There’s a fact that is worth considering: 80% of home buyers search online while researching for a real estate and that more than 95% of them are looking for local property agents. There’s been a multifold increase in Google searches in past 5 years pertaining to this sector. In other words, you can’t afford not to be visible locally as these are your real consumers thus, making it imperative to take advantage of powerful Google Places. Today businesses spend tremendous amount of resources in terms of time and dollars to gain marketing advancement on real estate website design, paid search and organic search strategies while, overlooking and often underestimating Google Places.Google Places was launched in 2009 as a free online yellow pages to facilitate businesses to create online office addresses in their native places of operation to be found on Google Maps. Using Google Places, businesses in a particular area will be ranked to appear in search results if the user is in the same general area searches for specific keywords. If a business has registered on Places with their relevant information, it will appear as a pointer when a relevant search query is entered in Google Maps.Following are the ways to use Google Places for your real estate business:Listing your Real Estate business: The initial step is to create your listing and presence on Google Places. This is fairly simple: Log on to Google Places with your Google account, submit pertinent information about your real estate business, facilitate the required documents to verify your business identity (like website, business card etc.), and then Google will take some time to review and approve your listing.Optimization of your listing: Content that you write while listing your business is an important aspect and must be dealt strategically. You have to make sure that you make it relevant and use appropriate keywords. This effort will come handy to improvise on the organic search rankings for your real estate business.Business Images: Images are very important aspect of a business listing as it adds to the business credibility, help business target right audience, gain interest of online browsers and make listing relevant. Therefore, wisely choose your business images with plenty of photographs and videos, describing your real estate business.Reviews Matter: As you are aware that positive customer experience and reviews is the best thing that can happen to any business and such experience can’t be generated only from your real estate website design. Clients usually build an opinion about a business online and hence customer reviews are a great way to promote your business. Your Google Places listing allows for your customers to write and post reviews to your space therefore, use this wisely to create a healthy environment for your real estate business.Small Things Matter: While setting up your listing, fill out the each minute detail including company phone number, business categories, hours of operation etc. Therefore, 100% completed profile gives you added advantage and goes a long way to complement your overall marketing campaign.
Whether you are buying your first home, or investing in your fifth investment property, you may be wondering if you need a real estate lawyer. First off, keep in mind that most real estate transactions cost at least $100,000.00 if not more, meaning they can easily be the largest investment of your lifetime.A realtor will be able to handle most parts of a real estate transaction on their own; however, they are not qualified to answer any questions or advise you on legal issues that arise. If you feel uncomfortable at any point in the process, or if you feel as if the person at the other end of the contract is avoiding your questions, it’s a good time to get a real estate attorney involved.An attorney will be able to perform a number of different functions, all of which will give you the confidence you need to either halt the estate transaction or proceed forward. Either way, with an attorney’s advice, you can proceed knowing that you are fully informed and your entire bases are covered. If you are a buyer an attorney can help you understand the purchase contract, including how title works.They can also check to make sure there aren’t any easements, liens or covenants registered against the property. They can prepare all legal documents, clarify the term of the mortgage and work with the bank where necessary, an attorney can arrange title insurance and they can attend the closing while closely reviewing any papers before you sign them.As a seller, your lawyer can review the binder and review the purchase or sale agreement, they can deal with any title issues as they arise and act fast to correct them, they can attend the closing and review any papers before you sign them, and they can arrange for transfer of security deposits among other functions.With intimate knowledge of the law, your attorney will be able to review your contracts and thoroughly examine every aspect of the transaction. Your attorney will be looking for any red flags that could potentially cost you money after the deal has closed. Truthfully, when you are dealing with such a large investment, having an attorney review the deal can save you a fortune in the long run by preventing any legal troubles before they begin. This is especially true if there are any IRS liens on the property or any other defects that you could be made financially liable for.
If you are like me, then you have an interest in real estate investment and want to do the right thing by educating yourself so that you can obtain your first real estate investment cheque. I have spent thousands of dollars over the years trying to find the company that would help me accomplish this goal. So what did I do? I watched various infomercials on the television with amazing testimonials of real estate investment success. I quickly found that once I registered to attend, my information was sold to various marketing companies, and I was in receipt of invitations to other investment opportunities that I didn’t even know about. Okay. Now I have sifted through all the invitations and I am on my way to a one-day seminar.For the most part, the information delivered is tantalizing and I am hungry for more knowledge and the opportunity to start working on my first deal. I also find that the information delivered in the one-day seminar is in bits – for a beginner investor, it is not enough material to be useful. But what do I hear? I now have to register for a weekend workshop to learn more. Full of excitement and determination, I pay the $1500 to $2500 cost for the workshop and off I go. Again, the information presented is titillating and at least one of the presented methods is immediately implementable. The other participants and I followed the instructions given, but no results – we could not find a property matching the given search criteria. Therefore, the audience was not taught what the next steps would have been had we done so. Still filled with hope, I took careful notes and listened intently for the remainder of the workshop. What’s this I hear? I can have advanced training if I want, a coach to work with me one-on-one, and the almost guarantee that I would make money at that level? What’s the cost? Oh, only between $10 000 to $100 000. This is where I hit the proverbial brick wall. Where was I to find all that money, and for some of the workshops, the money had to be paid the very weekend! The long and short of the model is this; one has to spend anywhere from $1500 to about $100 000 without even doing your first real estate deal! It didn’t make sense.Wait a minute. I now found that most of the real estate investors, who were calling themselves and each other gurus, were doing a massive on-line marketing campaign during the market’s downturn, only this time downplaying the ‘guru’ title. They were all offering one-on-one coaching. Why? No one was attending the conventions and workshops as before. The personal coaching idea sounded good. I decided to check out a few of them and tried one of them. I tell you the truth, because I was a rookie, I didn’t know what to ask for or what to expect from this coaching. As you can imagine, I did not get my money’s worth. By the way, the coaching was through e-mail and sometimes instant messaging only, at a cost of USD $1000 per month. Now, I could have allowed all these disappointments to derail my vision and cause me to be bitter. I refuse. Instead, I decided to use the experience to help others in similar situations make better decisions, spend less, and actually make money in real estate investment.The sum of it all is this: not having the right real estate investment education will cost you money and just as truly; obtaining the right real estate investment education will cost you money. However, obtaining the right education is an investment, not a liability. What should one look for in a real estate investment coach/coaching program? What questions should be asked? Here are a few to consider:• Before any money exchange hands, an outline should be provided to the student to ensure that both parties/sides understand what will be offered.• Costs should be clearly defined and explained.• Discuss funding. Will the coach/organization provide funding for your real estate deals? If not, will the coach/organization provide you with information that will allow you to access funding? What type of funding can you expect? Will it be transactional funding, hard money, private money, other?• Discuss if there will be or is there an option to partner on deals. Will the coach/organization put up the funding for the real estate deal while the student does the ‘ground’ work? If partnership is an option, discuss and agree on the split. Will it be a fifty-fifty split?• Discuss availability of the coach: Does the student have telephone, e-mail, and/or text access? What response time might the student expect? Does the student have to pay the fees for services like Skype or is it included in the coaching fee?• What are all the things included in the coaching fee?• If the coach is not available, is there a mentor or someone else that will be available?• Is this a stand-alone coach or is there a professional team available to the student? Is there a lawyer, accountant, contractor, et cetera that are a part of the team? If the coach is a one-man-band, then this might not be a good option for you.• Is there creative financing for property acquisition?• What are the payment options for the coaching costs? What are the financing terms?• How will the education be delivered? Will it be delivered through webinars, CDs, mp3′s, other? For how long does the student have access to the education?• How current are the strategies being taught? Is there proof?• Relative to the cost, how long is the coaching? How many hours of one-on-one coaching?• Will the student be provided with a virtual assistant?• What peripheral costs are entailed in the program? For example, LLC, websites, 800 numbers, et cetera. What other additional costs might the student expect to pay/cover?• What real estate investment qualifications does the coach have? If the coach is reticent to discuss this, then that might be a cue to not sign up with that particular coach/organization. Also, if the coach has a bad attitude, then you should reconsider using him/her.• Research the coach on-line. Look at reviews. Check out Facebook, MySpace, YouTube, LinkedIn, et cetera. Also use these sources to review his/her profile. Hint: If the coach has less than five hundred contacts in their profile, then that could be proof of inexperience.• What is the approximate turn-around time from the time the student signs up and follows all coaching instructions, to the time the student does his/her first deal?• How many hours per day/week is the student required to invest?• How are deals analyzed? Does the coach personally review them? How many exit strategies does the coach utilize per deal?• What is the coach’s real estate investment specialty: wholesaling, fix and flip, buy and hold, et cetera?• What real estate strategy are you expected to start with? Will this complement or go against your current financial situation?• How much money is the student expected to have on hand to do his/her first real estate deal?• If student does not make any money in say the first three months of the coaching, what is the next step? Will the current real estate investment strategy be changed or adjusted?• What guarantees does the coach/organization provide?• Is there a rescission period? What is it?• Can the student do the coaching with his/her spouse or business partner at no additional cost?With these points to consider, you should be well on your way to making the right decision as to your real estate investment education and coaching. I am sure that as you read through the points, they caused you to think of other questions that you might ask. Good.All in all, I am very thankful that I have finally found an organization that is indeed the complete package for real estate investment education and coaching – and the price is right! Working with a team of experienced real estate investors does make a difference in performance and results! For more information please visit www.sell-buy-or-rent-to-own.com.
A real estate sale is usually initiated by an offer from the buyer to the seller, written on a real estate contract form, and backed by a monetary deposit. If the seller accepts the offer, the buyer and the seller are bound by a legally binding contract. While the forms vary by locality, the essential terms include the offer amount, legal description, names of the parties, and date of closing. In addition to these terms, the contract interweaves numerous contingencies, disclosures of information, and procedures that dictate responsibilities of buyer and seller. The contract is the road map that takes you all the way through to closing. It is very important to understand its terms and follow them carefully. If it becomes necessary to terminate the contract, your close adherence to contract terms and procedures is critical.Loan ContingencyYour contract may contain a provision that the buyer must be approved for a specific mortgage loan and interest rate. If the mortgage cannot be obtained within the prescribed time, the buyer may terminate the contract and receive a refund of deposit. If it becomes necessary to terminate under this contingency, you should be prepared to document that you took prompt action to obtain the loan, received a written rejection, and gave notice to the seller within the time limit set by the contract.Termination based on credit disapproval is likely to cause anger and disappointment on the part of the seller. The seller may feel that he has been misled into signing a contract with an unqualified buyer. When anger and strong emotions enter into the transaction they may lead to difficulty in resolving the termination.Title and Survey ReviewContracts usually provide a title review period for the buyer. The buyer may object in writing to defects noted in the title documents. If title defects cannot be cured, you have the right to terminate.In the same vein, the buyer usually has the right to review a survey of the property. If construction is found to overlap building lines, or if there are encroachments on the property, you may choose to terminate your contract.
It is worthwhile to promptly consult an attorney if you have some concerns about the title documents or survey. Your objection to title or survey problems must be made in writing within the time frame allowed by the contract.Review of Seller’s DisclosureIn Texas, sellers (with some exceptions) are required by law to provide a seller’s disclosure notice to the buyer. On this form, the seller answers questions and provides information about the property. If the buyer receives the form after the contract has been created, he may terminate the contract within a certain number of days after receiving the seller’s disclosure. The receipt date of the disclosure should be documented in order to establish the start date of the review period. Be careful to avoid confusion about when a time period starts running.Mandatory HOA ReviewIn areas where there is a mandatory homeowners association, the Texas contract allows the buyer a period of time to review Subdivision Information. This information is normally supplied by the HOA manager after the contract is created. After receipt, the buyer has the right to review the documents, and possibly terminate the contract. Again, the termination notice must be given within the time limits in the contract.Inspection ContingencyContract procedures to allow the buyer to conduct inspections of the property vary from region to region. In some areas, the buyer may terminate if repairs exceed a pre-agreed dollar amount, and seller declines to make the additional repairs. In Texas, the buyer is allowed an “option period,” during which time he has the unrestricted right to terminate the contract. Inspections are done within the option period.Inspection issues are the most common reason for contract termination. During the inspection period, there is usually some re-negotiation of the price or terms in order to resolve repair issues that have been brought up by inspections. It is crucial to get inspections done, deliver repair requests, and negotiate contract amendments, or, if necessary, terminate the contract, all within the time guidelines set by the contract.Contingency for Sale of Other PropertyIn some cases the buyer may have a contingency for the sale of a certain property, usually the buyer’s current home. If this property does not close by a certain date, the buyer may have to terminate. As with other termination procedures, giving notice to the seller within the required time is critical. By allowing this type of contingency the seller has accepted the risk that the contract may not close.Lead Paint ContingencyFederal law requires that sellers of homes built prior to 1978 notify the buyer of any knowledge or inspections that they may have regarding lead paint. The buyers are allowed a period of time to review materials and conduct their own inspections. If lead paint is found, the buyer may terminate the contract within the prescribed time frame.We have touched on the most common termination clauses in standard real estate contracts in Texas. Contracts used in other states, or provided by builders for new homes, or written by an attorney for a particular transaction will vary greatly in the contingencies and terminations clauses included. In addition, there may be ways to terminate your particular contract, other than through contingency clauses.The important thing to remember is that the contract of sale is of primary importance to the real estate transaction. If you follow the terms of the contract and act within time limits, you may exercise the termination rights that the contract contains. If you fail to follow the terms, most contracts state that you have waived the right to terminate.After you have given the seller notice of termination, two closely related steps must follow: The parties must formally terminate the contract, and the earnest money deposit must be released. If the buyer and seller agree to the termination, their agreement is usually formalized by signing a termination form. In Texas we have an “earnest money release” form that handles both steps – it releases the parties from further obligations under the contract, and instructs the escrow company to give the deposit to one party or the other. It is usually in the best interest of all parties to resolve the earnest money and contract termination issues as soon as possible.If the buyer and seller cannot agree that the contract is terminated, the matter could lead to prolonged negotiation and possibly, litigation. In most cases, it is in the seller’s best interest to have formal termination of the contract, freeing him to put the property back on the market. However, occasionally, even when it is clear that the buyer has followed contract procedures, the seller may prolong the formal termination process. The seller may want to receive compensation from the buyer for the delay in selling the property. Buyer and seller may have conflicting points of view of the issue. The non- settlement of termination issues can result in additional time and money, and cause unwanted stress.Most buyers do not enter a real estate contract with the intention of terminating. However, buyers must not take for granted that all will go as expected. If a contingency date lapses, you will lose the benefit and protection of the contingency. A good Realtor, in addition to helping you find the property, can be invaluable in helping you to meet your obligations under the contract and, if necessary, exercise your right to terminate.Disclaimer: This article is provided as a service to the public. Nothing in this article is intended to serve as legal advice, or as a substitute for legal advice tailored to your specific situation and jurisdiction. If you have a question about an issue discussed in this article, you should consult an attorney directly.
If you are a real estate agent but so far have lack-luster results; chances are you could use some advice. Likewise this advice can be helpful if you are just beginning your career. Our tips could be the difference as to whether you make it or break it in your career no matter how long you’ve been on the job. So sit back and relax and read our article on this subject.One way you can accomplish this goal is to be more accessible on the Internet. In today’s world of marketing it is crucial to have a strong Internet presence. This applies to the real estate world too; including the agents. Whether you own your own business or simply have a lot of input with the boss; we would urge your company to have a website. This website ought to be easy to access and to use. Additionally you will want to have as much information on it as possible. Whenever you can, post pictures of the homes you are selling and/or of yourself. Accessibility is the key and these days that is best accomplished by being on the Internet.While we are discussing your Internet presence; let’s talk about the importance of Internet-accessible reviews for yourself and/or your company. Nowadays nobody will hire you without first seeing many positive reviews. Those reviews are typically found on your favorite search engines. While you do not want to have bad reviews on the Internet; it is inevitable that you will have at least a couple of them. If your bad reviews are excessive you will lose businesses. The key here is to do everything within your power to ensure you get at least a high percentage of good reviews. Those will offset any bad ones.Another suggestion we have is to know what you are talking about. Not only must you understand how to sell a home or commercial building; you must be able to navigate your client through the entire process. More than likely your client will not know a thing about real estate. Therefore it will be up to you to explain every step of the way to them.One final tip we have for you is that you should have a deep passion for real estate. If you do not; you should find a different career path. Clients will be able to tell if you truly love your work. In turn; that will prove to them that you care about them as a client, then you will get more clients. On the opposite end of the spectrum; if this is merely a job or a hobby for you, that will be apparent too. In that case clients will feel that you don’t care if you give them great service or not. Then you will lose them to real estate agents who do possess this passion. This is not necessarily something you are born with. It is frequently an acquired passion. However, it must be present if you want to succeed.
Would you sign your name to a multi-million-dollar contract for the company for which you work without an attorney first looking it over? Probably not, because it is your fiduciary responsibility to ensure there is no adverse language in the contract. Yet, we do it for ourselves all the time.Years ago when I enlisted into the U.S. Navy, several of us were in the same room to sign our enlistment contracts with the government of the United States. Afterwards, we would together go on to the next phase of the enlistment process. Everyone had signed their contracts without reading it and they were grumbling, because I would not sign my contract until I had read every word. The contract was many pages in length and lots of small print. After one guy was a bit too aggressive in his complaints of me making them wait, I quietly looked him straight in the eyes and said, “You signed your contract without reading it. Did you know that you have agreed to jump off the end of a naval ship into the ocean amidst a ring of fire?” The guy laughed and said the contract did not say that. The senior chief, who was supervising us and in the room, said the contract did say that. While everyone else went green in color and looking ready to throw up, I finished reading the contract. You could say that jumping into a ring of fire in the ocean from a very big naval vessel might be construed as “adverse language” in a contract.Signing purchase agreements for real estate is no different; yet, many people sign them every day without reading them, much less having an attorney review them.The average home will cost you a long-term commitment upwards of $135,000 — much more in the San Diego area. You are going into debt for a large amount of money over a long period of time. It is important to have a real estate attorney review such a contract, as it is for creating any other contract.A real estate attorney will tell you if the purchase is advisable, if it should be modified to protect you if the transaction goes bad, if it is legally binding as written, and whether there is any adverse language in it. You should be protected against any contingencies and possible outcomes.The services of a real estate attorney may cost $200 or more to review the contract. Though many realtors assist in this capacity, a real estate attorney is more knowledgeable and experienced, ensuring you get the best advice. That same real estate attorney can represent you in court, where the realtor can only shrug his/her shoulders and, maybe, offer an apology. Additionally, the real estate attorney can prepare all needed real estate documentation, including warranty deeds, title opinions, and documents to clear any title defects.There are times when having a real estate attorney review a contract could cost you the deal — you could be up against another buyer, who wants the same property and the seller will not wait for the review, which the other buyer is not requiring. In such a case, only sign the purchase agreement after adding the clause: “Subject to review and approval by attorney of buyer’s choosing.”Remember, once the contract is signed without a contingency clause, it is too late for redress. At that point, a real estate attorney can only advise you on what you have done and little else. The time to hire the real estate attorney is before you sign on the dotted line, not afterward.
If there’s one thing I think many people can attest to, it’s that plans often change. Throughout many of the online real estate forums, many people, including yours truly, have in one way or another, written down their plan of action! People do this to get other peoples reaction and approval. With any approval comes a sense of comfort and belonging. The problem is, most “plans” that people write down or post in forums, are simply…well, not good. They lack depth, focus and reality. I can remember my first “plan”. I posted it on a real estate forum. Then I proceeded to post about oh I’d say 10 others before I realized how silly it was for me to do this. It was silly because I completely did not understand what I was talking about.I would write things like, “I will: (1) File for LLC (2) open bank account (3) create business cards (4) blah (5) blah (6) blah.”People have all sorts of plans and ideas. Some of them can actually be really good. For instance, I read a recent posting where someone talked about how they planned to purchase foreclosures. They mentioned many factors that were impacting their decisions, demonstrated understanding of the risks involved, and had an actual step-by-step breakdown of the process, numbers, requirements, laws and time frames. They had identified a specific market with a specific investment strategy with contingencies for possible problems.The noob usually tries very hard to convince others he or she is getting better at the understanding of rei. It’s that need for approval and also comfort. Having a plan written down, gives direction. It lays out a path to follow. But a plan without specificity is just pure fluff. It does not drive an overall strategem for success. A plan without specificity, which requires knowledge of the subject, is just a gathering of words on a computer screen or on a scribbled-on piece of paper. So, how do you write an effective and useful real estate plan?First you have to build your understanding of numbers and finances. For me personally, I started by doing my own personal financials. I looked at several different Balance Sheets online and Income and Expense sheets. I then looked up what everything meant on the forms and made up my own simplified version [click here]. All I did then, was gathered all of my financial data. Most of my financial data revolves around debt and like most poor people, I have bad debt: car loan & student loan (no credit card debt for me though!). I took my bank statements, looked at all my bills and grabbed my last pay stub. I then called my lenders and got the exact amount owed on my loans (as well as daily interest accrual – for my debt elimination plan) and I proceeded to fill out my financials. I wrote down my earnings, matched them to my debts and realized I had a negative net worth of -$38,238.91 (on a good note, my net worth is now positive, thanks to rei, of $8,923.26).You may be saying to yourself, “okay, what’s this got to do with a real estate plan?” The point is, you must have an understanding of finances and more importantly, you must understand where you stand, financially! If you don’t, you’ll be continuing down a road without direction. Doing my own personal financial statements, gives me a sense of discipline and information I need to combat my old self, the schlub, who accumulated debt and thought nothing of it. Of course, any financial statement I do will not be 100% correct, as my accountant knows more about it then I do, but at least, I have a working knowledge of my financial standing on a monthly basis. And when I can afford it, I will have both professionally-audited personal and business financials done on a quarterly basis by my CPA. For now though, I have ground to stand on. Seeing this mess called my personal financials, lets me know how far I have to go.Now, my personal financials also let me know how well I’m doing in terms of paying off my liabilities (debts). Since I began this 5 months ago, I have decreased my fixed liabilities $1787.44. Now that may not seem like much, but compared to my previous way of life – they would have decreased $924 approximately, because I was not paying any attention to my finances. When I realized that the company that owns my student loan note, makes $6.73 a day in interest (as of June,2006), I felt sick. I felt stupid. I thought to myself, “I am smarter than this. I can do so much better than this.” Now I am.While learning about personal finances, the next thing to focus on is credit. The great thing about real estate investing or rei, is that there are so many different avenues you can pursue. Many people focus on their personal credit and then using it to borrow money. There’s no question that the advantage to rei is leverage. However, if you want to invest in real estate, it is also wise to focus on building business credit as well. Why? Because I said so that’s why! Wow, I’m having flashbacks.Anyway, as I was saying, a combination of building personal credit as well as business credit are important because as a serious real estate investor, you want to maximize your Return On Investment or ROI, while at the same time minimizing your personal liabilities. If little Johnie falls on the front lawn at one of your properties, big Johnie Sr. will sue you. Now, if you own your properties in your own name, then whatever you own, personally, is at risk. However, if you are a member of an LLC or Corporation, well then the business is liable for damages, not you. Now this is not as cut and dry as it appears, and of course, seeking professional legal advise is paramount, but the bottom line is, if title to your investments are in the name of an LLC or Corp, you technically do not own them, the company does. Think of Bill Gates. He does not own Windows XP, Microsoft Corp. does. Just as the government tried to sue Microsoft Corp., not Bill Gates. Of course, there’s a big difference between Microsoft Corp. and Joe’s REI LLC; try a team of about 50 lawyers, but that extra layer of protection between you and your investments, should not be overlooked.Now, getting back to personal and business credit – it is important to build both. Basically, you build credit by paying creditors on time. The same works for a business. You should have one personal credit card and one business credit card. Use them wisely and pay them off monthly. Contact any outstanding credit lines that have been destroying your credit and rectify matters with them, by setting up an action plan to begin paying them off. I am by no means an expert in this field, but it’s really simple logic. If you owe money, pay it off. Now, I must say this. I am no proponent of debt accumulation. That’s all credit is. It is evidence that a person or business has or has not been responsible in paying their debts. Our society has become debt-based. Debt is advertised as something that is “good”. Well, I am here to say that it is not “good”. Debt is complex and must be managed appropriately. Many large corporations take on debt to finance growth. However, a large corporation has complex business financials, that let a lender know, how well…or poor, a business is performing. The lender or vendor, can then make a judgement of whether or not to extend credit lines, mortgages, etc based on analysis of financial statements. There’s that phrase again!For the noob, it’s important to understand the relationship between your monthly cash flow and your available credit. What will most likely happen is, you will start doing your financial statements. The first few are rough, because you’re unsure if you’re doing it right. Just barrel through it. I will be offering a very basic look at “doing” financial statements in the near future. Next, you will review your personal credit. Work on getting it to a somewhat satisfactory position if it is not already. Get a copy of your credit report.Now, given what I have covered thus far, it is vital to the noob, to understand the importance of having a sound knowledge base for real estate investment/business. It is my firm belief, that the above is the absolute basic beginnings for a real esate plan. So many people have different backgrounds and some would say “just go out, learn a little about rei, and start buying.” That may work for them. It may have paid off big time for them. To me, that means very little. The purpose of this article is to give you the basic and most generic ideas for beginning a serious path towards rei/business success. There really is so much to cover and I could write 2 separate articles Part I & II on business entities alone. Understanding credit and your personal finances are absolutely essential in order to actually develop any kind of investment strategy. There is a strong relationship between these two, in peoples personal lives as well as in business or rei. The one key element to recognize when considering real estate investing, that many people overlook is how different a successful business conducts its initial start up. A successful business does not become over-extended on debt financing, before it even has its first customer or contract. It grows by managing both cash flow and credit. In rei, usually, it is the other way around – many use debt financing, whether through a seller note, personal loans or conventional, to create a cash flowing situation [i.e. rental or rehab], which makes rei different from a traditional business. This is an important point that must be factored into developing your real estate plan. For now, start with your financial positioning and credit, no matter how bad or good.© 2006 noobdogs.com
A marketable title in a real estate transaction means that the buyer is getting a deed to the property that is insurable by a title insurance company and he is not assuming any liabilities from the former owner. All deficiencies in the chain of title (defects) or attachments have been cured in the past or do not exist at the time of closing.It is very simple to get what is called an insurable title. For the casual observer at the closing, this title may appear to be the same as a marketable title. The difference can be enormous and very expensive later for the buyer. Title defects and deficiencies can be passed to the new owner if the closing agent makes these exceptions or exclusions to the title policy. The title will be insured at closing except for these title problems.This process of passing a title issue to a buyer is luckily not all that common except in REO (bank-owned) properties. With REOs the acquisition of the property by a foreclosure action can cause defects in the title for a number of reasons, including improper service to the legal owners of the property.Many banks don’t maintain their properties until required to do so by the local municipality that does code enforcement. This can result in on-going code violations that can quickly result in hundreds of thousands of dollars which the banks are seldom willing to pay. In most cases the banks will try and pass these liens on to the unwary buyer/investor.While there are other preventative methods to protect yourself when buying any property, here are three that are simple and work very well:1. Always put the following or similar clause in your purchase contract, “Seller to provide clear, marketable and insurable title at closing.” Some banks selling REOs will not agree to this and you will likely have a major problem selling to an end-buyer who wants to purchase with conventional financing.2. Ask to see the title commitment from the closing agent before you go to the actual closing. This is the identical document that will become your title policy after your new deed has been recorded. Look carefully at the exclusions and exceptions listed in Schedule A or B, whichever is applicable to that title insurer. Ask the closing agent to delete the B-1 exceptions at the closing and your title commitment will become your title policy. If you find lines or title issues as exceptions in your commitment, get them cured before you close.3. Ask the closing agent to review the lien letters he got back from the municipalities that enforce code violations for your property. If the lien letters are not back, don’t close as the letters stipulate that no code violations exist that have not yet become liens in the public record. These violations, but not yet liens, are exempt from the title policy in most cases, but you will be responsible for them as the new owner.In summary, taking a few minutes to review the above documents and using the specific clause in your contracts will go a long way toward making sure you get a title that you can transfer to another buyer without concern. I am seeing deficient title work and defects in over 40% of REO closings that we do and it is such a problem that we do what I call shadowing the closings using our attorneys to review the title work of the REO closing agents. As an example, the most common mistake is not paying an existing water bill at closing as the bill is not yet a lien so it doesn’t appear in a lien search. Just one of these bills was over $2,400 alone so be careful and review you closing documents or have your own attorney do it for you.
The real estate market is getting better for real estate buyers and tougher for real estate sellers. There are a variety of reasons for this and it is nothing unusual. The real estate market goes up and the real estate market goes down. It’s the nature of any market to move in both directions over time.Falling mortgage interest rates in the past few years have allowed real estate values to rise significantly. While prices have risen, the number of potential real estate buyers have diminished. This is due in part to the fact that some families simply do not qualify for the higher priced properties. AND, as the number of qualified buyers dwindles, real estate that is listed for sale, sits on the market for longer and longer periods of time, waiting to sell.This dynamic allows real estate buyers to get more aggressive with their negotiations. Good for the buyer; hard on the seller. Real estate sellers, faced with the prospect of receiving less money for their home or investment property, naturally want to know that the potential buyer can actually purchase. This article addresses one way to prove a buyer can purchase. Another important tactic to become familiar with is the art of using Earnest Money deposits to your advantage.Improve the odds of getting your offer accepted with a Pre-Approval Letter.Your chance of being viewed as a Serious Buyer skyrockets when the seller and the Listing Agent are presented with tangible proof that you, as a buyer, prepared for this transaction in advance. The Pre-Approval letter indicates that you have taken the time to sit with a mortgage professional, discuss the details of your financial situation, applied with a Lender and been approved by that Lender, before looking at homes.Pre-approval and pre-qualification are two entirely different processes.Pre-approval is (in theory at least) much stronger. The pre-qualification process entails meeting with a mortgage professional and discussing your financial situation to determine:
how much you can borrow
how much you want to borrow
what kind of roadblocks may need to be addressed
what kinds of loan programs are available current interest rates
what the loan will cost you
This is all valuable information needed by any prospective real estate buyer. But, it is not meant to prove that you can purchase. This meeting is a starting point for borrowers. Savvy real estate sellers and their Listing Agents are well aware of the difference between a pre-qualification and a pre-approval. Pre-qualification indicates some organizational skills on the buyer’s part. Pre-Approval indicates much more than that! Loan officers don’t approve loans! Just as Realtors® don’t approve acceptance of offers, loan officers don’t approve loans. Lenders approve loans. In both cases, the Realtor® and the Loan Officer are acting as facilitators of the transaction. Neither of them has the authority to legally bind the parties they represent.A Pre-Approval Letter is such a strong buyer’s tool because it means that a Lender has reviewed the buyer’s application and supporting documentation (pay stubs, bank statements, W2′s etc.). In addition, the Lender has agreed in writing, that they will loan money to the buyer if they find an acceptable property. Loan officers can confirm to a buyer that they will be able to get a loan. The Lender will confirm that the buyer is actually approved for a loan. This approval will have loan conditions to satisfy, but it is a real approval. The predominant condition will of course be that the buyer finds a piece of acceptable real estate! Pre-approvals are issued without an address. If you wish to be viewed as a Serious Real Estate Buyer, have your Pre-Approval Letter in-hand before shopping. The selling agent will take you more seriously. The listing agent will take you more seriously. The seller will take you more seriously. A pre-approval letter puts you in the driver’s seat when you are ready to negotiate.
There are numerous career choices in the field of real estate if you are fascinated. The very visible career in the real estate is of a broker or an agent. Their income is typically based upon the commissions from sales that can be higher or lower depending on the sales.Estate agent and brokers are authorized, the state gives them licenses and they are required to meet some requirements based on education. There are 2 fundamental types of commissions: sales and listings.Both the selling agent and the listing agent get a sizable commission which is based on the bucks amount whenever a property is being sold. As its a single astonishing paycheque, it may consume months and weeks to just end an individual sales agreement, thats the reason the income is undeterminable.A few prosperous agents might be allowed a “draw” against time to come commissions, but some are unpredictable commissions.Almost every real estate agency has several backing personnel who love rather a routine of income. This may include clerical and administrative backing faculty, personal helpers, it may include supporting faculty for affiliated financing, assessment, or review departments.A few agencies may offer promising fresh agents sales coaching. Reciprocally, they possibly predicted to hold back regular agency hrs to welcome the clients.Most real estate agencies also hold each week meetings regarding sales and tours of fresh lists which are necessary for every agent. A few agencies may hold periodical competitions for lists or gross sales, and offer acknowledgment for great accomplishments.You require those people as agents who have excellent public skills, as they have to address with hard situations. Single agent had a customer who desired to purchase afresh home with his “warranted profits” from mail. However some other potential customers may have serious credit troubles, or unrealistic requirements.Reviews and legally-required revealings may even hurt a potential deal, or even a shift of their heart suddenly.There are different real estate agencies that have other “culture”. A few may be more earnest while other people are more amusing. It is essential to find something that matches your own personality. Your coach can assist in showing you the way, a coach who has an elemental manner is related to your wish assist you develop your incomparable talent to its higher potential.Estate agent may be asked to adapt a certain manner. While there’s a few margin in dress, you’ll believably be anticipated that you have an automobile suitable for driving customers to displays.A career in real estate may be fruitful and amusing.