Real Estate

How to Determine the Value of My Home?

2008-11-14T21:13:00.000-08:00

Things to consider in valuing your home are, first, how does it compare to like kind homes that have sold recently? Recently meaning within the last three months, I believe six months is too long, in this markets things are changing daily. Is the asking price fair? In other words is in within reason. What value do you place on the advertised features and amenities and the lack thereof. You need to really take a realistic look at your home, understand that the market is not going to be as emotional as you may be pricing.

Zillow home valuation, RealestateABC.com, Reply.com are among a multitude of websites that can help you arrive at a price. They are not exact but should give you a pretty good idea on the price range. If you have time call around .and ask for Real Estate agent's opinion, go to as many open houses as you can in your neighborhood. Stick with similar properties, same look and feel and withing15% on square footage.

Looking at "Comps"
Knowing whether an asking price is realistic will be vital when you're ready to make an offer on a house. Why? Because if the house is priced too high it will never appraise at the negotiated price, so either you put addition funds or the seller must drop the price.

Check with your agent, Zillow.com, propertyshark.com, or other websites to see recent sales of homes in the area that are similar, or comparable, to what you're looking for. It is advisable to print them out and keep these "comps" in your three-ring binder; you'll be referring to them quite a bit. I know it sound like a bit much, but it may save you thousands. I don't think you will ever lose buying in California as long as you hold on to the property; it doesn't make sense to overpay.

Note that "recent sales" means within the last six months in today's market I recommend three months. A sales price from a year ago is useless it has little or no relation to what is going on in your area right now. In fact, most lenders will not accept comps older than three months.

The market's activity also determines how easy or difficult it is to find accurate comps. In a "hot" or busy market, with sales happening all the time, you're likely to have lots of comps to choose from. In a less active market finding reasonable comps becomes harder. Also with properties that don't fit the norm for the neighborhood, over build homes. And if the home you're looking at has special design features, finding a comparable property is harder still. It's also necessary to know what's going on in a given sub-segment. Maybe large, high-end homes are selling like quickly, but owners of smaller houses are staying put. Normally the cookie cutter homes move quicker, three bedroom, two bath, etc.

5 Don'ts In Selling Your Home

2008-11-13T21:12:00.000-08:00

Thinking of selling your home? Reviewing the following tips may save you both money and potential headaches.

1. Don't put your home on the market until both you and it are ready. While this may sound obvious, eager sellers often list their home before it is ready to show and before they fully understand the consequences of a sale. Make sure you've done your homework on pricing and have decided on both the listing price and what you wish to net from the sale. You should have already made the decision on selling by owner or with the help of an agent, and you know which firm you will use to help you. You've checked your closing papers or with your mortgage company to see if your loan has a pre-payment penalty, and all of your touch-ups, clean-up, repairs, or improvements are 100% complete.

2. Don't let emotions cloud your decision making process. Once you've decided to sell, the house is no longer your home; it's a commodity you wish to dispose of. When you're too emotionally attached to it, it's difficult to be objective. Remember, buyers aren't trying to offend you with low offers or criticisms of your home; they are looking for the right home for themselves at the lowest possible price. You will probably do the same thing when you look for a replacement. Never counter an offer with, "take it or leave it." Most often, even if they are interested, they'll leave it. Being turned off by a buyer's comment or offer makes it difficult to analyze and make a proper counter offer.

3. Don't price your home at your "must have price." Few buyers will be willing to pay your asking price. Everyone wants to negotiate with the assumption you've added in more than you are willing to take. Give potential buyers the satisfaction of getting a better deal. But, you must be realistic in your initial price. If the market doesn't justify your asking price, you're asking for trouble by pricing it too high. If you truly want to sell your house, you must be flexible. And, don't price it high just to see if you can snare an uneducated buyer. You'll make it more difficult to sell and when you do lower the price later, buyers may wonder if there's a problem with the house.

4. Don't do extensive remodeling prior to sale. Especially don't over-improve for your neighborhood. While there are legitimate repairs or improvements that you may need to make, understand that major renovations rarely recoup their costs. Put your money where it will benefit you the most.

5. Don't try to cover up problems with your home. Most states require sellers to disclose problems-potential or actual-with their homes. Not being honest opens you to a lawsuit after the sale. Consider hiring a home inspector to do a pre-inspection. While you'll have to pay $250-$400 for their services, you'll be aware of potential problem areas and can begin addressing them. Buyers will respect your openness and, though they probably will still want their own inspection, they will be more comfortable knowing that someone has already thoroughly reviewed the home.

In today's tumultuous housing market, sellers must be pro-active. Developing a plan of action and understanding your responsibilities during the process will put you ahead of most sellers. Then, if your home is priced competitively, and marketed aggressively, it will sell.

A Simple Process to Sell Your Houses Fast in Today's Troubled Market

2008-11-03T21:12:00.000-08:00

So you've gotten into the real estate market. You found a motivated seller who was really feeling a financial pinch brought on by the economic crisis. They reached the conclusion that their chances of saving their home was next to zero, so they chose to take the consolation prize: to walk away under their own terms with their pride intact and their credit report in better shape than they expected.

Because of your Real Estate investing education you were able to purchase their property with a subject to transaction. Knowing the smart money was on purchasing their property through a land trust, now you're ready for the next step - finding a buyer in today's market. The chances of quickly flipping the property for a profit are relatively low, so what can you do - short of renting it out and playing landlord?

Let me give you a better option.

What if I told you that instead of simply renting the property out for market rent you could find a tenant who might want to buy the property in the future for much more than it's worth now, is willing to give you a substantial "down payment", will pay a premium rental rate, and will agree to pick up most of the maintenance expenses? I don't need to pinch you; you're not dreaming.

Instead, I need to explain how you can step into a real estate investing goldmine. I'm referring to the lease option strategy to real estate riches.

The lease option is two agreements, although a lot of novice investors think it's just one. The first part is a standard rental agreement, while the second part is an option agreement.

The rental agreement lays out the terms of the rental - how much they'll pay each month for the privilege of living in your house. You'll also spell out all of your rules, explain their deposit, etc. It's a simple agreement. Even though you're a Real Estate investor who may just be starting down your personal pathway to prosperity, you've probably seen one of these agreements even if only as a tenant.

Where this Real Estate investing strategy becomes a work of art, though, is by incorporating a second agreement into the transaction: the option agreement. Don't be afraid of the lease option - it's not scary. You don't need to spend thousands of dollars on a worthless piece of paper that says "Bachelor's Degree" to understand lease options; in fact, you'll spend less time over-complicating the concept if you don't have one. Here's how it works:

- Your tenant-buyer pays you an option consideration fee (generically referred to by some people as a "down payment"). The amount is based on your comfort level - and your tenant-buyer's ability to pay, but is generally between $2,000-$10,000. This money will be credited back to the tenant-buyer when they finally decide to purchase the property. If for some reason they decide to walk away from the agreement or can't complete the purchase within the alloted time, they'll lose this fee.
- In exchange for the option fee, the tenant will have the right to buy the property for the amount that you negotiate before they move in. This price is always more than the property is worth today, which guarantees you a nice profit margin when they exercise their option. They'll have a fixed amount of time - usually 12-36 months to exercise that option.
- For every on-time rental payment for the term of the agreement, you'll grant them a rental credit that will also be deducted from their closing costs when they exercise their option.
- Because a lease option is further up the real estate food chain then a simple landlord-tenant relationship, the tenant/buyer will often agree to pay all maintenance expenses less than a certain dollar amount. Anything more than that you'll pay. What this does is help guarantee they'll be proactive in letting you know about problems quickly and it gets you out of midnight plunger patrol calls for clogged toilets.

When the tenant buyer decides to pull the trigger and exercise their option they'll receive credit for the option consideration fee and any rental credits they've earned along the way. If you agreed to a purchase price of $175,000 and the tenant gave you an option fee of $10,000 and they were to pay $1,500 per month with a rent credit $500 per month for three years, they would only need to bring $147,000 to the closing table.

The lease option is a tremendous tool for you to use in establishing yourself as a real estate investor, but it gives you another benefit you can't easily put a price tag on: It gives your tenant the pride of ownership. They have money tied up in their house, so they're going to be much more willing to pay their rent on time and prevent damage from taking place.

Recent market changes have shaken up the way the lease option works. Knowing this will keep you from making a mistake that could potentially strike a devastating blow to your transaction: lenders have added what are called "seasoning rules" to real estate transactions. All this means is that they're stating how long they want the house owned by a party before they'll approve a loan on that property. This is generally 12 months; since most tenant buyers won't exercise their option within the first 12 months anyway, it's a moot point. However, since you've purchased the property yourself with a subject to transaction and you placed the property in a land trust, you're covered regardless.

So get your real estate investing career off on the right foot by using the lease option in conjunction with a subject to transaction to quickly shove yourself down the pathway towards prosperity. You're gaining a valuable education in real estate; take your profits and invest them in your future by buying even more property creatively. The real estate world is your oyster; let your profit potential increase your drive to prosper in 2009!

10 Top Tips to Add Value to Your Property For Free

2008-10-20T21:10:00.000-07:00

1. Have a clear out. You will want to create an illusion of having ample space and you need to create as much space as possible. Having messy piles around the house, although may feel cosy and homely to you, will indicate that you don't have enough space and that your house is simply too small to accommodate you. If it's too small for you it could be too small for your potential buyer. Also, without the clutter your buyer will be more easily able to imagine how their own furniture and belongings will fit and suit each room. If they can imagine this then your property will memorable.

2. Keep your house tidy because first impressions count. A messy or unclean house will make the house uninviting to live in. Remember people viewing your house must want to actually live there and spend tens of thousands of pounds on it. Unless your buyer wants to renovate or update a house, which is the minority of buyers, they will not want to imagine themselves living in an unclean house. Of particular importance, are the bathroom and the kitchen. They have to be sparkling, ultra-hygienic with no unsavoury odours. Each viewing is a potential sale and tedious though it may be, clean thoroughly before each one. Also remember that if you indicate any lack of care, buyers may quickly take the view that you have not cared for the property and therefore there may be maintenance problems lurking which buyers will not find attractive to deal with.

3. When you have a viewing take any pets out or leave them with the neighbour. Some buyers will not be bothered by pets and it may be a common interest but other buyers will certainly find this a turn-off. Pets can mean that dirt is being brought into the house, fleas could be around, lingering odours, hair and fur on the floor and furniture and even droppings (here we're talking house rabbits, birds in bird cages, or pet hamsters and gerbils being petted out of the cage). The only exception is fish in a fish tank!

4. Get rid of any house smells. Scents are evocative and are remembered. Top smells to get rid of are smoke, pets and some cooking. Avoid using air-fresheners - they can have the effect that you are trying to hide something. Baking bread, cake and coffee smells are inviting and attractive to buyers as they evoke relaxation and general good times.

5. When you have a viewing insist that your agent accompanies the viewer and be sure you are out of the house. The potential buyer will then feel more relaxed and uninhibited. They will be able to talk freely and imagine themselves more easily living in the house. They will be able to sit down in the lounge and get a real feel of the house without feeling they are intruding. If they want to ask any questions of you, then that can be done at a later date. You will also avoid answering any difficult questions such as why you might be selling and in fact, some sellers are prone to point out the defects of their house! Of course, this needs to be avoided at all costs.

6. Most buyers apparently decide whether they like the property in the first 15 seconds. You therefore need to ensure that your property is inviting from the outside. Tidy the front, have flowers in pots and hanging baskets, move any car out of the driveway. Hide any unsightly bins and have any lights on if it is likely to be at all dark. Have a foot mat on the outside - it shows that you don't want dirt in the house. Make sure it is clear that this house is cared for and well-maintained. Many potential buyers do an initial drive-by to check out the house before viewing it and you need your property to pass this initial test.

7. Time your viewings carefully. Avoid the school runs, market days, bin-collection days and any days where traffic could be a problem. You do not want the sale of your house compromised by factors outside your control.

8. Before your first viewing ask your agent for their opinion on how your house can be made more sellable. You can ask friends but having their opinion could be awkward and possibly unwelcome - it's better to keep it to the professionals.

9. The best time of the year to sell your house is in the spring, and secondly the autumn. If you sell at the best time of the year there will be more buyers and so you'll get a better price.

10. Ensure that the property details from your estate agent such as photos and descriptions do justice to your property. Many photos could be improved upon, descriptions can be wrong and can undersell your property. For example, a garden could be described as a courtyard, a bedroom could be described as a box room. Check your property details, do not solely rely on your agent and take the initiative to sell your property in it's best light.

Spending a small amount of time to improve the desirability of your property will attract more potential buyers. You want them firstly to be interested in the property details, then at the outside of the property you want them to want to come inside. Once inside you want them to want stay inside and live there. You need to make sure that they are given the opportunity to imagine themselves living in your property. If they can do all of these things then you are more likely to receive an offer which should take you to the crucial sale.

Understanding Property Investment - Real Estate For Beginners

2008-10-15T21:52:00.000-07:00

Understanding property investment is the most vital aspect of becoming a professional real estate investor. If you are just starting out in the Real Estate business then it is vital that you develop a good understanding of what is required when purchasing an investment property. Understanding property investment is the best way to feel comfortable about putting lots of your hard earned money into a home that you aren't even going to live in. I am often asked "what is the best real estate for beginners tips that I know?". Without doubt the best bit of advice that I can give you is to get a Real Estate education and truly understand property investment before you start buying houses.

To many people this advice will be quite straight forward but many of us want to run before we can walk. Some of us (myself included) decide that we are going to buy a house and then want to buy the first bit of property for sale that we see. Whilst this enthusiasm is great it is much more beneficial if you take things a little bit slower and develop a wide and complete understanding of property investment.

For instance should you buy residential or commercial property? What is stamp duty & how much will it cost me? What is capital gains tax & how much will it cost me? Where are the best Real Estate Listings? Which real estate agents should you talk to? There are many more questions that I'm sure you want to be answered but for now lets have a quick look at some of the basic concepts that any real estate for beginner books should (but don't necessarily) cover. Once you understand these concepts you will be well on you way to completely understanding property investment.

1. Residential vs. commercial property - Which one is for me?

If you are just beginning in property then I would suggest that you stick with residential property. There are many great advantages to commercial property but it is generally slightly more advanced and risky. Lets face it, most people are going to know a lot more about what people are looking for in residential houses because they have all done it themselves- whereas not too many people truly understand what makes a great commercial property investment. Remember 'Always play to your strengths'.

2. What is stamp duty & how much will it cost me?

Unfortunately you will be forced to pay capital gains tax on your investment property. The exact amounts vary depending on how much the investment property is worth but on average you can expect to pay about 5% of the properties value. For instance if you bought an investment property for $300k then you would have to pay about $15k in stamp duty.

3. What is capital gains tax & how much will it cost me?

Most professional investors never sell their investment properties so therefore capital gains is not an issue. You might be wondering "what the point in buying a house if you don't plan on selling it?" You will be surprised to know that there a easy and legal ways of accessing your profits without actually selling your house.

4. Where are the best Real Estate Listings?
When it comes to Understanding property investment it is important not to over complicate things. Today there are hundreds of websites that have 99% of all real estate listings. This will save you hours and hours of work as you dismiss hundreds of houses that in the old days you would have needed to inspect personally.

5. Which real estate agents should you talk to?

All of them - If I can give you one bit of advice it would be this

'Real Estate agents are your friends'
If you can get a good relationship with real estate agents it will make your job so much easier. Whilst they are working for the vendor it is in their interest to sell the house. Their commission won't alter too much if the house sells for $300k or $350k but for you that is a massive difference.

So in order to truly understanding property investment it is vital that you get a great education. There is so much information available on the net these days that it is very easy to great high quality free information. So what are you waiting for - Find a good Real Estate for beginner's book, read it, learn from it and then implement it. The people that truly understand property investment are the ones who will succeed.

Are Real Estate Agents Necessary?

2008-09-13T21:09:00.000-07:00

When you are in the market for a new residence, consider the necessity of a real estate agent. Real estate agents are usually more useful to the seller of a property, but you can certainly use one to find property for you, particularly if your search is out of town or you have very little time and a set approved budget.

A real estate agent's number one goal is to sell property. A disreputable agent will use whatever means necessary to do so, but typically an agent wants to maintain a good relationship with buyers and sellers in a community and will be an ethical representative. The most important thing to remember when purchasing a house is to have both an appraisal and an independent inspection of the prospective property, and use the agent for the search.

Typically the worst shortcoming of an unethical real estate agent to watch out for is when they are willing to keep important information quiet in order to sell a house. Of course, an agent only knows what they have discovered on their own or what the seller has told them, but if there are undisclosed problems with the house, the problems could become the new owner's.

The possible hidden problems with any house could run from foundation issues, plumbing problems, electrical wiring system that are out of date, not up to code or faulty, bug infestations, or heating and cooling issues. All of these areas will be covered by a comprehensive inspection, and the money you may have to pay for an inspection on a house that you decide not to purchase could save you thousands in long term costs on a house you should not have purchased. It is much better to spend a few hundred bucks to make sure you know what you are getting in to, than to pay thousands of dollars to repair a cracked foundation.

An agent may also work to sell a house without providing the important information an appraisal can give a buyer. An appraisal will give you an idea of the typical resale time of homes in the neighborhood, and what houses in the neighborhood have sold for in the last year or six months. The appraisal of your prospective home will be based on the homes that are the most like yours in the area.

Real estate agents can provide several benefits to those who are unable or unwilling to do a lot of the research to find a new home. A reputable agent's knowledge of an area's market and available properties can provide needed services to a buyer new to the region, or who is still out of town. However, the Internet has created a database so wide and useful, if you are willing to work for yourself, you can purchase a new home without an agent.

Potentials Available For Real Estate Investors

2008-09-02T21:50:00.000-07:00

The prime reason for the real estate business would be to get the property at a lower price but you can improve it so that you can sell it at a higher price covering all the improvement expenses plus the profit. With the situation of the Miami real estate market the presence of foreclosures are getting a bigger impact to many people as they can get the properties that most likely have a big chance of giving them high profit. The real estate market in Miami continues to have more events of foreclosure that there are more properties that are now under the control of many investors.

There are many individuals who are interested in Miami real estate market and other things that it can offer to a buyer. The reason behind this is that there are many opportunities that can be achieved through the market in Miami. Thus, there are people who think that the Miami real estate market is a good market to invest in. However, you should know that not all investments done due to foreclosure would be good, but with the case of the Miami market, there is a big chance for this to be achieved.

The common situation that is done in the Miami market would be buying a property and selling them at a slightly higher price. Thus, the realtor would not need to buy the property on their own money but they may be able to get a good amount of profit without the need of keeping the property in their care for a long time. Thus, this seems to be a case of easy money but you should have the needed experience and knowledge to be able to know how the Miami real estate market works. Aside from having a good market to start with the real estate business, you should also consider the other factors that might help you have an improved choices and decisions while you are doing business in real estate.

There can be more potential available for the real estate investors in the Miami real estate market. However, you should know that you also have a chance to get a bad investment. But you can avoid it if you are able to keep a good choice of market and the chance to change those bad and poor quality houses into something that can be a good buy. There will also be times that you would also have to spend some money for purchasing and improving the properties. But if your aim is to generate more profit, this step would still be very helpful. There are more improvements that can be done so start learning about the market and try to make it as a better option in real estate.

10 Common Traits of Real Estate Billionaires

2008-08-23T03:03:00.000-07:00

Did you know that 46 out of the world's 691 billionaires made their fortunes in the real estate industry? Well, according to Forbes magazine's 2005 annual list of "The World's Richest People," this elite group have quite a bit in common between their habits, lifestyles, and business styles. Here are some unifying qualities shared by America's richest real estate moguls.

1. Go commercial. Billionaires who make their fortunes in real estate don't do it in residential. They are moguls with an empire of owned and operated office buildings, shopping centers, apartment complexes, and luxury hotels. That strategy works particularly well for "America's richest landlord," 73-year-old Newport Beach Resident Donald Bren, the wealthiest man in American real estate. This self-made millionaire, with a net worth of $4.3 billion, made much of his money as chairman of The Irvine Company, a privately held real estate investment company known for creating balanced, sustainable, quality communities like the 93,000-acre Irvine Ranch in Orange County. Finished plots sell for more than $1 million an acre. The ranch also has 400 office buildings, 35 shopping centers, 80 apartment complexes and 2 luxury hotels. Bren is 6th wealthiest real estate billionaire and the 122nd richest man in the world. He is also one of real estate's great philanthropists.

2. Do more than invest. Making big money in real estate goes beyond buying property and waiting for it to appreciate in value. It's all about improvements. John Sobrato of Sobrato Development Companies calls Atherton, home, but he made his fortune in Silicon Valley - for more than 40 years, Sobrato's SDC has developed real estate in Silicon Valley - specializing in facilities for high tech and R&D companies. Another self-made man, he began in 1953 with one of the first "tilt-up" buildings in Santa Clara County. Sobrato, who owns and manages the buildings it constructs and maintains single tenant occupancy, boasts a portfolio of $1.5 billion. His assets include land throughout Silicon Valley, San Jose, Fremont, Newark and Santa Clara and he has developed in excess of 7,000 rental units.

3. Be able to see the property for what it could be. Just because you buy a shopping complex doesn't mean that's the highest and best use of the property. Know the local zoning codes and be open to the possibilities...Los Angelino Ed Roski did just that. Roski is the founder of Majestic Realty, the largest commercial builder in Los Angeles, boasting an office, retail and industrial portfolio totaling more than 55 million square feet. The USC grad with a net worth of $1.1 billion saw the highest and best use of the formerly blighted area near the convention center and built the Staples Center with Philip Anschutz. Roski is also a minority owner of the Lakers and the Kings. Headquartered in City of Industry, Majestic Realty also has offices in Atlanta, Dallas, Denver, and Las Vegas - where they have a 400-acre business park and 3 million square feet of casinos.

4. Be tenacious and relentless. Billionaires don't let obstacles or pitfalls keep them from achieving their goals. Newport Beach billionaire George Argyros is the grandson of Greek immigrants. Argyros began by running a Palm Springs grocery. He graduated to buying and selling corner lots at busy intersections for gas stations. Turned to apartments in 1968. Today, as part of Arnel & Affiliates, Argyros manages apartments and commercial properties in southern California. He has a net worth of $1.2 billion.

5. Have a thick skin. People can be resentful and jealous of successful people. Don't let criticism of your work deter you from your goals. Consider Red Emmerson - the second wealthiest real estate titan in California. Emmerson is the largest private forestland holder in North America - assets include 1.52 million acres in Northern California, timberland stretching more than 350 miles from Mount Shasta to Yosemite National Park. For the last 20 years, while other logging companies retrenched or relocated, Emmerson, and his company - Sierra Pacific Industries - quietly grew into the second-largest private landowner in the United States. Needless to say, Sierra Pacific is a darling of environmental groups.

6. Have superior information. If you do more research than your competitors, you'll have an advantage in any transaction. Self-made billionaire Carl Berg was a loan processor before investing in Silicon Valley commercial real estate with John Sobrato in the 1960s. He struck out on own, forming Mission West Properties, a real estate investment trust (REIT) in Silicon Valley. Berg owns a controlling stake in the REIT, which focuses on single-tenant research and development and office properties in Silicon Valley. Mission West now owns and manages more than 100 properties, major tenants include Microsoft and Apple Computer. Currently, the Atherton-based businessman boasts a portfolio of $1.2 billion.

7. Don't accept the cards you're dealt. Forbes notes that while one-third of the world's 46 billionaires who make their money in real estate inherited and then grew their fortunes, two-thirds are self-made. Stockton-based A.G. Spanos Companies are known for building, managing, and selling multi-family housing units; constructing master-planned communities, and developing land. Although California based, they have expanded to build more than 100,000 apartments in 18 states since 1960. A.G. Spanos Companies have also developed top-class office space in San Joaquin County. Alex Spanos, owner of the NFL's San Diego Chargers, operates the company with his sons Dean (president and CEO) and Michael Spanos (EVP). Spanos, whose net worth is $1.1 billion has pledged $200 million to San Diego for a new stadium for their football team.

8. Live in California. Of the 21 U.S. billionaires who made their fortune in real estate, more than one-third live in Atherton, Los Angeles, Newport Beach, Palo Alto, or Stockton.

9. Get, and stay, married. Of the 43 real estate billionaires whose marital status is known, according to Forbes, 37 are married, while only three are divorced and three are widowed.

10. Go back to school. Of the 26 real estate billionaires whose educational attainments are known, 20 have a college degree or higher. Five made it on high school diplomas, and one is a high-school dropout. John Arrillaga is a big donor to alma mater Stanford University. Arrillaga + Richard Peery are two of 2 of Silicon Valley's biggest commercial landlords. In the 1960s, they converted farmland into pricey office space. Peery and Arrillaga are lifelong business partners who avoid debt, and the media. Each has net worth of $1 billion."

23 Marketing Weapons For Commercial Real Estate Professionals

2008-08-23T03:01:00.000-07:00

It's a jungle out there. You are all surrounded by the enemy vying for the same bounty. The enemy is trying to steal your business or better yet, make sure no new business comes your way. These enemies are disguised as other real estate professionals, the very ones who greet you at conventions with a smile and ask about business. They stand waiting for you to get turned down for business and then swoop down for the kill.

These enemies thrive on competition. These guys are out to get you and get you good. But there is good news - by implementing a dynamic marketing program, you can beat your enemies at their own game! All you need is a solid marketing program consisting of approximately 10 of the Marketing Weapons listed below (part 2 and 3 of the list will appear in the next 2 issues of my newsletter).

Just make yourself a marketing calendar (a marketing calendar is simply a document that lists your marketing weapons and shows when and how often they will be implemented) through the end of the year. Make sure this marketing calendar lists your marketing weapons, the action step(s) required for each one, date(s) when each will happen, as well as a place to record the results. You need to record as you'll soon learn which weapons work, the ones you'll keep.

The 27 Marketing Weapons - Part 1:

1. Competitive Advantage: Make sure you have the competitive advantage within your target market. Be professional, referable, and provide outrageously good service. This is a good example of a daily marketing weapon.

2. Have a prospect List: Have a prospect list, keep it updated, and review it daily.

3. Follow-Up: Believe it or not follow-up is a marketing weapon because 90% of commercial real estate professionals stink at it! The best way to make sure your follow-up is working for you is to review your potential deals, deals in progress and deals under contract daily - determine what action steps are needed, make a list and then block out 1 hour of your time when you will not allow yourself to be interrupted and go for it. And, don't forget all of those things you've promised people you would do. There are many other ways to create a follow up system - call me if you'd like to explore this.

4. Get an 800#: This number is easy to get, and you only pay when someone calls you. You can use it for pre-recorded messages. This is an easy way for anyone to contact you, a way to get some business from Canada (it is costly to call Canada and some people therefore don't), and it gives you a very professional image.

5. Website and Online Presence: This one's easy. Get a website and make it work for you. Then you can send prospects to your site for more information about you. And, while you're at it, give away a free report in exchange for capturing their name and email address.

6. Make an Audio CD Interview: This is cool. Go out and buy yourself a digital recorder (I recommend the Olympus DS-2, $149.00 because you can download the recording directly to your computer and make CD's from there), have a colleague get on a phone call with you and interview you about business. Have a list of questions prepared in advance so there are no surprises. You can then send a CD made from the recording to prospects or better yet, post it on line. This will give a taste for what you're all about. Be sure to capture the "benefits" a client receives when working with you.

7. Host a breakfast: Send invitations to 6 of your favorite prospects and invite them all out to breakfast. Don't be concerned with having them all together at the same time, promote this as a way to meet new people and network - even call it a networking breakfast! Before they leave, in addition to thanking each person individually for coming, give something of value (a copy of your favorite book, a gift card to Starbucks, anything). This is a great tool for a monthly or quarterly marketing weapon.

8. Postcards: Start a monthly campaign. It takes 7 to 9 times for a prospect to see your name before they will pick up the phone and call you. Remember, people do business with those they like, know, and trust. This builds trust and makes the prospect feel like they know you.

9. Speak at Conferences: For those who like to speak, this is a great way to quickly gain credibility. Just think of the times when you attend a conference and hear people speak, don't you automatically view them as an expert? Speak on subjects you are comfortable with, that way it will be effortless.

10. Effective Use of Voicemail: Leave clear, precise and to-the-point voice mail messages. For example, if you have a space you are marketing, state the exact location and request a callback with any interest the prospect may have. Or, if you're calling to confirm a meeting, state that. This eliminates guesswork and allows the recipient a chance to answer the question in the event that you are unavailable when they call. Also, when leaving your callback number please do not mumble or speak slowly. State the number twice. And finally, note that leaving a precise message increases your odds of a callback.

11. Provide Outrageously Good Client Service: Providing outrageously good client service will make you stand out and memorable. Why? Because most service providers do not! Take the time to create a system for "WOW" client service and then don't forget to follow it. This one marketing weapon is worth mega dollars. Go out of your way to go the extra mile. The reward will not only be a client for life, but referrals too.

12. Testimonials/Brag Book: You're probably asking yourself who does this? Exactly the point - you should. Create a Brag Book that consists of testimonials, letters of recommendation, descriptions of deals well done and even a list of deals completed. I can tell you few people have this and most clients love looking at them, and it will make a prospect feel like he or she is working with a pro.

13. Publish a Newsletter: This works, and I am proof! Consistently get good information in front of your target audience. Add value by providing information that would be of interest to your readers. Send it monthly, bi-weekly or even quarterly. For those that don't know how to do this, I will be offering a free class coming up soon and I will give you the step-by-step process!

14. Host Teleseminars: This idea came to me last week. I realized how cool it would be for you to host a teleseminar (a group call lead by you on a specific topic). For example, 7 Steps Leasing an Industrial Space. Or, Don't Get Caught in a Bad Location - 5 Strategies for Site Selection.

15. Have a Marketing Calendar: This simply means you map out in the beginning of the year or at the very least on a monthly basis, all marketing action steps you intend to take, the date (s) they will be taken, and the desired result. This can be written in a calendar, made as a spreadsheet or whatever. The point is to plan ahead and then follow through.

16. Post on e-bulletin boards: Although I have never carried out this particular marketing weapon, it is my understanding it can be quite effective. Just Google bulletin boards in your target market and begin answering the questions posted. This will then make you "the expert" (see #9). Prospects who participate in these types of informational exchanges will begin seeking you out - I promise.

17. Write a Free Report: Add value always. Your clients and prospects will profit by receiving a free report from you loaded with useful information. An example is "10 ways to Profit From Purchasing Your Own Building"; or, "7 Strategies to Choosing The Perfect Retail Location". At the end, add a paragraph on the benefits of using you to assist them in their needs. (Hint: make it all about them.)

18. Be an Expert: This is a no-brainer! Everybody wants to work with an expert. List 10 ways you can become known as an expert in your niche and then start checking each one off as you accomplish it, and before you know it, you will be "the expert!"

19. Ask: We so seldom remember sometimes all that's needed is to convey our need - more business. Don't be bashful or shamed because you are asking for business. Ask and you shall receive. If asking catches your tongue, write up a script or two ahead of time and you'll do fine.

20. Prospect Letters: Have an arsenal of prospecting letters you regularly send out. For example, if you notice a business acquaintance has changed jobs, send him a letter and offer to sit down and share some of your knowledge about his new territory. Or, mail a prospecting letter to your key centers of influence asking for referrals. But remember, if you don't follow up with a personal phone call the prospecting letter will be less effective.

21. Word of Mouth: Learn how to work into casual conversations that you have just finished working with a couple of key clients and now have room in your schedule for a few more. Even better, spell out who an ideal client is. Let your peers know you'd like additional business and in exchange you will be mindful to send business their way as well when you can (get in the habit of referring).

22. Offer 5 FREE Consultations: By this I mean call up 5 prospects and offer to sit down with them over a cup of coffee and talk about their current and future real estate needs, no strings attached. Give a suggestion or two towards the end and then walk away without asking for business. The key is to follow-up, ask how it's going and oh by the way, can I be of service to you? This works like magic.

23. Write a Book: Nothing will position you as an expert faster then writing a book - you will have instant celebrity status. If writing isn't your thing, record it and have your assistant transcribe and edit it.

How to sell your house?

2008-08-15T04:50:00.001-07:00

Every viewer is your potential buyer. Each viewing must be prepared for and you may have a viewing as soon as your house is on the market. Therefore you need to have the bulk of the house preparation completed prior to this so that you simply need to refresh your house when you have a viewing. Otherwise you may be caught unawares with an immediate viewing, not be ready and in effect lose a buyer.

Firstly consider the whole house - have a spring clean: get rid of clutter from every room including the loft. For any clutter that you want to keep store it in neat cupboards or boxes. Clean every room thoroughly. Cleaning the carpets with a hired carpet cleaner is cheap and gives the carpets a new lease of life.

Do any repairs that have been waiting and touch up any marks on walls or if necessary repaint to give the room a fresh look. Viewers can be thorough in your inspection. Also clean the fridge, the oven and make sure any inbuilt cupboards are tidy and well-organised. A property sells for thousands of pounds. Investing a small amount and putting in the time to spruce up your home may save you thousands when an offer is made.

Once the house as a whole is ready view each room individually. Ask yourself what is this room used for. Is it obvious to a stranger? For example, the dining room or area needs to be clearly defined as one - not a playroom, or a storeroom or a hobby room. Your sitting room needs to convey an atmosphere of comfort and relaxation. The garden needs to appear well-cared for and be inviting.

First impressions are hugely important so you must view the house as a viewer will see it. Start from the outside and ask what the house tells you - is it well cared for? Is the garden tidy and inviting? If not, dig up the weeds, mend the gate, have some pretty flowering pots. Get rid of or neatly tidy away any unattractive garden furniture.

On entering the house you will want a viewer to feel excited about living in your house. If the entrance is a dark hall, consider placing a small cozy lamp on a small table or shelf. Show the best room in the downstairs first - ideally the kitchen. It should be sparkling clean,coffee on and have fresh flowers on the table. Another key room is the bathroom. Again, make sure it looks fresh with clean linen, no clutter and new shower curtains. When you think you are ready to sell your home, ask a friend to look round your house and see how it can still be improved.

With the final adjustments made you are then ready to have your house on the market and to have those all-important viewings.

If an agent is selling your home it is best if you are not there - let the agent sell your house. If you are showing the viewers around your home show them around each room and sell the home subtlety. And then, give your viewers privacy to look around the house themselves.

In order to sell your house at the best price and as quickly as possible prepare with care. Good luck!

Tips on Selling a Home - Follow These Tips and Sell Your House Fast

2008-08-13T21:11:00.000-07:00

If you're selling your home you want it to sell fast and for the highest dollar. There is some work that needs to be done on your part to get it to do that. Some success depends on the market and economy but there are many things that you can do to make your home the one that sells. Here are some tips on selling a home that are pretty straightforward.

Hire an agent. Agents are professionals and should know real estate better than you. If you don't think you can handle the pressure of selling your house yourself, enlist an agent with your best interests at heart. Don't be afraid to interview several before finding one you are comfortable with.

Look at your house from the buyers point of view. Would you buy it? Sometimes there are things that we would overlook because we're used to them, the spot on the carpet, the cracked paint, the scratches on the door frame - the buyer wont. Make sure your house is as spotless as it can be. Your house must outshine all the others in the neighborhood.

More tips on selling a home.

Get rid of the clutter. You only get one chance to make a first impression. Make it a good lasting one. Make your house look like a model. Get the stuff off the counters, clean up the garage. Prospective buyers like to see clean open spaces so they can think about putting their stuff in the house.

Increase the curb appeal. What does your house look like from the street? Most buyers will make drive bys before setting appointments to come inside. Don't turn them away at the street. Make sure your lawn is well groomed. Plant some flowers or put flower baskets at the entry way to welcome the new owners.

Get out! When the house is being shown, get out and take the pets with you. You want the prospective buyer to feel like they are walking into their new house, not yours. It's a good thing to remove any personal items like pictures also. You can have a box in each room that you place personal items in when the house is being shown. Take the razor and comb and brush off the bathroom sink.

Lose the emotions. When it comes to negotiations, take your emotions out of the situation. The potential buyers may have some plans for the home that you don't like, but it will soon be their house not yours. Don't let your emotions cloud your ability to turn over the keys.

Types of Commercial Real Estate

2008-07-23T03:05:00.000-07:00

Throwing down a wad of money on a new business venture is a risky endeavor any time, no matter what the economy looks like. But for a confident, adventurous business person interested in expanding their investment portfolio and generating multiple streams of income, commercial real estate is one of the many options that they can consider picking from when the urge for new business growth strikes them.

There are quite a few different kinds of commercial real estate properties to investigate when looking at the big picture. In fact, the only type of properties that cannot be categorized as commercial real estate are single family homes and single home land lots. Multi family units, such as brownstones in urban areas, duplexes and multi family apartment buildings are all considered to be examples of commercial real estate. This investment is also known as a residential property. Families and individuals leasing the space pay rent to the owner of the residential property each month, but it is the owner himself who is responsible for making repairs, maintaining the buildings and insuring that all taxes are insurance is paid in full. The dividends pay well in this type of commercial real estate venture, but not without quite a bit of work on the part of the owner. Just managing and maintaining the grounds and tenants can be a full time job.

Another type of commercial real estate is the retail space. Clothing stores, coffee houses, and retail businesses of all kinds fall under this category. Chances are that when you walk into your local book store, the people that own the store do not own the building that houses the store. This means that the store is leasing the space from the commercial real estate owner. If you are said owner, chances are you are making bank. The interesting thing to note about retail spaces is that they typically sign up under what is called a Triple Net Lease. This is music to the ears of the commercial real estate owner. Under the terms of a triple net lease, or NNN lease, the tenant pays for all repairs and upkeep, the insurance as well as all of the property taxes. Add to that the fact that NNN leases are usually long term leases, perhaps between five to twenty years, and your smile will just get bigger and bigger, if you own the property that houses the store. Rent goes up, but your investment in the property remains the same. Not a bad gig, all things considered.

Another type of commercial real estate property is the warehouse and office space. Just like retail space, the warehouse and office space is typically rented out by a NNN lease, and just like retail space, the warehouse and office space is a good bet for a would be commercial real estate owner simply because once a warehouse is built, it is there, ready for leasing, with not too much effort expended on the part of the owner. The NNN lease comes through once again, and that means more money in the bank for you, if you have taken the plunge and dove into the world of commercial real estate. Lets face it, everything in life entails some kind of risk. Investing in commercial real estate can benefit the investor as well as the local economy and the businessman to whom you lease the property. It can be a win-win situation, if you play your cards right.

Online Advertising - The Newest Way to Market Your Home

2008-07-15T04:54:00.000-07:00

Selling a home requires advertising it in as many ways as possible to reach a wide audience. If you fall in the FSBO (for sale by owner) category, you need to exert extra effort to market your home in various advertising media. One of the best options available today is advertising on the internet because of its numerous advantages over the traditional method.

The advantages

Global reach is a major advantage of online advertising compared to newspaper, radio and TV ads that cater only to a certain area. With this newest form of advertising, information and content can be transmitted to millions of people regardless of time and geographical location. This means that you can attract people looking for a new home or a second home even from countries outside of your own. So don't be surprised if you'll get a potential buyer for your home located in the U.S. from, say, Europe or Asia.

While its reach can be global, online advertising is also targeted. In other words, it has the ability to reach your specific target audience. Examples of programs that help achieve this goal are Google's AdWords and AdSense which match up advertisers with content that their target market reads on a regular basis.

Internet advertising is also Cost effective. Compared to a small yellow-page ad, for instance, that can cost you hundreds of dollars, you can advertise your home for sale online with only a small fee. You can even market it free of charge on some MLS sites that don't require any listing fee. All you need is a little research and you will surely find a good MLS site on which to list up your home.

Types of online ads

Online advertising has different variations. These include using search engine results pages, banner ads, social network advertising, e-mail and affiliate marketing and advertising networks. For paid ads, they can be of various types such as floating, expanding, polite, wallpaper, trick banner, pop-up, pop-under, video, map or mobile ad. Most of these forms of advertising, though, require payment of certain fees.

E-mail marketing is also another option available for home sellers as it does not entail any expenses. You just need to find time to e-mail friends, colleagues and real estate companies and agents you know about the home you are selling. This is quite easy because you can already send a single letter to several people in one click of your mouse.

Helpful tips

The National Association of Realtors reveals that 24 percent of new home buyers get information about new homes for sale from the internet. This only means that people looking for homes now use the internet more than using the newspaper classified ads. The convenience and quick search results provided by the internet may be attributed to this.

When opting for this advertising form, be sure to provide the necessary details about your home for sale such as the location, number of bedrooms and your contact number. If necessary, include a photo of the property to perk up the interest of potential buyers and entice them to look deeper into your offer. A virtual tour of your home is another popular way of attracting buyers. Remember to be creative and direct to the point when advertising your home online.

Real Estate Investing - Short Sales and the Recession

2008-05-15T04:53:00.000-07:00

You've probably heard by now that the real estate market has crashed. Unfortunately, the crash has caused a lot of grief for homeowners that have had to leave their homes due to foreclosure. Many more are on the verge of foreclosure and simply cannot afford their mortgage payments any longer.

A foreclosure causes a chain of events that can leave a family without a home and without hopes of purchasing another one any time soon. For this reason, many homeowners will do whatever it takes to avoid foreclosure. This is where you come in. You can purchase these homes for a fraction of their value, help the family avoid foreclosure and make a tidy profit for yourself. Buying a home that is in foreclosure while it is still owned by the family is called a short sale.

There is an abundance of properties that you can buy via short sale in this economy. A real estate agent can help you find such properties or you can do the leg work yourself. All foreclosures have to go through the court system. And since court records are public records, you can access this information yourself at the courthouse.

Once you find a home that is in foreclosure, you will need to contact the owners. Before you do so, however, you should make sure that the home can be purchased for a bargain. All of the information you need can be found at the county recorders office. Information that you might find useful with include the original mortgage note and the value of other properties in the area. If the value of similar properties in the area is higher than what the owners paid on the home, you will likely get a great deal.

For example: Let's suppose that you find a property that is valued at $200,000 according to comparables in the neighborhood. The mortgage of the home was originally $120,000. The homeowners have paid on the home for quite a while and have paid the loan down to $80,000. But they are desperate. They are willing to let the home go for $100,000. Their home is paid off and they end up with $20,000 to find new housing and pay off bills. You end up with an investment opportunity that is bound to make money.

You may also want to give the homeowner an option to stay in the home and rent it from you. Once they get their credit patched up, they can buy the property from you for a predetermined price. You will not only make money from renting the property, but you will still make a tidy profit when the family takes back ownership of the home.

Do not think of this type of investing as predatory. You are not taking advantage of a family in need; you are giving them time to get back on their feet, something that would be much harder if they were foreclosed upon and evicted from their home.

How Successful Real Estate Investors Survive Tough Markets

2008-04-15T04:52:00.000-07:00

The real estate crash of 2008 was and is a distressing time. However those who are familiar with the regular cycles of real estate will realize that it is a normal occurrence as there are times in history when real estate has dropped and then boomed but that does not take away from the fact that real estate is still one of the strongest and most reliable investments that you can have.

Most markets state that real estate doubles in price every 10 years, despite crashes and down turns in between. This trend makes the difficult times seem like only temporary hardships which need to be endured as best as possible.

Real estate investors should be prepared for market changes and the need to alter strategies according to market changes. Even if a market slumps or crashes, it does not necessarily mean you should sell all your assets. Good investors will make wise investment decisions and be able to recover from any down turn. Savvy investors are able to pick up and leverage their existing properties when a market recovers again.

Wise investors will be able to time their purchases according to market trends. A slow market usually means slowing down of purchases, unless you are a sure of a market recovery and thus a fast return on investment. Other factors to consider in a down market include renovations, where you may wish to slow down or even halt renovating during this time in order to save the cash for emergency cases.

Real estate investors should study the cycles of the market in order to be able to reduce speculation about what may or may not occur following a crash. By studying the past few decades you get a good idea of the regular real estate market cycles and where the market may be heading. There are many factors that can influence real estate cycles so it is important to be able to watch out for the critical clues. These can include employment rates, inflation, interest rates, government policy, immigration, development and many more factors.

A good real estate investor will balance his investments to include not just real estate but also stocks and other smart investments which may go on strong when real estate crashes. This ensures that you have a back up plan and other options if you need to make fast cash, rather than selling your properties.

7 Tips on Choosing Your Estate Agent:

2008-03-15T04:51:00.000-07:00

1. Ask a number of estate agents to view your house and do not immediately take the estate agent who gives you the highest valuation. They may simply be doing this to secure your custom. If no buyers make an offer you will need to lower your price and be stuck on the market for longer.

2. Ask what exposure the estate agent has. You must have your property advertised widely on the internet and not just their own website. Ideally your property also needs to be advertised on a national property site as well.

3. Negotiate on their commission percentage. Even 0.25% discount can mount to hundreds if not thousands of pounds. Estate agents want your business and you lose nothing by haggling.

4. Are you allowed to take your own photos for the brochure? First impressions on house details matter. If you are not happy with the agent's photo ask if you can take your own. This should not be a problem especially if you have a digital camera and can email them your photo.

5. Does the estate agent like your property? A good salesman needs to believe in what they are selling and their positive speak can persuade a buyer in your favor. Can they suggest ways of making your property more marketable?

6. Call the estate age pretending to be a buyer. Are they helpful? Do they send you the details you request? Did they make a positive impression on you? If not, then be wary of using them.

7. Does the estate agent accompany viewers on visits or do you need to show people around. When viewers look at houses it is preferable that an agent shows them around. Viewers are then more freely to speak their mind and the agent is a practiced salesman. Homeowners are not and can sometimes talk too much and even talk down their house.

Remember you are not selling your property to make friends with your estate agent. It is of course beneficial to have a good working relationship with your agent but be sure that they are working for you and that they work to earn their commission.

Maintaining Your Home to Retain Value:

2007-12-31T03:13:00.001-08:00

You've got the kitchen of your dreams and a master bedroom suite that would look right at home in a 5-star hotel. And your gorgeous new exterior paint job is the envy of the neighborhood. Your place looks so great that real estate agents are dropping off their cards telling you how much they could sell your place for, if you felt like putting it on the market.
Sell it now! Good grief no! Not after all the remodeling work. But... who knows? In five or six years when the kids are off to college and you and your mate get tired of mowing that big lawn and knocking around in a house built for five but inhabited by two, a downtown condo may look pretty inviting. Face it. At some point in the future, whether it's next year or in 20 years, you're going to want to sell your house. And with all the improvements you've made over the years, you should get a nice return on the sale, assuming you don't let your house fall apart.
Remodeling can be frustrating but it's also fun -- filled with anticipation and visible rewards at the end of the project. Maintenance is dull and routine, but you have to do it if you want to retain the value you've added to your home. For example: Hardwood floors need to be refinished every 5-10 years depending on wear and tear. If they get too worn down you can do permanent damage to the wood. Exteriors need to be repainted every 5-10 years too, depending on such factors as the weather where you live, or you can damage the exterior wood. Your roof and gutters need annual inspections. A clogged or damaged gutter and drain spout can flood your basement and cause serious damage.
And the list goes on. Like taxes and dental checkups, regular home maintenance isn't fun. But you must do it if you want to take care of what is likely your biggest single asset -- your home.
Annual checklist home maintenance checklist:
Kitchen: Check for leaks under and around the sink. Plumbing leaks can damage cabinetry and floors. Check and repair grout and caulking on tile countertops and around the sink. Also check wear and tear on wood floors, which periodically need to be refinished.
Bathrooms: Check for plumbing leaks and check grout on tiles. If the grout gets worn away water will start getting into the walls behind the bathroom, causing damage.
Basement: Check for cracks in the foundation and leaks. Buildings settle over time and even after decades of having a dry basement leaks may suddenly occur.
Attic: Check for signs of water leakage from the roof. Also look for any sign of termites or rodents. Squirrels or rats that nest in your attic can chew electrical wiring, which can lead to fires.
Smoke alarms: Batteries need to be changed annually.
Heating system: If yours has a filter, change it annually.
Air conditioning system: Change all filters monthly or as recommended by the filter manufacturer.
Roof: Note if any shingles have fallen off or if gutters or downspouts appear clogged or damaged. You can always hire a reliable roofing company to get on the roof and take a look. Reputable roofing companies won't try to sell you a new one unless you really need it. You can simply pay them for an inspection.
House exterior: If your house is wood, check that the paint hasn't worn away so much that the primer paint is showing. If the primer also wears down, you can do damage to the wood. Brick houses should be inspected for damaged bricks or masonry. Check stucco houses and repair any cracks large enough to slide a nickel into.
Asphalt and concrete driveways: Repair any cracks or buckling.

Home Equity Loans and Lines:

2007-12-31T03:12:00.001-08:00

If you've ever asked yourself "What the heck's a HELOC," then you've come to the right place.
There are two types of home equity borrowing: home equity lines of credit and home equity loans.
A HELOC, or Home Equity Line of Credit, is the right to borrow money from a lender up to a certain amount of money. The "line" is a credit line guaranteed by your house, meaning that if you can't live up to the terms of the line, then the lender has a right (after a few nasty letters) to foreclose on your house. Typically HELOCs (pronounced HEE-lock) have floating interest rates that can change periodically.
For example, a borrower might obtain a $75,000 HELOC at "prime plus one." This means that the interest rate is one percentage point higher than the Prime Rate. If Prime is 5.5%, then the HELOC is 6.5%. Remember: The rate is tied to the Prime and could change as much as at every billing date. (The change can be dramatic; e.g., in April of 2007, the Prime Rate was 8.25 percent, whereas in June of 2003, it was 4.25 percent.) Many HELOCs today have a fixed rate feature sometimes called a "Fixed Rate Partition" that allows the borrower to lock a portion of the loan amount at a fixed rate for a period of time. This feature varies greatly between different lenders.
Who should get one: Someone who might need extra cash for home improvements, or is looking at borrowing money to buy a different house (in addition to a mortgage).
Who shouldn't: Do not use a HELOC to splurge for things like vacations or to finance other consumer debts, like credit card purchases (unless you then plan to tear those cards up!). HELOCs are guaranteed by your house, which means the stakes are very high.
Home Equity Loans are when a lender gives you a set amount of money and you pay it back over a fixed payment schedule. Typically these loans have fixed interest rates. This is a better option for someone who wants to lock in a fixed interest rate, either because they think interest rates are going to increase or because they like the certainty of knowing what their payment schedule will be.
A home equity loan also is a better option than a home equity line if you know exactly how much money you need to borrow and when you want to borrow it.
How to get one: You can get a home equity loan or line either from a mortgage broker or from a bank directly. These loans are also called "second mortgages" because they are typically obtained after the home has been purchased with a first mortgage loan.
Taxes and Interest
Are HELOCs tax deductible? Sort of. Like first mortgage interest payments, home-equity borrowing differs from credit card debt in that you can deduct the interest on your tax return. But this only applies if you itemize your deductions. Also, the tax deduction on interest is limited to loan amounts up to $100,000, with some restrictions.
What determines the interest rate? The Loan to Value Ratio and your credit score determine the interest rate of a home equity loan or line. If your credit score is excellent (760), you may be able to get an interest rate at the prime lending rate, or possibly lower. A good credit score (700 - 760) will likely get you an interest rate that is about the same as the prime rate. Poor credit will likely result in rates of 1 - 5 points higher than the prime rate. Except in some cases, you should be able to avoid fees such as application or appraisal fees, though you might get hit with an annual fee or a small "recording" fee.
The Good News
Home equity lines can be used by the borrower to pay for anything. You literally get a checkbook for the HELOC and you can write checks to your heart's content until you've maxed out the line's limit. Although HELOCs were originally designed for homeowners to pay for home improvements and other house-related projects, nowadays borrowers use home equity lines for almost anything. Most HELOCs also have online Internet access so you can pay bills online using your HELOC just like you would with a regular online checking account.
HELOCs and home equity loans can also be used as second mortgages at the time of purchase. Frequently they are the second purchase mortgage for 10, 15, or 20 percent of the purchase price when buying a home. Home buyers can avoid buying mortgage insurance (PMI) if they take out two loans instead of one, with no single loan exceeding 80 percent of the purchase price. HELOCs can fill this gap, wherein the first mortgage is frequently 80 percent of the purchase price and the HELOC is the second mortgage.
Like a credit card balance, you can pay down a HELOC at any time, without penalties.
The Not-So-Good-News
Home equity lines are serious stuff, since they're secured by your house. If you can't meet the payment obligations such as your minimum monthly balance, your homeownership is in jeopardy.
Real Life Example
Bonnie is buying a $300,000 home and has $30,000 saved for her down payment. She needs to borrow the remaining $270,000. She works with a mortgage broker to take out a first mortgage for 80 percent of the purchase price ($240,000) and a home equity loan for 10 percent ($30,000). The terms of the home equity loan are fixed at 6 percent. On closing, she ends up with a $30,000 home equity loan, in addition to her $240,000 mortgage. She may pay a slightly higher interest rate on the home equity loan than on her first mortgage, but that interest is tax deductible, whereas the private mortgage insurance premiums she would have had to pay with a mortgage greater than 80 percent would not have been.
Real Life Example
Harriet wants to remodel her kitchen because she loves to cook. Also, she has heard that a modern kitchen will help her resale value when she sells the house. (She has used the My Estimator tool on Zillow, and knows that in her area kitchen remodels are good investments.)
Harriet goes to her local bank where she has a checking and savings account and gets a HELOC. The bank orders an appraisal to see if the house value justifies the HELOC. It will also check to see how much equity Harriet has in the house. Her house appraises for $400,000 and she has a mortgage with $50,000 remaining on it, so the bank knows there is $350,000 of equity there -- plenty to support a $25,000 home equity line of credit.
Harriet uses the $25,000 line to buy a new refrigerator and oven, and to pay the contractor who does her remodel.

Home Value by Square Foot:

2007-12-31T03:11:00.002-08:00

One of the biggest determining factors in determining comparable value is square footage.
When comparing the square footage of homes always try to keep comps as similar in square footage as possible. Figuring out the price of a home on a square footage basis is an excellent way to compare apples with apples. It becomes more complicated when one home has been renovated and another needs work. Don't compare a newly built home's price per square foot with an older home's price per square foot.
There's Square Footage and There's Square Footage
A square foot is defined as a two-dimensional square measuring one foot on each side. If you are looking at a home that seems a little smaller than the stated square footage, it might not be your eyes. Real estate brokers tend to measure square footage by inside room dimensions. Developers like to measure the exterior of the building. This can add considerable square footage to the home.
You also need to find out exactly what has been factored into the equation. Does the total measurement include basement space? Garage space? Deck space? Space on staircases? There's no standard way to measure square footage. Sellers will include every nook and cranny and buyers won't.
Do not solely compare the size of the land the property sits on and the price of the property. Lots sell for different prices than homes and the cost varies greatly from neighborhood to neighborhood. For example, if the house is in terrible shape, or is considered a "tear-down," a developer may only want to pay for the price of the lot, since tearing down and hauling away the existing structure is an added expense.
Side-by-Side Comparison
In some areas of the country, agents do not want to be liable for representing a total square footage of the property. Total square footage is not indicated on the listing sheet, but room dimensions are shown. The room count may not include bathrooms, hallways, closets, and other spaces. You might have to compare every room side by side and guesstimate total size.
In this instance, estimate the total square footage by multiplying the dimensions of each room. For example, if the bedroom is 10 feet by 12 feet, then the area, or square footage, is 120 square feet. Add up all of the room dimensions for a total square foot measurement. You may still have to estimate hallways and other spaces, but it gives you a good estimate.
After determining the size of the home you desire, the equation is simple. Just divide the listing price by the number of square feet and you will get the price per square foot. For example, a 1,000-square-foot condo priced at $300,000 costs $300 per square foot.
It's always to your advantage to buy a home with a reasonable cost per square foot. A home with a square footage cost lower than other homes in the neighborhood might be a great deal. On the other hand, the home may have a lot of other things wrong with it that need renovation, and unless you had remodeling in the budget, it might not be worth it to you.

Home Pricing Strategies:

2007-12-31T03:11:00.001-08:00

Just as a football coach has a bunch of different plays to choose from and use throughout a game, you have a variety of strategies to help you determine the price of your home. No one strategy can stand alone, but used together they can narrow the best possible price for your home.
Review Comparables
After sizing up the landscape, comparables play the biggest role in setting the price. Considered part art, part science, "comps" are regarded as the single-best tool in determining a home's value. There are some tricks determining which comps are the best; see the article on Picking the Best Comps for help. You can view comps on your property or anyone else's on Zillow.com, simply by entering an address.
Look at Unsold Homes
Homes on the market that haven't sold yet are also a consideration, although not a strong one, since it's unproven whether the house will bring the money it's asking. But, look at the active competition. Find a home most similar to yours and find out how many days it has been on the market. You can also look for homes owned by celebrities, and benchmark against those houses. If the house has been sitting for a while (more than 30 days), you will see the market is not convinced that is the correct price for that home. Once you see the "Sold" sign, find out how much above or below the list price it sold for. This will give you a good idea of how the market is behaving and how aggressive you can be in setting a price.
Use Square Foot Pricing
Some neighborhoods are a mixed bag of architecture, style and size, which means if you can't find another home similar to yours, you can use square foot pricing. How? Take 3 - 5 homes as similar to yours as possible, add up the square footage and divide by the number of homes. This will give you an average per square foot for your comps. Then, add up the sold price of each home, divide by the number of homes to get the average. Lastly, divide the average sold price by the average square foot to get the average price per square foot. Once you have the average price per square foot, multiply it by your home's square footage. This is just another tool to help you price your home.
Example:
Step 1: Find the average sq. ft. of comps
Home 1: 1,950 square feetHome 2: 2,400 square feetHome 3: 1,800 square feetHome 4: 2,050 square feetTotal: 8,200 square feet
8,200 / 4 = 2,050 sq. ft.
2,050 is the average sq. ft. of your comps
Step 2: Find the average price of comps
Home 1: $310,000Home 2: $410,000Home 3: $299,000Home 4: $325,000Total: $1,344,000
$1,344,000 / 4 = $336,000
$336,000 is the average price of your comps
Step 3: Divide the average price by the average sq. ft.:
$336,000 / 2,050 = $164/per sq. ft.
$164 is the average price per sq. ft. of your comps
Step 4: Set the price of your home:
Take $164 and multiply it by your square footage to get a price. For example, if you have a 1,975-square-foot home, multiply it by $164 (e.g., 1,975 sq. ft. x $164 = $323,900).
Bingo! Your home's price: $323,900!
Get a Comparative Market Analysis (CMA)
If you've used the three strategies above, but still need reassurance, go to a real estate agent -- or two or three -- and ask them for a CMA. Whether you use the agent to sell your house or not, they will be more than willing to provide a CMA in hopes of getting your listing. It shouldn't cost you any money to get one.
Get an Appraisal
If you really need extra assurance, hire a professional appraiser. An appraiser will cost approximately $250 - $400, depending on your home size and uniqueness of the property. They will come to your home and itemize the number of rooms and amenities (e.g. swimming pool, fireplace, etc.) and will pull comps from other nearby homes that sold recently. Once they have completed their review of your home, the comps, and the market, they will furnish you with an appraisal. This will be an estimation of your property's fair market value.

Real Estate Pricing Checklist:

2007-12-31T03:10:00.000-08:00

You are anxious to get that sign up, but hold on! Before you set the price on your house, take a look at what's going on. Not only your perspective of things, but from the current mood of the market. The market is not sympathetic to "you need" or "must have" pricing methods. The time spent here may save certain headaches and disappointment that lay ahead if utilizing these strategies in determining your home's current value. The home is worth what a buyer is willing to pay for it in an open market. So please take some time and review the following strategies.
What is your Mindset
A seller's biggest advantage is time, because the more time you have, the more you can prepare and do your homework. However, if you're in a rush to sell, you're at the mercy of the buyer; you won't have the luxury of preparing or waiting for an ideal one.
Do not disclose your timetable to anyone, except your agent. If you can't trust your agent don't do business with them. Your agent has a duty of confidentiality to you per your written contract and will only disclose information you as the seller give permission to disclose. A rushed seller means a bargain for the buyer and savvy buyers can smell panic a mile away. If you're planning on selling in the next 6 to 12 months, you have lots of time to prepare.
As odd as it sounds, sometimes people sabotage their own intentions by being too greedy. Don't do it! As you really start looking at homes on the market, you will develop a sense about what is priced low, high, or just right. Doing your homework here will help you truly understand home values and you will be able to set a reasonable price -- a price that buyers know is just right.
Tracking neighborhood values - You need to become somewhat of a snoop because you need to learn more about your neighborhood than you ever thought possible.
Mood of the Market
Markets have moods? They do! You need to judge whether it's a sellers' market or a buyers' market and it could vary by city, state, and neighborhood. Your interest is in your own neighborhood.
And when we mention "market", we don't mean the neighborhood grocery store. The market is a catch-all term for all the ingredients that go into the mood of real estate at a given time. It can include such things as interest rates, home inventory, job forecasts, and even time of year. The market shifts constantly, so you need to raise your antennae and tune into what's going on in your neighborhood.
Market Mood Checklist
Inventory. How much is out there? Assess the inventory of homes in your area by driving around or use online sites to search for sale homes in your neighborhood. Also, real estate agents send out monthly mailers detailing home sales and include all kinds of information, such as number of homes that are on the market. If you live in a desirable neighborhood and there aren't many homes for sale, you will have a clear edge here. However, if you drive around and do see lots of homes on the market and they're not selling very quickly, you might have to reduce the price you had in mind.
Days on the market. Review the homes in your neighborhood and their days on market (DOM). Once again, that real estate mailer that you were throwing away for all those years will now come in quite handy.
Look up your ZIP code's Zindex on Zillow.com. Look at trends for the past year and assess whether homes were appreciating or depreciating (e.g. homes in your ZIP code were rising by 2% each month for the past 6 months). Unless you see a downward tick in this number, you can probably assume this will continue. If the Zindex in your neighborhood is rising, that means people are in the buying mood. If the Zindex is on a downturn, that means buyers have the upper hand.
Check your local news. If Zillow does not provide a Zindex for your home (in which case, Zillow provides you with a tax assessed value), check your local newspaper's real estate section for charts or articles on sales trends in your ZIP code.
Jobs, jobs, jobs. Monitor the job situation in your area. Are companies or factories closing down? Not a good sign. But, if "Major ABC Company" in your local town is expanding, kick your heels up because that means jobs, more people, and more housing will be required. This is good.
Track neighborhood values. Each week, walk or drive around your neighborhood and begin collecting listing sheets -- you know, those fliers that agents create to list the facts and amenities of a home. It's amazing the knowledge you gain by tracking neighborhood home values and price points. Ideally, find homes similar to yours and pay close attention to the "action" surrounding them. Are they getting lots of traffic? As you collect these listing sheets, put them in a folder and date each sheet. Make note of the list price, sold price, and days on market (DOM).
Attend nearby open houses. This is good for a number of reasons: to observe how other properties are showing and to assess their value, to chat up the listing agent (they have loads of info to share), and to feel the "mood" of potential buyers. Once you do this weekly, you will get an excellent feel for home values and what potential buyers are after. After doing this for a couple of weeks, challenge yourself by guessing what homes "go for" as you approach them for the first time. You'll be surprised at how well-trained your eye becomes with some practice and exposure to homes.
Tour some homes with your agent. Get out there -- act like a buyer and see what they see! Hear other sellers make mistakes, hover over you, or talk too much or apologize for condition!
Price per square foot. If you don't want to go down on your asking price, you could choose to focus on your price per square foot. Show potential buyers how your price stacks up against others in the neighborhood.

Increasing Seller's Property Value:

2007-12-31T03:07:00.000-08:00

Understand first of all that there IS a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.
Some tips to achieve a positive impact on value are:
Perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.
Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who wont allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.
Cosmetics are important.
Fresh paint will always add more value than it costs.
Clean or new carpet/flooring adds more value than it costs.
Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.
If you can, add some colorful flowers and new sod.
Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.
Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accomodate for property condition and repairs.
If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.
Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.

Commercial Property: Buying and Selling:

2007-10-29T22:34:00.001-07:00

If you are looking to buy or sell commercial property, your best bet is to engage a real estate attorney who can advise you on legal matters involving the transfer. As with home purchases, it’s important to have the property inspected thoroughly before committing to buy. You will also want to ensure that zoning laws permit you to renovated buildings to suit your needs – for example, buildings that are zoned as small retail outlets may not always be turned into restaurants; warehouses may not necessarily be converted to apartment complexes. Real estate lawyers will make sure that you know as much as possible about your property before you buy.

Choosing a Real Estate Professional:

2007-10-29T22:33:00.002-07:00

Although some people prefer to work on their own, it is usually good to hire a licensed real estate professional if you are looking to buy or sell a house. You may choose between a real estate broker, who is independently licensed to review the entire market and show any house that suits your needs, and a real estate agent who works for a specific company and is usually restricted to showing properties in that company’s listings. Which one you choose will depend on your needs, budget, and the number of real estate companies competing in your area. If there are a large number of companies, you may do better with a broker, but if there are only a few, you can save money by using an agent.
No matter what type of professional you choose, there are a few things you should consider before making your decision. How does the agent or broker intend to market your house? How successful has he been in the past, particularly with homes in your range and area? If he is an agent, what is his company’s track record? What is the time limit on the contract you will sign, and can you break it if you’re dissatisfied? Do you feel comfortable that he understands your needs and will work hard to meet them? Recall that, above all, real estate agents are salespeople, so be sure that you are confident that they are working with you as well as for their employers. A great way to narrow down choices is to check the Internet for websites that compare companies and agents in your area. You may also want to talk with friends who have recently moved about their experiences with local agents and brokers.

Real Estate Basics:

2007-10-29T22:33:00.001-07:00

Are you looking to buy or sell a home or other piece of property? The real estate market is a difficult one, and should not be entered casually. With the right information, you can make your venture a success, but all to often lack of foresight and failure to do the proper exploration leave consumers in unfortunate situations that are difficult to rectify. An educated consumer is a happy consumer, and in no market is this truer than the property market. Before you commit, learn as much as you can – whether you’re buying or selling, you’ll never regret doing a little extra research.

To begin with the basics, let’s consider a few definitions. “Real Property” is legally defined as “land and improvements permanently attached to the land.” Improvements include everything from houses and garages to in-ground swimming pools, but exclude portable items like mobile homes and tool sheds. Also included in real property are substances beneath the land, such as gas, minerals and oil.
There are many types of real estate, but most consumers will encounter only two: single-family homes and commercial property. Commercial property may include spaces used for retail, office, shopping, hotels, warehouses, manufacturing facilities, apartment complexes, as well as vacant land zoned to be used for any of those purposes. Aside from specialty properties like farms and industrial sites, almost any property to be used for anything besides a single-family homes is considered commercial.
Different rules govern transactions involving each kind of property, and it’s important to know what you will encounter before you get started. The use of any property is limited by zoning laws, which govern the purpose – for example, housing, retail, or industrial – for which the real estate can be used. Zoning laws also restrict the size and height of buildings, the portion of property that may be used for parking, how far buildings must be set from the street and from each other, and whether and what kind of hazardous materials can be stored there. Public easement and right of way laws, which fall into the general category of zoning, outline whether and which parts of private property must be reserved for public use, usually in the form of sidewalks, electrical lines, sewer pipes, fire hydrants and similar public goods. Laws differ from town to town, so if you are looking at multiple locations, keep track of how each municipality’s rules will affect how you can use your property.

Home For Holidays:

2007-10-29T22:25:00.000-07:00

The holiday season is fast approaching - 'tis the season to be jolly! Planning for the holidays can include welcoming guests in your home. For many, this means getting your home in order and that might include some light remodeling. Your home needs to be in tip top shape for all the guests it needs to impress.
While remodeling may sound like a task you don't want to tackle as the days get shorter, there's minor things you can do that are both affordable and quick. The rooms that will see the most traffic are inevitably the kitchen and the bathroom. They are also the two spaces that will see the most return in value if you decide to sell your home in the future. A bit of focused attention in these two rooms will make your in-laws want to stay forever.
In the kitchen:
Cabinets - Replacing them might be a mountain of a task, but replacing the hardware isn't. A new trend is brushed nickel - gives off a shine while hiding nicks and scratches. Count the knobs, pulls and hinges you'll need before you head off to the store.
Paint - Look at your ceiling. Typically the most neglected, it can be the one spot with the most power to brighten up a room. Or, if your kitchen is mostly neutral, choose a single wall to spice up with a bold new color.
Lighting - While you're staring at your ceiling, consider some new lighting fixtures that might be more modern or welcoming. Most are easy to install and won't break your budget.
In the bathroom:
Paint - Most bathrooms are a breeze to paint and can be done in a couple hours. Pick up a contrasting rug and towels for a finished look.
Faucet - a shiny new faucet could really give your sink a sharp look.
Mirrors - Since bathrooms are small, adding a mirror or two can add depth and light to a small space.
So, before you bring out the decorations, do a sweep of what can be updated and will still have value for your home in the New Year. These simple, affordable projects could be done in a weekend just in time to welcome your holiday guests.

For Home Sellers:

2007-10-29T22:24:00.000-07:00

Home Sellers: Don't 'Scare Away' Buyers This HalloweenBy Lauren Baier Kim
Last October, Jacky Teplitzky got a fright when she entered the residence of one of her clients and was transported into a haunted house.
A broker for Prudential Douglas Elliman, Ms. Teplitzky mostly sells homes in Manhattan's high-end market. This particular apartment had been listed since the end of August, and she had convinced her Upper East Side clients to clear out excess furniture in the 1,200-square-foot, two-bedroom and two-bathroom unit to make it more appealing to buyers.
When she walked in, Ms. Teplitzky expected to see less clutter. Instead she found fake witches, cadavers and pumpkins on the floor, as well as "things that make noise and surprise you," scattered around, she says. Every room in the apartment -- including the kitchen and bathrooms -- oozed Halloween decorations.
The place was so full of seasonal décor that Ms. Teplitzky had difficulty maneuvering through it. When she asked house hunters what they thought about the unit, they replied: " 'We didn't see the apartment; we only saw the decorations,' " she says.
She asked her clients -- who had decorated the home for their young children's enjoyment -- to limit the ghoulish decorations, but they were offended and refused. They kept the Halloween décor up for 31 days, and the apartment sat on the market a month longer than it should have, Ms. Teplitzky says. She finally secured a buyer in December and the unit closed in June at its listing price, $825,000, she says.
With the housing market slumping, there are already plenty of ways to dig a grave for yourself as a home seller this fall. Making sure Halloween decorations aren't a dealbreaker is relatively simple by comparison.
You don't want to "spook" house hunters, real-estate agent Phyllis MacBeth of Main Street Realtors in Long Beach, Calif., says. Some might not understand the holiday, while others may find it offensive, she explains. To avoid turning off potential buyers, opt for a neutral autumn theme over ghosts and goblins, she suggests.
Try adding displays of fall leaves, colorful mums, or pumpkins -- use white ceramic ones if orange clashes with your interior. "They look nice and make a house look more homey, while skeletons don't," she says.
Barb Schwarz, founder of Stagedhomes.com and credited as the founder of home staging, recently used carefully selected Halloween and seasonal items to help market a $1.5 million home in Palm Springs, Calif.
She didn't string up orange and black garlands or place a scary scull on the kitchen table. Instead, she put a pumpkin made of dried willow on the front porch, added a vase with gold and copper twigs and eucalyptus to the entryway, and used another arrangement in the kitchen that matched the room's black granite counters. In a child's bedroom, she replaced some toy soldiers with a set of mini pumpkins with various facial expressions. The decorations are "minimal and tasteful," she says.
She didn't want to flood the home with seasonal props, but also didn't want to ignore the holiday, either, she says. "People expect to see something happening for the season," she explains.
While Ms. Schwarz used upscale decor to give the home a holiday flavor, another option is to make your own seasonal decorations, offers James Barry of ListingBook.com, which provides client-management services for real-estate agents. If done tastefully, your crafts can show potential buyers the care and attention you devote to your home, he explains.
Looking for another way to get buyers to stop "dead" in their tracks and take notice of your home? Try using the holiday as a marketing opportunity.
Use trick or treating as an opportunity to talk up your home. One could even distribute flyers that highlight a property's top selling points, Ms. MacBeth suggests. More potential buyers are likely to visit your house this Halloween than during any open house, she says.
Or, take it a step further and host a Halloween open house, Pam O'Connor, president and chief executive officer of Leading Real Estate Companies of the World in Chicago, suggests. The event could be themed as a late afternoon cocktail hour, or a more family-friendly offering would be light refreshments and pumpkin cookies, she says. The holiday open house may be just what you need, she says, to "draw people in to see the house."
Provided it's not haunted, of course.

Buying and Selling: What You Need to Know:

2007-10-28T22:34:00.000-07:00

When you are in the market to buy, your individual situation will determine whether or not to hire a professional. You may find that you can do well enough finding suitable listings without the help of an agent. However, if you live in a city where good housing is scarce, you may want to engage someone to help you discern the good from the bad. Real estate agents can also be very helpful when it’s time to close the deal, sorting out what items are included with the house (for example, appliances and furnishings) and working with the seller to divide costs fairly.
Although it is possible to sell your home without professional help, but this should be attempted with great caution. A real estate professional will help sort through potential buyers to find people who are serious, work with to get a fair price for your property, and be indispensable at closing time when it comes to dividing up property taxes and other shared costs. In general, as a seller, you should expect to run up against a number of expenses when you close on your house. These may include excise tax (a tax levied on the seller of any property or item), attorney and professional fees, property taxes, real estate commission, and fees for survey, inspection, certification and other items, depending on the laws of the state in which the house is sold.

Real Estste

2007-10-04T07:39:00.000-07:00

Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land along with anything permanently affixed to the land, such as buildings. Real estate (immovable property) is often considered synonymous with real property (also sometimes called realty), in contrast with personal property (also sometimes called chattel or personalty). However, for technical purposes, some people prefer to distinguish real estate, referring to the land and fixtures themselves, from real property, referring to ownership rights over real estate.The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.In law, the word real means relating to a thing (from Latin res/rei, thing), as distinguished from a person. Thus the law broadly distinguishes between "real" property (land and anything affixed to it) and "personal" property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. (The word is not derived from the notion of land having historically been "royal" property. The word royal — and its Castilian cognate real — come from the related Latin word rex-regis, meaning king.)

British, French and Italian usages of the termIn British usage, however, “real property”, often shortened to just “property”, refers rather to land and fixtures as such while the term “real estate” is used mostly in the context of probate law, and means all interests in land held by a deceased person at death excluding interests in money arising under a trust for sale of or charged on land.In French, Italian and Spanish, real estate is called "immovables" (immobilier in French, immobili in Italian and inmueble in Spanish); other property is called "movables" (mobilier and mueble).
Business sectorWith the development of private property ownership, real estate has become a major area of business. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:Appraisal - Professional valuation servicesBrokerages - Assisting buyers and sellers in transactionsDevelopment - Improving land for use by adding or replacing buildingsProperty management - Managing a property for its owner(s)Real Estate Marketing - Managing the sales side of the property businessReal Estate Investing - Managing the investment of real estateRelocation services - Relocating people or business to a different countryWithin each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate."Internet Real Estate" is a term coined by the internet investment community relating to the parallel that exists between high quality internet domain names and real-world, prime real estate. Many internet companies actually use the address of properties as domain names.
LevelsAccording to The Economist, "developed economies'" assets at the end of 2002 wasResidential property: $48 trillionCommercial property: $14 trillionEquities: $20 trillionGovernment bonds: $20 trillionCorporate bonds: $13 trillionTotal: $115 trillionThat makes real estate assets 54% and financial assets 46% of total stocks, bonds, and real estate assets. Assets not counted here are bank deposits, insurance "reserve" assets, and human assets; also it is not clear if all debt and equity investments are counted in the categories equities and bonds. For US asset levels see FRB: Z.1 Release-- Flow of Funds Accounts of the United States.
Mortgages in real estateIn recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich or poor, a significant fraction of the total wealth is in the form of land and buildings.In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgage loans (or other instruments). These are loans for which the real property itself constitutes collateral. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can foreclose by filing a court action which allows them take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an off plan or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development.But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry, as such, either does not exist at all or is only available to members of privileged social classes.
Real estate in Mexico and Central AmericaReal estate in Mexico and Central America is different from the way that it is conducted in the United States.Some similarities include a variety of legal formalities, (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and monies in order to smoothly make the exchange between the parties. Increasingly, US title companies are doing work for US buyers in Mexico and Central America.Prices are often much cheaper than most areas of the U.S., but in many locations prices of houses and lots are as expensive as the US, one example being Mexico City. U.S. banks have begun to give home loans for properties in Mexico, but, so far, not for other Central American countries.One important difference from the United States is that each country has rules regarding where foreigners can buy. For example, in Mexico, they cannot buy land or homes within 50km of the coast or 100km from a border, while, in Honduras, they may buy beach front property. There are also different special rules regarding certain types of property: ejidos - communally held farm property - cannot be sold to anyone, but that does not prevent them from being offered for sale.Many websites advertising and selling Mexican and Central American real estate exist, but they may need to be researched.
Real estate brokerFrom Wikipedia, the free encyclopediaJump to: navigation, searchA real estate broker is a party who acts as an intermediary between sellers and buyers of real estate and attempts to find sellers who wish to sell and buyers who wish to buy. In the United States, the relationship was originally established by reference to the English common law of agency with the broker having a fiduciary relationship with his clients. Estate agent is the term used in the United Kingdom to describe a person or organization whose business is to market real estate on behalf of clients.In the US, real estate brokers and their salespersons (commonly called "real estate agents" or, in some states, "brokers")[1] assist sellers in marketing their property and selling it for the highest possible price under the best terms. When acting as a Buyer's agent with a signed agreement (or, in many cases, verbal agreement, although a broker may not be legally entitled to his commission unless the agreement is in writing), they assist buyers by helping them purchase property for the lowest possible price under the best terms. Without a signed agreement, brokers may assist buyers in the acquisition of property but still represent the seller and the seller's interests.In most jurisdictions in the United States, a person is required to have a license in order to receive remuneration for services rendered as a real estate broker. Unlicensed activity is illegal, but buyers and sellers acting as principals in the sale or purchase of real estate are not required to be licensed. In some states, lawyers are allowed to handle real estate sales for compensation without being licensed as brokers or agents

The difference between salespersons and brokers
In the past, when brokers (and their agents) only represented sellers, the term ‘’real estate salesperson’’ may have been more appropriate than it is today, given the different ways that brokers and their agents can help a buyer through the process rather than simply “sell’’ him or her a property. Legally however, the term 'salesperson' is still used in many states to describe a real estate agent.Real estate education: In order to become licensed, most states require that an applicant take a minimum number of classes before taking the state licensing exam. Such education is often provided by real estate brokerages as a means to finding new agents.Today in many states, the real estate agent (acting as an agent of the broker with whom he/she is employed) is required to disclose to prospective buyers and sellers who represents whom. See below for a broker/agent’s relationship to sellers and their relationship to buyers.While some people may refer to any licensed real estate agent as a real estate broker, a licensed real estate agent is a professional who has obtained either a real estate salesperson's license or a real estate broker's license.In the United States, there are commonly two levels of real estate professionals licensed by the individual states, but not by the federal government:Real estate salesperson (or, in some states, Real estate broker): When a person first becomes licensed to become a real estate agent, he/she obtains a real estate salesperson's license (or some states use the alternative term, "broker") from the state in which he/she will practice. To obtain a real estate license, the candidate must take specific coursework (of between 40 and 90 hours) and then pass a state exam on real estate law and practice. In order to work, salespersons must then be associated with (and act under the authority of) a real estate broker.Many states also have reciprocal agreements with other states, allowing a licensed individual from a qualified state to take the second state's exam without completing the course requirements, or, in some cases, take only a state law exam.Real estate broker (or, in some states, Qualifying Broker):After gaining some years of experience in real estate sales, a salesperson may decide to become licensed as a real estate broker (or Principal/Qualifying broker) in order to own, manage or operate his/her own brokerage. Commonly more course work and a broker's state exam on real estate law must be passed. Upon obtaining a broker's license, a real estate agent may continue to work for another broker in a similar capacity as before (often referred to as a broker associate or associate broker) or take charge of his/her own brokerage and hire other salespersons (or broker) licensees. Becoming a branch office manager may or may not require a broker's license. Some states such as New York allow licensed attorneys to become real estate brokers without taking any exam. In states, such as Colorado, there are no "salespeople", as all licensees are Brokers.A REALTOR, pronounced “Real-tor” (re??l tor), is a real estate salesperson or broker who is a member of the National Association of Realtors (NAR). All Realtors are brokers/salespersons, but not all brokers/salespersons are Realtors.
Agency relationships with clients versus Non-Agency relationships with customersAgency relationship: Traditionally, the broker provides a conventional full-service, commission-based brokerage relationship under a signed listing agreement with a seller or "buyer representation" agreement with a buyer, thus creating under common law in most states an agency relationship with fiduciary obligations. The seller or buyer is then a client of the broker. Some states also have statutes which define and control the nature of the representation.Agency relationships in residential real estate transactions involve the legal representation by a real estate broker (on behalf of a real estate company) of the principal, whether that person or persons is a buyer or a seller. The broker (and his/her licensed real estate agents) then becomes the agent of the principal.Non-agency relationship: where no written agreement nor fiduciary relationship exists, a real estate broker (and his agents) works with a principal who is then known as the broker’s customer. When a buyer, who has not entered into a Buyer Agency agreement with the broker and buys a property, then that broker functions as the sub-agent of the seller’s broker. When a seller chooses to work with a transaction broker, there is no agency relationship created.
Transaction brokersSome state Real Estate Commissions, notably Florida's after 1992 (and extended in 2003) and Colorado's after 1994 (with changes in 2003), created the option of having no agency nor fiduciary relationship between brokers and sellers or buyers. The transaction broker assists buyers, sellers, or both during the transaction without representing the interests of either party. They may be then regarded as customers.As noted by the South Broward Board of Realtors, Inc. in a letter to State of Florida legislative committees :"The Transaction Broker crafts a transaction by bringing a willing buyer and a willing seller together and assists with the closing of details. The Transaction Broker is not a fiduciary of any party, but must abide by law as well as professional and ethical standards." (such as NAR Code of Ethics)The result was that in 2003, Florida created a system where the default brokerage relationship had "all licensees …operating as transaction brokers, unless a single agent or no brokerage relationship is established, in writing, with the customer" and the statute required written disclosure of the transaction brokerage relationship to the buyer or seller customer only through July 1, 2008.In both Florida and Colorado's case, dual agency and sub-agency (where both listing and selling agents represented the seller) no longer exist.
Dual or limited AgencyDual agency occurs when the same brokerage represents both the seller and the buyer under written agreements. Individual state laws vary and interpret dual agency rather differently.Many states no longer allow dual agency. Instead, Transaction Brokerage (see above) provides the Buyer and Seller with a limited form of representation, but without any fiduciary obligations (see Florida law). Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency, and many states require written Disclosures to be signed by all parties outlining the duties and obligations.If state law allows for the same agent to represent both the buyer and the seller in a single transaction, the brokerage/agent is typically considered to be a Dual Agent. Special laws/rules often apply to dual agents, especially in negotiating price.In some states (notably Maryland[8]), Dual Agency can be practiced in situations where the same brokerage (but not agent) represent both the buyer and the seller. If one agent from the brokerage has a home listed and another agent from that brokerage has a buyer-brokerage agreement with a buyer who wishes to buy the listed property, Dual Agency occurs by allowing each agent to be designated as “intra-company” agent. Only the broker himself is the Dual Agent.Some states do allow a broker and one agent to represent both sides of the transaction as dual agents. In those situations, conflict of interest is more likely to occur.
Types of services that a broker can provideSince each state's laws may differ from others, it is generally advised that prospective sellers or buyers consult a licensed real estate professional.Some Examples:Comparative Market Analysis - an estimate of the home's value compared with others. This differs from an appraisal in that property currently for sale may be taken into consideration (competition for the subject property).Exposure - Marketing the real property to prospective buyers.Facilitating a Purchase - guiding a buyer through the process.Facilitating a Sale - guiding a seller through the selling process.FSBO document preparation - preparing necessary paperwork for "Sale By Owner" sellers.Full Residential Appraisal - but only, in most states, if the broker is also licensed as an appraiser.Home Selling Kits - guides to how to market and sell a property.Hourly Consulting for a fee, based on the client's needs.Leasing for a fee or percentage of the gross lease value.Property Management.Exchanging property.Auctioning property.Preparing contracts and leases. (Not in all states.)
GeneralThe sellers and buyers themselves are the principals in the sale, and real estate brokers (and the broker's agents) are their agents as defined in the law. However, although a real estate agent commonly fills out the real estate contract form, agents are typically not given power of attorney to sign the real estate contract or the deed; the principals sign these documents. The respective real estate agents may include their brokerages on the contract as the agents for each principal.The use of a real estate broker is not a requirement for the sale or conveyance of real estate or for obtaining a mortgage loan from a lender. However, once a broker is used, the settlement attorney (or party handling closing) will ensure that all parties involved be paid. Lenders typically have other requirements, though, for a loan.
Services provided to both buyers and sellersIn addition to the services to sellers and buyers described below, most real estate agents coordinate various aspects of the closing.Real estate brokers (and their agents) typically do not provide title service such as title search or title insurance, do not conduct surveys or formal appraisals of the property such as those required by lenders, and do not act as lawyers for the parties, although they may "coordinate" these activities with the appropriate specialists. Some real estate brokers may be associated with loan officers who may help to finance buyers to make their purchase.Regardless of whether a real estate agent assists sellers or buyers of real estate, negotiation and financing skills are important.
Real estate brokers and sellers
Services provided to seller as clientUpon signing a listing contract with the seller wishing to sell the real estate, the brokerage attempts to earn a commission by finding a buyer for the sellers' property for highest possible price on the best terms for the seller. In Canada, most provinces' laws require the real estate agent to forward all written offers to the seller for consideration or review.To help accomplish this goal of finding buyers, a real estate agency commonly does the following:Listing the property for sale to the public, often on a Multiple Listing Service, in addition to any other methods.Based on the law in several states, providing the seller with a real property condition disclosure form, and other forms which may be needed.Preparing necessary papers describing the property for advertising, pamphlets, open houses, etc.Generally placing a "For Sale" sign on the property indicating how to contact the real estate office and agent.Advertising the property. Advertising is often the biggest outside expense in listing a property.In some cases, holding an Open house to show the property.Being a contact person available to answer any questions about the property and to schedule showing appointmentsEnsuring buyers are prescreened so that they are financially qualified to buy the property; the more highly financially qualified the buyer is, the more likely the closing will succeed.Negotiating price on behalf of the sellers. The seller's agent acts as a fiduciary for the seller. This may involve preparing a standard real estate purchase contract by filling in the blanks in the contract form.In some cases, holding an earnest payment cheque in escrow from the buyer(s) until the closing. In many states, the closing is the meeting between the buyer and seller where the property is transferred and the title is conveyed by a deed. In other states, especially those in the West, closings take place during a defined escrow period when buyers and sellers each sign the appropriate papers transferring title, but do not meet each other.
The "listing" contractSeveral types of listing contracts exist between broker and seller. These may be defined as:Exclusive Right to SellIn this type of Agreement", the broker is given the exclusive right to market the property and represents the seller exclusively. However, the brokerage also offers to co-operate with other brokers and agrees to allow them to show the property to prospective buyers and offers a share of the total real estate commission.Exclusive AgencyAn alternative form, "Exclusive Agency", allows only the broker the right to sell the property, and no offer of compensation is ever made to another broker. In that case, the property will never be entered into an MLS. Naturally, that limits the exposure of the property to only one agency.Open ListingThis is an Agreement whereby the property is available for sale by any real estate professional who can advertise, show, or negotiate the sale. Whoever first brings an acceptable offer would receive compensation. Real estate companies will typically require that a written agreement for an open listing be signed by the seller to ensure the payment of a commission if a sale should take place.Although there can be other ways of doing business, a real estate brokerage usually earns its commission after the real estate broker and a seller enter into a listing contract and fulfill agreed-upon terms specified within that contract. The seller's real estate is then listed for sale, frequently with property data entered into a Multiple Listing Service (MLS) in addition to any other ways of advertising or promoting the sale of the property.In most of North America, where brokers are members of a national association (such as NAR in the United States or the Canadian Real Estate Association), a listing agreement or contract between broker and seller must include the following: starting and ending dates of the agreement; the price at which the property will be offered for sale; the amount of compensation due to the broker and how much, if any, will be offered to a co-operating broker who may bring a buyer. Without an offer of compensation to a co-operating broker (co-op percentage or flat fee), the property may not be advertised in the MLS system.
Brokerage commissionsIn consideration of the brokerage successfully finding a satisfactory buyer for the property, a broker anticipates receiving a commission for the services the brokerage has provided. Usually, the payment of a commission to the brokerage is contingent upon finding a satisfactory buyer for the real estate for sale, the successful negotiation of a purchase contract between a satisfactory buyer and seller, or the settlement of the transaction and the exchange of money between buyer and seller.In North America a commission in the 5% to 7% range is considered "standard" for residential real estate and is typically paid by the seller at the closing of the transaction. Commissions are negotiable between seller and broker. The commission could also be paid as flat fee or some combination of flat fee and percentage, particularly in the case of lower-priced properties, vacant lots, or other unusual real estate. The details are determined by the listing contract.However, some brokers charge as much as 10% while others will offer services for 1%. Fee-for-service or flat-fee real estate brokerages are also increasing in popularity. This is not, however, the norm throughout the world. In Australia, for example, listing agents are paid between 2-4% and very few buyers use an agent. If they do, they pay out-of-pocket.Out of the commission received from the seller, the broker will typically pay any expenses incurred in doing the work of trying to sell the listed properties, such as advertisements, etc.Real estate brokers who work with lenders may not receive any compensation from the lender for referring a client to a specific lender. To do so would be a violation of a (US) federal law known as the Real Estate Settlement Procedures Act (RESPA). All compensation to a broker must be disclosed to all parties.
LockboxWith the sellers’ permission, a lockbox is placed on homes that are occupied and, after arranging an appointment with the home owner, agents can show the home. When a property is vacant or where a seller may be living elsewhere, a lockbox will generally be placed on the front door. The listing broker helps arrange showings of the property by various real estate agents from all companies associated with the MLS.The lockbox contains the key to the door of the property and the box can only be opened by licensed real estate agents (often only with authorization from the listing brokerage), by using some sort of secret combination or code provided by the brokerage or the issuer of the lockbox.Lockboxes come in two varieties - mechanical and electronic. Mechanical lockboxes utilize a combination dial or special mechanical key and are readily purchased at local home improvement centers or over the internet. Mechanical lockboxes offer the most basic protection of the homeowner's key and therefore expose the most risk of unmonitored or potentially unauthorized access to the home during the sales process. The risk stems primarily from an agent forgetting to change the combination after each sale. The frequency of use of mechanical lockboxes by agents has steadily declined due to the availability of more secure electronic lockboxes.Electronic lockboxes increase the level of security because agents wishing to show a property must have a valid electronic key to open the box. The electronic key must be renewed or refreshed at regular intervals by the agent otherwise the key deactivates itself preventing access to the lockbox contents. Electronic keys can range from credit card sized smart cards to a separate electronic box. In addition to greater security, electronic lockboxes typically record all key access activity internally. This access log can be downloaded and reviewed by the listing agent to determine the date, time and person accessing the lockbox. Electronic lockboxes also offer a host of other features such as controlling allowed showing times, homeowner privacy modes, special showing restrictions etc.
Shared commissions with co-op brokersIf any buyer's broker (or any of his/her agents) brings the buyer for the property, the buyer's broker would typically be compensated with a co-op commission coming from the total offered to the listing broker, often about half of the full commission from the seller. If an agent or salesperson working for the buyer's broker brings the buyer for the property, then the buyer's broker would commonly compensate his agent with a fraction of the co-op commission, again as determined in a separate agreement. A discount brokerage may offer a reduced commission in the event no other brokerage firm is involved and no co-op commission is paid out.If there is no co-commission to pay to another brokerage, the listing brokerage receives the full amount of the commission minus any other types of expenses.
Potential points of contention for agentsReal estate commissions are becoming a point of controversy. Home values in many areas have quadrupled over the past 20 years. This may be contributing to the increased number of licensed agents and growing competition between them. The number of real estate agents in areas tends to rise when home values do, and the productivity of existing agents goes down. The rewards have increased, but so have the demands of clients and business risks faced by agents. In North America, agents have had to become familiar with marketing through the internet as well as traditional print and other media. Additionally the law is complicated with issues such as defects in housing, grow houses and other issues of which the agent is the front line defense for his client. There is more liability than ever in advising buyers and sellers.Another controversy exists for the commissions to real estate agents. If a listing agent sells a property for any amount above the listed price, he in turn will make additional income. In theory, this will motivate him/her to get top dollar price for his client, the seller. However, if the agent representing the buyer attempts to obtain a lower sales price for his client, then he/she would make a lower commission. Thus, it could be considered to be in the agent's best interest to advise his client to purchase the property at a higher price.In practical terms, there is rarely a great enough difference between the listing (asking) price and the negotiated selling price to make a significant difference between the commissions generated on each side, and certainly hardly enough to justify an agent failing in his fiduciary duty to obtain the best terms for his/her client.Another potential conflict of interest exists when a listing agent in a very active real estate market has incentive to sell properties quickly at unnecessarily low prices in order to benefit from a high volume of sales.In any case, agents who create satisfied clients and develop subsequent referrals are likely to do far better in the long run.
Real estate brokers and buyers
Services provided to buyers:Buyers as clientsWith the increase in the practice of buyer brokerage in the US, especially since the late 1990s in most states, agents (acting under their brokers) have been able to represent buyers in the transaction with a written "Buyer Agency Agreement" not unlike the "Listing Agreement" for sellers referred to above. In this case, buyers are clients of the brokerage.Some real estate brokerages choose only to represent buyers in an exclusive buyer's agency relationship and do not take "listings" from sellers.A real estate brokerage attempts to do the following for the buyers of real estate only when they represent the buyers with some form of written buyer-brokerage agreement:Find real estate in accordance with the buyers needs, specifications, and cost.Takes buyers to and shows them properties available for sale.When deemed appropriate, prescreens buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional to do that task).Negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form. The buyer's agent acts as a fiduciary for the buyer.Due to the importance of the role of representing buyers' interests, many brokers who seek to play the role of client advocate are now seeking out the services of Certified Mortgage Planners, industry experts that work in concert with Certified Financial Planners to align consumers' home finance positions with their larger financial portfolio(s).Buyers as customersIn most states, until the 1990s, buyers who worked with an agent of a real estate broker in finding a house were customers of the brokerage, since the broker represented only sellers.Today, state laws differ. Buyers and/or sellers may be represented. Typically, a written "Buyer Brokerage" agreement is required for the buyer to have representation (regardless of which party is paying the commission), although by his/her actions, an agent can create representation.Find real estate in accordance with the buyers’ needs, specifications, and affordability.Take buyers to and shows them properties available for sale.When deemed appropriate, prescreen buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional to do that task).Assist the buyer in making an offer for the property.
The impact of globalization on real estate brokers' activitiesGlobalization has had an immediate and powerful impact on real estate markets, making them an international working place. The rapid growth of the Internet has made the international market accessible to millions of consumers. A look at recent changes in homeownership rates illustrates this. Minority homeownership jumped by 4.4 million during the 1990s, reaching 12.5 million in 2000, according to the Fannie Mae Foundation. Foreign direct investment in U.S. real estate has increased sharply from $38 billion in 1997 more than $50 billion in 2002 according to Census data.Most local real estate agents view the foreign market as a significant revenue potential and may have already worked with international clients in their local market, new immigrants or more sophisticated investors from different cultures and from other countries. For example, they are providing value-added services to an overseas relocation employee figure out which inoculations his or her children will need as well as the steps needed to register a car in the United States. Real estate brokers want to keep central to the transaction, protect the best interests of their members and address the unique needs of each multicultural global client by acquiring specialized training and designations. (See below for more)Recently the Mexican association of real estate practitioners in Mexico, AMPI, and the NAR, National Association of Realtors in the US, signed a bilateral contract for international real estate business cooperation. Also at the local level, many other state and local associations are helping other countries achieve the same result. For instance, in New Mexico, a historically multicultural state, under the RANM, Realtor Association of New Mexico and the President’s Advisory Council, is looking into forming an ambassador association to help a foreign country into signing a bilateral agreement with the NAR. In New Mexico, there are 4500 licensed real estate professionals and only 14 or 15 CIPS designees, out of whom, only 6 speak a language other than English.
Real estate brokers / agents and further educationIn addition to completing the educational requirements for a state real estate license, most states issue real estate licenses for limited time periods and require real estate professionals to complete a certain number of hours of further education on an annual or biannual basis in order to renew their licenses.Required course hours range from 10 to 20 per license period. Typically, some specific courses are required to be taken; these would include real estate law updates.
NAR educational requirements and recognized designationsAs adherents to NAR's Code of Ethics, Realtors are required to update their acquaintance with the Code every 4 years by taking a course, available on-line or "live".However, Realtors, as members of NAR, also have the option of studying for additional certifications in a variety of specialties, several of which are backed by NAR with offerings of certification and update courses available nationwide .The most well known NAR sponsored designations are the following:Accredited Buyer Representative (ABR). The Real Estate Buyers Agent Council has over 40,000 members and is the largest association of real estate professionals focusing on all aspects of buyer representation. Of the REBAC members, over 30,000 have completed REBAC’s two-day course and provided documentation of buyer agency experience. Linked to the ABR is the ABRM, Accredited Buyer Representative Manager (ABRM) for managers.Accredited Land Consultant (ALC). ALC’s are the recognized experts in land brokerage transactions of all kinds of specialized land services including farms and ranches, raw land sales and development.Certified Commercial Investment Member (CCIM). CCIMs are recognized experts in commercial real estate brokerage, leasing, valuation and investment analysis. There are more than 7,500 designees and an equal number of candidates principally in North America, but also in Asia and Europe.Certified Property Manager (CPM). Geared to real estate property management specialists, designees handle all forms of management from residential to commercial to industrial.Certified Real Estate Brokerage Manager (CRB). The designation is awarded to REALTORS® who have completed the Council's advanced educational and professional requirements. CRB designees consistently increase their level of industry knowledge, advance their earning and career potential, increase their firm’s profitability and benefit from active involvement in our network of real estate professionals.Certified Residential Specialist (CRS). Designees, with 44,000 members - 4% of NAR members - who average 43 transactions per year and earn four times as much as the average Realtor, belong to the Council of Residential Specialists which is the largest affiliate of NAR. They are involved in over 27% of all transactions because the consumer prefers to work with a more knowledgeable and seasoned brokers or agents. Requirements for this designation include a total of at least 25 transactions (or specific $$ volume of sales) over a specific time period, significant experience, as well as complete rigorous educational requirements.Certification for Internet Professionalism (e-PRO). An e-PRO is a Realtor who has undergone a new training program presented entirely online in order to be certified as Internet Professionals. NAR is the first major trade group to offer certification for online professionalism which involves all aspects of doing business on the internet.Certified International Property Specialist (CIPS). Realtors with the CIPS designation have both hands-on experience in international real estate transactions, Whether traveling abroad to put transactions together, assisting foreign investors, helping local buyers invest abroad, or serving an immigrant niche in local markets. CIPS designees have also successfully completed an intensive program of study focusing on critical aspects of transnational transactions, including currency and exchange rate issues and cross-cultural relationships, regional market conditions, investment performance, tax issues and more. The CIPS network is comprised of 1,500 real estate professionals from 50 countries who deal in all types of real estate.Counselor of Real Estate (CRE). A CRE designee is one of only 1,100 by-invitation-only members of an international group of professionals who provide seasoned, objective advice on real property and land-related matters.Graduate of the REALTORs’ Institute (GRI). The GRI designation is held by 19% of Realtors and courses are offered through state Realtor Associations with 90 hours of coursework on marketing and servicing listed properties to real estate law. In a 2003 survey, NAR has determined that GRIs earned over $33,200 more annually than non-designees.Real Estate Professional Assistant (REPA). Designed for administrative assistants or employees of Realtors (who may or may not hold a real estate license), a two-day certificate course provides an intensive introduction to the real estate business and to the specific ways support staff can become valuable assets to their employers.
Success rateCompensation is typically based on a percentage of the sales price, split between the buying and selling brokers, and then between the agent(s) and his/her real estate agency. While a split based on the percentage received by the broker is generally normal, in some brokerages agents may pay a monthly "desk fee" for office costs, monthly fee, etc. and then retain 100% of the commission received.According to various trade journals such as Realty Times, the first year failure rate is over 86%, and for those brokers or agents who have survived, over 70% have an income less than $30,000. A National Association of Realtors survey found a median income in 2004 of $37,600 for agents, and $52,800 for brokers, though many top agents earn six-figure incomes. . Even for those who have survived for years, most earn a modest income comparable to that of the American middle class. However, many agents work only on a part-time basis.