Month: November 2024

10 Important Tips to Successful Real Estate Investing

10 Important Tips to Successful Real Estate Investing

by admin0

Buyer’s Reports

As real estate professionals, it’s our job to make the real estate buying and selling process as easy as possible for everyone involved. That means providing quality information that can benefit you immediately. We care about this community and whether you’re buying or selling. We want to share some important information with you that will help you in your next move.

The following reports will not only SAVE you money, but can make you money in real estate!

Please let us know if we may be of any further assistance!

10 Important Tips to Successful Real Estate Investing

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents

Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be careful – Tax laws may change

Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financingis what you should look for as an investor.

3. Specialize in something you Know

Start in a market segment you know. Whether you focus on fixer-uppers,foreclosures, starter homes, low-down payment properties, condominiums,or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the Costs going in!

Know the financial statements inside out. What are operating expenses?What are loan payments? Vacancy costs? Taxes? What does the cash flowstatement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from

If the last rent increase was recent, your tenants may be considering amove. If tenants have a short-term lease, they may be living theresimply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess the tax situation

Taxes are an integral part of successful real estate investing, and Theyoften make the difference between a positive cash flow and a negativeone. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage

If seller’s coverage is based on lower-than-current replacement value,your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs

Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult Your Accountant

Taxation is a key element of successful real estate investing, so besure to find an accountant who is well-versed with the constantlyevolving tax code.

10. Inspect!

Make sure that you always perform a thorough inspection of the propertybefore buying it. Never, ever buy any property without at leastexamining the site. In some cases, hiring professional inspectors toexamine the structural mechanical system may be a sound investment.

Questions to Ask Your REALTOR®

by admin0

1. Are you a full-time professional Realtor®? How long have you worked full time in real estate? How long have you been representing buyers? What professional designations do you have?

Knowing whether or not your agent practices full time can help you determine potential scheduling conflicts and his or her commitment to your transaction. As with any profession, the number of years a person has been in the business does not necessarily reflect the level of service you can expect, but it is a good starting point for your discussion. The same issue can apply to professional designations.

2. Do you have a personal assistant, team or staff to handle different parts of the purchase? What are their names and how will each of them help me in my transaction? How do I communicate with them?

It is not uncommon for agents who sell a lot of houses to hire people to work with them. They typically work on a referral basis, and, as their businesses grow, they must be able to deliver the same or higher quality service to more people.

You may want to know who on the team will take part in your transaction, and what role each person will play. You may even want to meet the other team members before you decide to work with the team. If you have a question about fees on your closing statement, who would handle that? Who will show up to your closing?

3. Do you have a Website that will provide me with useful information? Can I have your URL address? Who responds to emails and how quickly? What’s your email address?

Many home buyers prefer to search online for homes because it’s available24 hours a day and you can do it in the privacy of your own home. By searching your real estate agent’s Website you will get a clear picture of how much work you would be able to accomplish online.

4. Will you show me properties from other companies’ listings?

Some real estate companies do offer their buyers’ agents a higher commission if they are able to sell “in-house” listings. In such circumstances, there can be added incentive to limit the range of homes you are shown. This may impact your home search and how much your buyer agent’s fee will be.

5. Will you represent me or will you represent the seller? May I have that in writing? How will you represent me, and what is the direct benefit of having you represent me?

The goal here is to ascertain to whom the real estate agent has legal fiduciary obligation, which may vary from state to state or even locale to locale. In the past, agents always worked for sellers. Then the listing broker was responsible for paying the agent or sub-agent that brought a suitable buyer for the home. And even though the buyer worked‘with’ an agent, the agent still represented and owed their fiduciary duty to the seller.

Although seller agencies still exists in certain areas, agents today almost always have a sense of moral obligation to buyers. Find out what is common in your area and understand what kind of agent you have before you begin to work with them.

6. How will you get paid? How are your fees structured? May I have that in writing?

In many areas, the seller pays all agent commissions. Sometimes, agents will have other small fees, such as administrative or special service fees, that are charged to clients, regardless of whether they are buying or selling. Be aware of the big picture before you sign any agreements.Ask for an estimate of buyer costs from any agent you contemplate employing.

7. What distinguishes you from other real estate agents? What is your negotiating style and how does it differ from others? What geographic areas do you specialize in?

Each agent has unique methods of overcoming obstacles and negotiating deals. The most important thing is to make sure your agent is an effective advocate for you.

8. Will you give me names of past clients?

Interviewing an agent can be similar to interviewing someone to work in your office. Contacting references can be a reliable way for you to underst and how he or she works, and whether or not this style is compatible with your own.

9. Do you have a performance guarantee? If I am not satisfied with your performance, can I terminate our Buyer Agency Agreement?

In the heavily regulated world of real estate, it can be difficult for an agent to offer a performance guarantee. If your agent does not have a guarantee, it does not mean they are not committed to high standards.Typically, he or she will verbally outline what you can expect from their performance. New Era Realty understands the importance of win-win business relationships: the agent does not benefit if the client does not also benefit.

10. How will you keep in contact with me during the buying process?

Some agents may email, fax or call you daily to tell you about properties that meet your criteria, while others will keep in touch weekly. Asking this question can help you to reconcile your needs with your agent’s systems.

5 Powerful Buying Strategies

by admin0

1. Get “Pre-Approved” – Not “Pre-Qualified!”

Do you want to get the best property you can for the least amount ofmoney? Then make sure you are in the strongest negotiating positionpossible. Price is only one element in the negotiations, and notnecessarily the most important one. Often other terms, such as thestrength of the buyer or the length of escrow, are critical to a seller.

In years past, I always recommended that buyers get “pre-qualified”by a lender. This means that you spend a few minutes on the phone with alender who asks you a few questions. Based on the answers, the lenderpronounces you “pre-qualified” and issues a certificate that you canshow to a seller. Sellers are aware that such certificates areWORTHLESS, and here’s why! None of the information has been verified!

Many times unknown problems can come to the surface! Some of theproblems I’ve seen include recorded judgments, alimony payments due,glitches on the credit report due to any number of reasons bothaccurately and inaccurately, down payments that have not been in theclients’ bank account long enough, etc.

So the way to make the strongest offer today is to get“pre-approved”. This happens AFTER all information has been checked andverified. You are actually APPROVED for the loan and the only loose endis the appraisal on the property. This process takes anywhere from a fewdays to a few weeks depending on your situation. It’s VERY POWERFUL anda weapon I recommend all my clients have in their negotiating arsenal.

2. Sell Your Property First, Then Buy the House

If you have a house to sell, sell it before selecting a house to buy!Contingency sales aren’t nearly as strong as one that comes in with aready, willing and able buyer. Consider this scenario: You’ve found theperfect house – now you have to go make an offer to the seller. You wantthe seller to reduce the price and wait until you sell your house. Theseller figures that this is a risky deal, since he might pass up a buyerwho DOESN’T have to sell a house while he’s waiting for you. So he saysOK, he’ll do the contingency but it has to be a full price offer! Youhave now paid more for the house than you could have because of thecontingency, and you have to sell your existing house in a hurry!Otherwise you lose the house! So to sell quickly you might take an offerthat’s lower than if you had more time. The bottom line is that buyingbefore selling might cost you THOUSANDS of dollars.

If you’re concerned that there is not a house on the market for you,then go on a window-shopping trip. You can identify possible houses andlocations without falling in love with a specific house. If you feelconfident after that then put your house on the market.

Another tactic is to make the sale “subject to seller findingsuitable housing”. Adding this phrase to the listing means that WHEN YOUDO FIND A BUYER, you will have some time to find the new place. If youdon’t find anything to your liking, you don’t have to sell your presenthome.

3. Play the Game of Nines

Before house hunting, make a list of things you want in the new place.Then make a list of the things you don’t want. You can use this list as aguide to rate each property that you see. The one with the biggestscore wins! This helps avoid confusion and keeps things in perspectivewhen you’re comparing dozens of homes.

When house hunting, keep in mind the difference between “STYLE ANDSUBSTANCE”. The SUBSTANCE are things that cannot be changed such as thelocation, view, size of lot, noise in the area, school district, andfloor plan. The STYLE represents easily changed surface finishes likecarpet, wallpaper, color, and window coverings. Buy the house with goodSUBSTANCE, because the STYLE can always be changed to match your tastes.I always recommend that you imagine each house as if it were vacant.

Consider each house on its underlying merits, not the seller’s decorating skills.

4. Don’t Be Pushed Into Any House

Your agent should show you everything available that meets yourrequirements. Don’t make a decision on a house until you feel thatyou’ve seen enough to pick the best one.

A decade ago, homes were selling quickly, usually a few days afterlisting. In that kind of market, agents advised their clients to make anoffer ON THE SPOT if they liked the house. That was good advice at thetime. Today there isn’t always this urgency, unless a home isdrastically underpriced, and you’ll know if it is.

Don’t forget to check into the SCHOOL DISTRICTS of the area you’reconsidering. Information is available on every school; such as classsizes, % of students that go on to college, SAT scores, etc. You can getthis information from this web site.

5. Stop Calling Ads!

Please note – ads are sometimes created to make the phone ring! Many ofthe homes have some drawback that’s not mentioned in the ad, such astraffic noise, power lines, or litigation in the community. What’s notmentioned in the ad is usually more important than what is.

For this reason, I want you to be very careful when reading ads.Remember that the person writing the ad is representing the seller andnot you! The most important thing you can do is have someone on yourside looking out for your best interests. Your own agent will critiquethe property with an eye towards how well it meets your needs and willpoint out any drawbacks you should know about. So whether you decide towork with me or not, pick an agent you feel comfortable with and enlistthe services of that agent as a buyer’s broker. Then you become a clientwith all the rights, benefits, and privileges created by this agencyrelationship, and you’re no longer just a shopper. Did you know thatmany homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUTIN THE PAPER? These “great deals” go to those people who are committedto working with one agent. When an agent hears of a great buy, who doyou think he’s going to call? His client, who he has a legal obligationto work hard for you, or someone who just called on the phone and said“keep your eyes open”? So to get the best buy on a property, I alwaysrecommend that you hire your own agent and stick with him or her.

Selling Mistakes You Don’t Want to Make!

by admin0

Mistake #1 — Pricing Your Property Too High

Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property.Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually longtime to sell, and they end up being sold at a lower price.

Mistake #2 — Mistaking Re-finance Appraisals for the Market Value

Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encouragere-financing. The market value of your home could actually be lower.Your best bet is to ask your REALTOR® for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.

Mistake #3 — Forgetting to “Showcase Your Home”

In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.

Mistake #4 — Trying to “Hard Sell” While Showing

Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don’t try haggling or forcefully selling.Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.

Mistake #5 — Trying to Sell to “Looky-Loos”

A prospective buyer who shows interest because of a “for sale” sign he saw may not really be interested in your property. Often buyers who do not come through a REALTOR® are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate.

Your REALTOR® should be able to distinguish realistic potential buyers from mere lookers. REALTOR®s should usually find out a prospective buyer’s savings, credit rating, and purchasing power in general. If your REALTOR® fails to find out this pertinent information,you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people.If you have to do this work yourself, consider finding a new REALTOR®.

Mistake #6 — Not Knowing Your Rights & Responsibilities

It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what you are responsible for before signing the contract. Can the property be sold “as is”? How will deed restrictions and local zoning laws will affect your transaction? Not knowing the answers to these kind of questions could end up costing you a considerable amount of money.

Mistake #7 — Limiting the Marketing and Advertising of the Property

Your REALTOR® should employ a wide variety of marketing techniques. Your REALTOR® should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your REALTOR® is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch with many potential buyers.