Thursday, May 28, 2009
Wednesday, May 27, 2009
Wednesday, May 20, 2009
Not all Realtors are created equal: Is your Realtor helping you make it or break it?
Not all Real estate agents are created equal. Not only because some people have that go-getter personality, the kind that makes us think creatively to accomplish a goal and save a deal while others simply lack those over-achieveing traits, but because not every real estate agent has taken the time to educate themselves to be better sales people, better deal makers and the best at what they do.
Here, you will find a few ways to help you distinguish between the good, the bad and the ugly before hiring a real estate professional:
1. First off, you should know that not every real estate agent is a Realtor. A real estate agent has a state license that allows them to sell real property in that state. In Florida, the class lasts 60 hours, typically taken over the course of a week and is followed by a state exam. A Realtor however, is a member of the National Association of Realtors and someone who must abide by a strong set of ethical standards.
2. A good Realtor should be someone who thinks real estate is a serious business and treats it as a profession. Ask them questions about their track record. How many homes they have listed, how many they have sold, etc.
3. Ask what kind of continued education they have,what designations they hold and what they specialize in.
4. Some Realtors specialize in commercial properties, while others in residential. The Realtor you hire should have experience in selling and buying the type of property you’ll be buying/selling.
5. Hire someone who specializes in your geographical area and knows the various subdivisions, the prices, the bargains, the nice streets, the best values, etc.
6. A Realtor who has been in the industry for a while should have established sound working realtionships with people in related fields, such as mortgage brokers, property inspectors, etc. and can recommend them to you.
7. A professional Realtor keeps abreast of current market conditions and can advise you accordingly.
8. A good Realtor should treat every transaction with skill, care and diligence. Ask for references. You ask for references before hiring a plumber, so why not before hiring the person who will help you sell your most valuable asset? make sure you call a couple of past clients to find out how the Realtor performed and whether they were happy and satisfied with their services. Ask them also if they would hire them again.
9. You and your spouse should feel comfortable working with the person you are hiring, so make sure you both take the time to meet the Realtor and ask questions.
10. A Realtor should feel comfortable explaining to you the purchasing process. Ask if they have a written guide for home buyers/sellers or any other tool you might find useful in the home buying-selling process.
11. A Realtor is someone who can answer all of your questions honestly or help you find the answer if he/she doesn’t know it.
Here, you will find a few ways to help you distinguish between the good, the bad and the ugly before hiring a real estate professional:
1. First off, you should know that not every real estate agent is a Realtor. A real estate agent has a state license that allows them to sell real property in that state. In Florida, the class lasts 60 hours, typically taken over the course of a week and is followed by a state exam. A Realtor however, is a member of the National Association of Realtors and someone who must abide by a strong set of ethical standards.
2. A good Realtor should be someone who thinks real estate is a serious business and treats it as a profession. Ask them questions about their track record. How many homes they have listed, how many they have sold, etc.
3. Ask what kind of continued education they have,what designations they hold and what they specialize in.
4. Some Realtors specialize in commercial properties, while others in residential. The Realtor you hire should have experience in selling and buying the type of property you’ll be buying/selling.
5. Hire someone who specializes in your geographical area and knows the various subdivisions, the prices, the bargains, the nice streets, the best values, etc.
6. A Realtor who has been in the industry for a while should have established sound working realtionships with people in related fields, such as mortgage brokers, property inspectors, etc. and can recommend them to you.
7. A professional Realtor keeps abreast of current market conditions and can advise you accordingly.
8. A good Realtor should treat every transaction with skill, care and diligence. Ask for references. You ask for references before hiring a plumber, so why not before hiring the person who will help you sell your most valuable asset? make sure you call a couple of past clients to find out how the Realtor performed and whether they were happy and satisfied with their services. Ask them also if they would hire them again.
9. You and your spouse should feel comfortable working with the person you are hiring, so make sure you both take the time to meet the Realtor and ask questions.
10. A Realtor should feel comfortable explaining to you the purchasing process. Ask if they have a written guide for home buyers/sellers or any other tool you might find useful in the home buying-selling process.
11. A Realtor is someone who can answer all of your questions honestly or help you find the answer if he/she doesn’t know it.
Thursday, February 05, 2009
TO RENT OR NOT TO RENT: THAT IS THE QUESTION
Many landlords and tenants today are faced with a game of tug-o-war when it comes to minimizing risk and asking and giving deposits and advance rent.
With the economic crisis haunting consumers across the board, a lot of potential tenants have less-than-desirable credit worthiness to show a potential landlord that they will in fact pay their rent on time, so landlords are opting to ask for higher security deposits or more rent in advance (I have heard as much as six months worth of rent in advance plus security deposit).
It is only fair that a landlord, who is putting most of the risk upfront (if a tenant stops paying rent and continues to occupy the property it may take up to 3 months for an eviction process to be completed, plus the time it may take the landlord to re-rent the property), has the option to protect itself.
However, the only problem to the tenant in this case is not that they may not have the money to put upfront (I mean, not everyone these days has 3 to 6 or more moths worth of rent in the bank?)but that those funds are virtually unprotected. The Florida Landlord Tenant Act and most standard leases instruct the landlord to hold the security deposit and in some cases any advance rent in a separate bank account and in some cases even to post a surety bond against those funds, however, most landlords ignore or are unaware of this commitment they have made and spend the money elsewhere, typically in mortgage payments or improvements to the property. This is not only against the law, but in the event of a foreclosure, the bank who repossesses the property will not honor the terms of the lease and will not only have the tenant vacate the premises, but will not refund any money back to him, which means that if the landlord has in fact spent the money of security deposits and advance rent and is unable to refund it to the tenant, then the tenant has lost a significant amount of money and has to now go find a new place to live, where the new landlord may ask for security deposits and rent in advance.
So, how do we end this tug-o-war and make it fair for both parties? if you are a tenant and you have the finds available but are just scared to lose it in the event the landlord is unable to fulfill the terms of the lease, then ask that the funds are held in an attorney's trust account or a real estate brokerage's escrow account, which are governed by the Florida Bar and FREC respectively.
Short Sales: Are banks really interested?
It is hard these days to find a property advertised for sale that does not include the words "foreclosure", "bank owned", "repossessed" or at the very least, "short sale" in its advertising. A total of 31% of all sales in the nation in 2008 were of foreclosed homes and short sales according to Zillow.com, with some states having as high as a 58% of thse distressed sales.
The American Dream of owning a home has become an American nightmare, with about $3.3trillion in home equity being erased in 2008. American's highest and most precious asset is being lost to an economic crisis. During a crisis, when homeowners run into rough financial patches and would need to tap into their homes equity to pay bills, they find it impossible to cash out their equity (lenders won't loan more than the property is worth and many are reducing owner's already established lines of credit).
If you bought your homes five years ago, there is a 41.2% your home is worth less than what you owe on it.
So, when you have a home that is losing value with each passing day, you cannot tap into its equity and you cannot pay for it anymore, your most probable option is to sell it short. A good possibility at first, but the more and more people are interested in following this path, the slower the process becomes at the bank's end.
A typical transaction that is not a short sale and involves financing on the buyer's side should take 30 to 45 days to close, whihc means that from the time a buyer selects a home they like and the time they actually own it, 30 to 45 days have passed. In a short sale however, a seller's lender(s) must approve the sale before the buyer can even start their process, so that means that however long the lender(s) take to approve, should be added to those 30-45 days.
These days, lenders are taking anywhere from 60 to 180 days to approve a short sale.
Let me illustrate the problem with an example of one of my personal sales. I got a listing for a beautiful apartment in a prestigious area. We priced it right, competitive without giving it away. After about 40 days we got an offer at a very reasonable price.
In an ideal scenario, as soon as you have an offer, you should send it to the bank in what is called a short sale package, which includes seller's financial statements, bank statements, hardship letter and other documents. Once the package is uploaded into the bank's system (indeally 10 days after you submit the package), a BPO (Broker's Price Opinion) is performed on the property to determine whether the offer is at fair market value. Again, in an ideal scenario, the BPO is uploaded into the bank's system within 10 days and a negotiatior is assign, who should i turn accept, deny or counteroffer within 30 days. A total of 45-60 days in all. In most cases however, scenarios are far from ideal, so in our case, after 4 months of patiently waiting (most buyers would have walked after just a couple of months), the file was "closed in error" according to the bank's negotiator. The file had to be re-opened and because to much time had passed since the first BPO was performed, a new one needed to be ordered.
To my surprise, the buyers agreed to wait just a little longer, becasue according to the negotiator, this time it should be much quicker. Well, it wasn't and after 7 months, we finally got an approval. The problem with this approval is that it was for an offer 7 months old, which means that the value that the buyers saw in this property 7 months ago, was no longer there. We all know that in 7 months, the value of a home could drop significanlty and even if the buyers still want the home, if financing is invloved, the buyer's appraisal would come in lower that the offer, which would mean starting over from scratch.
We are now working on an approval for a new offer from a new buyer for $50,000 less than the original offer.
The American Dream of owning a home has become an American nightmare, with about $3.3trillion in home equity being erased in 2008. American's highest and most precious asset is being lost to an economic crisis. During a crisis, when homeowners run into rough financial patches and would need to tap into their homes equity to pay bills, they find it impossible to cash out their equity (lenders won't loan more than the property is worth and many are reducing owner's already established lines of credit).
If you bought your homes five years ago, there is a 41.2% your home is worth less than what you owe on it.
So, when you have a home that is losing value with each passing day, you cannot tap into its equity and you cannot pay for it anymore, your most probable option is to sell it short. A good possibility at first, but the more and more people are interested in following this path, the slower the process becomes at the bank's end.
A typical transaction that is not a short sale and involves financing on the buyer's side should take 30 to 45 days to close, whihc means that from the time a buyer selects a home they like and the time they actually own it, 30 to 45 days have passed. In a short sale however, a seller's lender(s) must approve the sale before the buyer can even start their process, so that means that however long the lender(s) take to approve, should be added to those 30-45 days.
These days, lenders are taking anywhere from 60 to 180 days to approve a short sale.
Let me illustrate the problem with an example of one of my personal sales. I got a listing for a beautiful apartment in a prestigious area. We priced it right, competitive without giving it away. After about 40 days we got an offer at a very reasonable price.
In an ideal scenario, as soon as you have an offer, you should send it to the bank in what is called a short sale package, which includes seller's financial statements, bank statements, hardship letter and other documents. Once the package is uploaded into the bank's system (indeally 10 days after you submit the package), a BPO (Broker's Price Opinion) is performed on the property to determine whether the offer is at fair market value. Again, in an ideal scenario, the BPO is uploaded into the bank's system within 10 days and a negotiatior is assign, who should i turn accept, deny or counteroffer within 30 days. A total of 45-60 days in all. In most cases however, scenarios are far from ideal, so in our case, after 4 months of patiently waiting (most buyers would have walked after just a couple of months), the file was "closed in error" according to the bank's negotiator. The file had to be re-opened and because to much time had passed since the first BPO was performed, a new one needed to be ordered.
To my surprise, the buyers agreed to wait just a little longer, becasue according to the negotiator, this time it should be much quicker. Well, it wasn't and after 7 months, we finally got an approval. The problem with this approval is that it was for an offer 7 months old, which means that the value that the buyers saw in this property 7 months ago, was no longer there. We all know that in 7 months, the value of a home could drop significanlty and even if the buyers still want the home, if financing is invloved, the buyer's appraisal would come in lower that the offer, which would mean starting over from scratch.
We are now working on an approval for a new offer from a new buyer for $50,000 less than the original offer.
Thursday, November 20, 2008
TENANT SCREENING TIPS
TENANT SCREENING TIPS
1. Always use a preprinted rental application whether it is our generic form or a special company printed form.
2. Full Name: Should include first, middle and last names and any generation, such as Jr, Sr, etc. Include all nicknames and aliases previously used. Do this for all persons to occupy the property. Check to make sure that the drivers license, pay-stub, social security information match up.
3. Date of Birth: Obtain a birth date for each person and likewise verify the with IDCheck or Credit Report.
4. Driver license Number and State: Know what a valid license looks like and examine the driver license for genuineness. Be sure to check the full name, the address, the date of birth, the driver license number, the signature and most of all, the picture. Compare all these items with the data on the rental application form and with the physicality of the applicant. Also IDCheck will verify the applicants drivers license number and state of issuance.
5. Employment History: Get the business's name, supervisor's name, phone number and business address. Ask for copies of applicants pay stubs. Confirm and cross-reference all information with original application. If the prospective tenant is self-employed, ask for copies of tax returns. IDCheck may provide the name & date of Employement.
6.Reference Verification:Have at least three references of persons who know the applicant for a minimum of three years. Make sure the references are checked and confirmed. Although most references will not say something bad about applicant, references can be used as good sources for skip tracing should it be needed later.
7. Landlord History & Movement Patterns: Get the names, addresses and telephone numbers of last three Landlords. It is important to check present and prior landlords, however our professional screeners our careful as present landlord may not provide negative information in order to get rid of problem applicant. IDCheck also reports all addresses on file for applicant for the last 10 years.
To see the rest of the article you can go to http://www.verifytenant.com/Documents/TenantTIPS.pdf
Good Luck
Ivan Warman
www.verifytenant.com
www.rightabouthomes.com
1. Always use a preprinted rental application whether it is our generic form or a special company printed form.
2. Full Name: Should include first, middle and last names and any generation, such as Jr, Sr, etc. Include all nicknames and aliases previously used. Do this for all persons to occupy the property. Check to make sure that the drivers license, pay-stub, social security information match up.
3. Date of Birth: Obtain a birth date for each person and likewise verify the with IDCheck or Credit Report.
4. Driver license Number and State: Know what a valid license looks like and examine the driver license for genuineness. Be sure to check the full name, the address, the date of birth, the driver license number, the signature and most of all, the picture. Compare all these items with the data on the rental application form and with the physicality of the applicant. Also IDCheck will verify the applicants drivers license number and state of issuance.
5. Employment History: Get the business's name, supervisor's name, phone number and business address. Ask for copies of applicants pay stubs. Confirm and cross-reference all information with original application. If the prospective tenant is self-employed, ask for copies of tax returns. IDCheck may provide the name & date of Employement.
6.Reference Verification:Have at least three references of persons who know the applicant for a minimum of three years. Make sure the references are checked and confirmed. Although most references will not say something bad about applicant, references can be used as good sources for skip tracing should it be needed later.
7. Landlord History & Movement Patterns: Get the names, addresses and telephone numbers of last three Landlords. It is important to check present and prior landlords, however our professional screeners our careful as present landlord may not provide negative information in order to get rid of problem applicant. IDCheck also reports all addresses on file for applicant for the last 10 years.
To see the rest of the article you can go to http://www.verifytenant.com/Documents/TenantTIPS.pdf
Good Luck
Ivan Warman
www.verifytenant.com
www.rightabouthomes.com
Thursday, July 31, 2008
How is the price of gas affecting real estate?
The price of gas is affecting almost every industry and it is impacting the lives of Americans in more ways that one. From the price of groceries, to the price of a checked bag on an airline all items of our day to day lives seem to be going up. The real estate industry is no exception. The $4 +/gallon of gas price has altered the behavior of the real estate market in unforeseen ways.
It is changing the way in which brokers market properties, how brokerages charge clients, how real estate agents show properties, how managers budget improvements, how tenants decide where to locate, how local governments are approaching development and transportation issues, how consumers decide where to spend money, how landlords calculate their expense pass-throughs, and how lenders fund construction projects and acquisitions.
It is also impacting the new construction market. Construction costs are skyrocketing and builders are using energy efficient and “green” features more and more.
LOCATION, LOCATION, LOCATION
The ultimate motto of real estate has buyers deciding on location from a different point of view. Buyers are now looking for homes nearby or next to bus stops or other public transportation and closer to work. As the price of gas continues to rise, the affordability differential of living in the suburbs vs living in the city is diminished, causing a higher demand –and therefore increase in price- for homes near city centers.
THE CHANGE IN BROKER-CLIENT RELATIONSHIPS
The face to face meeting between a broker and his client is often being postponed until the day of property showings, having the initial interview to discuss the kind of home a buyer would like and the must-haves and would-likes of a home, over the phone.
Buyers are using the internet and other resources, such as brokers, attorneys, accountants, etc. to gather more information about a property before making a site visit.
Agents are now being much more judicious about showing property in certain areas, they are doing a better job of prequalification before getting in the car with clients. Some residential agents will not tour a buyer without an exclusive representation agreement.
It is changing the way in which brokers market properties, how brokerages charge clients, how real estate agents show properties, how managers budget improvements, how tenants decide where to locate, how local governments are approaching development and transportation issues, how consumers decide where to spend money, how landlords calculate their expense pass-throughs, and how lenders fund construction projects and acquisitions.
It is also impacting the new construction market. Construction costs are skyrocketing and builders are using energy efficient and “green” features more and more.
LOCATION, LOCATION, LOCATION
The ultimate motto of real estate has buyers deciding on location from a different point of view. Buyers are now looking for homes nearby or next to bus stops or other public transportation and closer to work. As the price of gas continues to rise, the affordability differential of living in the suburbs vs living in the city is diminished, causing a higher demand –and therefore increase in price- for homes near city centers.
THE CHANGE IN BROKER-CLIENT RELATIONSHIPS
The face to face meeting between a broker and his client is often being postponed until the day of property showings, having the initial interview to discuss the kind of home a buyer would like and the must-haves and would-likes of a home, over the phone.
Buyers are using the internet and other resources, such as brokers, attorneys, accountants, etc. to gather more information about a property before making a site visit.
Agents are now being much more judicious about showing property in certain areas, they are doing a better job of prequalification before getting in the car with clients. Some residential agents will not tour a buyer without an exclusive representation agreement.
Monday, June 30, 2008
Nearing Retirement? Avoid These Common Mistakes
As Baby Boomers see retirement in their horizon, financial planners counsel against these common mistakes.
No current will. Even if you created a will when you were younger, it may be badly out of date as you approach retirement...and...not in synch with your wishes or circumstances. Update it.
Out-of-date beneficiary designations. Beneficiaries named in life insurance policies and retirement accounts must be up-to-date to avoid misunderstandings and possibly adverse tax consequences for your heirs.
Concentrated stock holdings. Whether through long association with a single employer or as owner of your own business, you may have a significant portion of your wealth tied up in a single stock. Nearing retirement, it's too risky to keep so many eggs in one basket. Diversify.
No excess liability insurance. Auto and homeowner's insurance policies offer liability protection if someone comes to harm on your property or in an accident involving your car. If claims exceed your policy limits, though, plaintiffs could come after your personal assets. Carry an excess liability, or "umbrella, policy, for added protection.
Emotional investing. Volatile financial markets can be unnerving, especially when you're close to retirement. Be patient, and hew to your well-grounded investment strategy...but...recognize that your stockbroker will never tell you, "When in doubt, get out" of the stock market.
No estate or tax planning. Many retirees craft an investment plan but overlook estate and tax planning. Start the process now if you haven't already, both to minimize tax bills for you and your heirs and ensure that your estate is distributed according to your wishes.
Source: The Wall Street Journal, March 8, 2008
No current will. Even if you created a will when you were younger, it may be badly out of date as you approach retirement...and...not in synch with your wishes or circumstances. Update it.
Out-of-date beneficiary designations. Beneficiaries named in life insurance policies and retirement accounts must be up-to-date to avoid misunderstandings and possibly adverse tax consequences for your heirs.
Concentrated stock holdings. Whether through long association with a single employer or as owner of your own business, you may have a significant portion of your wealth tied up in a single stock. Nearing retirement, it's too risky to keep so many eggs in one basket. Diversify.
No excess liability insurance. Auto and homeowner's insurance policies offer liability protection if someone comes to harm on your property or in an accident involving your car. If claims exceed your policy limits, though, plaintiffs could come after your personal assets. Carry an excess liability, or "umbrella, policy, for added protection.
Emotional investing. Volatile financial markets can be unnerving, especially when you're close to retirement. Be patient, and hew to your well-grounded investment strategy...but...recognize that your stockbroker will never tell you, "When in doubt, get out" of the stock market.
No estate or tax planning. Many retirees craft an investment plan but overlook estate and tax planning. Start the process now if you haven't already, both to minimize tax bills for you and your heirs and ensure that your estate is distributed according to your wishes.
Source: The Wall Street Journal, March 8, 2008
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