Homefinding Book

No doubt, ‘Real Estate’ is a profitable career but it is not so easy to get success in this business. A lot of hard work, research, struggle and persistence along with good luck are required to achieve your goals in this field. If you are interested to gain something in your life by doing some business in real estate then it is somehow quite difficult to attain your goals. The main reason that why most of the people opt this field is because of great income and easy access to the license. On the other hand, very few amounts of people have the knowledge of the real outcome of this business. Though, this field pays you well but it is very hectic, pricey and a stressful job.

Being an expert, I would like to share some of my personal experiences in this field to give you a better idea regarding all the positive and negative aspects and their direct effects on personal and business lives. When I planned to start this business, everyone warned me that 70% - 80% real estate agents are out of their business within a year. Well, I do not know the exact statistics but it is true that most of the people cannot withstand easily in this business. In fact, I have seen a lot of people who invested too much money in RE but they failed to achieve the exact outcomes they expected at the end.

Though, I have a flourishing career in this field but I have also suffered a lot in this business. Only thing that is the real cause of my success in real estate is my persistent behavior along with hard struggle. I was a student of Business Studies and graduated at the age of 22 majoring the subject of ‘Real Estate’. At starting, the housing prices I faced were magnanimous and all of my relatives and friends asked me that why you have started this business in the time of recession? But this criticism did not fail my hopes and wish-lists that I had for Real Estate and at last I ended-up as a successful realtor. I am sure that you’ll be thinking about the techniques that I applied to keep myself persistent in this field and they are also mentioned below for your assistance.

The very first step is to keep yourself prepared mentally that what you are going to do and what are the outcomes you have to face in this field. Truly speaking, this career is NOT suitable for those who have a weak heart. You have to prepare yourself and those who are dependent on you that you can face big losses while doing this business. The very important advice that was given by my elders was to arrange enough money to survive for first 6 months without being paid. Certainly, all of the above symptoms happened with me but I availed every single possibility to overcome all these hardships.

The second most helpful technique to withstand Real Estate business is finding a reliable company that offers good training to his trainees. The value and success I have gained now is only because of the company where I practiced Real Estate techniques. So, it is quite necessary for you to find a trustworthy and reliable company.

I am sure that by acting on these simple techniques you can easily get success in Real Estate Business.

Real estate market has changed too much with passage of time and the trends are still changing to introduce new ideas and concepts regarding buying and selling of properties. Those people who are too much concerned with real estate face different trends in this market and these trends of real estate directly influence their lives in positive and negative ways. A lot of people are affected by these trends either in their personal lives or in their business. Therefore, it is quite necessary that you should learn some techniques that can help you to figure out the ways of getting rid of the negative aspects of these real estate trends.

RE trends affect the progress of market in both negative and positive ways and most of the people are in pursuit to find different ways that can alleviate the negative effects of these trends. You might be thinking about the ways that can help you to beat the trends. Well, fortunately and unfortunately it totally depends on you that how you manage all your tasks related to RE. It’s ‘you’ who have to work with great devotion and strategy to overcome all type of real estate trends.

Moreover, there are several issues that are responsible for the real estate trends and it is quite necessary for you to observe all these issues in a suitable way to avoid any kind of displeasure. The very first thing that affects RE too much is the sudden rise and fall in the economy. There are as such no techniques that can help you to avoid the outcomes of economy because no one can conclude that either these trends will remain or go. The main category of business men that are highly affected by these trends are sellers, buyers, brokerage companies, broker agents, mortgage companies and many more.

As I mentioned earlier, no one can get rid of real estate trends but there are certain ways that can help you to handle these trends without any difficulty. Below, three important real estate trends are given that are expected in upcoming months.

Now-a-days, skillful techniques in photography and video making are in boom. Many brokers create videos of properties and show them to their customers instead of taking the customers to the property. This trend is quite helpful to save money and time and you can easily overcome many expenses by acting on this trend of RE.

The second major trend that has a great influence on Real Estate business is ‘Internet’. Internet has provided everything to man. They can access everything without even leaving their room. So, it is quite necessary for you to keep yourself updated through internet. Internet has already changed many industries in past few years back and there are hundred percent chances that real estate business will also be influenced by internet.

“MLS” also known as ‘Multiple Listing Service’ is also making a progress in the field of Real estate. This trend has also brought several changes in this industry and still it is affecting it in several ways.

The bottom line is, if you want to be successful in RE business then show your keen interest towards the techniques to face all the live effects of most common real estate trends.

In this era of recession, it has become quite difficult for an individual to sale his house easily. Buyers are unable to get high loans from banks and this inconvenience affects your business. You should contact a third party like a real estate agent so that it will be become easier for you to sale your property in an effective way. Below, few vital techniques are given that are very helpful for you to sale your real estate property.

Hiring a Real Estate Expert:
The very first method to sell your property in an effective manner is by hiring a skillful Realtor in your are area. After choosing a good broker agent, it is quite essential to make a good business relationship with him because this behavior will generate a good bond between both of you and he will also put his all sincere efforts to sale your house or real estate property at good price.  Make sure to examine the experience of the agent you are going to hire because experience matters a lot in this field. Moreover, qualified real estate agents will automatically list your home in the database of MLS and it will become easier for you to sale your house.

Below, few important points are given that can help you to sell your house easily.

Is the Bid amount of your house is suitable?
The second most important step to sell your house without any loss is to put a reasonable amount of your house for sale. Make sure that the amount you placed to sell your real estate grabs attention of buyers. Remember, a good reasonable price is the most beneficial tool to make successful transactions with buyers. Do not place a high price for your house because the buyers will just run away only after seeing the price tag of your house.

Try to utilize the ‘Color Psychology’ to sell your house:
It is quite necessary to give a re-touch of everything to your home before putting it into the database of MLS. Being an expert in real estate, I will suggest you to go for ‘Color Psychology’. This technique is quite helpful to sale a real estate property within days. All you need to do is paint your whole house with different alluring and aesthetic colors and designs. This method might seem difficult but after availing this technique you can easily grab the attention of buyers towards your house. Choose appropriate interior and exterior colors because these colors will leave a deep impact on those people who trot your house.

Moreover, examine your house thoroughly and make sure that every electric appliances, windows and floor etc are in their perfect condition. A malfunctioned house can easily loose the attention of buyers.

Spend more time at your house to welcome the buyers:
It has been noticed that most of the people are not present at the moment when someone comes to see the house. Therefore, it is quite necessary for you to always hang in there for face-to-face negotiations with the buyers. Respect their suggestions for the betterment of your house because these ideas can easily help you to present an enthralling house for sale.

The decision to search and purchase a property that is either commercial or non-commercial is the most vital step that a person can take in his life. If you are going to buy a place for your own personal use, like a house, then I will suggest you to buy a residential property because it is an enthralling idea. It is because your future dreams regarding your home along with your ideas to make it so perfect combines together to give you an ideal real estate. You can achieve all your dreams without any hassle and annoyance if you choose a well experienced real estate agent. Well, sometimes it is quite difficult to find a trustworthy and reliable real estate agent but internet has resolved all such issues.

You can easily find a brilliant agent through internet. There are dozens of websites that allows their customers to find real estate agents that fulfill their needs and requirements. On the other hand, if you are new in this filed and do not know much about finding a good agent then I will suggest you to read the whole article because this article contains some useful content on finding a perfect real estate agent. The first main step that you have to keep in mind is your mental satisfaction and chemistry with the agent you are working with. If he totally understands your problems and gives appropriate suggestions then he is your guy, otherwise think about finding an alternate.

The agents who easily understand the changes in daily routine life after buying or selling a house can guide you well, like what place and area suits you the best. They can easily assist you to choose a real estate either it’s a house or a commercial building. All you need is better guidance and this will leave a deep influence on your whole life. So, I will say that finding a better agent instead of spending a lot of money on buying an estate is quite important because an agent can summarize your expenses very efficiently.

You might be thinking that what actually real estate agents are and what type of business they do? A real estate agent plays a vital role of liaison between buyers and sellers who are willing to buy or purchase a house or a commercial plot.  Well, it is quite necessary to find a good real estate agent because this technique can saves you a lot of money. Below, some important tips are given that can help you to choose a reliable and trustworthy agent without any disturbance.

Experience:
Experience matters a lot while searching a good real estate agent to buy property. So, always hire those agents that have finished nearly 20+ transactions in their career. Now-a-days, many websites provide fresh agents that are not so experienced. So, I will recommend you to avoid such agents because they can bring harm to your business.

Proficient Attitude:
Proficient attitude is a main aspect in the field of real estate and I will advise you to hire those agents that are highly skilled and have a professional attitude towards their business along with you. Always remember, buying and selling of homes and commercial areas can easily take up to months and sometimes years. Therefore, try to choose those agents that are reliable and you really feel comfortable with them while working.

If you follow the simple techniques I have mentioned above then you can easily choose a highly skilled real estate agent without any hassle.

Real estate business can be complex. Same holds true for real estate agents. You need to understand their psyche to get the best out of them and from them. Often, nexus with them helps to understand the way they operate.

Like any other professional, real estate agents are in charge of a huge data base of information which can be a gold mine for a prospective real estate investor. Unfortunately, such information is jealously guarded by them which they only disclose once they have cause and ensured that they are getting the maximum possible from a prospective investor.

Real estate agents are always on the look out for easy and hard cash and for those with a good or satisfactory credit background and requisite financial resources. They always mean business! The foregoing approach ensures them that they will get their cut sooner rather than later.

The agent’s commission must be reasonable for you to get their attention. If you intend to make a substantial expenditure, you may want the agent to give you a bond or guarantee in your favor (of indefinite period or until the transaction closes and for at least the amount equal to the commission given).

You may also grab the agent’s attention by pressing him to close the deal as soon as possible, for any reason whatsoever. This way, he will be assured that you are also serious about the deal and hence he will get his commission sooner too. So this works as a very good incentive for them.

Without generalizing, It is also observed that real estate agents are more attracted to established customary ways of structuring and marketing deals and do not like to think out of the box. In any event, they do not cascade the information to the owner in that fashion. There appears to be a specific mind set of such real estate agents. In such an instance, it is best to deal with the owner your self and explain him/her the way you want it explained.

There may also be instances where you find a rabid agent. Always beware of such agents. They are looking for a quick buck and may go to any extent to make you buy a property, which may not be according to your specifications or liking. That is where a comparative valuation of sales of earlier properties in the same locality would help and guide you (which should be authenticated and reliable).

Once you have formalized an offer through an agent, do not rush to offer the earnest money for the property. In fact, as a matter of principle, you only give the earnest money once the contract signed with the concerned.

Needless to say, you should always avoid agents who appear to be involved in unethical practices or do not seem to co-operate or liaise with you. Your next contact person in such instance can be any other agent or a listing broker. If that fails, then you have no other choice but to get in touch with the seller/owner directly.

People have this tendency of relying on such contracts without thoroughly comprehending the meaning and background. It cannot be emphasized enough as to how vital it is to review and understand such agreements, no matter what the transaction or the parties status.

Although not always relevant, but it is always important to understand the basic principles of contract laws (which has evolved and continues to do so) based on which such documents are (or should be) drafted.

If in any doubt, one must always adhere to the plain vanilla type format of real estate contracts, often found lying in the office of real estate agents and attorneys. The agreement, for those who do not know, only becomes binding and operative (in the absence of any contrary term or condition to the contrary) once signed by both the parties (real estate contracts are invariably bilateral contracts) concerned. Hence, if the offer is accepted subject to certain conditions, then it does not tantamount to a binding agreement, rather, it is a counter offer, which can only be finalized into an agreement, once the other party agrees to such counter offer. Similarly, the mode of acceptance is also important. If the contract specifies that the acceptance should be in the form of writing or e-mail, it cannot be oral or otherwise.

Although, an agreement can be oral as well as in writing, as part of prudent practice, a sale agreement relating to real estate should be in written form to be properly enforceable. It adds an element of certainty to the entire process.

The name and details of the parties need to be accurately and clearly written to avoid any misunderstandings and adverse claims in future. This is quite elementary, but often ignored or overlooked by the parties concerned.

The property in question must be clearly identified with details as required by the real estate contracts. Ambiguous details and descriptions should be avoided at all costs which makes the sale transaction of the property open to varying and wrongful interpretation, which would be most unfortunate and quite a shame.

The sale price of the property (inclusive of all charges, duties, levies and taxes) should be stated; hence the consideration (an essential component of a legally binding and enforceable contract) i.e., monetary payment in exchange of the property should be duly paid and acknowledged as received by the party concerned. In case the payment is to be made in tranches, then the details of such tranches and amounts need to clearly mentioned in the agreement as well.

And finally, a legally enforceable contract, which has been duly read and reviewed by both the parties concerned, reflecting their true intention and accurate facts and figures and other commercial aspects, ought to be signed or executed by the both the parties. Having said that, each party should ensure that the person signing the agreement have attained the legal age and has no mental problems. For contracts executed in US, no notary attestation or witnessing of the signing of the contract is required.

Invariably, all investment transactions (including real estate) give rise to legal implications, which must be comprehended by the investor so that he may take an informed and balanced decision; since this may also have repercussions on his overall financial and general well being and also his and his family’s future at stake!

To avoid any untoward instance, it is wise to know the legal ramifications that may arise; hence putting your hard earned money, in the form of an asset, at a massive risk.

Contract Precedents

People have this tendency of relying on real estate contracts from websites, local stores or borrow an already used draft from a friend/relative. Like any other contract, it is a legal document and should be duly vetted by preferably a real estate attorney to check and ensure that it does not contain anything adverse to your interests (in which case it should be amended or deleted appropriately) and amply covers your position vis-à-vis the property you have invested in (if required, then make appropriate insertions in it). Legal documents (particularly real estate contracts) would inevitably contain legal jargon which should best be read by a competent lawyer on whose advice a prospective investor should eventually rely. As for the cost of the attorney, it is usually quite reasonable for a review of a relatively small document, which they deal with on a daily basis. Investor’s responsibility is to check and confirm the facts and figures and other commercial aspects.

Discriminatory Treatment & Your Rights

Numerous pieces of legislations (including The Fair Housing Act and The Americans with Disabilities Act, which keep getting amended from time to time) expressly prohibit any form of unfair act or treatment towards any person including discrimination against people with varying race, religious beliefs, domiciles, age, gender, color etc. For example, you need to be extremely careful with the choice of words you use for placing ads etc, as they may be easily misinterpreted (by way of design or otherwise). Similarly, one needs to be cautious when rejecting applications of tenancies by varying people including those with disabilities or recovering from drug or alcohol abuse.

Disclosures

Investors need to be mindful and aware (at all times) of the prevalent legal requirements of disclosure relating to a property. If in any doubt, they should disclose all they know, that a prospective tenant or buyer need to know about a property, which would put him or the property itself in danger, in any manner.
Solicitiation For Funds

Always be careful with what you publish in adverts to the general public regarding solicitation of funds for investment in properties. This process should invariably be done through competent real estate attorney who is well versed with such modes of raising investment.

Other Liability

To avoid tax penalties and possible law suits, always be up to date with the applicable taxes on yourself as a property owner or otherwise on your tenant or those who work on your property as contractors/sub-contractors. This may get fairly complex if you have not dealt with such taxes before. Hence, it is best to consult a tax specialist or attorney.

In the ever changing and fluctuating real estate market of present times, it is becoming increasingly difficult to pin point the true value of a property. The most logical and prudent way forward, in such regard, seems to be a comparative study of the property sales. Such method is most commonly adopted, providing close to accurate calculations regarding the valuation of properties; be it single or multiple unit abodes or leased buildings of any size.

A good starting point can be a comprehensive research on the internet regarding properties that have recently been sold. The searches can be made on various weblinks such as the official local governmental websites focusing on a particular locality/area or tax authorities websites or special websites (free as well as subscription based) which do maintain detailed information about real estates in varying areas for the benefit of prospective buyers and sellers. Another added benefit of such online research is that most of these sites also reflect on the legal status of the property concerned, i.e., whether it is secured by any financial institution to a borrower (owner of the property) or is subject to litigation on some disputed matter.

Having said that, one needs to be careful and vigilant regarding the comparative valuations provided on such websites which are based on models/softwares, whose accuracy or reliability cannot be guaranteed. You should consult your real estate agent or valuator on the subject of computer databases and subsequently make an informed decision.

Some (and not all) of the vital features that one needs to bear in mind when doing comparative analysis regarding the valuation of property (residential in particular) are divisions within the unit (i.e, number rooms/bathrooms), locality where it is situated and size of the property (in square foot). A professional valuator will invariably compare the sale properties within a mile radius and those within a 20% near about enclosure area of the property. Similarly, similar properties in the same locality need to be valued by same yardstick/calculations. Valuation will also vary depending on proximity and level (ground,  basement etc.) of the bathrooms and the bedrooms and their quality (for instance, in case of bathrooms an appropriate one would include a toilet and sink, bath area and a shower); such placing may be variable depending on the different locations in a particular country, with varying climate conditions/temperature.

Other important factors for the purposes of valuation would be the size of garage/carport, if any, depending on the overall neighborhood standards. In busy residential areas, where parking is somewhat a ‘luxury’, the same may obviously increase the valuation of the property significantly.

It also helps to have an idea of the properties surrounding the one you are concerned with and look out for the dis/similarities.
If you consistently buy real estate in a specific area, then it will only be prudent to keep an up to date data of your research and findings in a safe and secure manner, which will eventually assist you by cutting on your time and efforts when you intend to look for another property in that same area.

Flipping is buying a real estate and instantly reselling or ‘flipping’ it for a gain.

In order to ensure the profit component on a property, the person needs to comprehend that the same can be best achieved by purchasing the property at a good price. The cheaper you buy it the bigger the profit. Also, you will need to spend a reasonable amount from your own pocket (depending on the condition and locality of the property concerned) towards the maintenance and renovations to make it more attractive to the prospective buyers. Having said that, one needs to be extremely careful with all the related costs, as all the expenditures and the actual cost that you have paid towards the purchase of property are based on mere speculations and prevalent buy/sell market of the real estate, which may or may not reap the benefits that you are expecting.

Prior to signing the sale agreement of the property concerned, it is always prudent to spend a reasonable amount on the inspection of the property by a specialist who would invariably know more about the condition and state of the house, i.e., regarding the quality of the material used, any defects in the structure, any other hindrances etc. Such inspections usually do not take that long, given that the scope of work is agreed in detail. This will, at the outset, enable you to exit the transaction, if there appears to be any kind of problem with the property.

Once you have bought the property, you need to ensure that it is available for the flip, sooner rather than later. Reason being, you never know how and when the market is going to change or due to any other external reasons, which may eventually affect the sale or the pricing of the property. In such context, it is quite appealing to have the work done through the DIY means as materials and tools are readily available in the market. Although tempting, but this must be avoided at all costs for the simple reasons that there are experts who can do that for you at a much cheaper price and more efficiently and effectively, which is exactly what you want. Yes, the cost needs to be factored in to your total expense on the specific property, but this need not exorbitant, if you have appropriately negotiated the rates/cost with the construction contractors/sub-contractors. Such contractors can get the property up and ready for sale in no time which would in turn save you all that precious time and efforts, which can easily be spent in looking for a new flip deal or something related.

In cases where the market has been (or during the flip process) gets slow, then it is wiser to bring the cost down (i.e., your profit margins down to a reasonable level); hence making it more appealing to the buyers. If confused and getting disturbed (or even if not), then its best to hire a real estate agent, who can get active on your behalf and provide you with the requisite assistance in making your flip successful.

It really becomes painful to apply for a credit to finance the purchase of your dream house, or some property you want to invest in, or any other location, only to have that credit declined. Such an instance may lead you to wonder why the request was declined in the first place. Knowing the answer to this may help you prepare in advance before applying for a real estate credit, and avoid any such unpleasant happenings.
Most of the lending institutions have a sort of checklist to validate your application against, and it is necessary to pass these checks for getting your application approved. Please note that some of these checks have nothing to do with your credit score at all. Here’s what you really need to know in this regard:
- Little or no credit: People over time have developed this mistaken notion that no credit is somehow better than bad credit. While this may have held true in some instances, usually the lender wants you to have some credit. Why? Because they want to assess you in terms of making payments. A mortgage financer is not really interested in your bank credit history. For this particular purpose, you can build you credit history by various means, for example, obtaining a departmental store credit card, utilizing only a small percentage of available limit, and making payments regularly and in time. With such a practice, you can soon build up a solid credit reputation that will favor your loan application with lenders.
- Bad credit: If you are having a bad credit score, chances of finding a mortgage lender who will consider your application are close to zero. However, even if you run into such a situation, this is not the end of world for you. You still have ways that can help you come back, upgrade your score and still manage to get your hands on that property you so much desire. First off, get a copy of your credit report from the three major credit bureaus. Examine your report. Are there multiple late payments? Over dues? Several pending collection items? If that turns out to be the case, get in touch with each company and have your accounts get current. Astonishingly you will realize how much difference a single timely payment can make to your credit score.
- Credit-to-Debt-Ratio: Credit to debt ratio is simply an assessment of your ability to make payments. It provides a comparison between your total available credit limit against the usage of that limit. CDR is calculated by dividing the total credit limit available to an individual by the amount actually owed by the individual in question. The premise here is that if you are using a high percentage of your credit limit, it shows a shortage of money, and consequently, a lesser ability to make timely repayments. Hence, having a solid credit-to-debt ratio is necessary if you want your application to get through approval.