Real Estate Update

Archive for the ‘Business Ideas’ Category

How do you hire a full-service realtor and only pay half a commission? It is always surprising when a homeowner is going to hire a realtor® to sell his property, especially when he next complains bitterly about paying 5% or 6% to someone who he believes does little or no work. Usually the seller marks up the property to cover the commission which over-prices the property and the result is it doesn’t sell.

Usually, the commission paid to a realtor® is split equally between himself and his “broker”, who is the licensed agent in charge of a particular firm. If the commission on a sale is $20,000, the realtor® and the broker each get $10,000. Newer methods of payouts to agents include paying “desk fees” to the broker in exchange for higher payouts. For example, if the agent pays $135/month as a “desk fee” he may be entitled to a 95% commission while an agent paying $60/month may only entitled to a 70% payout.

If the agent doesn’t sell the property he listed, but another agent does, the buying and selling brokers each get half of the commission and the 3% commissions are again split with the agent so he gets 1 1/2 % net. So for a $20,000 commission the split looks like – $5,000 each to the two brokers and $5,000 each to the two agents. This is a simplified summary of the process but illustrates the payout procedure. If the agents are on a higher payout because of their monthly desk fees, their portion of the commission is increased and their broker’s portion is reduced proportionally. Industry statistics show that 95%+ of the time the listing agent does not sell the property! So the real money for a realtor is in getting the listing and having another realtor® sell it. The largest commission producers in the industry sell listings and not properties.

The way to save at least half of the realtor’s commission is to list with a flat-fee broker who will list the property on the MLS® (Multiple Listing Service) and Realtor.com® but who does not show the property. The buyer for your property will come from a “buyer’s agent” who brings a client to see your home and make an offer. He is interested in receiving his usual 50% of the full commission or 3% of the sales price. If you offer a 3% commission to the buyer’s agent, you have saved 3% by not having to pay the seller’s agent (listing agent)! In the above example of a $20,000 commission, the agent who brings the buyer still gets $10,000 but you are saving $10,000.

What if you are unfamiliar with the sales and contracting process and you need help? For the $10,000 commission savings you can hire an attorney to review any contract and give you advice usually for less than $500 so you are still ahead $9,500. But better yet, the attorney can give legal advice that your realtor® can not, and you have recourse against your lawyer if something goes wrong.

So to save at least 50% of your commission, should you decide to have a realtor® sell your house, use a buyer’s agent only and offer him a 2.5% or 3% commission. Another unique benefit of only paying a buyer’s agent is that if desperation sets in and you need to sell quickly, you can increase your payout to the buyer’s agent and attract many more buyers than using a seller’s agent. The highest commission seen in the past year is a 12% commission to buyer’s agents for condo units. In the depressed condo market these days, it is not uncommon to see 10% commissions to buyer’s agents. So if you have decided to sell your home on the MLS using a realtor®, you can save substantial money and sell your home faster by focusing on paying only a buyer’s agent to sell your home.

I hear from a lot of people we work with that they initially did not want to deal with Realtors when purchasing a property because they can sometimes be pushy or just a pain to deal with. This can be true, as it would be with any position that is involved in sales transactions, but if you find the right Realtor to represent you, then they can be an invaluable consultant and guide through the purchase transaction.

For one, a good Realtor has the experience and understanding of the real estate market beyond what you can pick up in 1 month of looking alone. Personally, I would never buy in another city without employing a local Realtor. Sure I could save a little bit of money, but I could loose a whole lot more money by buying an over-priced house in the worst part of town. Every city and even every neighborhood has different advantages and disadvantages, and it is important to have a guide who can help you understand all these points.

A good Realtor has the knowledge and skills to guide a Buyer into the right neighborhood. Taking into account price, location, and style, it is quite the balancing act to determine where someone will be happy living. Before becoming a Realtor, I only really knew the couple neighborhoods I had lived in. After driving around for thousands and thousands of hours and looking at all kinds of homes, you definitely get a sense of what is available in each neighborhood. This is the kind of experience that a Realtor can provide. In addition, Realtors have the hands-on, or maybe ears-on, knowledge of what are the most desired areas and trends in the real estate market from being in the car for thousands and thousands of hours with clients and listening to what they are looking for.

A good Realtor also has the professional experience to handle all the aspects of an offer, negotiating, and closing process. There’s more to offers than just a piece of paper with some signatures. A Realtor has an understanding of what is a typical and atypical offer and hence, can guide you through what sales price, option period days, closing date, and the myriad of other options would be appropriate. And most importantly, a Realtor will negotiate on your behalf to get you the best deal. It is so much simpler to have someone with experience to do all this for you rather than guess if your requests are reasonable. And finally, a Realtor will guide you through the closing process with all kinds of help like referrals to good inspectors and lenders as well as making sure the process goes as smooth as possible without any worries from the Buyer.

Purchasing a home is most Americans’ primary investment. When making any other investment, it makes sense to consult with an expert, so why go at it alone? Find a good Realtor who fits with your values and has the right experience to help you.

When a property owner is trying to avoid foreclosure, there are many options available. Some of them may work and others may just be a waste of time in a given situation. The person facing foreclosure needs to look at the circumstances and the availability of various options. One option that makes a lot of sense is to list the home with a realtor.
There are few things to realize when listing a home in foreclosure with a realtor. The amount of time available to list and market the house is crucial to making it work. If the house is in foreclosure and going to auction in a week, listing with a realtor may not be a hopeful option. But if the foreclosure process has just begun, listing with a realtor may be the way to go.
The first step to take is to call the lender and communicate your intentions. Contrary to popular belief, most lenders do not actually want to foreclose on a home. It is costly and time-consuming. Because of this, if the borrower is willing to work with the lender and keep the lines of communication open, a lender will generally work the borrower. Ask for a mortgage forbearance and list the house with a competent realtor as soon as you decide this is what you want to do. A forbearance means that the lender is giving a short time to bring the mortgage current before proceeding with the foreclosure. Usually the time period will be around 60 days, but some lenders will give more or less time.
Realtors have many tools at their fingertips and a good realtor can give a property owner a realistic idea of how feasible it is to sell the home before it is foreclosed upon. A realtor will have access to the average number of days on the market (DOM) it takes for a home to sell in a particular neighborhood. Be sure to ask the realtor for an adjusted DOM for the home that is in foreclosure. An adjusted DOM will give you an idea of how long it will take to the sell the home and at what price it should be listed given the unique qualities the home has. For example, if most homes similar to your property are being sold in 45 days at the price of $120,000, then that gives a starting point for what the house should be listed at and how long it will take to sell. Adjusting for differences in the property is crucial because a major problem or major renovations can affect these calculations.
Listing with a realtor is best for someone with a small amount of equity in the home. In fact, the more equity there is in the home, the more likely that an offer will be made on the home that is sufficient enough to accept. An ideal situation would entail enough equity to cover the amount of any liens against the property and closing costs.
To get started, look for a realtor who has experience in the business and who has a good track record for selling homes without the listed properties spending too many days on the market. The only major drawback is that most realtors will charge a commission fee of about six percent. Nevertheless, the benefits definitely outweigh the expense here. Get the best realtor available who is willing to work with you. It is better to sell the home than to end up with nothing.

I hear from a lot of people we work with that they initially did not want to deal with Realtors when purchasing a property because they can sometimes be pushy or just a pain to deal with. This can be true, as it would be with any position that is involved in sales transactions, but if you find the right Realtor to represent you, then they can be an invaluable consultant and guide through the purchase transaction.
For one, a good Realtor has the experience and understanding of the real estate market beyond what you can pick up in 1 month of looking alone. Personally, I would never buy in another city without employing a local Realtor. Sure I could save a little bit of money, but I could loose a whole lot more money by buying an over-priced house in the worst part of town. Every city and even every neighborhood has different advantages and disadvantages, and it is important to have a guide who can help you understand all these points.
A good Realtor has the knowledge and skills to guide a Buyer into the right neighborhood. Taking into account price, location, and style, it is quite the balancing act to determine where someone will be happy living. Before becoming a Realtor, I only really knew the couple neighborhoods I had lived in. After driving around for thousands and thousands of hours and looking at all kinds of homes, you definitely get a sense of what is available in each neighborhood. This is the kind of experience that a Realtor can provide. In addition, Realtors have the hands-on, or maybe ears-on, knowledge of what are the most desired areas and trends in the real estate market from being in the car for thousands and thousands of hours with clients and listening to what they are looking for.
A good Realtor also has the professional experience to handle all the aspects of an offer, negotiating, and closing process. There’s more to offers than just a piece of paper with some signatures. A Realtor has an understanding of what is a typical and atypical offer and hence, can guide you through what sales price, option period days, closing date, and the myriad of other options would be appropriate. And most importantly, a Realtor will negotiate on your behalf to get you the best deal. It is so much simpler to have someone with experience to do all this for you rather than guess if your requests are reasonable. And finally, a Realtor will guide you through the closing process with all kinds of help like referrals to good inspectors and lenders as well as making sure the process goes as smooth as possible without any worries from the Buyer.
Purchasing a home is most Americans’ primary investment. When making any other investment, it makes sense to consult with an expert, so why go at it alone? Find a good Realtor who fits with your values and has the right experience to help you.

The Internet is often used for browsing new properties, especially when there is distance involved. Statistics tell us that 80% of all home buyers will start their search for a new home by browsing the Internet. While looking at the Internet gives a general feel for areas and prices, for obvious reasons, at some point you will need to involve a realtor.

In today’s market, one of the key requirements to being a skillful realtor is familiarity with the Internet. This not only speeds up the property finding, it also means that the computer can do the compilations for you, and you can get the perfect home without getting out of your chair!

Once you have chosen the area you wish to live in, then choosing the right real estate agent for you will be your first priority when buying a new home. The emphasis here is on ‘choosing the right real estate agent for you’. This is because it is not difficult to find an efficient and willing realtor, but the ideal is to find one that is suited to your personality

If you are a ‘let’s get this show on the road’ type of person, then you will want an up and at’em type of realtor. One who is slower and very precise may drive you up the wall! You also need to feel that the realtor that you choose knows exactly what you are looking for in a home and will not waste your time (or their own time) offering you property that is unsuitable. This will only happen if you communicate accurately to your realtor exactly what you really want.

If you are looking at vacation property, there is often a ready made realtor who knows everything you need to know about the property involved. This is often the case with vacation homes and beach front properties that have been built to attract investors wishing to buy second homes. Often these are large blocks of condos with recreational facilities included.

If you are the type of buyer that says ‘when I see it, I will know it’, then the Internet, with all its choices of homes to buy is invaluable.

One of the questions to ask a realtor, is how familiar they are on the Internet. Make sure they can contact you by email and that they can turn up the MLS listings for you to look at. Sit with your realtor and get the virtual tour on a couple of homes.

Often, realtors will actually state in their profiles that they are internet proficient. This may often mean that they may know more about market trends and economic indicators in the business world as well as having all the realty facts at their fingertips,

If you want to save time, money and frustration, then take the time to find a realtor that knows exactly what you want and who knows exactly where to find it on the Internet.