Archive for July 2011
Role of Real Estate Agents
July 31, 2011 | 
Author 
What role do real estate agents play when you set out to invest and purchase real estate? There is one thing that you ought to notice. It is that these folks have the same role to play as that of the stock analyst. It might seem to be a weird comparison, but veracity is that this example vindicates the stance well. A real estate agent can easily tell you about the site that would benefit you and the one that fits your budget. He can easily reveal which neighborhood would benefit most and which neighborhoods should you avoid buying in at all costs. All of this is possible because of the fact that these agents know all the places around town very well and can show you any site that might draw your interest.
When you set out to buy property, you go and meet a real estate agent. You tell the guy all about your housing needs and how well a home would suit you. Accordingly, that guy starts taking you around town and shows you all those places that are up for sale or for rent and the ones that would fit your budget as well as fit your housing needs. These agents keep scouting for properties all the time so that they are well aware of all the vacant sites and can help out people anytime who come to them with their property needs. They take you all across the place and make you see all the sites that you ever wish to see. Once you have identified the place where you would want to put up, then all the formalities and legal tangles are completed.
The Realtor ensures that you are told about the correct market price that the house can be bought for. Any exaggerated quote would invariably propel the agent to tell you that the price is exaggerated and the property is simply not worthy enough of being paid for that much. Then you can move on with him and he will take you to various other properties where you can invest. When the priced too has been agreed upon, then the papers of the property will be dug out. The paper will be the deed that is made between the parties and the real estate agent puts his signature as the witness of the deed. The onus of having the names transferred from the papers lies on the Realtor, something that he is a veteran at doing. When that too happens, he will tell you about the mode of payment.
He also helps you identify the site and takes you all around the place. He shows you neighborhoods where schools, colleges, shopping malls and other commercial sites are available and something which would suffice your requirements. He ensures that you get the best deal on the block where basic supplies and utilities are available at the drop of a hat. He takes you on an extensive reconnaissance.
Being in the business for many years, the agent is a champion identifier and does not even take a minute to tell you about the place where you might potentially find your dream home. He knows all the places well and is pretty well versed with the amenities available there. This ensures that when you go to see the site along with him, you end up making the right choice. You will never ever land up at the wrong place and feel cheated when you go to get the deal sealed with an experienced land broker. This is the biggest benefit of having a veteran Realtor overseeing things.
By: Payal Gupta
Posted in Real Estate | 
Tags: Formalities, Housing Needs, Invest, Legal Tangles, Neighborhood, Rea, Real Estate Agent, Real Estate Agents, Real Play, Realtor, Role Play, Scouting, Stock Analyst, That Fits Your Budget, Veracity | 
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Tapping Home Equity Considerations When You Need Funds Now Or Later
Home equity is the difference between the market value of your home and the remaining mortgage amount you owe.
Usually the longer you own the house, the lower the owed mortgage amount is, and thus resulting in a higher equity in the house.
May be you are already considering to use that money fund. You may have your reasons such as money you need for an emergency, your health care needs, you want a home renovation or need money for a home repair or you just need to supplement your income.
For certain expenses you could consider using your credit card but using the equity from the house may be less costly than the interest costs from your credit card.
Anyway, there are also other factors playing a role when it comes to decide to use the money that is in the value of the home.
Future financial situation
Besides what you need right away, it is crucial to look at your financial situation in the years to come. How much money do you require in the future.
You may need funds now, but what do you need later? May be you need it more by then.
It may scare you off to use the equity, as in the first place, you see your home as a place to live and not as a source of money to supplement your income or for your everyday living expenses.
Or may be you want to leave an inheritance for your children.
Altogether you have to think it over thoroughly: do I leave the equity unchanged or am I going to use it and may be ending up later with not enough money and be forced to sell the house – when using all of the funds from the house.
It is wise to keep some of your funds in case you want better housing in the future or have to pay for future repairs or even have to move to a senior housing apartment or assisted living.
It takes time
In stead of a home equity loan you could consider selling your home, but chances are that both solutions will take time to receive the money you build up in your house.
To have funds available this way, you also need to look into issues such as
home repairs, title to the home, finding a new home or place to live.
Buying, owning and selling a house normally involves a variety of experts. You may need a banker, an appraiser, a realtor – real estate agent, a lawyer, an inspector and may be a contractor.
So, you may well start planning these things to avoid delays later.
By: Brian G Blaine
Posted in Finance | Tags: Apartment Living, Assisted Living, Credit Card, Enough Money, Everyday Living, Financial Situation, Health Care, Home Equity Loan, Home Renovation, Housing In The Future, How Much Money, Inheritance, Interest Costs, Living Expenses, Money Fund, Mortgage Amount, Need Money, Selling Your Home, Senior Housing, Stead | No Comments »
Have Your Property Taxes Reassessed
If your home has lost value there may be a silver lining. If you purchased your home between 2003 and 2007 its possible you are paying too much for property taxes and you can have your assessment lowered and even get a refund.
Many homes across the country has suffered value loss due to declining market values. If you purchased your home in the last 5 years it’s important to find out if you are being assessed for more than your home is worth.
Here in Southern California there was a period after the Northridge Earthquake in the mid 90′s when property values dropped dramatically and the average homeowner was over assessed on their property taxes. With the right information you can get your home reassessed and your property taxes lowered. In this economy who wants to just keep throwing money away.
The tax assessor is a government agency that assesses your property taxes based on your purchase price and some incremental increases allowed by your local regulations. You may also be reassessed every time you add a room, pool, landscaping or remodel based on your permits. Lets say you live in Los Angeles and you bought a home a couple years ago for $700,000 and the market has dropped to say $500,000, you are still being assessed at the higher purchase price and even higher if you made enlargements or permitted improvements.
The tax assessor has a difficult job and I would imagine they are going to be flooded with applications for reductions in assessed value and minimal lowering of tax bills. I know when I handled my own reduction years ago I filled out an application for reduction and they readily agreed to a small decrease, well being an licensed appraiser I knew I could do much better and requested a hearing with an assessor and came prepared to do battle. I was a little nervous but knew my information was strong and was determined to win. As soon as I sat down to compare info they began to show me what data they had and found they made a huge typo mistake on their information and conceded immediately. I won and did not even get a chance to fight for it. My taxes were probably the lowest in the neighborhood because I was persistent. I felt sorry for my neighbors who didn’t even try.
The process is a little confusing and I am not an expert on governmental procedures. I am a licensed appraiser with some personal first hand experience on my own properties. Technically you do not need an appraisal but a licensed appraiser with experience can be your best advocate by preparing a defensible appraisal for your benefit and help you get the results you are after. I would suggest you find out what you are assessed at and what your home could be valued at with any current value declines.
Appraiser/Author
Clifford Diamond, CREA
As an experienced appraiser in Southern California with over 20 years experience I am available for expert witness, court work and speaker for local attorney and accountant groups. Please look me up in Los Angeles CA.
By: Clifford Diamond
Brand Your Book Market – 5 Steps to Creating Definition For the Writer in You
Every writer needs a solid definition to carry their business forward and that definition should offer a specific focus the writer can follow. Focus gives the writer voice, character, and position in the act of writing and marketing their materials. Whether you write books, articles, or white paper reports, your definition will carry you forward.
1. The Genre Decision
With the genre choice comes the often assumed identity – I’m a fiction writer, or I’m a science history writer, or any one of the hundreds of other genre specifics. But in reality, you’re probably more balanced as a person than just one genre. The decision you make, to write just one area may not be made intentionally. You may actually make it while writing. Business or copywriting offer a payday benefit, while other types of writing offer a different sort of payday.
Make the genre decision consciously and understand that you can write in more than one genre without having a major effect on your writing skills or results. Concentrate on your favorite topics to find sources of writing that you’re best at writing.
2. Original Topics
No matter what genre you choose, be sure your topics are original. Before we get started on this topic, let’s define original. In reality, there probably isn’t much new available, so when we talk original in writing, it means an idea someone else hasn’t put together or combined into one comprehensive study or writing. Bring up a new idea and write about it. Use new characters, new thoughts, new concepts and put together old concepts, ideas, and characters in new ways. You can create a new original scenario by using you imagination and being creative.
3. A Comprehensive Voice
Dig a little deeper and seek out your natural writing voice. Everyone has a specific voice or tone to their writing. When you find that voice, everything you write will be new and valuable. Your voice is innovative. Having a powerful voice, simply means you know who you are and what you’re talking about. Take the time when you write to find your voice and use that voice to shout your message from the rooftops of writing. Bring the people YOUR words, YOUR way.
4. Parallel Universe Disclosures
Often writers get hung up on the idea that something has already been written. Step over the obstacle and write on a different plane. Give up their repetition to a new and parallel universe and write your article. Give it your best shot and tell the world the way you want to do things. You can write your story, even using their article as a reference if you choose to do so, and you’ll get rave reviews so long as you stay off the “copyright-infringement route” and use your own original thoughts and ideas.
Reference the work if you quote it.
5. Understanding the Market
Probably the most important thing for you to grasp from this whole article is right here. Know your market. When you know who will read your information, your information will be written specifically for that market, sold to that market, and it will be profitable. Give it your best shot and understand the value of your market niche and knowing what that is.
Once your market is identified, you only have to write for them. The easy part is writing for people you know and understand.
By: Jan Verhoeff
Posted in Business | Tags: 5 Steps, Act, Benefit, Books Articles, Fiction Writer, Follow Focus, Genre Choice, Imagination, New Thoughts, New Ways, Powerful Voice, Science History, Specifics, Writing Skills | No Comments »
Florida’s Amendment 1 – What It Means to You
On January 29, voters spoke loud and clear. Amendment 1 passed with nearly 65% of the vote – an astounding percentage. With the passage of Amendment 1, many people will be seeing some major changes in their tax bills. Are you one of them? Here’s quick rundown on the four sections of Amendment 1, what each section is, and how it might apply to you.
Part 1: Portability
The first part of Amendment 1 allows those who received a homestead exemption to transfer their Save Our Homes benefit to a new home under certain conditions. Under the old system, many people were “trapped” in their homes – unable to move because a move would mean a drastic increase in their taxes. The large increase in tax was due to the yearly 3% cap that a homesteaded property is privy to. So if property values increased more than 3% every year, a homesteaded property’s assessed value capped out at 3%. You can see that a homeowner that has resided in a home for a number of years would see a substantial tax benefit by means of a lower assessed value. Under the old plan, each time you purchased a new home, you lost any accumulated tax benefit from your old home and the assessed value reset to the market value of your new home.
Under the new amendment, you get to take your accumulated tax benefit with you as long as you apply it to another homestead within two years. A seller that had homestead exemption in 2007, and who either sold or abandoned their homestead in 2007 will be eligible to take their Save Our Homes benefit with them if they move to a new home in 2008 and apply for homestead portability. From 2008 onward, you can take your Save Our Homes benefit with you as long as you transfer it within the same year or the following year.
In order to receive this benefit, you must apply by March 1, 2008 to your property appraiser for your new homestead exemption and for the transfer of the “Save Our Homes” benefit to your new homestead for 2008.
In order to take advantage of portability, you have to make two separate applications – one for your new homestead exemption, and one to transfer the Save Our Homes benefit for 2008. You’ll find the application forms DR-501T and DR-501R on the Florida Department of Revenue website.
Here’s a quick FAQ regarding portability:
1. How much is the portability benefit worth?
You can transfer up to $500,000 of portability benefit to a new homestead. If your new homestead is worth more than your old one, you transfer the dollar amount. If your new homestead is worth less than your hold one, you transfer the percentage. For instance: your current homestead is assessed at $300,000, but under Save Our Homes, $150,000 of that is exempt. If you move to a new home that is assessed at $500,000, your portability benefit will be $150,000. If you move to a new homestead that is assessed at $200,000, your portability benefit will be 50%, or $100,000.
2. Is the change of homestead and transfer of Save Our Homes automatic?
No. You need to apply for each benefit separately.
3. How do I apply for portability?
You simply turn in a completed application form to the office of the county appraiser in the county in which your new homestead is located.
4. Does portability only apply if I buy a new home?
No. If you already own a second property, you can transfer your homestead exemption to one property to the other and transfer the Save Our Homes benefit as well. Make note that your Homesteaded property must be your primary residence.
5.Am I eligible for portability this year?
If you filed to give up your old homestead after January 1, 2007 and are claiming a new homestead for 2008, you’re eligible, but you have to file your application for portability by March 3, 2008.
Part 2: Additional $25,000 Homestead Exemption
The second part of Amendment 1 is an additional $25,000 homestead exemption. The exemption is available to anyone who is already claiming the original $25,000 exemption. In order to claim it, you don’t have to do anything. It will automatically be applied to your 2008 tax assessment. In Hillsborough County, the average savings will be $250-300 per household. This is how it will be calculated:
First 25,000 of value – exempted from taxes
Second 25,000 of value – fully taxable
Third 25,000 of value – exempted from all taxes except the school taxes
Why isn’t the second 25,000 of value exempt? It is designed to protect cities and towns within Florida that may have many lower assessed property values, particularly in more rural areas. If the exception applied to the second 25,000 of value, many of these cities and towns would not collect enough revenue to run their local governments.
Why does the second 25,000 exemption still allow for the schools taxes to be collected? Simple answer is that the revenue is needed to fund our schools.
Part 3: Tangible Personal Property Exemption
According to the DOR:
Tangible personal property is all goods, chattels, and other articles of value. It includes: machinery, equipment, furniture, fixtures, signs, window air conditioners, supplies, leased, loaned, borrowed, or rented equipment used in a business, mobile home attachments on rented land (carport, screened porch, Florida room, etc.) furniture and appliances in rental properties.
The third part of Amendment 1 is a $25,000 exemption on all tangible personal property. Business owners must complete the TPP return and file it by April 1 each year. If it’s determined that your total tangible personal property is less than $25,000, you won’t have to file again. The first $25,000 of tangible personal property is exempt from taxation under Amendment 1.
Part 4: 10% Non-Homestead Assessment CAP
The final part of the amendment is a 10% limitation on assessment of non-Homestead property, both residential and non-residential. As of January 1, 2008, state law requires that all non-homestead property be assessed at just market value, and be reassessed annually, but the change resulting from the reassessment can not exceed 10% of the current assessed value, and the assessed value can not exceed the market value. In 2009, owners of non-homestead property will be able to apply for the 10% non-homestead assessment CAP.
In practical terms, that means that as of January 1, 2008, the assessed value of your non-homestead property will be equal to its market value. If your property is appraised at $350,000, it will be assessed at $350,000 for tax purposes. In 2009, if you apply for the 10% CAP, the property assessment can not be any higher than $385,000 – 10% above this year’s assessed value – no matter how much the market value increases. If the market value of the property is less than that, then the assessed value can be no higher than the market value.
You’ll find any forms needed to apply for the various exemptions at the DOR web site or at your county appraiser’s web site.
By: Calum MacKenzie
Posted in Real Estate | Tags: Advantage, Amendment 1, Drastic Increase, Homestead Exemption, Lost, Many People, March 1, New Homestead, Property Appraiser, Property Values, Rundown, Substantial Tax, Tax Benefit, Tax Bills, Vote | No Comments »
Real Estate Investors: Change Strategies as Market Cools
Depending upon where you live, it may be time for you to rethink your investment strategy if you’re a real estate investor, because many areas of the country appear to be on the verge of a price downturn. The indicators are there, beginning with the fact that it’s taking significantly longer to market homes when compared to last year. When coupled with rising interest rates, it’s likely that the recent real estate boom may be coming to an end.
One of the most startling statistics can be found in Los Angeles, where the median home currently sells for ten times the area’s median income. That trend can’t continue, regardless of interest rates or the kinds of creative financing options banks come up with.
LA’s trend isn’t unique, however, and home prices will probably continue to fall as 2006 progresses, and will decrease even more dramatically in 2007, especially if interest rates continue to rise. That trend will be more pronounced in areas of the country that have seen dramatic price increases in recent years. Some economists even predict double-digit declines in Miami and Las Vegas, two of America’s hotspots during the recent real estate boom.
However, those sorts of declines aren’t expected to be countrywide. Some areas of the country may actually see real estate values continue to grow, but at more modest rates, including most of the Midwest, parts of Texas, and even some larger cities like Atlanta.
As an investor, you’ll need to be aware of the trend in your area and invest accordingly. For example, if you’re a builder, the combination of higher home prices, higher interest rates, and higher gas prices will make it harder to sell high-end homes that are built some distance away from major cities.
Homes are also getting smaller, after increasing in size for the past thirty years (peaking at 2,430 square feet) and the things people want to see in their homes are changing. For example, luxury kitchens and deluxe bathrooms have gained in popularity while the demand for formal dining rooms has decreased.
If you’re an investor who depends on flipping houses, your profit margins may be shrinking and your flipping time may be increasing. Therefore, you may want to begin thinking in terms of income and not capital gains. Although being a landlord isn’t for everyone, if real estate values continue to decline and on-market times continue to increase, you may want to think about renting your homes as you wait for the market to improve.
You may also want to look at properties closer to downtown areas, since many renters are attracted by easy proximity to their jobs and to the amenities offered by cities. Rental units near office complexes or near several main highways can be especially attractive investments in a market that is showing signs of slowing down. If you’re really not cut out to be a landlord, you can always turn the details over to a property management company, assuming you make enough on the rental to cover their 5-10 percent fee.
Regardless of your previous real estate investment strategy, you may want to begin rethinking your options as the real estate boom begins to slow down in most areas of the country.
Copyright ? 2006 Jeanette J. Fisher
By: Jeanette Joy Fisher
Posted in Real Estate | Tags: Change Strategies, Creative Financing, Declines, Deluxe Bathrooms, Downturn, Financing Options, Gas Prices, Investment Strategy, Luxury Kitchens, Major Cities, Median Income, Miami And Las Vegas, Price Increases, Real Estate Boom, Real Estate Investor, Real Estate Investors, Real Estate Values, Rising Interest Rates, Startling Statistics, Verge | No Comments »
Real Estate Marketing: Power Up Your Prospecting For 2007 Success
With every deal, agents have the opportunity to gain transaction knowledge and improve skills in negotiating, legal and regulatory matters. On the other hand, many agents focusing on transactions find it challenging to fit marketing activities into their day-to-day routines.
Though the past few years have been characterized by quick sales, rapid price appreciation and record commissions, this prosperous period has had an unexpected downside – many residential real estate pros enjoying their success neglected the marketing basics that are crucial for long-term success. Today, many agents are reevaluating business plans to meet the challenges of slowing markets, increased competition, and emerging technologies. Here are some questions agents might ask to see if their marketing efforts are on target in 2007:
o Research the National Association of Realtors calls a “troubling disconnect” shows that nearly 80 percent of buyers begin their home search on the Internet, but less than 10 percent of real estate marketing dollars are spent online. Most agents are willing to increase Internet marketing activities, but are not sure which online channels and activities will produce the best results.
o Do your marketing materials pack that visual impact? Many agents simply print, copy and paste material from the MLS and other sources that were never intended for consumers. A high percentage of property listings still appear without photos. Today, consumers have higher expectations and want maps, images, and current data wrapped up in a professional presentation. Younger consumers who grew up on video games and 3D graphics strongly respond to color and visual impact. Agents who understand this can use high-impact materials to stand out from the crowd.
o There are many online sources for consumers to obtain information on individual properties. But what about neighborhood and community information? By a wide margin, buyers rank neighborhood quality as the most important factor when deciding where to purchase a home. By providing neighborhood expertise in addition to individual property knowledge, agents can gain a competitive advantage.
o Ready for the end of one-size-fits all marketing? One of the most successful tactics for online marketers is segmentation – developing multiple marketing messages to target specific customer profiles. Today, the U.S. population – and probably your own neighborhood – reflects more generational and racial diversity than ever. That means you need to know your audience and personalize more than ever. It’s a challenge because what works for empty nesters probably won’t resonate with generation Y buyers coming into the market. It’s an opportunity because real estate niche markets can be very profitable, even when broader market conditions are trending downward.
Focus on marketing and prospecting
Real estate marketing and lead management have changed dramatically in the past few years. As Web technology advances, people are able to perform more tasks related to buying, selling and home ownership online. Naturally, more real estate marketing activity has moved online to capture these consumers.
Unless you’re fortunate enough to work in an office with a proven lead generation/management system, you’ll need to develop these skills to build your real estate practice. Putting aside the larger debate about lead aggregators and which types of leads are good or bad for the industry, the source of leads is an important consideration.
Before the Internet, real estate leads came from referrals, cold calling and open houses. They were usually self-generated and each received a personal follow-up. Contacts generated from databases or Internet may or may not be self-generated, and it’s often not practical to follow up on them on a case-by case basis.
They could originate from your agent website, or be purchased from any number of third-party lead sources. Their quality may vary depending on how the lead was captured and other factors. When leads are not generated through your own marketing activities, you must take steps to make them your own:
o Have a system in place to manage your lead pipeline – often shown as a funnel – to ensure you’re taking advantage of every lead that comes your way.
o Measure the cost and quality of leads from various sources to determine which types of leads work best for you.
o Handle leads quickly and efficiently so that lead generation and conversion becomes part of your day-to-day agent routine.
By: Charles Warnock
Posted in Real Estate | Tags: Association Of Realtors, Impact Materials, Individual Properties, Marketing Efforts, Marketing Materials, Marketing Power, National Association Of Realtors, Paste Material, Price Appreciation, Professional Presentation, Prosperous Period, Rapid Price, Real Estate Marketing, Record Commissions, Regulatory Matters, Target, Term Success, Unexpected Downside, Visual Impact, Wide Margin | No Comments »
What is the Definition and Process of a Bank Owned Home?
A bank owned home comes to fruition by way of a Trustee Sale or a Deed in Lieu of Foreclosure. A Deed in Lieu of Foreclosure allows the bank or lender to take back the property without the expense of the foreclosure process to the seller “giving the property back to the bank”. When the home is acquired via a Trustee Sale, the bank, lender or Mortgage Company owns the home if it is not purchased by a third party through a Trustee Sale. An example of a third party might be an investor. If there are no winning bids at the Trustee Sale Auction, then the home reverts back to the lender. To eliminate some confusion “foreclosure” homes, bank owned” homes and “Real Estate Owned” (REO) homes are synonymous.
Once the bank takes ownership of the property, the home is usually assigned and managed by the banks “asset manager” or their REO Homes division. The asset manager or REO Homes department is responsible for assessing the value of the property, determining any necessary repairs needed to the home and eventually, selling the home at current market value.
When writing an offer on a bank owned home, the buyer is typically required to have a “pre-approval letter from their lender indicating they can qualify for the home along with an earnest money or “good faith” deposit which will be held by the Realtor until the offer to purchase the home is accepted. Once the offer is submitted to the bank, the buyer will be required to sign some additional paperwork generated by the bank. This additional paperwork might also be referred to as an “Addendum to the Sales Contract”. These addendums include but are not limited to, an “As-Is” addendum stating the bank will not make any repairs to the home, an outline of time frames for the inspection of the property to occur as well as the ramifications of canceling the contract. The addendum will also specify what happens to the earnest money should the buyer uncover unanticipated concerns or problems with the home. Addendums for bank owned homes usually include language stating the financial penalties or “per diem charges” if the buyer does not close on time which can amount to additional closing costs for the home buyer.
The bank does not provide a history regarding the condition of the property or any of the typical disclosures normally found in a real estate transaction. In real estate, we refer to the “history” of a property as the “Residential Seller’s Property Disclosure Statement” (SPDS). Additional disclosure documentation that buyers may not receive include a homeowners insurance claim history, previous damage to the property such as roof leaks, non-permitted room additions, mold damage or remediation of mold, as well as general knowledge of the home and neighborhood of the bank owned home. The buyer must perform all inspections within the time frames allotted by the bank at the expense of the buyer.
The buyer’s earnest monies are immediately deposited with the Escrow/Title Company upon an acceptance of an offer by all parties. The Escrow Company acts as a third party to a real estate transaction and is responsible for research of additional liens to the property, pro-rating property taxes, providing the buyer with the Homeowners Association rules and regulations (CC&R’s) and issuing Title Insurance to protect the home buyer from recorded and unrecorded liens associated with the home.
By: Jeffrey Austin
Posted in Real Estate | Tags: Addendum, Addendums, Asset Manager, Bank Lender, Current Market Value, Deed In Lieu, Deed In Lieu Of Foreclosure, Earnest Money, Faith Deposit, Foreclosure Homes, Foreclosure Process, Fruition, Good Faith, Mortgage Company, Necessary Repairs, Pre Approval Letter, Ramifications, Sales Contract, Time Frames, Trustee Sale | No Comments »
Understand Commercial Real Estate Market Values
One of the biggest differences between single family and commercial real estate, other than the obvious number of units, is the way in which the properties are valued. Residential real estate, including most single family homes, is valued almost always as a function of recent sales, or “comps”. Commercial real estate, by contrast, is valued based upon income. The reasons for this are primarily three in number.
First, residential homes are usually in a lot of company. When there are plenty of similar properties in a given area to compare to, the ability to use comparable and recent sales is enhanced. It also makes the valuation of residential real estate much easier because sales trends are pretty easy to track with modern technology. By contrast, commercial properties have fewer properties out there to compare to, making a comparable sale model far less effective.
Second, residential real estate is primarily owned by homeowners, making the income production of property rather in irrelevant feature, from the standpoint of assigning property value. Sure, some neighborhoods have more rental homes, but there are still usually enough comparable sales to determine a value that way.
Commercial properties are less often owned by someone who also lives in the property. This is more common among income properties that have 2-4 units but these are also typically valued similar to single family homes. Larger commercial properties are primarily purchased as investments so the income model works most effectively when valuing them.
That leads us to the last reason for different valuation, and that is the type of buyer the properties most appeal to. Residential properties appeal most to owner occupants, who place the greatest value upon what other homes in their area have sold for recently. Commercial properties (especially larger ones) are almost always purchased by investors, who appreciate the importance of numbers (or at least should) and want values to be based upon the property’s value as an investment.
This last point is a big plus for investor purchasers of commercial real estate. We can often find bargains because properties that are expense heavy, under rented (value wise), or both are going to be valued accordingly. Motivated owners who don’t manage their expenses well or who do not perform updates that will command higher rents are often left with undervalued property.
A new owner who gets expenses under control and who brings rents up to market levels can often dramatically increase the value of a property in a short period of time. This ability is due to the income based value model for commercial real estate and is one you simply need to be aware of when looking for good deals.
By: Dave Lindahl
Posted in Real Estate | Tags: Commercial Real Estate, Commercial Real Estate Market, Comparable Sales, Income Model, Investments, Investors, Modern Technology, Owner Occupants, Real Estate Market, Residential Properties, Residential Real Estate, Sales Trends, Single Family, Standpoint | No Comments »
Barn Door Hardware – Increase Your Home’s Real Estate Market Value
Home improvements and remodels are quite popular right now. With the economic struggles America has had recently, the housing market took a turn for the worse. Though things are starting to turn back around, any expert will tell you that recovery is not instant, and that even a swift turn-around in the housing market may take several years. This is why homeowners have engaged in home improvements and remodels, to increase the market value of their homes.
There are a few things to consider when deciding what types of remodeling are more important than others. One of those is whether or not the project would boost the appraisal value of the home. Certain elements of a house are more important than others when appraising the home’s worth.
The following is a list of a few things that may affect the appraised worth of your home: number of bedrooms, whether or not there is a fireplace, number of bathrooms, whether or not there is a formal dining room and type of house construction material. A few things that don’t matter quite as much are wall color, the brand of appliances, and surprisingly whether or not the basement has been finished off.
An easy and economic way to add value to your home is by using barn door hardware, also known as flat track hardware, to close off an open doorway to a room such as a home office, study, or dining room. Barn door hardware is simple, rustic, and aesthetically pleasing. It allows doors to add to the decor of a room. The hardware itself also adds to the overall aesthetics of a room.
Implementing barn door hardware, or flat track hardware, is a great way to quickly and economically add value to your home. It is neat, attractive, reliable, and strong.
By: Keith Stone
Posted in Home Improvement | Tags: Aesthetically Pleasing, Aesthetics, Appliances, Appraisal Value, Barn Door Hardware, Bathrooms, Bedrooms, Construction Material, Doors, Economic Struggles, Elements, Fireplace, Formal Dining Room, Home Improvements, Housing Market, Open Doorway, Real Estate Market, S Real Estate, Track Hardware | No Comments »