Real Estate Articles

The internet has arguably not had a more significant impact on any industry more so then real estate. It has effectively changed the way prospective home buyers find the property they ultimately purchase.

Here is the most compelling statistic to support my argument - according to the National Association of Realtors (NAR) 70% of home purchasers found the home/property that they ultimately purchased on the internet “BEFORE” they hired a Realtor. Prior to the internet individuals looking to purchase a new home had to go to a Realtor and outline their requirements (price, bedrooms, bathrooms, region, etc) and then have the Realtor go through the MLS to find suitable properties that matched your requirements. The realtor would then present his/her findings and set up appointments to view. Today prospective buyers have access to that same information and can use web based products like Google Earth to zoom in and view aerial photos of homes and neighborhoods. They can also go online and get free appraisals or access real estate comparables and see exactly how much the house down the street sold for. They can also shop for mortgages and compare rates. City data sites provide demographics, rate school systems and provide community features for virtually all cities and towns across America. And the best part, it is all free and readily accessible at their fingertips!

While there are many websites that offer access to real estate listings according to Hitwise (an internet monitor which collects data directly from ISP networks) here are the top 10 real estate websites:

1. realtor.com (most active site in world with 350 million page views/month)

2. realtytrac.com

3. homegain.com

4. rent.com

5. remax.com

6. realestate.yahoo.com

7. zillow.com

8. apartments.com

9. ziprealty.com

10. move.com

Realtor.com, the official site of the National Association of Realtors, is far and away the No. 1 ranked real estate website with a 8.8% market share. According to the USA Today traffic on real estate websites jumped 8% in 2005 - double the growth rate of Internet traffic overall.

The internet has effectively leveled the playing field - homebuyers simply do not need a Realtor as much as they used to, this fact ultimately puts pressure on Realtors to justify their commission rates. Supporting this outlook is the fact that real estate commissions have dropped to an average of 5.1%, down from the long-standing 6%, according to Real Trends.

As in any industry the less you do, the less you are paid, why should Realtors be any different? The curious thing is that as home prices go up so do commissions - unless of course you engage a “Discount” real estate broker. These brokers recognize their reduced role and workload and simply offer their services at a reduced rate. But don’t underestimate the powerful NAR lobby (remember they have 91 BILLION reasons to protect their industry). Realtors have helped “persuade” about a dozen states to pass laws limiting the ability of real estate agents to give rebates to home buyers or to offer a la carte services at low prices to home sellers. The Justice Department, in an effort to protect competition laws, has pressured some states to reverse plans to pass such laws.

In 1995, just 2% of home buyers used the Internet to look for a home. Last year, 77% of home shoppers went house-hunting online. Shockingly, again, according to the NAR, the average Realtor spent under $500 annually on the internet (advertising and development).

The rising dominance of the Internet comes at a pivotal point in the real estate market. The average home price dropped 6% this year. Home buyers and sellers, meantime, are seeking new ways to save money, and they’re finding them on the Internet. Armed with more information many home sellers are cutting out the real estate agent altogether and moving towards “For Sale by Owner” (FSBO). The biggest challenge for FSBO’s is the effective marketing of their property. While there are many (thousands) of websites that cater to FSBO’s the industry is extremely fragmented and there is no repository of properties that competes with Realtor.com or any of the other “Top 10″ real estate sites listed above. One option is Flat Fee MLS (http://ezinearticles.com/?Flat-Fee-MLS&id=548210). With Flat Fee MLS a Realtor essentially agrees to list a FSBO property on the MLS for a “Flat Fee” as opposed to a commission. The service is barebones and the Realtor that lists the property does not provide any services beyond putting the property on the MLS. It does however expose the typically marketing challenged FSBO to a Realtors most effective marketing/sales tool for a minimal fee (usually $399 - $699). Another option is to simply list your property on Realtor.com (my preference - I will explain why in another article).

While the way individuals “look” for property has changed, the way they purchase hasn’t - 81% of home buyers that utilized the Internet to look for a home still engaged a real estate agent to buy.

The fact is the internet has drastically eroded the value of traditional real estate agents. Ask yourself this question - Is putting a sign on your property, listing the property on MLS and then spending the next 3 months convincing you to lower your asking price worth 3%? Is “showing” a house worth 3% of the asking price? Am I being too harsh - maybe. I understand that Realtors provide a level of expertise and more often then not “deliver” the purchaser to your doorstep, but if you look at the process of getting there the purchaser is clearly doing most of the climbing, a Realtor simply opens the door after their journey.

Every Sunday evening we have a group discussion with Realtors from different parts of the state of Florida. It’s our belief that knowing an area helps all of us in understanding market trends.

The topic of conversation last night was “Agents leaving the business”.

We discussed last night about a significant amount of agents that recently left the business.The numbers are staggering! It seems that 600 agents dropped out one board in North Florida, and i’m positive more will follow.

In South Florida the numbers of Agents leaving the market has increased as well.

There seems to be a drop in people who are attending Real Estate schools as well, although some now turn to the net for Real Estate courses the amount of people seeking a Real Estate license has definitely decreased.

Is this an opportunity to capitalize or should you start wondering what do do next?

I guess we as Professionals can look at this in two ways. Those who are able to ride out the current Real Estate market will have a huge advantage over others when the market returns. With the current drop in sales, Realtors and other people who are related to the industry will be seeking alternatives to supplement their income.

Many will become part time agents,some will just “park” a license,until the smoke clears.

Much like the Internet Stock Market Gold Rush that transpired 7 years ago, I believe we`re witnessing many agents who decided they could strike gold by obtaining a license! They`re moving on now because they can`t afford to stay in our profession.The gold rush is over for these folks!

I like to believe that many people came into our profession seeking a “quick buck” without the understanding that it takes time to grow a business. It seems that so many forgot the steps of building a business.

As the market evolves what are many of you doing differently than you were last year? How has the market changed your strategy? How do you handle your clients today versus last year?

No Out-Of-Pocket Cash. The most successful real estate investors are the ones who have conquered the art of creative financing. They seldom if ever use their own out-of-pocket cash. One of the best methods of creative financing is finding private lenders (also referred to as “private money”).

This is funding that comes from a private source such as friends or family members. It could be a business acquaintance, or a professional such as your physician, accountant, attorney, or even your eye doctor.

If you are in a position where you have no capital and perhaps a less-than-stellar credit rating, it may be difficult for you to believe that people are out there ready to hand money over to you, but it’s true. They are out there and they would very much like to hear from you.

Private lenders are people who have money in low-return investments such as an IRA, Certificates of Deposit (CDs), or perhaps even low-yield mutual funds. If you come to such a person with a strong deal which could net them a higher percentage than they are now getting - and receive it quicker - most will say yes. And furthermore, they will say yes repeatedly. This means you can borrow 100% of your purchase price including the repair costs and closing costs. You need never use your own capital.

Create the Deal First

Those who are new to real estate investing think they need the money before negotiating a deal. However, the opposite will be true in this case. What better way to convince a private lender than to have a deal right in your hands.

The details your investor will need to know are such items as:

o Anticipated sale price

o Purchase price

o Repair costs

o Holding costs

o Selling costs

o Total loan

o Loan to value

o Profit potential

The more information you can present, the better the private lender can make an informed decision. Having the information in hand also means you can present it to more than one lender. In other words, you can “shop” your deal. If this is your first deal, it’s best to begin with lesser amounts. Once you earn the lender’s trust, then advance to the higher priced deals.

When you find a willing private lender, make sure that the money is readily available. There’s nothing worse than coming down to the closing day and find that he or she needs two or three more days to get the money in hand.

How Much To Pay?

The standard going rate for such funding is around 15% and some will charge points as well. (Be sure to avoid any type of pre-payment penalty.) Loan to value (LTV) will range between 65% and 75%.

Some of your loans will be for a very short time - a few days perhaps. Others may stretch into two or three years. It is usually the older lenders who are patient and would rather see their money multiplying over a longer period of time.

Finding Your Lenders

If you have difficulty finding an individual who fits these qualifications, try an ad in your local newspaper seeking private money. Detail how much is needed and the approximate return. You may be surprised at the responses you receive.

In addition to newspaper ads, ask real estate agents, title or escrow officers, and even other investors in your area. There are people with money “for hire” who would love to have a client like you who would repeatedly borrow funds. If their money is sitting idle, they are not happy!

After your reputation becomes more secure, you will have a number of private lenders who will work with you on most any deal. In fact, once you win their trust, they may not even need to see the details of the transaction. All they want to know is how much you need and for how long.

Once you begin to think creatively about financing your deals, you will have more leeway to make offers on bargain properties that would be impossible to transact with conventional lending sources. That’s pretty exciting.

There are a number of beautiful places you would like to visit or spend your vacations but, it is very difficult to build a new house or even renting an apartment would not help every time. However, you can land up in a good solution in the form of government foreclosure auctions as there you can find houses that come for cheap and are beautiful homes that could most possibly be your new vacation homes.

The foreclosure auctions are usually held by the government agencies or the banks with the purpose to release the foreclosed properties. The foreclosed properties held for sale in the foreclosure auctions are those distressed properties which are acquired by the government agencies, the banks or other financial institutions for the reason that the owners of these houses have failed to pay back the mortgage amount or the due amount of credit. Therefore, these repossessed properties held in the foreclosure auctions are readily available and on a far lower price than the market price of a normal house.

This is so because of the fact that the banks are liable to pay the taxes on these foreclosed properties and in order to get rid of the burden of paying taxes they usually sell off the properties on prices below the market value.

Owing to their incredible low prices, there are large numbers of bidders in the foreclosure auctions as they can get a beautiful house for half its actual price. For this reason, the foreclosed properties are much in demand among the average home owners, the real estate agents and invest savvy people. Also, because the foreclosure auctions holding the foreclosed properties for sale have become the most essential step of recovering the lost money, the government agencies are actually liable to provide the accurate information regarding the property one is bidding for. Hence, to an extent this assures you of the authenticity and quality of the house or other property you are buying from these foreclosure auctions.

However, before you decide to buy your new house from the foreclosure auctions, you must keep certain important things in mind. First and foremost, you should make sure an adequate inspection of the foreclosed house you want to buy as there may be many facts about it that you may not be aware of. It may happen that the previous owners are still residing in the house or there may be some reparation needed to be done for which you will have to pay from your pocket once you have bought the home. So, it would be better and in your interest if you negotiate the terms and additional costs of any repairs before you finalize the deal and hand over your money.

Apart from all this, you can easily find the list of these foreclosure properties held for sale in the foreclosure auctions online. You just need to browse through the foreclosure auctions list online and locate your desired house and register it there itself. This will save your precious time and energy from being wasted in searching for them outside so, the house of your dreams is just a few keystrokes away from you.

Home equity loans are for home owners to use at their own discretion. There is no control over the spending of the loan. These loans are secured against the home which makes it easy to qualify for one. The lenders are secure in the knowledge that they will not lose their money if you did not pay off the loan in full. They will be able to sell your home out under you to retrieve their money.

The equity is the difference between what the home owner owes on his home and the value of the home. Home owners may access the cash in their home loans as often as they like as long as the previous loan has successfully been paid off.

Home owners often make use of this loan to pay tuition fees for their children’s college or university education. Education is very expensive and in order to give your children the best it is worthwhile paying off a loan to do this.

When you shop around at the banks and money lending agencies for interest rates on the loans be sure to check online as well. Many money lenders only advertise online and their rates are normally very competitive. By getting the lowest interest rates possible you will be saving yourself a lot of money during the life time of the loan. This makes shopping around for prices worthwhile. It is always a good idea to first count the cost of a loan before you apply for one.

Knowing what is Section 8 can open your United States rental properties to a larger pool of potential tenants, slash your turnover rates by introducing longer term tenants and allow to enjoy earning stable rent checks straight from the government. We will explain what is Section 8 and what you need to do to qualify for this program as a landlord.

What Exactly is the Section 8 Housing Program?

Section 8 is a federal housing voucher program in the United States. It was started in 1974 as a way to help people with modest means afford their housing needs. Unlike most types of subsidized housing, Section 8 provides its members with more choices when it comes to their rental home.

As long as a rental property meets certain basic requirements and the landlord is willing to accept a Section 8 voucher, a tenant is free to choose his own place to stay.

The way the program works is that a tenant will receive a voucher to pay for a portion of his rent. In general the occupant must pay 30 to 40% of the rent amount. The rest is paid by the government in the form of a voucher, hence the term Housing Choice Voucher. The tenants’ eligibility for the program is reviewed every year.

How to Screen and Handle Your Section 8 Tenants

When asking the question, “What is Section 8?” many property owners are concerned with what type of tenants they will meet from this program. While Section 8 tenants do have a lower income, this does not mean that they will make poor tenants.

You will encounter a wide variety of people, just as you would when screening conventional tenants. The bottom line is that you should screen all your tenants carefully whether they are from Section 8 or not. It’s important not to make assumptions about a potential tenant based on their Section 8 status; treat them as you would any other potential tenant.

How You Can Become a Section 8 Landlord Today

It’s easy to become a Section 8 landlord. There are no formal steps required. Once you screen your tenant, you will need to have your rental property inspected by the housing authority to ensure that it passes Section 8 housing standards.

The certifying agency will also verify that the rent you are asking is reasonable when compared with similar units in the area. Once the inspection is complete, you’ll finalize the paperwork and agree to a few simple terms set by the housing authority in your area.

Some landlords only realise what is Section 8 when they are approached unexpectedly by a prospective tenant who is from the Section 8 program.

However, you don’t have to wait for Section 8 tenants to find you. Simply get in touch with the public housing authority in your area and tell them to you wish to make your rental property available to Section 8 tenants. You can also indicate in your advertisements that you are willing to accept Section 8 vouchers.

Landlords and property owners have to contend with a number of issues, risks, and problems when renting out an apartment or a land, for instance. Of course, there are laws that supposedly protect owners from dubious entities who practice rental fraud. But unfortunately, these laws do not work much to their advantage, as the frauds can already get their way around these roadblocks to their criminal intent. This is, now more than ever, it is essential for a landlord or a property owner to secure a tenant report.

A tenant report can serve as anyone’s insurance against fraudulent individuals. Once a landlord hands the key to a property, it will be very difficult to get it back; the contract that should serve the landlord as protection could work to the tenant’s advantage, instead even if he or she is not adhering to it. Therefore, a landlord should do the extra precautions by securing a tenant report.

Many would be skeptical with this practice, since this is a relatively new process, but here are some problems and risks that landlords have to contend with, and how a tenant report can eradicate these risks.

Asking for referrals from previous landlords is a common practice when assessing potential tenants. Unfortunately, unless the landlord plans to do actual work on this assessment, there is no way to find out whether the potential tenant is lying about the information he or she will give the landlord about his or her previous landlord. For instance, he can simply give the contact number of a friend-and (especially if the dubious tenant is prepared) the landlord will have no way of knowing. A tenant report can remedy this potential risk; a tenant report contains information regarding a potential tenant’s past addresses. With this, a landlord can verify the information given to him.

In connection with previous items, landlords do not have some sort of networking system in order to verify and inform each other of fraudulent individuals. Adding risk to this lack of system is the landlord’s intent to remove any fraudulent tenants from his property. Therefore, he usually gives favorable referrals for these frauds-even if they do not deserve it-just so they can move to another property. A tenant report can do what a referral can’t-tell the truth about a tenant’s history and capacity.

Landlords usually do not entertain individuals without jobs, assets, or forwarding addresses. Yet, anyone can easily provide false information regarding these areas, as well as provide false evidence of employment, assets, and addresses (for instance, one can easily get fraud employment certificates online). Again, a tenant report can inform a landlord regarding these areas-and he can be certain that the information in the tenant report is true and accurate.

Unfortunately, landlords and property owners will have a difficult time making fraudulent tenants liable for their actions. Non-payment for rental properties cannot be considered as a criminal act if the landlord cannot prove the tenant’s criminal intent-which can be difficult. So why should anyone put themselves into this much trouble when it can be avoided with a tenant report anyway?

There are no doc HELOC loans and no doc equity loans that are perfect for special situations that have trouble verifying their income. These type of mortgages will not require you to submit a huge stack of documents to prove anything. This is one of the parts of the mortgage process that can be very frustrating.

Many of those that are looking for a good refinance like no documentation equity loans and HELOC loans because they make the mortgage process faster for them. These loans also can be called stated income loans, which will allow you to state a specific amount as your monthly income and the loan company will not verify this number with tax forms or paycheck stubs.

Loan companies all offer different products, but they are usually very similar. There are companies that are in business to deal with those that don’t have the best of credit and there are some that deal with only good credit. You can even use a broker, which will give you access to many different types of companies through one broker.

Finding the right lender to give you the no doc, no income verification mortgage loan you want can be a bit difficult. You need to start with a quote from a broker and quotes from at least three mortgage companies. This should be free and if they try to charge you, then you need to avoid that company.

You should shop your rate, the loan to value, and the fees from one to another companies. Once you have found your lowest quote let the other companies know what deal you are getting and they might match or beat that quote. Then, you need to go with the mortgage company that has the best deal and gives you the best customer service for your no doc HELOC loan or no doc equity loan.

Thus, choosing your moving company is something that can provide a great relief or further problems.

Resorting to a moving company is not the only action you can take. It all depends on the amount of things you have and the distance that separates one property from the other. You may be able to move most of your things by yourself or maybe all with the aid of some friends or family members. But take into consideration the fact that some furniture and appliances are fragile and should better be handled by professionals.

Costs And Alternatives

Hiring a moving company can be expensive. If you have to move especially delicate things like a piano for example, you may even have to hire the services of exclusive moving companies that will charge significantly higher amounts. You can shop around and compare prices but bear in mind that sometimes what is too cheap turns out expensive and the company will be transporting all your belongings which you surely consider valuable in more than one sense.

As explained above, the cost of hiring a moving company will vary according to the amount of things that you need to transport from one property to the other but mainly on the distance that separates both properties. If the type of things you need to move would allow you to transport them yourself provided that you had the transport means, hiring a moving company may not be your only possible solution.

It is also possible to rent a truck or a van where you can (with the aid of friends or relatives) carefully load all your belongings and transport them from your current residence to your new home. Bear in mind though, that you’ll need to fasten and secure everything so nothing gets damaged during the carrying. Using a proper cushion wrapping to reduce the risk of damage is an excellent idea.

Financing: The Simple Solution

Though moving companies can be expensive, you may decide that they are the best choice for you. If that’s the case, the good news is that you can obtain finance to move your belongings. Some moving companies will agree to provide several installments to finance the fees. Even if that’s not the case, you can still resort to other forms of financing in order to obtain the funds to pay the fees altogether.

You have mainly two alternatives: you can pay with credit card and use the ability to finance the balance on your credit card so you can pay as much as possible every month. Or (and this is my preferred solution), take a personal unsecured loan to pay for the whole fees and then repay the loan in the small resulting installments. This last alternative is probably the cheapest one because the interest rates on personal loans are considerably lower than the ones charged by credit card financing.

Green initiatives are a driving force in the Obama Administration’s economic plans. The $787 billion American Recovery and Reinvestment Act is expected to create 3.5 million green economy jobs over the next two years. While federal agencies like the Environmental Protection Agency (EPA) and the General Services Administration (GSA) have increased budgets and revitalized green mandates to power the Administration’s sustainable agenda, there are signs that the private side is getting on board.

With increased public and private commitments to green initiatives, awareness of sustainable design polices and practices have become paramount to the success of the green movement. Since the emergence of the green movement, sustainable design has remained a random compilation of national policy interspersed with local applications.

The Obama Administration is applying standardized third-party sustainable fundamentals to federal projects and carrying those fundamentals to state and local levels. Effective sustainable design addresses three basic concepts:

·         The reduction of negative factors on the environment

·         The reduction of negative health and comfort factors upon building occupants

·         The increase of building efficiency and performance

Like all federal agencies, the GSA is determined to minimize the bottom-line impact during the implementation of sustainable design for all the agency’s projects. In the past, the private sector has been wary of the cost of green design and construction. GSA maintains that increased construction costs related to effective sustainable design are more than offset by the reduction in operating costs and specifically in reduced energy and waste costs.

To achieve cost-effective sustainable design, the federal government has set forth a six-step process that the Obama Administration hopes the private sector will utilize.

·         Site selection and preparation

·         Utilization of building operating systems that minimize the use of non-renewable products

·         Insistence on the use of sustainable building products

·         Address the preservation and conservation of water

·         Improve the building interior environment to the benefit of the occupants

·         Implement environmentally responsible operational and maintenance practices

Accordingly, the GSA has received a $5.5 billion budget allocation for green projects. The EPA has finally received supplements to its dwindling budget. The Agency’s budget was trimmed each of the past 8 years, resulting in a 27% cumulative decrease. 

The new $10.5 billion budget includes a $3.9 billion allocation for improvements to the country’s water infrastructure. Specifically, the agency will address 1000 clean water projects and 700 drinking water initiatives ranging from, San Francisco to Chesapeake Bay and including major projects in The Great Lakes and Lake Champlain.

The acknowledged universal and primary consideration in sustainable design has become the carbon footprint. The recognition of the carbon impact offers sustainable designers tangible criteria upon which every product, every building and every green initiative can be evaluated and promoted. In fact, the future of sustainable design and the development of carbon regulation will not only drive sustainable design but will unify the private and public sector’s sustainable focus.