Real Estate Blog

August 6, 2010

What Exactly Short Sale Is?

Filed under: Short Sale — John @ 1:28 pm

If you are going through a foreclosure, you will come across people who will advice you to go for short sale to avoid foreclosure. This has become a common statement among people about short sale and foreclosure however, only a fraction of really understand what exactly short sale is? You must be looking for exact definition of short sale and have already been browsed several websites. But most of the websites feature same old definition which is full of jargons and can only be understand by experts. In simple language, short sale is when homeowner agrees to sell his property for lesser amount than he owe on the existing mortgage balance. To finalize the short sale, third party or home owner decides a pay off amount after negotiating the discount. The amount will be then paid to the mortgage company or bank.

In case, a homeowner owes more than the mortgage amount then the current value of the property comes under negative equity which commonly defined as upside down or underwater. As a homeowner, if you are selling an “upside down” property, the bank needs to agree to accept less than what is currently owed. With foreclosures on a property, mortgage companies need to face big losses and they try to the maximum to avoid these kinds of situations. Therefore, even mortgage companies prefer short sale which is feasible alternative to take the house back on foreclosure. Most of the times, lender finds selling property at a moderate loss better option than pressing the current debtor.  Both lender and mortgage companies agree for short as this come up as the most suitable alternative to avoid foreclosure. In the process of foreclosure, large sum of money as fee for the bank is involved in addition to poorer credit report as an outcome for the borrower.

There are people who still doubt the process of short sale. However, according to experts, short sale has become the necessity of the real estate market. Moreover, short sale is legal and much more beneficial than the process of foreclosure. Few people try out bankruptcy to get rid of the mess. However, short sale always comes up as better and easier way to handle real estate issues. Short sale is a kind of beneficial process for everyone involved in it whether its homeowner, lender, mortgage company or bank. Homeowner would get a financial predicament with short sale and regain peace of mind. As a family, you will get rid of constant stress. With the help of short sale, you would not only save your home from foreclosure but also your credit rating. Let’s talk about lender; he/she can avoid costly foreclosure proceedings. These proceedings would become more costly in the future. With short sale, new buyer gets the property at good market value.

August 2, 2010

Commercial Real Estate Lease – Know the Basics

Filed under: Real Estate Leasing — John @ 1:50 pm

Are you new to real estate business? If you are intending to invest in commercial real estate, you should get to know about the facts that are essential to make your business venture a success. Satisfactory location, rent and neighborhood are some of the things that always remain on the top, if you are looking for the success in commercial real estate business. You must have good negotiation skills so that you can negotiate the lease to terms that would allow you to start up your business with necessary opening. It also ensures long term profitability. Negotiation does not mean that you should dominate the landlord. It won’t do any good for you. Therefore, you must find a mutual decision on your lease that will be beneficial for you as well as landlord. If you don’t do lease on good terms, tenants will refrain from your property which means loosing on your business.

Since you are starting up with the business, you should know basic terminologies that are there in the real estate lease. If you are not sure about how to go about a lease while investing in commercial real estate in California, you should get in touch with reputed California Property Management Company. But still you should know about basic constituents of a commercial property lease. Any commercial property which is up for lease will have standard lease form agreement which will be prepared by the landlord. Structure will remain same but you will come across difference in terms and language from landlord to landlord and from property to property.

You will get this standard lease form agreement after your agent sends RFP (request for proposal) to the landlord. RFP will have several important issues however it must have section outlining the expectation of the tenants with respect to the Tax escalation and (CAM) common area maintenance. Base rent is the next thing that gets included in the lease. Base rent is the asking price for the space. It does not include any kind of taxes, insurance and maintenance that may be used for the build out. Common Area Maintenance (CAM) in addition to taxes and insurance known as Triple Net. It will be divided between the tenants on pro-rata basis. Now, let’s talk about the gross rent which means that total of base rent and triple that you would need to pay throughout the lease.

Vanilla box is the next terminology. It is not a dessert but every important aspect in a commercial lease. Primarily it is defined as concrete floor, drywall shell, basic commercial lighting and basic HVAC. The variation depends on the understanding of landlord about vanilla box. Build Out or tenant improvement is the amount of money which is to be taken out from vanilla box. Therefore, build out is a great bargaining tool especially while starting up a business when you don’t have big budget. Before finalizing the lease, you should know what is important.

July 31, 2010

Know the Difference between Short Sale and Short Pay

Filed under: Short Sale — John @ 1:14 pm

Are you going through foreclosure of your property? You might be getting many suggestions and advices such as short sale is better than foreclosure or you should try short pay rather than foreclosure. However, what is the real difference between a short sale and a short pay. Short sale can be defined as situation where lender is ready to give you discount to the existing mortgage(s) and further sell to an investor for a hard cash transaction. Lender can also sell it to the end buyer who does financing. Lender will finance a buyer only in the case of he/she has excellent credit scores and can qualify for another loan with an impression that the buyer will live in the house. Otherwise lenders don’t consider buyer to finance the property.

If lender agrees to short sale, a strict policy gets followed according to which a homeowner might not receive ant proceeds from the sale of property. In case of short, procedure will be quite similar. Lender will discount the mortgage same as that of short sale however, the difference lies in the fact that lender would be still interested in selling the property back to the homeowner. There is no gesture of sympathy or empathy in case of short pay from lender’s side. It is completely based on financial manipulation. The lender believes it is in their best interest to get rid of the property and they will be receiving the same amount in the final analysis.

For instance, lender sells the home back to the current owner.  In case, there are liens on the property. They could IRS or Tax liens. If the liens or judgments won’t be extinguished at the foreclosure auction then lender would need to assume these liens on order to sell the home. However, if lender sells home back to the current owner, homeowner will need to face the issues with extinguishing these lines. This allows lender to make more money even with taking a discount on the mortgage.     Now you must be wondering, from where homeowner is going to get the money to buy the home again? The lender doesn’t have an issue or concern with homeowner’s finances. He/she can arrange finances by lending it from a relative, another lender or can look out for an investor to buy the mortgage. The new mortgage amount would be around 80% or less than the old mortgage amount which is an instant equity to the property owner. This is because he is still on the deed. Biggest advantage of the short pay is that the owner of the property retains possession and title and majority of homeowners wish to retain this.

July 27, 2010

Looking to Achieve Success in Real Estate Sales

Filed under: Real Estate Sales — John @ 12:59 pm

Have you completed the real estate sales training? You must have attained the technical knowledge which is mandatory to know what all it takes to be a real estate agent. However, technical knowledge is not the only thing that can help you in touching the top spot of the field. While getting trained for real estate sales training, you would have learned about real estate marketing and what all should be there in real estate sales contract and other related things. However, key to success is not only your knowledge; you should also know how to use your soft skills. There are several other factors as well that are required to achieve success in real estate sales.

Communication skills

During every walk of life, communication is the most important thing. Communication becomes the point of survival if you are dealing directly with your clients. Being a real estate agent you would be interacting with the clients everyday: face to face, over the phone or through mails. Therefore, you must possess good written, oral and listening skills. Effective communication is the soul of real estate business. It brings mutual understanding and make sure everyone involved in the deal is in-sync.

Relationship building skills

Professional relationship lays the foundation of your business venture. Therefore, meeting new people and then ignoring them would not do any good for you and your real estate business. Once you have made a contact communicate regularly.

Interpersonal Skills

There are people who think interpersonal skills automatically come with good communication skills. However, interpersonal skills make you likable unlike communication skills that only help you in communicating. Effective communication is blend of good communication skills and great interpersonal skills. Your politeness, listening skills, honesty and respectful and helpful nature would add a likeability factor. Honest, empathetic and trustworthy are other things that are included in interpersonal skills.

Organizational Skills

While handling a real estate business, you should have organized structures and systems in place. Good organizational skills allow you to know what you need to do; how it can be done; when it should be done and above all why it should be done. Organization provides efficiency, effectiveness, mental clarity and productivity. It also saves your precious time and energy. If you want to take a glimpse of best of organizational skills, you should get in touch with some Los Angeles real estate agents.

Patience and Persistence

While dealing with short sales, complex real estate transactions and foreclosures need a lot of patience because these are very time consuming and labor intensive. If you can’t give time to these things, you are more likely to loose your real estate business. Real estate is not consistent at all. You would come across various ups and downs while handling real estate business. Therefore, you should plan your business strategies in a way that you can maintain an adequate level of business in every phase of the business.

July 24, 2010

Real Estate Constructions – Hiring Contractors is Best Thing

Filed under: Real Estate Construction — John @ 1:38 pm

Have you invested in real estate? If it is an old property you would need to rebuild it and if you are looking to add a unique factor to it, you must renovate it and make some modifications to match with the ambience. There could be several property construction projects such as commercial building renovation or home improvement. You cannot handle them all alone especially when you need to handle other things as well. Therefore, you should look out for a contractor who can look after all the construction work and can take care of every aspect associated with it.

Even if you have not decided the nature of the project yet or have detailed plan, you should consider hiring a contractor who will have all the service providers in his contact to provide you the best results. This kind of contractor is known as General contractor. You can also go for individual contractors who are engaged in different trades. No matter what your choice is, hiring an experienced and qualified contractor is must for best outcome. While looking out for a contractor, first thing that you should check is the qualification of the contractor.

If you start finding a contractor through newspapers and other means within a day or two, you will find proposals in your mailbox. Now picking the best one out of them is critical. A good selection procedure is the best thing to save your time and money. To get reliable options, you should get some referrals. Try your personal contacts such as friends and relatives. You can also approach your industry associations for some referrals. For some better options, get in touch with some building material suppliers as they closely work with contractors. But make sure, you enquiring everything about the contractors before hiring him as building material suppliers have their share in contractor’s profit.

After getting proposals from prospective contractors, you analyze and assess before making your final decision. Some of the factors that would allow you to shortlist the contractors are:

  • Check if they can meet all your requirements. To check this thing, the proposal needs a thorough look. While going through the proposal, check the services they specialized in.
  • There should a value added factor in the proposal. In other words, contractor would suggest few things to improve the efficiencies of the project. This would also show the expertise of the contractor.
  • Experience in handling your kind of project is the most important thing. The expertise and experience in handling the particular type of project makes the contractor fit for the job.
  • A genuine contractor would provide you with some references so that you can confirm the projects they have handled previously. Their previous client would give you feedback and it would influence your decision of hiring a contractor.

After finalizing the contractor, you should get all the expectations and commitments get signed on a legal paper. The agreement with the contractor must have price and payment terms, project requirements, quality controls, dispute resolution plan and Liability & Insurance Responsibilities.

July 22, 2010

Real Estate Auction – What You Should Know

Filed under: Real Estate Sales — John @ 12:51 pm

These days real estate auctions are on the rise. This is happening because of the growing number of physical and online inventories from where investors, bidders and buyers can easily get the information about the real estate which is being auctioned and terms and conditions that you need to abide by. Therefore, now you don’t need to get in touch with brokers and pay them commission, you can check online or contact your real estate agent. For example, you are planning to represent a bid to buy a property in Los Angeles; you should look out reputed Los Angeles real estate agents. You can find them online as well.

More and more buyers and sellers have started investing in real estate through real estate auctions because they are more open and transparent and seldom get influenced by market cycle and trends. If real estate auction is properly conducted it will attract good amount of buyers and will motivate them to act at the earliest. If you trying to buy property using traditional methods such as getting in touch with the broker and surf through several properties  in and around your town. In this case, you always have an insecurity of overpaying at the back of your mind. However, if you are investing in real estate through auction, you can easily get rid of the fear of overpaying as you can analyze and see what other bidders are willing to pay.

In case, market demand is high but inventories are low selling price will be much more than what the willing seller has accepted in negotiated private treaty sale. To establish top market price, real estate auctions takes place during up markets. If you think that auction would be a better option to earn more profit out of your property then you should be aware that not all the properties and sellers are good contender for auction. There are sellers who put their property on auction with a motto of get rid of problems caused due to the financial crisis in the market which has affected the market value of the property. In this case, possibility is there that the amount the willing buyer is going to pay cannot meet the expenses what you owe.

If you want that your property would do well in the real estate auction, your property must have a unique factor that can entice the buyers. So, before putting your home in an auction, try to figure out what specialties your property has and how you can improve the quality of your home. In case, you don’t find a unique factor in your property, best alternate to gain good amount of profit is to offer the most competitive price available in the market. Qualified Real Estate Auctioneer is very much required so that your real estate auction can be conducted in professional manner. To find the best auctioneer, you must check with National Auctioneers Association.

June 9, 2010

Are You Buying New Construction Real Estate

Filed under: Real Estate Construction — John @ 12:32 pm

Are you looking to invest in real estate? If yes, you must be considering various facts to buy a pre constructed or fully constructed property. Everything has its pos and cons. But most of the people are more inclined towards newly constructed real estate because they don’t need to face the hassle of preparing the home. With already constructed property, you get open floor plans, new appliances and much more. Moreover, it is very easy to purchase these homes with the help of on site sales agent. However, if you don’t have knowledge about the field of real estate, you should seek professional help and if you re intending to buy properties in Los Angeles, you can choose from several Los Angeles Real Estate Agents in the city.

While looking for a real estate agent you should pick the one who carries a good amount of experience in new home sales. One you step into the real estate market to buy new home, homebuilders will put pressure on you to employ pre approved lender, on site estate agent and title company. It would be a big mistake, if you don’t hire a realtor of your own choice. A qualified and experienced realtor would make sure that costs and interests rates are within the industry standards and will consider your interests and expectation while showing you the properties in Los Angeles.

Once you have selected a property and ready to sign the deal. Make sure you are not signing anything before all the details have been negotiated. Never assume that whatever the homebuilder or other people involved are saying is done. Don’t trust anything till the time it comes on the papers. Once you get the deal in writing you can sign however, still if you think that some of the clauses are too hard to follow, you can always negotiate on them. Home inspection is an integral part of the process of buying new home. Even if the home is newly constructed you should not refrain from inspecting the home. It will allow you take a closer look of the design and the material used. You must be getting warranty with your new home however, such warranties will only last 6 to 12 months. Irony is that your home would require a repair only after 12 months. Therefore, you should get in touch with professional and independent inspector to avoid costly repairs that would come after few years.

Majority of homebuilders have their own lenders and they will try to convince you to use their lenders. Main issue with using the homebuilder’s lenders is that they charge very high interest rate and closing costs are not easy to meet. Search for your own homebuilder and who has reputation in the market for making good quality homes and enjoy some incentives.

June 8, 2010

Why homeowners Prefer Private Real Estate Sales

Filed under: Real Estate Sales — John @ 1:52 pm

These days you must have seen big hoardings and exaggerated commercials of real estate agents and real estate firms. There are several reasons for this kind of marketing for individual agents as well as firms. First is the ever increasing competition. Everyday new real estate firm popped up with a target of establishment so their fresh enthusiasm and ideas benefit lot of people. But the thing which has compelled the real estate companies to market their services in better manner than their competitors is that more and more people have started selling their homes without taking any assistance from professionals. Although sometimes they find themselves in big mess but it is a great loss to real estate business owners.

If you are one of those people who selling their homes without taking any assistance from any of the real estate, you must be aware of the fact that real estate agents charge very high fee for professional services. The commission could be anywhere between 3% and 7%. So, if you are selling home for $500,000, just calculate the commission at 3% and you will know the reason why more and more homeowners are choosing to sell their homes on their own. The commission will be based on the total price of the home and once you consider the equity of your home, you will find that the amount of commission is much higher than that of the equity.

Whenever you need money on the toes, you can count on your property. However, if you want a professional assistance in order to sell your Los Angeles Property, it would take more time than expected as you would need to find experienced and reputed Los Angeles real estate agents. Without hiring any real estate agent, you can easily speed up the sales process as you can decrease the asking price without comprising on your profit because you are not paying any commission. Lower property price will definitely help you in quicker sale. Best part of selling your property without employing any real estate agent is that you can sell the home on your terms.

In the scenario of selling home on your own, you have the control over everything. You are the one who is going to decide the price and preconditions that are required for the potential buyers. You know your property better than anyone else so, you’re the best person how to advertise and market your property and what all feature should advertise to create an appeal among the buyers. No one wants to leave the control over the sale of the property. There are several advantages of opting FSBO (for sale by owner), to sell your home however, the process has some challenges as well. Since you are managing on your own you would need to put in lot of efforts. Marketing and advertising expenses will come out of your pocket and you would need to get to know private real estate law as well.

June 4, 2010

Real Estate – Don’t Overlook the Logo

Filed under: Real Estate — John @ 1:35 pm

Today real estate business has become one field where you can earn millions. However, strategy, planning and marketing are few things that are required to reach at the top of the real estate business. Marketing is sub part of planning and strategy but still plays a vital role in making your business venture a success. The brand, design and logo are the main things that come under marketing. Most of the people mix up the concept of logo and brand. Your brand is not your logo rather logo is the main constituent of branding. Logo just represents your company but it does not complete your brand. Customer service, the way you handle your business and many other things complete your brand. It doesn’t mean that you should ignore the logo of your real estate company. Logo is the identity of your company. Therefore, it is very much essential to get a great company logo so that you can maximize the impact of the presence of your company.

Every company has its own character and logo is one thing that provides character to your real estate company. Therefore, while selecting you should make sure the design of the logo is not inspired from any big brand. If your logo gives a feel of some other brand, people will definitely not rely on your firm. An ideal logo design for a real estate company must have creative, luxurious and relaxed feel but with a tinge of professionalism. Are you getting confused about the design of the logo while opening up a new real estate in Michigan? First of all you should consider in area real estate you want to target. For example, you want to excel in the field of property management; you can take reference from reputed Michigan Property Management firms. Clients know the reputed companies just by their logos like Nike, Reebok, target and Wal-Mart. But make sure you are copying nothing from the logos of these big brands as your new inspired logo will not do any good for your rather will market the existing brand indirectly.

If you research in the market and check the logos of the property management firms, most of the logos do not have appeal and they don’t give you a feel of reliability, sustainability and stability. So, your research will let you create a logo that would not only show professionalism but high quality as well. These days, real estate investors and renters do not want to face the hassle of searching for properties in the physical market therefore; internet has become a great place to search for good properties. So, you can make a website that compliments you company logo in best possible way and the design and theme of the website will provide a depth to the logo.

June 1, 2010

What You should Ask before Hiring Property Management Firm

Filed under: Property Management — John @ 2:14 pm

Have you invested in California real estate? You must have plans for spending hefty amount of money you are going to earning for the property. But before earning money, you should first spend it. It’s understood that you have already spend a lot in buying the property however, if you want to earn form it, you must seek professional help that doesn’t come cheap. So, start looking for reputed property management company who can manage your property and help you to grow in the field of real estate. Ask for some references from your friends and relatives. It will help you in getting a reliable firm. You will come across names while searching for good California property management firm. Shortlist what you think will be able to manage your property and than go for face to face meeting or interview. But what you should check and what questions you would need to ask from the representative of the firm. If you are blank, read on…

First thing that you should check while hiring a property management firm: whether the firm dedicated management department or not. There are property management companies in the market that claim to provide you every kind of assistance related to property management however, managing property is not their specialty rather it is just a sideline business for them. Ask the plan of action to manage your kind of property and which expert is going to look after it. There are mainly two kinds of property management companies, first is selling real estate and second is managing real estate. In most of the cases director or owner of the company is involved with sales department as it is the main source of revenue for the company. But if director is also looking after property management department as well, employees would take it more seriously. Therefore, you should pick the company whose director or owner is involved in the property management area.

You should personally meet the manager who is going to look after your property. Check for how he/she is into the business and how many he/she has managed. Take a closer look of his/her profile and check from last how many years he is working with the same company. It will help you in check the stability which is very much required to build professional relationship with the tenants. Once you have gone through the manager’s profile, it’s time to check the work ethics of the company. In other words, you would need to check how he/she would manage the property. Property inspections are required in the process of managing a property. However, if it happening every month or so it will become a point of concern for tenants which in turn might make you loose your business.

« Newer Posts — Older Posts »

Powered by WordPress