Posted by admin | Real Estate | Posted on October 22nd, 2009
Wealthy home buyers who buy multi-million dollar homes are typically self-made millionaires with new money, according to a recent online survey of 683 Coldwell Banker Previews International property specialists. The study revealed the top professions of these affluent customers. According to the respondents, 88 % of their customers are business or corporate executives, 37 % are physicians, 31 % are lawyers, 30 % are financial professional and 14 % are entertainers, entertainment executives or professional athletes.
Wealthy home buyers require their real estate agents to be equipped with special skills, according to the Coldwell Banker’s survey. Given the magnitude of the financial transactions involved in luxury home purchases, 78 % of sales associates said that the top most need their clients require from their real estate agents is privacy and confidentiality. The luxury customers also want their real estate agents to exercise discretion while dealing with their multi-million dollar transactions. Almost 70 % of respondents polled that their wealthy clients want their real estate professionals to offer customized services while 44 % said that the luxury home buyers want their agents to have good network and work relationship with executive assistants, CPAs and attorneys.
Wealthy home buyers also want their agents to know the inside scoop on the real estate market, according to 36 % of the respondents in the Coldwell Banker’s survey. Seventeen percent of the sales associates surveyed indicated that one of the necessary skills for real estate professionals working with affluent customers was the ability to provide emotional support to their clients. And according to 11 % of respondents, luxury customers want their real estate agents to establish personal rapport with their clients.
The study also included queries on the “must have” amenities that the affluent clientele want in their luxury homes. Wealthy home buyers want media rooms in their homes, according to 60 % of respondents and another 60 % polled that their affluent customers want “wired” homes. However, there are a few home design elements that are out among luxury home buyers. Gourmet kitchens, granite countertops and wet bars are no longer counted as luxuries by wealthy home buyers, according to the survey respondents.
The survey also found that the multi-million dollar home buyer pays a typical down payment of 20 % to 30 %, while a quarter of clients put down 30 % to 50 % of the sale price.
Posted by admin | Real Estate | Posted on October 20th, 2009
The real estate investment industry lures many a newcomer with lucrative deals and the dream of huge profits. However, like any other industry, this one too involves careful consideration of a number of factors that affect the investments. The industry has gone beyond being merely the purchase and sale of premises. The finer aspects like home improvement and repair are now part and parcel of the industry. A real estate investor’s job does not end with closed deals anymore. It involves preparing the property for sale too, and for close scrutiny!
It is always a good investment indulge in home improvement to any property you invest in. This increases the re-sale value. However, the industry is also one where home improvement and real estate investment go hand in hand and any error in securing a deal could cost a lot of money.
Many investors are known to identify and invest in properties that are in a not-so-good location. This is obviously done to save and yet procure a property. Some even end up investing more than the actual cost of the property. Such investments only spell future insecurity. It pays to exercise caution while investing hard earned money. The value of such investments only depreciates in time.
It is also very essential to understand and adhere to the building codes applicable to a particular area. Paying no heed to the essential legal permits will only end up with you paying more to get rid of the yoke of your investment being branded as illegal. There are authorized building inspectors who make sure that the home improvements are taken care of within the paradigms set by local or state authorities. This saves you a lot of money too.
Many real estate investors also make the mistake of sticking to a very rigid budget for home improvement projects. A detailed budget, not too rigid, always works to your advantage. You need to calculate every minute requirement beforehand. You will be surprised at the unexpected small returns you benefit from by being a little liberal initially.
Another mistake that real estate investors make is attempting home improvement themselves. Certain legalities specify on the services of state licensed contractors. In any case, extensive renovations are best taken care of by the experts in the industry. This also ensures safety measure in place and enables you to save a lot of money by evading legal issues in future.
With so much of calculated and hard-earned money at stake, you should avoid these mistakes. Careful consideration of the above-mentioned errors that are common within the industry is sure to help you navigate through rough times too. In a nutshell, you should:
. Identify with the real value of the property
. Double check that the location is decent
. Maintain a flexible budget
. Consider the cost of services and material
. Cover yourself to tackle unexpected costs
. Consider professional help
If you tread with caution and discrimination, you are sure to succeed in this very profitable, but volatile investment industry.
Posted by admin | Real Estate | Posted on October 8th, 2009
North Idaho real estate has always carried a high premium. Before Idaho was a state and before it was even a recognized U.S. territory people have literally rushed to get their hands on North Idaho real estate. Is it the mountain scenery that calls to people? Is it the wildlife, the rivers, fertile farmlands or the beautiful frosty winters? Perhaps those things are reasons why people stayed, but historically the real draw to snatch up North Idaho real estate has been gold.
In 1860 gold was first discovered on the Clearwater River, an event that prompted a mass migration to North Idaho, causing the population to surge from less than 10,000 to 89, 000 before 1890. Few people actually found the gold they were looking for, more people were lucky with finding and mining silver, but even as hopes of striking it rich with gold or silver began to die, people didn’t leave Northern Idaho.
Today Northern Idaho is still a beautiful place to live, attracting tens of thousands of new residents every year. The Idaho economy does not seem to be slacking like the rest of the country, and the housing market is booming. In this exciting atmosphere hiring a North Idaho real estate lawyer could be remarkably helpful.
North Idaho real estate lawyers are not real estate agents. They are not there to help you find a house, to talk you into buying a house you can’t afford, or to barge into your home at all hours to show people around. North Idaho real estate lawyers are there to answer legal questions you may have regarding the sale of your property, to help you to negotiate the sale, to properly document the transaction, and to advise you as you go through the sale process. The services of North Idaho real estate lawyers are most suited to independent home sellers or buyers who don’t want to pay commission fees to real estate agents, but need some assistance with the legal ins and outs of selling real estate.
Of course finding a good North Idaho real estate lawyer takes a little research; you don’t want to trust just anyone with a law degree to serve your best interests regarding such an important sale or purchase. Following are a few tips that may help you find the right North Idaho real estate lawyer.
Talk to friends, family members and co-workers, or your state’s Bar Association for referrals.
You can also call a local realtors association for referrals.
Prepare a list of questions pertaining to your situation. Most North Idaho real estate lawyers will answer simple questions over the phone for free. Identify a number of possible attorneys and call each one.
Ask how much each lawyer charges per hour, and request an estimate of the time required to complete the tasks you require – looking over contracts, handling disclosures, and helping with the closing.
Using this process should help you identify the best North Idaho real estate lawyers to suit your needs and facilitate the purchase or sell of your North Idaho property.
Posted by admin | Real Estate | Posted on October 3rd, 2009
If you are thinking of buying a new home, you must be aware of the difference between seller agent, buyer agent and dual real estate agents. Using the wrong kind of agent could affect the financial wording of the deal and have material legal implications. Read on to arm yourself with an understanding of the difference and how to use it to your advantage when buying a home.
Real estate law has evolved to require that an agent list who they are representing. This is normally done in you first meeting with the agent through a formal disclosure document that you must sign that identifies whether the agent is representing the buyer or seller. A seller’s agents represent the seller. Most real estate agents believe it or not are seller’s agents. They may be friendly to you as a potential buyer, escort you around town to show you multiple homes and help you prepare an offer on a home. However, the agent is working for the seller and looking out for the interests of the seller. And vice versa, buyer’s real estate agent actually works for the buyer and have a fiduciary responsibility to look out for the interests of the buyer. There are also dual agents, but we’ll come back to that in a moment.
More often than not, this has nothing to do with who actually pays the agent. Why is this important? If you are the buyer, you should seek a good buyer agent because of the financial, legal and ethical implications. A seller’s agent has a fiduciary responsibility to the seller not to you as the buyer. This means during the negotiations a seller’s agent will be working for the seller. Here’s a real life case in point to help clarify. Suppose an agent discovers that the seller must relocate for a new job, has become highly motivated and is now willing to accept $25,000 under the listed price. If the agent is a buyer’s agent he/she will be obligated and very likely excited to tell you this message. However, if the agent is the seller’s agent working for the seller – he/she does not have to convey this message to you and may not give away the data initially in an effort to get the higher offer from you.
Now, back to dual agents. Periodically your will find an agent that says they are operating in a dual role; meaning they are functioning as a buyer and seller agent. Be careful in this situation. As a buyer you may want to stay clear of a dual agent. Realistically, the dual agent is unable to fully negotiate the buyer’s interests without adversely affecting the seller and visa versa. There are some outstanding agents that can operate effectively in the dual role. However, as a buyer, you should understand the potential conflict. If you want the lowest price on a home, seek a outstanding buyer’s agent whose loyalties are aligned exclusively with you. You may be wondering who ultimately pays for a buyer’s agent. Normally the selling agent lists the property in the MLS (”multiple listing service”) and shares the commission with the agent who brings the buyer. Generally, the seller’s agent and the buyer’s agent split the real estate commission with fifty percent going to each agent. This means that although the buyer’s agent is working for you, the seller is funding the commissions to the buyer’s agent. At various times you may find a listing where the selling agent does not agree to share the commission with the agent who brings the buyer and in that case you would have to settle on who will pay for the buyer’s agent. Recognizing the financial, legal and ethical implications of buyer, seller and dual agents is important to you as a home purchaser. Prior to engaging in any real estate transaction as the home buyer, find yourself a good buyer’s agent with at least 10 years of experience in your market. They will have a fiduciary responisibility to act in your best interest and have the experience to help you negotiate the lowest price for the home.
Posted by admin | Real Estate | Posted on September 14th, 2009
The professional brokerage services in the commercial real estate in canada have become relatively recently. Therefore, so far most people to question «What is the broker for commercial real estate?» Simply pozhmut shoulders. and even those who have already sdaval or rented premises with the help of agencies often do not have a clear understanding of the benefits of treatment with professionals do not know what can and should demand it. In this paper, we would like to razvenchat most common myths associated with the broker for commercial real estate.
Myth number 1: The more impressions, the better Commercial real estate broker?
There is widespread view that the broker must regularly show customers as many options for accommodation, and the more he does, the better the quality of his work. In fact, everything is accurate to the contrary. A specialist in Brokerage says that to find a place that meets all the requirements of the customer, it is very difficult. It is therefore too frequent views are likely to indicate that the broker inattentively listening to the customer and invites him options «random». Because such a broker-«guide» losers as the owner of land or a potential buyer, because they spend their valuable time without any result.
This pros listened carefully to your wishes, will explore all available on the market offers and choose the one that is the one that really suits you. Typically, to achieve the result it needed a maximum of 3-4 run.
Myth number 2: Professionals working in large agencies
Most people believe that the name loud and «scale» Commercial real estate agent are the guarantee of experience and professionalism of brokers. However, it is not always the case. First, imenitye company with a long history and so have no shortage of willing them to work, therefore, offer brokers a fairly low percentage of commission agency. At the same time, smaller companies, by contrast, are interested in attracting qualified staff and are ready to provide them with more favorable financial conditions. Secondly, the major agencies are working with their brokers (exclusive) targeted the company. That is, they do not need to perform the full range of work (searching the premises, negotiate with the owner, the conclusion of a treaty, etc.), their challenge – to find a buyer or lessee for the finished space. In the same small companies where its facilities are not a lot of brokers make the deal «zero». Accordingly, they are inherently requires a deeper market knowledge and understanding of customer needs.
Myth number 3: The private broker deal advantageous
How many people would not burn at the service of so-called «private brokers», still find someone who advise you to refer to what someone Ivan Ivanychu because it has a «cheap». Save you the truth, not at the cost of services as well as their own and tranquility, but one that you certainly will not be prevented. So for what is, in fact, «overpay» client, referring to the agency?
First, any self-respecting agency has a code of ethics, which clearly stated rules of conduct broker with a client. For example, according to the code, the broker has no right to give you incorrect information, he is obliged to protect your interests and provide you with all information on the transactions. Violation of these rules officer could lead to a very unpleasant consequences for him, up to and including dismissal.
Secondly, the agency all brokers are under the direct control of management. That is, if the broker makes a wrong step, it is always correct, will help the Council and, if necessary, transfer the customer to another specialist.
In the third, all the documents through the agency, must be checked by legal department, which simply did not miss a treaty, if it in any way harm the interests of the client.
At the same time, the private broker – his own boss. He chooses what information and voice as silence, which contract clauses to draw your attention, and what – to turn a blind eye. If later you have a claim to the quality of his work to bring him to justice will be very difficult, especially since most of these «mediators» never registered.
In other words, use the services of private brokers – the same as changing currency outside exchanger: the best rate, but no guarantees.
Myth number 4: Better to apply directly to several agencies
It would seem that logic is simple: the more agencies involved in the sale of your object, the faster will be the result. But it can talk only to people uncomfortable with the technology of the brokerage firms. There are quite a narrow range of print and online editions, in which the agency placed on their sites. Accordingly, if you go in, say, five agencies, the risk to see five different ads on your site in the same media. Not only that, this in itself gives questionable advertising, so more likely is that each agency will try a little «glossed» characteristics of the object, and as a result of the five ads will give contradictory information.
In fact, just one mention in a single edition, and the subject invariably enters the Realtor database. Most brokers use the same database, so eventually have the same information. In other words, referring to one agency, you are not at all does not diminish their chances of quickly and sell objects, and the main thing – you save it (the facility) reputation.
Another negative working with several agencies – not with one of nih.vy can not conclude an exclusive contract. But only an exclusive contract with the company, the broker will give you the most advantageous plan for moving your site and the best conditions of the transaction.
Myth number 5: Just look at base facilities – and is ready to deal
«Agencies huge database, so the broker is not working on specific criteria quickly find a suitable place …» Unfortunately, such statements have to hear quite often. But if everything was so simple, the deal would be for one day, but brokers do not have to go out of office. There is a logical question: why is this not happening?
Ironically, this sounds trite, but each case is individual, and in addition to the basic requirements for space, a lot of suggestions, «popup» already in the works. Someone is, you need a certain thickness of the walls and ceiling height, someone – large display cases without denying their trees, someone – the possibility of redevelopment … Yes, and the owner often has its own vision of the potential lessee: some are unwilling to «sit» state structures, others do not want the office was a large flow of visitors, still categorically against auditing firms … from the broker requires maximum patience and perseverance to find a solution that satisfies both sides. Is not enough just to work with the foundation: you have to go to watch, personally meet with the owners, always check the validity of the information, etc. That is why the «secondary» transaction usually takes two weeks to two months.
Myth number 6: Target broker – only to find a buyer
Many believe that when a potential buyer nods his head approvingly and said that it is suitable premises, the broker ends. However, in reality, at the end only the first stage – search – and begins the most difficult – to bring a deal before signing the contract. It would seem that this special? Did the seller and the buyer (owner and tenant) are not able to agree? But the reality is that of a very positive mood on both sides in 70% of cases prior to signing the deal just does not come!
Most disagreements arise when it comes to the payment schedule. Many sellers prefer not officially identify the real value of the site and receive a portion of cash through offshore companies or foreign banks. At the same time, not all buyers (especially integrity in such matters are foreign companies) are ready to go.
Another reason why the parties can not reach a common denominator – the desire of the owner of the premises set in the contract of any special conditions. For example, the landlord can set high fines for smoking in the office, taking over the territory of a business center pets … If at first glance, such claims can not raise specific complaints, it being documented, they are often greeted with a fundamental rejection of the tenant.
Thus, there is little to find a buyer. Craftsmanship broker is the ability to circumvent the acute angles, find the necessary compromises to bring the deal before signing the contract and help his client to conclude it in the most favorable terms.
Myth number 7: Broker gets huge money «for nothing?
And finally: Many believe that life is a broker – a paradise in which money is literally falling from the sky. In fact, it is not. This is hard work, and the result is until the last moment not in a position to predict one. The broker can work for months over the same transaction, and on the day of signing a treaty She sorvetsya. Or show room once, and it would thus «ideal» option. The customer can articulate demands, and perhaps did not know what the wants and reject good offers, one after another. This stress job that requires high concentration and absolute dedication. And again: we should not forget that the broker receives a commission only for results, so his income is directly proportional to the effort.
Information provided by «United Realty Group» (consulting, brokerage services, leases, buying and selling commercial real estate, legal support transactions). http://www.pro-bargainhunter.com
Posted by admin | Real Estate | Posted on September 10th, 2009
When you are looking at buying or selling property; or, you just want to gain some general knowledge in real estate, there are many terms that are widely used terms in the industry that is like a language of its own. The terms are not difficult to grasp, yet, there is a greater possibility of error if words are misheard and misused. Here are a few basic terms and their definitions that are often misunderstood by the consumer and or seller:
MLS- Multiple Listing Service:
A type of association that assembles, collects, and issues data in relation to various properties that are recorded for sale by its associates, who are real estate brokers. This type of membership is not attainable to the community. However, there are chosen MLS information may be sold as listings to real estate websites. There is not a sole MLS covering the whole US.
PITI- Principle, interest, taxes, and insurance:
These are the four main components to a monthly mortgage payment. The remaining balance is known as the principal, which reduces the amount owed. The fees that are charged by mortgage companies for obtaining a loan is called the interest. You pay taxes and insurance into an escrow account every month for property taxes and mortgage and hazard insurance.
Appreciation- This is an increase of property value; due to changes in market conditions, inflation, and several other factors.
CMA- Comparative Market Analysis:
This is report that provides prices of different properties that are in comparison to a particular property and those that are recently sold, that is on the market or were previously on the market, but was not sold within the listing period.
Closing Costs:
These are the various costs that are settled between the buyer and seller when the agreement is finished. These expenses include mortgage related fees, escrow or attorney fees, recording fees, title insurance, brokerage commission and others charges. Closing costs are commonly collected via escrow.
Contingency:
Contingency is considered a stipulation of an agreement that prevent it from legally binding until certain criteria is made. A common stipulation is a buyer right to demand a professional home inspection before acquiring the property.
Title Insurance:
Title insurance is a special policy that safeguards the interest of a lender or owner involving real property from various forms of false or unforeseen claims. It’s considered customary for a consumer to pay the loaners title insurance policy.
Concessions:
These are advantages or allowances that are given by the seller or landlord of a home to aid in the closing of a sale or a lease. Common concessions contain absorption or moving expenditures, space remodeling or improvements, and reduced payment for the initial duration of the lease.
Sale- Leaseback:
A sale-leaseback is a type of agreement that an owner offers a property to an investor, who afterward leases the property back to the initial owner under arranged terms. Sale-Leaseback contracts offer the initial owner freed up capital and tax breaks while the investor receives a guaranteed profit and appreciation.
Posted by admin | Real Estate | Posted on July 30th, 2009
So, you’ve reached a point in your life where you think that you’ve learned a little about business, finance, contract negotiating, real estate, etc. and have at least a layman’s knowledge of law pertaining to each. Being that savvy, you might also be aware of the incredible retirement locations and values south of the border; furthermore, you might even be considering Mexico as your retirement destination. If so, you might as well forget everything you’ve learned and leave your law degree at home!
Mexico, as beautiful as it is, has a somewhat different way of doing business and a completely different set of laws. Additionally, all legal transactions, including real estate transactions, are done in Spanish. Therefore, for those of you that may be considering locations in Mexico as possible retirement destinations, the following information should give you some insight as to how the Mexican real estate industry works, list some of the possible pitfalls, and most importantly, give you the guidance required to assure a pleasant and safe experience.
In 1984, we made our first real estate purchase in Puerto Vallarta; a condominium in Mismaloya, about seven miles south of town. Our second purchase, two years later, was the adjacent condo. A year later, we removed the wall between the two condos and remodeled them into one very spacious three bedroom condo. For thirteen years, while still working in Houston, we thoroughly enjoyed visiting Vallarta two or three times a year.
At some time after the purchases of the two condos, we noticed that our original escrituras (legal property documentation similar to a title or deed that is held in a fidecomiso or bank trust) showed the property values to be about one third of what we actually paid for them. When we inquired about the discrepancy, we were told that the lower values were used in order to reduce our annual property taxes.
It wasn’t until many years later, when we decided to sell the condo, that we learned that capital gains taxes were due on the huge difference between the selling price and the documented purchase price. Ouch, we owed substantial taxes on a paper gain, when in fact; there was very little real gain! We then learned that the condo developer entered the extremely low sales prices on all the escrituras in the condo complex in order to evade paying substantial capital gains taxes. As we later learned, the developer could have entered the selling price, the appraised value, his cost of construction, or just about anything imaginable into the escritura, and we, being the naïve Americans that we were, were at his mercy!
Upon the sale of the condo, we bought a beautiful new mountainside villa with a panoramic view of Banderas Bay, El Centro, and the Sierra Madres. We saw the new villa advertised in one of the local magazines and asked our realtor friend to show us the property. He showed us what seemed to be every property in town, before reluctantly taking us to see the villa in the magazine. Some time after buying the villa, we learned that our realtor friend received only 10% of the commission on the sale because that was all the listing agent was willing to pay. The listing agent ran the ad in the magazine and didn’t feel that an agent representing a buyer was necessary in order to sell this beautiful new villa. Therefore, our agent spent a couple days showing us nothing but properties listed by his agency before caving in to our demands and taking us to the villa of our dreams; one that we have thoroughly enjoyed for more than a decade.
These experiences revealed the tip of the real estate iceberg and after living here for ten years, we’ve finally been able to expose the entire iceberg and share some of the details below.
To begin with, there are no licensed real estate brokers or agents in Mexico! In fact, there is no mandatory licensing for real estate agents in all of Mexico because the Federal legislation process has yet to accomplish it and therefore such legislation remains in limbo. In Puerto Vallarta, where there are in excess of 80 real estate agencies, there are probably more than 500 real estate agents with minimal qualifications. With the booming real estate market and economy that exists today, it’s quite obvious why we have such a diverse group of agents and brokers in Vallarta.
In order to have some degree of continuity from agent to agent, a voluntary association for real estate personnel exists in various areas of Mexico. The Asociacion Mexicana de Profesionales Inmobiliarios A.C., known as AMPI, is quite active in Vallarta with the membership of approximately 50 of the 80 real estate agencies in Vallarta. Although membership in AMPI is not compulsory and has no bearing on the capabilities of the agents representing the buyers or sellers, it is considered to be the standard bearer for listing agents in the area.
A second real estate association, mainly consisting of Mexican agencies based in the Vallarta area, is Asociacion de Profesionales Inmobiliarios de Vallarta A.C., known as APIVAC.
These associations schedule periodic conferences, conduct educational programs, and hold various meetings where they attempt to keep their members and the public current on activities in the area as well as changes in the Mexican law as it pertains to real estate. They have codes of ethics and they do attempt to establish uniform sets of operating policies and procedures, some of which are in writing, others understood but not documented. They bring real estate personnel together where their members voluntarily agree to abide by their organizations´ statutes and codes of ethics while attempting to operate with some degree of continuity and professionalism. For sure, these associations are better than nothing but still not to be confused with associations such as the National Association of Realtors or NAR in the US. Dual agency disclosure, designated agency, full disclosure, confidentiality, imputed knowledge and notice, implied knowledge, fiduciary duty, loyalty, and vicarious liability are foreign concepts to the majority of real estate agents in Mexico. Consequently, misleading or inaccurate statements often made by many of the agents can put both the buyer and seller in intolerable predicaments in Mexico.
Although AMPI and NAR do have a working relationship, one example of the differences between AMPI and NAR is that NAR provides its member agencies with standard statewide listing forms, pre-qualification forms, escrow account and earnest money forms, standard purchase agreement forms, letters of intent, etc. In Vallarta, there are no such forms provided by AMPI or APIVAC. Each real estate agency has its own listing form or uses a form provided by an outside privately owned publisher, which clearly depicts the listing agent as receiving 100% of the commission upon sale of the property. Also, NAR has written and enforceable guidelines regarding the handling of commissions and the sharing of commissions between the selling and buying agents. Although there are guidelines in Mexico for real estate commissions, they are still flexible, and to some degree negotiable with the seller. The listing agent can then negotiate commission sharing with the buyer’s agent.
All other forms vary from agent to agent and are not necessarily written in the best interest of the buyer. Also, most forms and contracts for North Americans are in English; however the Spanish version is the only document that has any legal standing in Mexico. Therefore, regardless of what you read in English, a Spanish speaking attorney should always represent you along with your agent.
Another major difference between the Mexican based associations and NAR has to do with the Multiple Listing Service or MLS. In the States, the MLS is controlled and monitored by NAR and is available to all NAR agents. In certain Mexican cities, including Vallarta, there is an MLS; however it is not controlled by AMPI or APIVAC. Instead, it is privately owned and operated by a local publisher and is available for property searching to the public at no charge. AMPI members are able to list their properties on the Vallarta MLS, with the general public as well as the other AMPI and APIVAC members having access to the listings.
Once you understand the inner workings of the real estate industry in PV, you need to learn a little about Mexican real estate law. It can be quite complex regarding trusts, escrows, mortgages, treatment of taxes, etc. and is often open to interpretation by a state appointed attorney, known as a notario. A small percentage of the realtors in Vallarta have a fair understanding of Mexican law as it pertains to real estate transactions; however the vast majority of them are sorely lacking in this field. Even with little or no knowledge of the law, they will be anxious to advise you, right or wrong; therefore, the best law to follow is caveat emptor, or buyer beware!
Because of the many pitfalls that a buyer can encounter while purchasing real estate in PV, we learned over twenty years ago that it is wise to interview realtors with scrutiny, keeping in mind that most all will be promoting their own listings first and meeting your needs second. It’s just human nature and with virtually no control in Mexico, it’s pretty much assured. Also, because almost 100% of them have listing agreements with the sellers, they are legally bound to act in the best interest of the sellers, and not necessarily in the buyer’s best interest. Because the buyer usually has no contractual agreement with the realtor, he will in all probability get the “short end of the stick” in this conflict of interest.
Of all places, in Mexico you should select an agent that is 100% dedicated to helping you find the property that meets your needs and satisfies your requirements; preferably, a contractual agreement with an agent with no listings, no axe to grind, no ulterior motive, and is exclusively representing buyers and their best interests.
A true buyer´s agent in PV should have no property listings, should have complete access to the Vallarta MLS, should know the areas and growth trends in and around Vallarta, should be able to professionally negotiate on the buyer’s behalf, should have a decent understanding of Mexican real estate law, should have a working relationship with the local notarios, real estate attorneys, escrow and title agents, mortgage bankers, insurance agents, inspectors, appraisers, and lastly, your representative must have a thorough working knowledge of the local real estate industry and understand the idiosyncrasies associated with it.
Buying your dream home or condo in Vallarta should be one of your best experiences, however without due diligence, it can be a nightmare. Obtaining an exclusive buyer´s agent with 100% dedication to you is a prerequisite for assuring a pleasant beginning of your retirement in Paradise.
Posted by admin | Real Estate | Posted on July 22nd, 2009
Top 10 Luxury Home Markets To Watch for Price Increases or Reductions
The Unique Homes Magazine has listed 25 luxury home markets to watch in 2007 in its January issue. According to the Unique Homes report the 25 luxury markets will indicate where the luxury real estate market is heading to. These markets along with features that make them stand out from the rest are worth watching out for.
The following is a brief report on the top 10 luxury home markets to watch for price increases or reductions in 2007.
1. Annapolis, Maryland. The waterfront city located on Chesapeake Bay offers excellent boating and affordable prices compared to Washington’s luxury enclaves. With Washington and Baltimore within reasonable commute, this city is highly desirable.
2. Asheville, North Carolina. An eclectic ambiance and low-key lifestyle attracts people to Asheville which continues to remain one of the hottest places for luxury home buyers.
3. Aspen, Colorado. From a ski enclave this luxury market has grown into a platinum location. With its four-season appeal and restrictive zoning policies, Aspen is still a highly-sought after destination.
4. Atlanta, Georgia. The city offers several new upscale communities, numerous lifestyle amenities, retreats and much sought after waterfront luxury homes.
5. Austin, Texas. A strong real estate market that saw record gains in 2006, the reputable University of Texas, the scenic lakes and the great music attracts buyers to this hill country.
6. Bellevue/Medina, Washington. With prices going up at 28 percent, the market has still not peaked and several upscale neighborhoods are available at a lower price range when compared to other markets.
7. Beverly Hills, California. One of the top ranked luxury markets that is perpetually in demand, Beverly Hills continues to be untarnished and idolized as the Mecca for luxury. Hollywood Hills is currently a hot market for buyers.
8. Idaho. The growing resort markets in the state garner attention for the state that is making its presence felt in the luxury home market.
9. Jupiter, Florida. The boom has arrived here after Tiger Woods’ purchase of a 10-acre estate for $38 m. The market continues to surge on this exclusive island.
10. Manhattan Uptown, downtown, midtown. The luxury market is upbeat with record sales of more than $5 m in 2006 accelerated by Wall Streeters. Co-ops and town houses are favorites among buyers here.
If you are interested in buying or selling a home, condo or any other type of real estate in any of these markets, be sure to seek out the services of a real estate agent to advise you about current local market conditions.
Posted by admin | Real Estate | Posted on May 24th, 2009
Real estate investing is a new, exciting, and wonderful adventure when you’re first getting started. For me, the new hasn’t worn off. I love real estate investing as much as I ever have. But, if there’s one thing I would have changed, it would be my knowledge of the terminology thrown around by more seasoned investors. If you’re tired of feeling like a dunce for having to look up the meaning of a real estate term every time you hear one, here’s a primer that should help get you up to speed.
Acceleration clause – a provision in a mortgage loan that allows the lender to demand immediate payment of the entire outstanding balance because of the violation of a loan provision, such as defaulting on the mortgage.
Addendum – an addition to a contract adding a provision that wasn’t in the original document. Once agreed to by both parties, the addendum then becomes a part of the original contract and is enforceable in court (assuming the provision is legal).
Appreciation – the increase in value of an asset.
Balloon payment – a required large final payment of a contract, frequently a large percentage of the original amount borrowed. Many times a contract will consist primarily of interest only payments for a period of time followed by a large payment that pays off the entire balance. For instance, someone might make interest only payments on a property for five years and then have to pay the entire balance off at the very end.
Cash flow – the amount of money left over on a monthly basis after paying all operating expenses on a property. This amount can be expressed as either a positive or a negative number. For example, if a property has total income of $1500 per month and expenses and debt service of $1000 per month, monthly cash flow on the property would be $500.
Closing – a meeting between the buyer and seller of a property where legal ownership is transferred. When this happens, there is typically a large stack of legal documents that needs to be signed by both parties. At this time, the seller receives certified funds as payment for their property, all closing costs are paid, and the buyer signs mortgage and other legal documents and receives a large stack of papers related to the purchase.
Closing costs – expenses that must be paid in order to legally transfer ownership of a property from the seller to the buyer.
Depreciation – a provision in the Internal Revenue Code that allows the owner of a property to take a tax reduction for the value lost through the year. One unique aspect of this provision is that the federal tax code allows a real estate investor to take a depreciation allowance on their tax return even though their property actually increased in value.
Due on Sale Clause – a provision in a mortgage contract requiring that the entire loan balance be paid immediately on demand in the event of the sale of a mortgaged property. Certain things can trigger the due on sale clause in the contract, such as the legal transfer (or equitable transfer) of ownership from the original loan borrower to another party.
Earnest money deposit – when someone places a written offer on a property, the seller will normally require that the buyer provide a small deposit (usually $500 or $1000) to prove to the seller that they are serious about making the purchase. These funds are normally placed into an escrow account by the real estate agent and will become the property of the seller in the event that the buyer fails to execute the contract as agreed.
Foreclosure – the legal process involved in repossessing a property, usually for nonpayment of a mortgage contract. There are two kinds of foreclosure: judicial and nonjudicial. Specific foreclosure laws vary from state to state, but in general the foreclosure process takes considerably longer in a judicial state because the lender must go to court and prove that the borrower has failed to make their payments as agreed. In a nonjudicial state, the process is much shorter and simpler because the lender is not required to receive court approval prior to forcing the removal of the borrower from the property.
GRM – also known as the Gross Rent Multiplier, which is a ratio you can use to estimate the value of an investment property. To figure the GRM, you need two pieces of information about the property: the sales price and the market rent rate. The way you figure the GRM is by taking the sales price and dividing by the monthly rent. For instance, pretend you have a property with a list price of $125,000 that would rent for $1600 per month. 125,000/1600=78. In this case the GRM would be 78.
Home Equity Loan – a type of loan where the owner of a property borrows money from a lender based upon the value of the property. Proceeds from a home-equity loan are typically used to make repairs to the property, pay off other debt, or to fund additional real estate investments.
HELOC – Home Equity Line of Credit is a type of loan where the borrower pledges the equity in their home as collateral. In exchange for receiving a HELOC loan, the homeowner usually receive a checkbook that they can use to access funds. While the homeowner is typically notified at the time that their loan is approved how much money they are qualified to receive, they don’t normally receive cash at that time. Instead, they use the checkbook to access HELOC funds, so they only pay interest on the portion of the loan that they are utilizing at any given time.
HUD-1 settlement statement – this form is also known generically as the closing statement. Put simply, it is nothing more than a detailed accounting sheet that discloses where every dollar of a real estate transaction is going. It lists things such as real estate commissions, mortgage broker fees, escrow amounts, etc. At the very bottom of the sheet it details the total amount of money paid by or on behalf of the buyer to the seller.
Lien – a type of encumbrance that can be placed on a property by a creditor that prevents the property’s sale without the payment of a legitimate debt. For instance, if a homeowner loses a lawsuit and is bordered by the court to pay the winning party a certain amount of money, many times the winning party will place an encumbrance upon their real estate to ensure that the judgment is paid.
LTV – a numeric value that can be used to determine how heavily leveraged a property is. If a borrower takes out a loan in the amount of $100,000 and the property is worth $125,000, the LTV is 80%.
NOI – the Net Operating Income of an investment property is the amount of money left over each month after making all debt payments and paying all operating expenses, such as insurance, maintenance, and repairs.
Owner financing – a method of financing where the seller acts as the bank and agrees to take payments for their equity over a period of time. This is a very common and creative real estate financing technique utilized by a lot of real estate investors who for one reason or another have decided to forgo institutional bank financing or the use of hard money lending sources.
PITI – an acronym that stands for principle, interest, taxes, and insurance.
ROI – an acronym that allows a real estate investor to determine their return on investment, which is expressed as a percentage. For instance, if you invest $100,000 and you receive $10,000 in annual returns, your ROI would be 10%.
Title insurance – an insurance policy that the purchaser of a real estate property can purchase to guarantee that there are no outstanding liens or other encumbrances that would affect the transfer of ownership from one party to another.
As you can clearly see from this list of real estate investing terminology, there is a huge vocabulary for you to learn as you begin to fully immerse yourself into the world of real estate investing. This is by no stretch of the imagination a full list. It is, however, enough of a starter list that you can feel a little more comfortable with getting up to speed. Your eyes won’t completely glaze over if you happen to overhear more experienced investors talking, and in many cases you can smugly smile – knowing that you’re a member of a select club of special entrepreneurs who have their own secret language. Plus, you won’t have to wear a special uniform or try to explain to people where the Klingon empire is located.
To learn even more of the jargon used by real estate investors, navigate over to www.REIconferences.com and look around a site built by investors for investors. It’s packed with all the tips, tools, and information you need to turn the corner and reach all of your investing dreams.
Posted by admin | Real Estate | Posted on May 23rd, 2009
Decide to Sell
Deciding to sell your home is a big decision. The first step in this process should be to understand your motivations, expectations, financial considerations, goals and what you plan to do upon the sale of your home. Many people begin the sale process with unrealistic expectations or unclear goals. It then becomes difficult to meet their goals because these goals have never been clearly defined. You must begin to view your house, no longer as your home, but as an investment property that you want to market.
Setting the Price
Of course one of your most difficult questions is the listing price of your house. What price should you ask? This is an important part of the sales process. If you set the asking price too high, you may scare away buyers. Agents who feel that your house would not be a good investment may not even show the house. After the house sits on the market for a while, people begin to feel that there is something wrong with it because it hasn’t sold. Even if you could sell your house for an inflated price, many times a lender won’t approve a loan on a house that doesn’t appraise for that amount and the sale might fall through at the last minute. If you under price the home, you won’t realize the maximum potential of your investment.
Marketing Plan
Decide on incentives that to be offered to buyers, determine the best places to advertise, and determine how to show the home. Remember that that goal is to sell the home for the highest price, in the least time, with the fewest hassles.
Prepare the Home for Showing
There are two important ways that you can have an impact in making your house attractive to buyers: property condition and listing price. After deciding on a listing price, setup an appointment with a decorating company. They will give you some suggestions for making your house look its best. This process is called “staging.” The suggestions might be simple such as clearing cluttered counter tops. Or they might be more involved such as painting front doors or repairing obvious defects.
The staging company will look at your house from room to room and will offer advice on how to make each room show great. They will also look at the exterior street appeal, backyard and garage. They have a lot of tips that can make your house shine. After this meeting, you will have a list of what you should do to prepare your house for sale. Following these suggestions in a timely manner will ensure your home shows at its best.
Remember that “staging” addresses the appearance of the house and not necessarily other problems, which might become evident during an inspection. An inspection will uncover most defects that eventually may have to be repaired. In this way you can have the repairs done before a potential buyer’s inspection uncovers a defect that might cause a buyer to either change his mind or to want a substantial repair allowance deducted from the price. It is a signal to buyers that you are a responsible, reputable seller. It also allows you to have plenty of time to schedule any work that might need to be done.
Offer a residential service contract to buyers. This guarantees the major appliances in your home as well as other systems and structures. You can also include coverage for your house while it is on the market so you don’t have to pay for any unexpected repairs.
Marketing the Home
Now the fun begins. Here are some ideas that can be used to promote your home.
It is important for you to keep your house in perfect condition everyday because buyers or agents might come by at any time. Keep the kitchen clean, make your bed every morning and keep clutter out of sight. It is especially important to keep pets and pet odors under control. Some wonderful added touches are fresh flowers and potpourri or freshly baked cookies.
As agents and potential buyers begin visiting your home either virtually on the Internet or in person, try to obtain feedback from the buyers. Make changes to the showing state, condition, and price as feedback deems necessary.
The Offer and Negotiation
You have an offer, now what? Sometimes the buyer will offer you the asking price and have no special requests. In this case, you sign that you accept the offer. Sometimes, the buyer’s offer is a lower price and might have other requests. You should consider what is best for you and make a counter offer. Consider carefully your response because if you counter offer, there is no guarantee that the buyer will respond again. Also remember that, once agreed upon and signed by all parties, an offer becomes a legally binding contract. Never get involved in oral offers and negotiation. If you verbally accept an offer, a buyer has no legal obligation to buy the house and may want to continue to bargain with you to see how low a price you will accept.
No matter how well you have prepared your house and how fairly you have priced it, there is always the possibility of receiving a low offer. It could be a limit to the buyer’s ability to purchase. Don’t take it personally and react angrily. This is business, it’s not personal. You can either reject the offer or make a counter-offer. Try to find out as much as you can as to why the offer was low. Certainly if other offers come in very low or if your home is not being shown or not receiving any offers consider adjusting the pricing.
Once the buyer and seller agree on the terms, the buyer will have the home inspected. If there are any problems that are found during this time period then the buyer can withdraw from the contract. The buyer might request that you complete certain repairs before closing or that you contribute a certain sum of money at closing to cover these repairs. If this happens, try not to let contract fall through. After the limited time period is up, the buyer is legally bound to buy your house unless they are denied financing. In the event of cancellation, the buyer would lose any earnest money. One exception to this is in the case of the buyer not receiving funding from the lenders. In that case then the buyer is not held responsible. For this reason, always ask the buyer’s agent for a letter showing that the potential buyer has been prequalified for a loan and, once a contract is signed, ask the buyer’s agent to keep you informed of the buyer’s loan application progress.
Closing
The exciting day is finally here! Verify in advance that all of the paperwork is in order. Request a copy of the HUD1 statement sheet so that you can read over it before closing. Feel free to ask any questions either before the closing or during the closing itself. Typically this is when you relinquish possession of the house so take the keys to give to the new owner.