men not as an independent activity but as a supplemental one called for by the nature of their business. consequence it is frequently poorly done. There is no reason, however, why its commissions should not prove a valuable source of income and its opportunities a means of building business. The insurance department ought to have the pre-eminent attitude of service. Clients will find its service a great convenience. Having placed their confidence in the dealer, they will naturally turn to him to write their insurance. The records and data available in effecting a sale or a transfer make the handling of insurance easy. Renting and appraising involves close personal relations between the dealer and the customer; that relationship makes the writing of insurance natural. Another advantage lies in the immediate protection which can be rendered to the customer. As soon as real estate is transferred or leased, the question of insurance becomes immediately vital. The interests of the buyer may suffer by the lapse of time involved in going from one office to another, attended as such passage may be by several delays and interruptions, or conscious postponement. If there were no commissions, it would be almost necessary for the real estate dealer to write insurance in order to secure the interests of his customers. The department has an exceptional opportunity, therefore, for building up good will for the business. Remembering the basis of competition, it should seek to render every service that will protect the interests of customers and bind them to the firm. There will also be occasions when it can secure new customers for the other departments. An efficient insurance department is an asset to any real estate office; any other sort ought not to be tolerated. SUMMARY 1. Insurance is a method of distributing the losses due to a certain contingency over a group subject to that contingency. 2. Insurance serves as anessential basis of credit and acts as a deterrent to losses by fire. 3. Insurance policies are standardized in nearly every state because of the ease with which an insurance company may be defrauded and the difficulty with which the ordinary person could protect his rights in taking out a policy. 4. The special features which an insurance agent should particularly regard are using general terms instead of specific, careful specification of the place in which the property covered rests, and the exact designation of the insurable interest. 5. The mortgagee clause provides for the protection of the interests of the holder of a mortgage. 6. The coinsurance clause arises from an effort to equalize the costs of insurance. It is used because losses are usually not greater than 80 per cent of the entire value of the property. 7. Rate making attempts to fix the cost of insurance on the basis of the losses experienced on particular types of risks. Risks involve two elements, the moral hazard and the external hazard. 8. Rates are fixed either by the state or by a Board of Underwriters. They are the same for all companies operating in the same place and are based upon the Universal Mercantile Schedule or the Analytical Schedule. 9. Many real estate dealers also write profits and rent insurance and different forms of casualty insurance, including liability, plate glass, boiler, crop, and automobile insurance. Title insurance is a special form of insurance written almost solely by title insurance companies. 10. The attitude of the insurance department will determine the amount of service which it renders to the organization as a whole. CHAPTER V REAL ESTATE SELLING Questions In what way can the real estate salesman become familiar with the commodity which he sells? What are some of the elements affecting value of property? What is meant by the fundamental attitude of the sales department? What are the steps in a sale? How are attention and interest secured? What are the essentials of constructive selling? How may belief be created? What means can a salesman employ to get action? What appeals may be used in selling real estate? THE real estate dealer, in every capacity in which he serves, is obliged to play the part of salesman. Perhaps in no other profession does salesmanship play a more important part. When the dealer is dealing with tenants, he "sells" them the property which he manages; when he secures a loan on real estate, he first "sells" the lender on the security of his loan; and when he insures property, he "sells" the company which he represents. Thus the attitude of selling pervades the other departments as well as the one operated for the sole purpose of sales. The necessity for a constant and applied study of salesmanship is, therefore, obvious. However long and diligent a study is made, the subject can never be exhausted. For salesmanship is an art which deals with human nature very intimately, and human nature can never be quite encompassed. Some general principles, which through years of careful study have been observed, may be pointed out with certainty. Knowledge of Commodity a Necessity.-In the first place, the salesman must be accurately acquainted with the commodity which he sells. This does not mean a casual relationship, but an intimate contact with all features. In real estate selling it means first, a knowledge of the land itself, its topography, layout, and qualities. In the second place, it means a knowledge of the improvements on the land, their adaptability to their situation, their age, their condition, and so on. The real estate broker, in particular, ought to be able to visualize as many buildings as possible in his city; he ought to study them for that purpose. And, finally, a knowledge of his commodity means that the real estate dealer ought to know how the land in his community could be utilized. A prominent real estate dealer in one of our small cities keeps a file of unusual lots, showing how they might be divided up and utilized to the best advantage. When a customer comes into his office and asks for a certain kind of property, this dealer has an advantage over his competitors inasmuch as he may be able to suggest something carved from the irregular unutilized lots. His advantage in case a customer desired an unusual lot is obvious. In addition to knowing the commodity itself, the real estate man must be acquainted with values and the elements which affect them. These have been discussed in the chapter on valuation; it is sufficient here to point out some concrete applications of the general principle. It is a great aid in selling a piece of property in a choice residential section, for example, to be able to point out the residences of prominent people. Such a procedure establishes beyond controversy the standing of the com munity. The same principle holds true of all communities; their standing is known as soon as it is known what "company they keep." In addition to knowing the owners of residences, the dealer will find it to his advantage to know as much as possible about the houses themselves, their construction, the number of rooms, and so on. A file should be kept showing all information possible about the residences of the community or city so that at the instant a place is put on the market, the salesman has at his disposal the information necessary to make the sale. Acquaintance with such a file would be as indispensable to the real estate salesman as knowledge of his catalog to the traveling salesman. This will be evident again in the consideration of facts as a means of inspiring confidence. Land and buildings are his stock in trade; ignorance of his stock is no less a fault on the real estate dealer's part than it would be on the part of a grocer or any other dealer. There are three ways in which this intimate knowledge of real estate necessary to the dealer can be secured: (1) by studying the map; (2) by talking with others about real estate; (3) by personally studying the city—by actually coming into physical contact with it. In order to train his salesman one dealer sends them out to walk over certain blocks, to make maps of them, including the name of the owner of every lot and the type of construction of every house. Block by block the salesman familiarizes himself with every foot of the territory which he is going to sell. This is intimate personal contact. Having walked over the streets and charted them himself, the salesman has established them in his mind. Such a map discloses at a glance every vacant lot in the district and saves the time of the salesman and the customer as well. Moreover, the knowledge thus gained |