Posts in category: Uncategorized

If you are looking for a great way of building your net worth, investing in real estate is a great idea. You can make a lot of money if you do it the right way. However, if you don’t follow the right techniques, this venture can cost you a lot of money. Therefore, we have shared a few tips with you that can help you achieve success as a real estate investor.

Opt for a Good Location

Location is the first thing that people consider when they need to buy a residential, vocational or commercial properly. Ideally, the property you are going to buy should be near a workplace and school. Similarly, if it’s close to the marketplace, people can go there without burning a lot of gas or killing a lot of time. Therefore, it’s much better to choose a better location.

Upgrade or Renovate Your Property

It’s better that you upgrade your property features to make it more appealing. For instance, you may add home automation, such as automated lighting. The same is true about commercial real estate as well.

If you offer wheelchair lifts, for instance, it can make your property more useful for people with disabilities. This will attract many more buyers. Actually, it all depends upon how convenient your property is. If your property offers features that can help people make their lives easier, more people will show their interest in what you offer.

Improve Property Conditions

More buyers will contact you if your house or apartment is well maintained. However, make sure you don’t go beyond the limits. In other words, you may not want to spend an arm and a leg just to make your property more beautiful. It won’t increase the value of your property exponentially. Although it may be worth it in certain situations, spending too much is not a good idea.

Let’s take a look at a few tips that can help you make your property well-maintained.

Kitchen: if you do it right, your kitchen can increase the value of your property by up to 80%. Therefore, if you renovate your kitchen by spending $15,000, you can sell your house at 80% higher price.

Plumbing: we all need clean running water. Keep in mind that rusty pipes pose a health hazard in addition to reducing the beauty of your house.

Landscaping: If you maintain your landscape properly, it can add ambience to your house or apartment. In addition, landscaping helps reduce your energy bills.

Do Your Research

Make sure you consider the type of people that you think will be suitable if you want to sell or rent your house. If you want to get the highest return on your investment, make sure you contact the right people. Otherwise, you won’t be able to earn a lot of profit or find good buyers. Opting for the right clients can help you find a great deal.

Conclusion

So, these are a few tips that you can follow if you want to get the most out of your investment. Hopefully, you will find these tips pretty helpful.

Even if your real estate contract has been written on toilet paper, it’s valid.

Content of your real estate investing contract is what’s important.

Your financial destiny in real estate investing is sealed BEFORE you walk into a real estate closing as a buyer. You have set in

concrete your profit (or loss) before you turn the door knob to enter the office of your attorney or title company at closing. The payoff of the transaction under anticipation is predetermined when the contract is signed between you as the buyer and the other party who is the seller.

The interpretation of these cold, hard words is that you must recognize the importance of the real estate contract that ties together the property transaction. Your contract contains implications for determining profits in advance.

When we strike a deal in real estate investing, we usually just reach for some pre-printed contract form that came from a real estate office or stationary store. We usually forfeit many of our closing rights to some stranger who put together traditional jargon and processes without recognizing that we ourselves have the right to charter this course. Subjecting ourselves to legalese of an attorney who may not even be a real estate investor nor own more than his own home is the pattern followed by most who purchase and sell real estate.

The first order of business in writing contracts is understanding that any sale or purchase of property is negotiable. While the payment of certain closing costs may be customary or traditional for the buyer and the seller, we are not bound by this protocol. Without differing specification in your contract to dictate your personal direction, the closing agent simply resorts to customary convention.

But by understanding your rights as buyer or seller of real estate property, you can actually INCREASE your profits on a transaction by the wording of your contract. However, these settlement terms must be in writing on your contract in advance of the closing. Otherwise, potential profits fly out the window.

One of the most euphoric feelings I have ever experienced in this business of real estate investing was walking out of a closing with a check payable to me for $75,000 on a package of a few cheap real estate properties! As with anyone, I had a use for that cash! But those profits were dictated on my special personal contract in advance of closing.

Much more cash at closing is available to real estate investors who take control of the options available by independently choosing wording in the content of their own purchase contract and sales contract. This choice is readily available to the real estate investing professional who understands these rights and applies them in the construction of a personal contract.

The suggestion in this article is not legal advice but encouragement to take advantage of an opportunity available in real estate investing. This suggestion is not encouragement to become greedy with legal rights but to give notification that negotiation is available over the dictates of closing costs. Sometimes transactions are profitable only when these considerations are understood.

A foreclosed home is one in which the home owner was unable to pay his home loan so that the lender took over home ownership through the foreclosure process. These bank owned properties are also known as REOs (real estate owned).

The process in Arizona is similar to that in other states and will be the basis for this article. When you work with a real estate agent he will write up your purchase offer with you on a standardized contract which was developed by the Arizona Association of Realtors. The contract allows the agent to customize the contract for your particular purchase and has many built in protections for both the buyer and the seller.

When you make an offer for a foreclosed property, you can expect to receive back from the seller (the bank currently owning the property) an addendum to the contract. These addendums are in essence a counter offer that the buyer must accept if he wants to purchase the property. In some cases the seller will negotiate with the buyer over these terms but most sellers expect the buyer to agree to their terms. We have seen a wide variety of addendums in the past year as we have worked with buyers. In all of them, many of the protections for the buyer in the standard contract are eliminated or modified. Here are some of the things we are seeing.

Inspection Period

In the standard contract, the inspection period lasts ten days from the date the contract has been signed by both parties. We have seen addendums that change that to be ten days from verbal acceptance of the contract and have even seen a five day inspection period that must be completed before the buyer signs and accepts the addendums.

Title/Escrow Company

The seller will typically require the buyer to utilize the escrow company of the seller’s choice. Usually using this company helps facilitate the timeliness of the transaction because the escrow company is familiar with the seller’s requirements.

AS/IS & Disclosures

When you purchase an owner occupied property, you will usually get a Seller’s Disclosure Statement. This will provide information about the property and a history of repairs done. When you buy a foreclosure property, the seller has not occupied the property and typically will not provide any disclosure statements. Additionally, the buyer is generally required to purchase the property in its current condition “as is” and the seller will not make any repairs. If something is missing such as a kitchen appliance or garage door openers the seller will not provide it. What you see is what you get. Read the addendum carefully to understand what the seller will be responsible for if the property is damaged during the escrow period. The escrow period spans the time from when the contract is agreed upon by both parties until the sale records (close of escrow).

Cost for Extension of Close of Escrow

Most of these addenda have a per diem charge if you need to extend the close of escrow beyond the date in the original contract. The most common reason buyers need to ask for an extension of the closing date is that the lender has not completed loan processing and delivered loan documents to title several days prior to closing to allow time for both the seller and the buyer to sign. We have seen costs ranging from $40 to $100 per day.

Loan Approval

The Arizona contract allows for a return of earnest money deposited by the buyer if after a good faith attempt to obtain a loan at prevailing market rates to purchase the property the buyer is unable to do so. Some addendums are limiting the buyer’s time to obtain loan approval to a set number of days from contract acceptance, for example 25 days. If the buyer does not notify the seller of his inability to obtain a loan within that time frame, he will forfeit his earnest money to the seller. This holds true even if the inability to obtain the loan had nothing to do with the buyer’s financial qualifications. We have seen loans turned down in the past few months for condo purchases because the community had too low a percentage of owner occupied units or the HOA was not financially solid or some cases for both of these reasons.

Tenants or Other Occupants

Most of these properties will be vacant; however, if you see evidence that someone is living in the property when you are viewing it and prior to writing an offer, you need to ask questions. Who is living in the property? If the property has been rented, what are the terms of the lease? We’ve seen addenda that indicate that the seller will not evict any occupants of the property and that it will be the responsibility or the buyer once he has purchased the property. You should also be aware that tenants have rights too. Be very cautious about writing an offer for a foreclosure property that is occupied.

What Does the Buyer Need to Do?

It is very important for the buyer to read the entire addendum provided by the seller prior to signing. If he has questions about the addendum he should ask his real estate agent for clarification. He should also verify that his real estate agent has read the entire addendum and made note of key dates.

These laws legally force the seller of a home to disclose to the potential buyer any serious defects of the property. The laws were created to help protect the buyer from any defects that were not noticed until they closed on the house and become the owners. Many times it is hard to enforce real estate disclose laws because what is considered serious defects may be open to interpretation. Because of this, the laws are constantly changing resulting in many states not having effective disclosure laws. If the state does not have mandatory real estate disclosure laws, they will usually have a voluntary disclosure.

These laws can cover many different subjects so you should consult with a qualified lawyer or real estate agent to find out the specifics of what they cover. In regards to real estate disclosure there are both state and federal laws regarding these laws. Some brokerages have additional regulations for listings they accept. In the United States, Federal law requires disclosure in regards to using lead paint in homes constructed before 1978. The disclosure laws generally cover toxic or hazardous materials and the presence of asbestos and radon gas.

These laws are designed to help protect a potential buyer from buying a home that has known defects or issues. For example, if the home you are considering buying has suffered from earthquake or flood damage these laws will typically require the seller to provide you with this information. In addition to real estate disclosure law protection the buyer should also have a home inspection done by a professional. This inspection can possibly find other potential issues. Sometimes, the lender will require that a home inspection be done before they approve the loan.

In some states, there are long questionnaires that the property owner has to fill out before they can sell the property. This questionnaire does ask about any potential issues or defects with the property. These questionnaires typically cover everything from issues with the land to the wiring and plumbing inside the home. Some of the things that the seller has to disclose include, but not limited to, are:

• Water damage caused by a leaking roof
• Presence of wetlands on a part of the property
• Recent deaths on the premises

Generally, these laws only require that the sell reveal issues that they are aware of. This means that they cannot be held responsible for any problems they were unaware of before putting their home on the market but not every state provides this protection. There have been some cases that the seller can be sued by the buyer after they buyer becomes the homeowner. This is why you need to have expert advice about real estate disclosure laws in your state.

Real Estate is anything related to the construction and development of land and buildings either commercial or residential. This seems to be a very simple concept, but there are many legal disciplines included. Real Estate Law governs who may use an own the land or buildings.

Some terms to note in the Real Estate Law:

• The title is the official legal term which describes the owner of the property

• The mortgage is lending money at interest in exchange of title on the debtor’s property. After the successful completion of the debt payment, the conveyance of the title becomes void.

• Foreclosure is the term used if the lender takes control of the house or any property used for mortgage if the debtor fails to pay back the amount

• The official meeting for transferring the ownership of the land or property is termed as closing

• Escrow is the term used for money or property withheld with the third party for safekeeping

• Real Estate Agent is the person licensed for negotiating and conducting real estate transactions

The much awaited regulation in the realty sector has been announced by the Government of India last year, which is the introduction of the RERA Act (Real Estate Regulatory Act). Under the act the home builders have to deposit about 70% of the amount in the Escrow account. This will ensure the buyers that the amount is not diverted to some other projects.

Benefits of the RERA Act:

• As mentioned earlier, the builder will divert 70% of the amount taken from the buyers to Escrow account and this will ensure the buyers that their amount is only being used for this project and safe as well without being transferred to other projects.

• With the introduction of this new act the buyers doesn’t have to pay for the area over the carpet area. It is one of the important things to remember.

• All the clearances both from the buyer and the builder should need to be made before selling. The builder needs to disclose the information regarding the apartment.

The builders are allowed to sell the property only after getting proper clearances
RERA, is the central law, but as Real Estate is subjected to state, the state governments have a major role in implementing this act. However the various other related practice area to the Real Estate law include Tax Law, Landlord Tenant Law, Accidents and Injuries, Estate Planning, Insurance Law.