertinent information is an excellent lead generator to build your credibility and show your familiarity with the area. • Blog – A blog of regular posts helps build your authority in the real estate industry and is a strategy for driving traffic to your website. Home buyers will be searching for information about the neighbourhoods you serve, market conditions, community events, concerts, area amenities, and home design. Sellers will be interested in how you market a home. A personal website is an investment that, if well designed and functional, can help build your brand, educate potential clients about you and your services, and direct them to your listings.

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Lesson 4 | Page 19 of 21

Devices Real estate professionals use a variety of devices for communication and marketing. Selling real estate requires you to be responsive and minimize turnaround times for supplying information or sharing important documents. You will benefit by becoming familiar with the latest trends and investing in commonly used devices. The following four sections contain information on devices used in real estate.

Smart phones Smart phones have become essential devices for real estate salespersons. Since many clients will expect to reach you on demand, a smart phone allows you to respond to requests for information as quickly as possible. With a smart phone, you can respond to emails, text messages, voice mails, and instant messages. In addition, you can use the smart phone’s built-in camera to take pictures or video of a property and upload them to the Web without having to use a desktop or laptop computer. Choose a smart phone that will meet your needs. Consider one with a good camera for taking property photos, app capability for receiving and sending documents, and for staying current in your social media marketing.

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Tablets and laptops Tablets are mobile devices which are replacing laptops, as they are easier to carry around. A laptop can create a barrier between you and your clients, while a tablet brings you closer. Some tablets have the same capabilities as a laptop. You can use a tablet for meetings with potential sellers and buyers. A tablet allows you to share your portfolio, access the local listing service and pull up documents easily as needed.

Drones Drones are one of the latest high-tech tools real estate salespersons are starting to use. A drone is any type of unmanned aerial vehicle (UAV) that is operated remotely. Drones come in a variety of shapes and sizes, though they often take the form of a small airplane or helicopter. Drones used for real estate purposes are equipped with cameras to take aerial images of properties. A drone allows you to show your buyers the full exterior of a house, avoiding the process of organizing a house visit or photo shoots from more difficult

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angles. A drone can also capture unique shots you cannot get from any other medium: a close-up bird’seye view, a 360-degree panorama outside the house, or a slow-zoom directly down the street. Drones are helpful when selling land or rural properties. If you plan to use drones, make sure you know and abide by specific drone operation rules and laws. For more information about regulations on drone operation in Canada contact Transport Canada Civil Aviation (TCCA) at [email protected] or 1-800-305-2059.

Laser measures Laser measures are a valuable tool to obtain accurate measurements when trying to sell a home. A laser measure shoots a laser beam from the starting point in a straight line to help you mark down the correct length. These measures usually give a very accurate measurement and are easy to use. When buying a laser measure, consider how you will use it to get the right one for your needs. Look for a model that can measure long distances and is compact enough to be able to fit either in your pocket or bag.

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Lesson 4 | Page 20 of 21

New Technologies Two new technologies that are growing in the real estate industry are virtual reality (VR) and artificial intelligence (AI). VR offers buyers an artificial, lifelike environment through the use of a computer-generated simulation using special electronic equipment. Some of the most common uses of VR in the real estate industry are: • Virtual property showcases that allow people to virtually visit properties without leaving their homes • Virtual staging that allows people to view an empty house or apartment fully furnished • Architectural visualization that allows potential buyers to view the exterior and interior of yet-to-be-built properties One of the biggest benefits of VR technology is the time saved for both buyers and salespersons. A buyer can simply put on a VR headset and enjoy an immersive, three-dimensional tour without having to travel to the property. ©2020 Real Estate Council of Ontario

AI is being used every day to make what used to be complicated into an easier experience. Salespersons and homeowners are using AI or are being influenced by the invisible calculations. AI makes behind the scenes. AI today is advanced machine learning with sophisticated algorithms that process huge amounts of input and user behaviour to make predictions. The ability to collect, analyze, and learn from a huge inflow of data promises to make salespersons more effective and efficient. AI also promises to help clients experience selling and buying with less uncertainty. Some ways AI may influence the real estate industry are: • Improving home searches for buyers • Identifying strong client leads for salespersons • Refining the transaction process • Predicting appraisals and market values You may want to consider learning more about these technologies and how they can help set you apart in the real estate market.

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Lesson 4 | Page 21 of 21

Congratulations, you have completed the lesson! There are four sections on this page with a summary of the key topics that were discussed in this lesson.

Estimating the firstyear expenses and income

Knowing your cash flow is important to any real estate salesperson, especially in your first year. As you start your business, you will need to carefully weigh each expense and balance it with the revenue you forecast. Income fluctuates through different seasons of the year. You need to be aware of the fluctuation and be able to manage your expenses month to month. Be realistic about your expectations. You must have money set aside to balance out the fact that there are fluctuations from month to month, and there is often no income in the first 60 to 90 days. It is important in planning for your expenses that you remember your tax liability. You will have HST and other remittances to make since, as an independent contractor, brokerages do not deduct income tax, Canada Pension Plan (CPP), and Employment Insurance (EI). With income, expenses, and remittances to keep track of, it is a good idea to create a spreadsheet. You will want to include both start-up and ongoing expenses. This will allow you to see the impact to your bottom line when you change any of the numbers.

Preparing an initial budget for the first year

As a real estate salesperson, you want to start putting together your budget. It must include your anticipated costs for running your business, your personal expenses, and income. This is a combination of a business budget and a personal budget in relation to your income.

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Networking, prospecting, and building relationships

You will want to consider how you will build relationships to foster leads in your business planning. You want to grow your network to ensure you have a healthy number of sales prospects. How you choose to proceed will depend greatly on your strengths and the steps you take. These steps include: 1. Focusing on prospecting efforts using sphere of influence contacts, for sale by owner (FSBOs), open houses, cold calling, and opportunity calling 2. Building listing sources 3. Selecting a defined geographic area in which to prospect 4. Putting your prospecting plan into action Some brokerages will help you in this planning as a first-year salesperson.

Technology in the modern real estate market

Technology is a growing part of the real estate business. There are a number of tools available to help you work more efficiently, market yourself, stay on top of leads, and manage your business. You will want to consider client relationship management (CRM) software, form solutions, electronic signature software, and cloud backup software. To use social media to your advantage, prioritize your time and focus on the platforms that are best suited for your market. The top three social media platforms for real estate salespersons are Facebook, LinkedIn, and Instagram. Real estate professionals use a variety of devices for communication and marketing, such as smart phones, tablets and laptops, drones, and laser measures. Two new technologies that are growing in the real estate industry are Artificial Intelligence (AI) and Virtual Reality (VR). Some ways AI may influence the real estate industry are improving home searches for buyers, identifying strong client leads for salespersons, refining the transaction process, and predicting appraisals and market values. Some of the most common uses of VR in the real estate industry are virtual property showcases, virtual staging, and architectural visualization.

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Module Summary | Page 1 of 5

Module Summary

This lesson contains a summary of the entire module and a list of helpful resources available in the Knowledge Management System.

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Module Summary | Page 2 of 5

Congratulations, you have completed this module! You have now completed the Pre-Registration phase of the Real Estate Salesperson Program and are nearing your goal of becoming a real estate salesperson. This lesson will present a summary of Learning Objectives, a list of helpful resources that you can search for in the Knowledge Management System, and some final important reminders.

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Module Summary | Page 3 of 5

There are four sections on this page with a summary of the key topics that were discussed in this module.

Assessing your skills and identifying needed support

Skills or traits that contribute to a successful career in real estate include: • People skills • Negotiating skills • Problem solving skills • Interviewing skills • Self-discipline • Research skills • Organization and planning • Confidence and persistence • Mathematical skills • Computer literacy • Technology proficiency Ongoing learning will be essential to your success in the real estate industry. A variety of development options are available to you, from local real estate board training programs to independent coaching and training seminars, conferences, and events. Knowing what ongoing education and training opportunities are available will help you in your professional development as a real estate salesperson. Completion of this lesson has enabled you to: • Discover the skills that contribute to establishing a career in real estate • Discover resources and opportunities for development

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Selecting the appropriate career path and brokerage

Opportunities in real estate that you can explore include these markets: residential resale, condominiums, new homes, rural, recreational, agricultural, and commercial. When choosing a brokerage to work for, consider your individual needs, the various services a brokerage offers you, remuneration plans, types of brokerages, types of services the brokerage offers to clients and customers, the brokerage’s primary source of revenue (i.e. listing and selling), and whether the brokerage works in organized or non-organized real estate. Completion of this lesson has enabled you to: • Discover how the opportunities for a career in real estate align with individual preferences • Identify key considerations to assess when selecting a brokerage

Selecting the right brokerage

You want to talk to more than one brokerage and gain a broad knowledge of what is available in the marketplace. Do your due diligence to check out a minimum of two to three brokerages. When interviewing a brokerage, be prepared to assess them and their offerings, and come prepared with questions. You want to pose personalized questions in each interview: ask questions about culture, education and training; business planning and support; transaction management; marketing support; and office resources and technology. Completion of this lesson has enabled you to: • Identify the key considerations when preparing to meet with a brokerage • Identify recommended types of questions a salesperson should ask while selecting a brokerage

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First year as a salesperson

As a real estate salesperson, you want to start putting together your budget. It must include your anticipated costs for running your business and your personal expenses. You will want to consider how you will build relationships to foster leads in your business planning. Focus on prospecting efforts, building listing sources, selecting a defined geographic area, working the plan, and scheduling the time in your calendar. Technology is a growing part of the real estate business. There are a number of tools available to help you work more efficiently, market yourself, stay on top of leads, and manage your business. Make sure you are aware and abide by specific regulatory requirements for each type of technology-based tool you use in your business. Completion of this lesson has enabled you to: • Identify important considerations when estimating the first-year expenses and income • Prepare an initial budget for the first year, considering the rough approximations for estimated expenses and income • Identify the importance and the key steps for effective networking, prospecting, and building relationships with sellers, buyers, third-party service providers, and other people in the community • Identify the importance of technology in the modern real estate market

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Module Summary | Page 4 of 5

Module Resources There are four helpful resources related to this module that you can search for in the Knowledge Management System. 1. First-Year Budget Planner: This job aid provides information to assist a salesperson with budgeting for firstyear expenses. A salesperson can use this job aid to help identify and plan for initial and ongoing expenses when starting their career. 2. Career Path and Brokerage Selection: This job aid provides an overview of the real estate markets, and key questions to ask when choosing a brokerage. A salesperson can use this job aid to guide them on the type of real estate they may wish to sell, as well as the questions they should ask when selecting a brokerage. 3. Recommended Sample Questions to Ask When Selecting a Brokerage: This job aid provides a list of sample questions that can be asked during an interview with a brokerage. A salesperson can use this job aid to help evaluate the brokerage and can be used to compare different brokerages when determining the best fit for their needs. 4. Skills Self-Assessment and Action Planner: This self-assessment and action planner identifies and evaluates skills that are useful for a career in real estate. The salesperson can use this planner to highlight areas of strength and opportunities for development. While navigating through the online module, click the KMS button in the Module Resources for tools and information on this topic.

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Module Summary | Page 5 of 5

Important Reminders • Now that you have completed the eLearning for the Pre-Registration phase of the Real Estate Salesperson Program, you will continue to have access to this eLearning for a defined period. Please refer to the Humber website for more detail. • In addition to accessing the Knowledge Management System (KMS) through your eLearning for the next two years, once you have set up your MyWeb access through RECO, you will continue to have access to the KMS. • Continue to review and update your action plans for skill development as part of your ongoing professional development. • You have one year from the day you complete the Pre-Registration phase of the Real Estate Salesperson to register with RECO. • Once you register with RECO, you will have to renew your registration every two years. For your first renewal, you must complete the Post-Registration phase of the Real Estate Salesperson Program offered online through ©2020 Real Estate Council of Ontario

Humber College. For subsequent renewals, you must complete the required continuing education, which is offered online through RECO. • You are not expected to be the expert on every aspect of the real estate profession. Once you start working with a brokerage, the broker of record and manager are your best resources. They are there to help you, so make sure you consult with them when you need help. If you have questions from sellers or buyers that you cannot answer, let them know you will get back to them and seek the answers through your broker of record, manager, or third-party professional. • You will want to build a list of preferred third-party professionals that you can refer your clients to. Aim to have names and contact details of at least three of each type of professional, such as mortgage brokers, real estate lawyers, and home inspectors. To build your list, ask your broker of record, manager, and salespersons at your brokerage who they would recommend. Check with your clients about their satisfaction with any of your thirdparty referrals.

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