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August 27, 2010

How to Price Your Property?

Filed under: Business — Tags: , — devianty @ 8:57 am

A house properly priced is half sold.
But there are plenty of ways to price it improperly..

* You can’t go by what you paid for the place. Perhaps you bought two years ago when local prices were skyrocketing, and things have cooled off since. Perhaps houses like yours can now be bought for less, and if you hold out for what you paid, you’ll just waste your time..

On the other hand, perhaps prices in your area have taken off, and you’d short-change yourself if you just tried to “get my money out” (but you’d have a fast sale.).

* You can’t go by how much you’ve spent on improvements. A given street will support only a given price range. If you’ve invested so much that yours would be the most expensive house on the street, the buying public is not likely to reimburse you..

* You can’t go by your tax assessment figure. Even in communities that aim at full-value assessments, the figures are almost never in line with what buyers are currently ready to pay..

So how do you price your house?.
By putting yourself in a buyer’s shoes..
What else is for sale in the area? How does it compare with your house? How long has it been on the market? What has sold recently, and how much did the buying public value it at? What has failed to sell in the past year?.

Any good broker can furnish the data you need, often in the form of a chart known as a CMA, Comparative Market Analysis. .

And once you have it, again think like a buyer. What price would it take for you to look at a list and say to an agent “Take me to see that one”?.

Ajay Pats is a professional manager.He manages real estate broking site “Real estate broker”(http://realestatebroker.nexuswebs.net/realestatebroker/index.html ),community for home based business entrepreneurs “Venturecon/Home business opportunities” (http://groups.msn.com/venturecon ) and inspirational ezine “Discover secrets of happy and prosperous life ” (http://www.topica.com/lists/venturemall ).

August 26, 2010

Why Should Sellers Be Absent During Showings?

Filed under: Business — Tags: , — charlesggeorge @ 8:56 am

If only there were a way to sell your home without letting all those people come through. Unfortunately, the reality is that homes must be shown in order to be sold. Also, few buyers commit to purchasing a home without first spending some time there. Some buyers need to spend a lot of time in a home before they decide to buy it.

Most experienced agents recommend that sellers vacate their home when it’s shown to prospective buyers. This is usually inconvenient for sellers, but there are reasons why it’s best for sellers to be gone when their home is shown.

Ambivalence, or the approach-avoidance syndrome, is a major theme in many home buying sagas. Here’s how the scenario often plays out: A great listing comes on the market. A buyer sees it, falls in love with it and seriously considers buying it. Then the buyer get nervous about making a commitment, has second thoughts, decides against it and moves on to other listings.

Before deciding to buy a home, buyers often must go through the process of picking the place apart. They need to look in every closet, nook and cranny. They need to discover everything they don’t like about a home before they can make a decision to go ahead and buy it.

Most buyers won’t scrutinize a home in the presence of the sellers. Buyers are often too embarrassed to look inside closets if the sellers are home. They may hate your green carpet, but they’ll smile and tell you how much they love your place if you are there.

Accomplished agents can help buyers get past their objections to a home. But to do this agents need to have the opportunity to analyze the home with the buyers in private–outside of the seller’s ear-shot. Green carpet can be changed. It may even cover beautiful hardwood floors.

It’s natural for sellers to want to know what buyers think about their home. You probably won’t get a straight answer from the buyers themselves. Nor is it appropriate to call the buyers’ agent and ask him or her for feedback.

Your own agent should follow-up on each and every showing of your home and report back to you with feedback from the buyers. Often useful information can be gleaned from your agent’s follow-ups. You may discover a common complaint, and it may be something that you can remedy. For example, if every buyer that looks at your home likes it but can’t stand the green carpet, you have the option of changing the carpet if the home isn’t selling.

Not all agents routinely follow-up on showings and report back to their sellers. Let your agent know that this is something you expect as part of your marketing plan. Also, don’t blame your agent if the reports are not 100 percent positive.

First-Time Tip: Some sellers never leave when their home is shown. This may be due to the sellers’ natural curiosity, or perhaps their agent didn’t counsel them properly. If you are going back to see a home you’re interested in, and the sellers have always been home, have your agent request that the sellers leave this time. This will give you the opportunity to evaluate the home without being inhibited by the sellers’ presence.

The Closing: Sellers who can’t leave during a showing should make themselves scarce. Sit in the garden, or hide-out in your home office. Greet the buyers courteously, then disappear. Under no circumstances should you follow the buyers around your home, hovering while they look.

For More Information on Selling your home quickly visit http://www.webuyhouseshome.com Unlike other so called We Buy Houses websites, Rescue Real Estate gives you every available option for selling your home. Simply complete our short 1 page form, and get anonymous online access to our team of specially trained REALTORS®. Then, in as little as 48 hours, you will begin to receive offers to purchase your home from our nationwide network of real estate investors. Click Here to sell your home quickly and compare agents.

August 25, 2010

Protective Covenants ? Buying A Home

Filed under: Business — Tags: , — akki440 @ 8:59 am

In addition to zoning, some properties have covenants recorded at the courthouse that "run with the land." These "protective covenants" can put a serious pinch in your plans for a piece of property.

Protective Covenants

A protective covenant remains in effect as the property is sold from owner to owner. The covenants are designed to maintain a certain aspect of the area in question. The covenants may require a particular architectural style or use for the land to mention only a few areas of restriction.

Land in a scenic area may have a protective covenant that prevents certain types of development for the land or properties on it. Importantly, these restrictions may not show up in the zoning laws, so make sure you research the issues before buying. Let’s consider an example of a great buy gone wrong because of a protective covenant.

A protective covenant may restrict the number of parcels into which the property can be subdivided. Thus, you could find yourself in a situation in which you buy a one hundred acre parcel with an eye toward subdividing it. Upon researching the issues, you discover the zoning laws allow the parcel to be cut into quarter acre lots. Visions of profit swirl before your eyes. Your development dreams, however, could turn to nightmares if there is a protective covenant.

Assume you go ahead and purchase the parcel. While showing it to a friend, a neighbor from down the road walks up and introduces himself. You excitedly explain you plans for subdividing only to be shocked when he tells you there is a protective covenant that prevents the creation of any lots under ten acres. What if the covenant restricts ANY subdividing of the parcels? That great deal you got on the parcel may not look so hot when the protective covenant is factored in.

So, how should you deal with protective covenants? First, you should ask the seller whether any exists for the property. Second, make sure you buy title insurance as the title company will certainly look for any protective covenants before issuing a policy.

Raynor James is with http://www.fsboamerica.org – providing homes for sale by owner, “FSBO”, properties. Are you thinking, “Should I sell my home?” Visit http://www.fsboamerica.org/seller.cfm to sell your home sale for free for one month.

August 24, 2010

Real Estate Investment – One Simple Formula

Filed under: Business — Tags: , — bersahaje @ 5:58 pm

I saw the ads in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. It might be a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.

A friend started doing the same thing and explained the process to me. It was a way to get a great return on capital. It was the opposite of buying with no money down. You bought for cash.

A Real Estate Investment Formula

It is simple, really. When you buy for cash, you often get a much better price. A house that needs a little work might be worth $75,000, for example. By offering $65,000 cash, you negotiate your way to a $68,000 purchase price. If not, you walk away – there are always others.

Then you put few thousand into high-return repairs and improvements. Paint, carpet, and maybe asphalt for the dirt driveway. For our example, we’ll say you put $5,000 into it.

Now it’s worth $85,000 perhaps, but you target those who can’t get financing easily, and you finance it yourself. By making it easy for the buyer, you can get $90,000 for the home – and do it without a realtor’s commission. Whatever the sales price, you let the buyer put 5% down, and make monthly payments of 1% of the purchase price. Of course, you get higher than market interest too.

The buyer is thrilled that they can buy instead of renting, and you get a capital gain of perhaps $14,000 after expenses, plus good interest. Your total rate of return is somewhere over 25%!

The first to do this cosistently in our town were a father and son. They were both lawyers, and saved money by doing their own foreclosures when necessary. After forclosing, they just raised the price and sold it all over again, of course. By the way, if you can get an average return of 18% on your money, you’ll turn $75,000 into more than one million dollars in about fifteen years.

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

August 23, 2010

Secrets of Making Money from Real Estate – Part 4

Filed under: Business — Tags: , — smnoor88 @ 5:58 pm

Analyzing and finding the right property deals:

Firstly read my other article on how to Buy the property at a discount, this will cover the basics on how to buy property at a lower than market value price. This is very important because It can completely change the aspects and financing the deal. It is also good to have more equity than just your deposit on the house because you have created instant wealth and because now you will have more equity compared to debt than what the bank had planned the loan for, enabling you to take out bigger and more loans faster. You will also be able to borrow money against your home to help you finance the property 100% if needed.

So aside from buying the rental property below market value you need to look at several other factors. Like the income from rent, interest rates and amount borrowed, expected growth, possible improvements, and other expenses.

Rent can be found from asking people who live in the area, real estate agents, and by property management companies.

Growth can be found from finding previous valuations of the property usually done by the government department in charge of housing, varies from country to country. If you can see how much the property increases by value from year to year you can usually get a good indication of what the capital gains percentage is.

Expenses will consist of insurance for the property, interest payments on the mortgage, any taxes you may have to pay, unexpected repairs such as a toilet breaking, property management fees, closing costs for when you purchase the property and maintenance fees such as electricity (can be passed on to tenant).

Renovation can be used to increase equity and weekly rent. Look here to for some good home improvement ideas. This is important because if you can increase weekly rent the figures will change.

Lets look at this example You find a motivated seller selling a three bedroom/two bathroom property. Because the seller is going overseas and needs the money quickly he is trying to sell it for a negotiable price over $140,000. You now get an independent evaluation which deems the property to be worth $155,000. You go and find out how much the value of the property has increased over the years. You also look into what new buildings such as malls are being built in the area which might increase the value of nearby properties. However You determine capital growth is a minimal 5%. You now find out what the median rent for a three bedroom/two bathroom property in the area of the property. You find out that its $220 per week. You now make an offer on the property for $125,000. The seller does not except. Three weeks later the seller is overseas and counter offers $130,000. Before accepting you go to several banks and find the best deal you can get is 80% financing with 6% interest. The mortgage will be for $104,000 with a down payment of $26,000. The yearly interest only payment will be $104,000*0.06 = $6240 You then establish your other costs such as insurance which is $500 per year, the property taxes which are $1,200 a per year, the cost a property manager $1,300 per year. You do your calculating to find out the cash flow of the property. The income will be $220 per week which is $11,440 per year. Your expenses which are $500 + $1,200 + $1,300 + $6,240 = $9240. $11,400 – $9240 = Positive cash flow per year of $2,200, excluding any possible tax advantages you may receive! The positive cash flow will be enough to cover any unexpected repairs, the fees of solicitors for the closing cost, and any vacancy costs. Realizing how good the figures are, you accept the sellers offer. You then paint and remodel the kitchen, a job worth $15,000. You get the property revaluated to see its now worth $170,000. You have increased your equity by $40,000. Because the property’s value has increased you can now charge more rent to your tenants. The new rent is $265 per week. This will increase your positive yearly cash flow to $4,540!

The key now is…Don’t get emotional:

I’m sure you noticed how every figure in the previous paragraph is in bold. This is because as long as the figures work out to make you money, EMOTIONS DON’T MATTER ONE BIT! Just because the property has a really nice garden, do not show you think that and be willing to pay extra for it. You aren’t going to be living in the house so do not buy a house which you want to live up your living expectations. You will also loose your negotiating edge when getting emotional.

One of the worst times to show your emotions is if you are trying to buy the property at an auction. Auctions are designed to put pressure on the buyers. Never go above your limit because of a quick emotional decision, this could lead to huge financial disasters. Also, with auctions don’t bid at all until you are very close to the “Third and final call”.

Settling and contracts:

The two most important things when it comes to writing a contract or sales and purchase agreement are that you have someone with legal advise and experience in property help you write it (a solicitor), and that you always have a legal way out of a potentially bad deal.

If you are looking to put the property into an asset protection structure, a good idea is to write your contracts under “As nominee” instead of your real name. This will allow you to legally buy it and put it into the asset protection structure.

One of the best things about real estate is that the contracts you can enter can be very flexible if needed. Sales and purchase agreements can be drawn for such purposes as renovating or finding tenants. Say for example you could include clause saying that you have six months to work with the house before you pay the money, or one month to find a tenant before you pay for the house to prevent a loss in revenue.

Due diligence is a way for both parties, the buyer and seller, to get out of the deal. If you can word a due diligence period of a few days into the contract you would have a few days to review the property and if unsatisfied with what you purchased, get out of the deal.

Property manager or should you manage your own property?

Now is the time to decide if you would like to use a property manager. I always use one because I can not be bothered fixing a toilet or shower at three in the morning. Property managers will take care of almost everything for you so you have more time. Some will even find tenants for you. Property managers will usually charge a small commission percentage. Some people argue that you shouldn’t pay someone to manage your asset. I disagree because If you spend most of your time repairing and looking after one rental property, you will not have time to find new property deals.

If you choose to manage your own property take these few points into consideration: Be sure to review rent every six months because rent prices will usually go up. Finding the right tenants will require some sifting skills on your behalf. Be sure the tenant is reliable, honest, and can make the rent payments. Check up on their previous renting history with other landlords if possible. Can you handle the tenants? If you have to evict a tenant do you know the exact process you must abide by in your area? Can you keep account of all rental payments? You need to file tax and have a good record of what you are earning from a property, especially if you want to be illegible for tax breaks. Your time is your most important asset, do you want become tied up in just one rental property?

This article was written by John Whiteside. The original article can be found here http://www.use-your-equity.com/realestateinvesting.html . Use-Your-Equity can show you how to create value in your home, then show you how to use the newly created equity to make money. http://www.use-your-equity.com for more information.

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