Posts tagged: real estate

The real estate market is the economic sector that involves the buying and selling of infrastructure such as buildings either for residential purposes, business premises, and the industry segment. Like any business sector it is susceptible to the economic forces of supply and demand. The main people involved in this field include the owner, renter, developers, renovators, and the facilitators.

This sector has a number of characteristics that are specific to it. Real estate is durable since the buildings can last for many years while the land it stands on is indestructible. As a result the supply is composed of a large share of already pre-existing stock and a tiny percentage of new development. Thus the stock varies in price only according the deterioration, renovation, and the new development coming up.

Stock in this sector could be referred as heterogeneous since every piece is unique. All buildings are different in terms of the location they are situated in, their structure and design as well as how they are financed. Change in this field takes quite a long time. This is as a result of the long duration involved in financing and construction of new property.

The real estate has the very unique feature in terms of the buyers in this market. The property can be purchased either as an investment with the expectation of earning returns or as a consumption good with the thought of using it. Individuals could also invest in the market for both reasons whereby they use the property for a while before selling it at a profit. As a direct result of its dual nature, there is a high demand since individuals tend to over-invest in this sector.

Immobility is yet another characteristic unique to this sector. The properties as well as the land it lies on are both immobile. As a result there is no physical market place meaning one has to go to where the property is situated. Therefore this issue makes location a prime factor before investment.

The main factor in demand for property is demographic, that is the population size and growth. The demographic composition plays a huge role in determining the demand and as a result the price. The performance of the economy also affects the performance of the sector since it plays a role in the ability of investors to take loans and mortgages for financing their business ventures. Naturally, the pricing determines the level of demand in the sector.

There are a number of ways to finance investment in the real estate market from government and commercial institutions. Financial aid can be obtained from commercial banks, savings banks, mortgage brokers, life insurance companies and other financial institutions. However, the best practice still remains getting funding from your own savings.

In view of the recent real estate market crash it is best to follow some guidelines. As a buyer ensure that the price you pay for the property matters a lot as well as the ability to dispose of the purchase later down the road. If not it is advisable to downsize your mortgage to be on the safe side. As a seller, identify when it is the right time to put your property on the market in order to avoid low offers.

The scenery is better and the gentle breezes coming off the ocean are second to none, but trying to sell real estate in the Bahamas can be just as challenging as other parts of the world when the real estate market is in a slump.

During these slumps, researching to find a qualified Realtor and taking special steps to market your real estate effectively can mean the difference between property that sells at a fair price in short order, and real estate that languishes on the market, said Rachel Pinder, Principal Broker of Island Living Real Estate in Nassau.

Brenda Knowles, a broker with Island Living Real Estate, suggests property owners ask a potential Realtor these questions when considering the best person for the job:

o How are you going to market the property?

o What is the history of your company?

o What is the background/Realtor experience of your agents?

o How long have they been in the business?

o What is the current market trend?

o Do you co-broke with other real estate agencies?

o What changes do I need to make to my property to make it competitive in the current market?

In short, sellers should find out how the Realtor intends to market their property, Knowles said. There are several marketing standards most Realtors employ when listing properties, so getting to the options that set one Realtor apart from all the others is paramount.

It is important to remember that the best marketing plan can only do so much; an owner should take the advice of their real estate agent to make their property look its best, Pinder said.

“It seems to go against common sense to put money into a home you’re trying to sell, but as many TV shows on the subject prove, you really can get a better price for your home by putting a little bit of money into making it appealing to a broad spectrum of potential home buyers,” she said.

Here are some easy and relatively inexpensive tips:

o Make sure the house is freshly painted in neutral colors.

o Remove personal items, such as family photos.

o Make minor repairs- patch holes in walls, fix cracked tiles, replace cracked windows, etc.

o Get rid of clutter, inside and outside

o Clean, clean, clean

o Give your front entrance curb appeal by adding colorful flowers.

Another tip to remember is to price the property right.

“Don’t try to over-price your home in a down market,” Pinder said. “It won’t sell.”

© 2007 Sinai Marketing and Island Living Real Estate. Authorization to post is granted, with the stipulation that Sinai Marketing is credited as sole source. Linking to other sites from this article is strictly prohibited, with the exception of herein imbedded links.

How do you currently generate real estate leads? Do you farm neighborhoods, publish a newsletter, have a lead generating realtor web site? Well, no matter how you get them I’m willing to wager two things;

1. They’re not so easy to get, and

2. You can always use more

While you struggle with trying to fill your leads pipeline, you can probably think of at least one agent who makes prospecting for leads seem like child’s play. But what is it exactly that they do so efficiently that you are not?

Of course the answer depends on lots of things, but let’s draw some ideas from an agent I know who worked with a builder of kiddie condos who did quite well at it.

Let’s call her Evette, which is not her real name, but it allows me to personalize the story in a way that you’ll be able to relate to.

Evette was a spark plug dynamo; full of energy, self driven and highly successful at what she did. And what she did best was market and sell lots of student housing units- mostly condos from what I could tell.

Hers was a 5 step process

1. She’d find raw land for her builder developer to purchase and develop

2. Try to set up partnerships with the seller of the raw land and her developer to offset the developers out of pocket costs while gaining controlling interest of the land

3. Would then list for sale all of the units the developer built as a result of the partnership

4. Then be positioned to resell the units when the students gradutaed from college and moved out of the area and

5. In some instances would be positioned to also get referrals to out of town agents for the relocating students.

As you can see, Evette had it going on. So, when I say meeting and working with Evette was a career changing experience you’ll know what I mean.

My attitude was the first thing that changed. I got over being paralyzed with awe by doctors, lawyers, judges, dentists and other high income earning professionals.

Initially, I felt inadequate when it came to marketing real estate to them. I just didn’t think I knew enough about real estate in general to come off as a competent professional.

But you know what? It turned out I knew more than all of them, and more than I needed to know to help them with their real estate needs.

I went on to find doctors, dentists, college professors, judges, insurance agents and garden variety investors to work with and had some mutually beneficial relationships for many years.

So, what does this mean for you? Actually, there are several things to take from this article.

If you’re not marketing to people with money you should. Some agents self sabotage by not aggressively pursuing leads with the financial wherewithal to buy real estate.

Instead, they market to folk who can barely qualify for mortgage loans and/or who have related and other difficulties to overcome before they can qualify at all.

Don’t let that be you – anymore.

Another thing to learn from this article is that one lead can multiply into 3 to 4 different income generating opportunities.

So, no matter how insignificant a client might appear to be treat them all equally well.

You never know when they might refer a friend or acquaintance to you, or ask you to help them purchase some investment properties, or seek you out to help them sell the first property you sold to them and help them buy another one.

It’s a well worn cliche’, but it’s true; there’s no shortage of real estate leads for agents. You just have to know how to spot them.

Generation of real estate leads has gone digital. With different lead generation tools and some mobile marketing apps, you might feel overwhelmed. So, how can you decide which tools to add to your strategy on lead generation to attract or nurture potential prospects?

Concentrate your core strategy on the basics to real estate marketing. Methods that are tried and true are ageless and should still part of your plan even if they are dressed up for the digital consumers.

Video

It’s absolutely worth investing in high quality professional videos to showcase yourself as a real estate agent. Buying a house is often the biggest purchase an individual will make in her or his lifetime and he or she likes to work with the one who has traits they trust like personality and authenticity. They’re also looking to see if you’re the agent they like to work with, so make sure to put your best face forward. Some agents create YouTube videos to show expertise and knowledge blended with their relatable and honest style. Videos may humanize an individual much more than the static site profile. Numerous realtors showcase the area’s beauty they specialize in on videos. Videos also bring a high ROI and have proven to be important marketing technique to generate leads.

Client Testimonials

You cannot beat a passionate, heartfelt statement from satisfied clients. Reviews and testimonials must definitely be part of your presence online. Video testimonials are a perfect so some potential sellers and buyers can resonate with that individual. If you do not have video capability, there are lots of ways to show your happy customers. Make a page on your social media or website to share testimonials and share them to bigger sites as well. Sellers and buyers will appreciate the customer’s honesty and have high probability to reach out.

Social Media

It is highly recommended to use social media. Facebook is one of the most dominant communication forms across the globe and the paid ad platforms are cost-effective way to generate some real estate leads. Use this when targeting your core demographic. Majority of marketers include Facebook strategies in marketing plans and you should also. It is a worthwhile, practical advertising investment that would pay off when generating some new leads. Although you do not spend money on the ads, you may still improve generation of leads on Facebook with the use of fresh content, engagement, and optimization.

Real Estate Lead Capture Forms

Majority of people used to look for homes for sale in a newspaper, yet now a lot of consumers start their home search over the internet. Having some forms on your site for lead generation is a good way to bring in the new business. It’s one of the best lead-generating strategies, yet never forget to ensure that your site is fresh and updated so people would keep visiting and you can boost your repeat traffic.

Blog

It can really improve your online presence and show your expertise as a real estate agent. Use this to communicate your grasp of everything related real estate consistently. Never forget to end your blog with effective call to action fill out the form for lead generation or make phone calls.

As a luxury real estate marketing professional, it is important to understand how a luxury brand is born and how it is developed. Here is an example of the challenges in developing the first Chinese Luxury Jewelry brand, Qeelin.

The founder Dennis Chan knew that he could not launch Qeelin in China. The Chinese marketplace would perceive it as a local brand regardless of the quality of the product. He knew that the Chinese marketplace would accept the brand if it was successful in other countries.

The brand was launched at the Cannes Film Festival in 2004. Maggie Cheung, who won the Best Actress award, wore the jewelry. Because she was the first Asian actress to be given this honor, she received worldwide coverage. And, so did the jewelry!

The first sale was made in Paris. They chose Paris as the first point of sale because the world of jewelry in Paris demands the very best. That challenged the partners to strive for and to achieve their potential.

The Results:

“We are currently perceived as an international luxury brand originating from China, and we have a good portion of our clients who are mainland Chinese.”

Qeelin’s target market is women who love haute jewelry (highest quality) from luxury brands. They have a discerning eye and look for handmade pieces with special stones. They do not follow trends; they follow what they consider to be the best.

The style of the designs reflect Chan’s Chinese heritage. One of the standouts is the Qin Qin (kiss-kiss, in Mandarin) goldfish pendant with magnets embedded within the golden lips. Chan explains, “The design has the ability to surprise and give our customers a little bit of a thrill through the unexpected.”

As you launch and build your own personal brand as a luxury real estate marketing professional it is important to understand your target market, i.e., their demographics. It is also important to understand their psychological preferences-their psychographics. By offering the unexpected such as a remarkable closing gift, you too can surprise and thrill your clients and trigger word-of-mouth advertising.

In today’s world telemarketing can be very effective. It can help a business generate leads, make sales, and increase profits. BUT, is it a good idea to do this in the real estate market? This article will examine that concept by looking at advantages and disadvantages of doing it.

One big advantage to using telemarketers in real estate is that it is more cost-effective to use a minimum wage staff as opposed to a higher-priced sales staff. It is also useful in reaching out to other geographical areas, when attempting to solicit new business. Likewise; it is necessary to keep up with current clients, having a telemarketing staff is a great way to do this; as the work is dispersed efficiently to them.

In more recent times real estate developers have begun to use telemarketers as powerful tools to reach a broad range of customers. As we mentioned, it is more cost-effective than using direct sales methods. Your telemarketing crew can reach more people in a short time span. You can always subcontract this work to an outside telemarketing firm. Then; on days where there is not much business, there are NO employees sitting around wasting time AND getting paid for it. You can also get an idea of the potential clients’ interest in your real estate services and receive feedback from them one way or another; thereby eliminating people who are NOT interested at all.

Let us now look at some DISADVANTAGES of using telemarketing for real estate businesses. Whether it is fair or unfair, most people regard telemarketers as a nuisance and want nothing to do with them. A lot of consumers have had bad experiences with telemarketers. Even though these had nothing to do with YOUR business, this will negatively impact people’s view of you.

Another big disadvantage of using telemarketers is the cost of training each person. Even though you are saving money salary-wise, you still have to train the telemarketers. That can be very expensive; especially since most of them will not work out, then that money is wasted.

The real estate business requires its professionals to be extremely knowledgeable in all aspects of the business. Before doing business with you, a consumer wants to know complete details of whatever property they are interested in. If they are talking to a telemarketer, odds are high the telemarketer will not have that information available. Therefore; you most likely have lost them as a customer, as well as any referrals they might have given you.

Then there is the fact that; with a telemarketer, your potential customer is not very likely to receive the face-to-face contact with you that they prefer. People can be quite put off by that. Even though the majority of your communications with them will be via phone or Internet; most people like the OPTION of meeting you and speaking with you in person. If that cannot be done, you will probably lose them to somebody else who can accommodate their wishes.

For Sellers:
“Home prices may fall 25 percent to 30 percent from their peak in 2006 and not hit bottom until 2010, with greater drops still in subprime mortgage debt markets.” – Peter Acciavatti, credit analyst and managing director at JP Morgan Securities Inc Source: Reuters 6/11/08

“Home prices, based on the S&P/Case-Shiller data, have fallen about 15 percent and I am expecting them to drop another 10 percent before reaching a trough in the spring of 2009.” – Mark Zandi, chief economist at Moody’s Economy.com Source: Reuters News 6/26/08

What these two quotes tell me about the Long Island real estate market is that if you’re in a position where you’re really going to need to sell, you’d better get it on the market now, rather than wait until next year or even the year after.

I am all for people not selling their homes now. Really! You may think and ask, “Yeah right, how would you make money?”. The truth is people will always need to sell and their will always be people looking to buy. If less people put their homes on the market, that would be a good thing – but only in large numbers. Supply and Demand dictate the pace of the market. When there’s an over supply, the more dramatic it gets, the more prices will come down. So, really in that scenario, I, as a real estate agent, will do well in the business, whether the homes are priced high or low.

If the Long Island real estate market shed about 50% of the houses currently for sale (about 17,000 homes), this would drastically improve and stabilize declining prices and, again, as a real estate agent, I would fair well because this would help even out supply and demand would increase (more buyers).

However, I really don’t like being in a position where I’m working with someone (seller) who is frustrated and dissatisfied with the results of “market feedback”. Market feedback is what buyers tell you, simply by their actions. If their actions are to avoid your home and not see it, either by themselves or with another agent, this says one thing loud and clear, “The price is too high.” It may also signal the fact that the home:

A. Is not photographed well.
B. Is outdated or in need of updates in key areas of home.
C. Is cluttered in the pictures (see A).
D. Is not differentiated from other homes.
E. Is not advertised fully or in high traffic areas (i.e. internet – and not just MLS).
F. Lacks a real estate agent managing the listing correctly.

Now, of course, some of these items are outside the real estate agent’s overall responsibilities (to an extent). Sellers must be willing to do “their share” in order to increase the sale-ability of the property.

Market feedback can also tell you the home has all “the goods” (i.e. move-in condition, updated, etc), but priced too high. How so? Simple. No offers. A lot of showings with no offers should tell an agent that the price is a bit too high and only a slight price adjustment and remarketing of the property is needed to get buyers to the table. Now I highlight the word “should” because it’s not a foregone conclusion that every agent will hear the market talking to them.

Homeowners working with real estate agents like to focus in on “a lack of marketing” by their respective real estate agents. And I will definitely say, that in some cases, they are right. But more times than not, especially in this market, it has little, if anything, to do with the marketing of the property. Why would I say this?

There are approximately 34,000 homes for sale in Queens, Suffolk, and Nassau Counties.

Now hiring an agent who works full-time and thus – has a vested interest in selling your home because it’s food on their table – is probably a good idea. But here’s a tip for prospective sellers – use google.com. Search the name of agents you’re interviewing. See how involved they are in the field. If they’re not involved…chances are they’re a nonentity in the business. The selling of real estate is a business. It’s not who’s the nicest person (although that goes a long way) or who has a good recipe for chocolate chip cookies (although they’re very yummy). It’s about who sells real estate. Who is apart of the 7% of agents that make 93% of the business? See Teammusso.

For Buyers:
Now with the interest rates rising, buyers may want to actually come out and play or they risk being priced out of the market for years to come. I wrote about the effects of higher interest rates on monthly payments and total interest paid on a mortgage. The effects are startling.

Now, more than ever, it is wise for any buyer to consider working with a Buyers Agent like myself. Why pay 3% of the money you bring to closing to an agent who works for the seller? That makes no sense. I specialize in Buyer Representation. It’s one of the reasons I use cutting-edge technology to help my buyer clients achieve the dream of homeownership.

I look forward to doing business with you!

Digital Marketing brings about great evolution in the field of marketing and regardless of what industry the concept is interpreted, there is always room for innovation and creativity. Unfortunately, this concept is not well adopted by Dubai Real Estate in the recent times, and a Pied Piper (of Hamelin) approach has been followed by most of the digital marketers which is losing the true essence of Digital Marketing. Most marketers try to copy the concept of one another and sometimes unlawfully even disguise their artwork concepts to catch leads online which although works great for numbers but it is almost zero when it comes to conversion because of quality.

In the basics of marketing, it is taught that every product has its own unique selling proposition (USP) and thus has a different target audience, where one marketing strategy cannot be applied to all. The setback of not following this concept has brought about digital marketing to such a stage where almost the same advertisements are being exposed to same audience over and over again via social media, emails, SMS and online portals which dilutes the interest and confuses a genuine client to what should be opted for amidst this war of similar offerings around all digital channels. Additionally in this process there has been a huge wastage of resource occurred that could have been capitalized better if an optimal utilization approach was adopted. One of the major reason witnessed behind this scenario is the gap that exists between marketing team and their on-ground experience of real estate. Generally, the organizations when they outsource their marketing campaigns to external agencies the objective of both the parties are different where the organization intends to save cost for the marketing campaign and on the other hand the marketing agencies focus on generating more numbers in leads so they can argue on their next contract renewals. In the whole process the essence of advertising the USP of the property is deprived and instead of targeted marketing, the approach goes to mass marketing concept which then again goes against the literature of digital marketing. The only party happy in this scenario is the service provider that are Google and Facebook as their business earns more revenue as the competition gets intense and companies are willing to pay more for the same campaign.

The digital marketing especially social media, SEO and SEM works mainly on bidding structure for a certain set of audience, and of course the mightier bid wins the race, but a well experienced marketer would always opt for an optimal bidding strategy on a specific target segment which would reduce down the cost per qualified lead significantly and eventually would utilize the concept of digital marketing to the fullest. It is high time now that marketers and especially digital marketers should realize the full potential of digital marketing and bridge the gap between knowledge of Dubai Real Estate and marketing approach which would immediately provide better results. The second step includes researching on the appropriate target audience for a specific property and justifying the time spent on this research which would discriminate quality versus quantity at large.

The culprit of this situation cannot be solely blamed upon digital marketers, rather the industry leaders and deciding management have also contributed to a large extend where they have missed out on allocating the right resources at the right time on the right places. Firstly, it is highly suggested to conduct digital marketing in-house since the stakeholders involved in the campaign are many at times exposed to sensitive data of clients and an in-house marketing resource would be not only be focused more upon generating quality leads, but would abide by the values of the organization and would not put up fake or flashy ads which in the long run only results in wastage of monetary resources. Additionally, there should always be an experienced real estate personnel working closely with the marketing team to ensure the research and messages are appropriate and accurate. In the event that organization intends to outsource marketing campaigns, it is highly advised to allocate an experienced personnel as a point of contact for the agency who would not only monitor the progress but would work closely to devise campaigns and messages which only would ensure success in the long run.

Although, the current situation depicts not a very good picture for digital marketing in Real Estate, but if this Pied Piper approach is not followed and right tools are used by the right person with the right resources, there is still a lot to be extracted from the benefits of digital marketing.

How Can HUD-1 Help You Generate Business?

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HUD-1 is a standard form you use very often. The form serves not just as a settlement closing statement, but also as a proof of payment of different tax deductions. Understanding the form and the tax deductible items and communicating them to your clients will help your clients to minimize their taxes and help you to build trust and get more business exposure.

What is the HUD-1

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HUD-1 is a form used by the settlement agent (closing agent) to itemize all incoming funds and all charges paid and accrued by a borrower and seller for a real estate transaction.

When is the HUD-1 Issued?

The Real Estate Settlement Procedures Act (RESPA) requires that the form be issued in all real estate transactions in the United States which involve federally related mortgage loans. RESPA states you should be given a copy of the HUD-1 at least one day prior to settlement.

When Do Clients Need HUD-1 For Taxes?

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Clients use the information included in the form when they file their annual taxes. The filing deadline is normally April 15 of every year for the proceeding year. To allow the client enough time to file taxes using the HUD-1 information, it is recommended that a copy of the HUD-1 will be sent to the client in January.

Because the real estate transaction takes place during the year, usually long before filing the tax return, the HUD-1 given to the client at closing time could be lost or misplace. Sending the client a copy of the HUD-1 with a cover letter will be very helpful and time savings to the client.

HUD-1 Client Sample Letter

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The following is a sample letter you can use to send your clients:

TAX TIME IS COMING

Dear [Client’s Name]:

Tax time indeed is just around the corner, and the first thing you will need is a copy of the Closing Statement on your property. Moving can be a very busy time, and you may have misplaced this very important document.

I would like to be sure you avail yourself of all the tax advantages possible from our transaction. If your accountant has any questions, please have him or her call me (if you need a referral to an accounting you can trust, I’d be happy to provide you with one).

I look forward to continuing as your realtor and providing you the highest level of service possible.

Yours sincerely,

Oh, by the way… If any of your friends or relatives are thinking about buying or selling a home, I’d love to be of service to them. So, when you think of these people, just give me a call with their name and number. I’ll be happy to follow up and tend to their Real Estate needs.

Which HUD-1 Information Is Important For Your Client’s Taxes?

The information reported in the HUD-1 relates to the following tax statements and schedules:

Tax form HUD-1 line

Schedule A (itemized deductions), Line 10 – Annual mortgage interest deduction Line 901

Schedule A (itemized deductions), Line 10 – Points deduction Line 802

Schedule A (itemized deductions), Line 6 – Real estate taxes deduction Line 1003, 1004

Schedule E (rental income), Line 20 – Depreciation (cost of property is required) Line 101, 102

Schedule E (rental income), Line 12a – Mortgage Interest Deduction Line 901, 802

Schedule E (rental income), Line 9 – Insurance 903, 1001, 1002

Schedule E (rental income), Line 16a – Real state taxes 1003, 1004

Schedule E (rental income), Line 18 – Other deductions 703, 801-811, 1005, 1101-1110, 1201-3, 1301-1302

Schedule D (capital gain) Part I, II, Column d – Sales Price 401, 402

Schedule D (capital gain) – Part I, II, Column e – Cost or other basis 101, 102

Form 6252 (installment sale), Line 8 – Selling price 401, 402

Form 6252 (installment sale), Line 8 – Cost or other basis 101, 102

Form 4797 (sale of business property), Part I, Column d – Cost or other basis 401, 402

Form 4797 (sale of business property), Part I, Column f – 101, 102

HUD-1’s two sections

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Section J, Summary of Borrower’s Transaction

This section contains 6 sections, and basically summarizes the entries made to the section L (Settlement charges, see below).

o Section 100, Gross Amount Due from Borrower

o Section 200, Amounts Paid By or In Behalf of Borrower

o Section 300, Cash at Settlement From/To Borrower

o Section 400, Gross Amount Due to Seller

o Section 500, Reductions in Amount Due to Seller

o Section 600, Cash at Settlement To/From Seller

Section L, Settlement Charges

That’s where many entries are tabulated before being brought forward to page 1. Columns contain charges that are paid from either the borrower’s or the seller’s funds. Your closing statement probably won’t have entries in all lines.

o Section 700, Agency Commissions

o Section 800, Items Payable in Connection with Loan

o Section 900, Items Required by Lender to be Paid in Advance

o Section 1000, Reserves Deposited with Lender

o Section 1100, Title Charges

o Section 1200, Government Recording and Transfer Charges

o Sections 1300 & 1400, Additional Settlement Charges and Totals

Line By Line Description

Section 700, Agency Commissions

701 Commissions paid to real estate agencies

702 Commissions paid to real estate agencies

Section 800, Items Payable in Connection with Loan

801 Processing or originating loan fees. If the fee is a percentage of the loan amount, the percentage will be stated.

802 “Points” charged by the lender. Each point is 1% of the loan amount.

803 Appraisal fees. If paid with loan application before closing, it should be marked “POC,” (paid outside of closing). The amount would be shown, but would not be included in the total fees you bring to settlement.

804 Cost of the credit report if it is not included in the Origination Fee.

805 Inspections fee, done at the request of the lender.

806 Private Mortgage Insurance (PMI) application fee.

807 Assumption fee, when buyer takes over seller’s existing mortgage.

808 Miscellaneous items connected with the loan, such as fees paid to a mortgage broker.

809 Miscellaneous items connected with the loan, such as fees paid to a mortgage broker.

810 Miscellaneous items connected with the loan, such as fees paid to a mortgage broker.

811 Miscellaneous items connected with the loan, such as fees paid to a mortgage broker.

Section 900, Items Required by Lender to be Paid in Advance

901 Interest collected at settlement for the time period between closing and the first monthly payment.

902 Mortgage insurance premiums due at settlement. Escrow reserves for mortgage insurance are recorded later. If your mortgage insurance is a lump sum payment good for the life of the loan it should be noted.

903 Hazard insurance premiums due at settlement. It is not used for insurance reserves that will go into escrow.

904 Miscellaneous items: flood insurance, mortgage life insurance, credit life insurance and disability insurance premiums.

905 Miscellaneous items: flood insurance, mortgage life insurance, credit life insurance and disability insurance premiums.

Section 1000 Reserves Deposited with Lender

1001-1007 Funds used to start the borrower’s escrow account, from which the lender will pay next year’s premiums. Each mortgage payment includes an amount that covers a portion of these recurring expenses.

1008 Escrow adjustment calculated by the settlement agent by comparing different escrow formulas to assure the lender does not collect more escrow funds than allowed.

Section 1100, Title Charges

1101 Settlement agent’s fee.

The fees for the abstract or title search and examination are entered in lines

1102 Abstract / title search fee

1103 Examination fee

1104 Title insurance binder (also called a commitment to insure). Payment for title insurance policies is entered later.

1105 Deed preparations record charges and work on mortgages and notes

1106 The fee charged by a notary public for authenticating the execution of the settlement documents

1107 Attorney’s fees.

1108 Title insurance (except the cost of the binder).

1109 Informational lines disclosing costs for the separate title insurance policies (Only line 1108 is carried forward.)

1110 Informational lines disclosing costs for the separate title insurance policies (Only line 1108 is carried forward.)

1111-1113 Other title-related charges which vary by location: tax certificate fee / private tax fee

Section 1200, Government Recording and Transfer Charges

1201 Recording fee

1202 City or County recording fee

1203 State recording fee

1204-1205 Miscellaneous recording fee items

Section 1300, Survey and inspections fees (for pests, lead-based paint, radon, structural inspections, inspections for heating, plumbing, or electrical equipment) and home warranty.

Line 1400 Total settlement charges paid from borrower’s and seller’s funds. They are also entered in Sections J and K,

lines 103 and 502.

Section J, Summary of Borrower’s Transaction

Section 100, Gross Amount Due from Borrower

Line 101 Gross sales price of the property.

Line 102 Personal property charges (draperies, washer, dryer, outdoor furniture, and decorative items purchased from the seller)

Line 103 Total settlement charges to borrower (from Line 1400 section L)

Lines 104-105 Amounts owed by the borrower or previously paid by the seller (include balance in the seller’s escrow account if the borrower is assuming the loan and uncollected rents borrower may owe the seller)

Lines 106-112 Item paid in advance by seller (Prorated portion of city/county taxes)

Line 120 Gross amount due from borrower. Total of Lines 101 through 112

Section 200, Amounts Paid By or In Behalf of Borrower

Line 201 Buyer’s credit for the earnest money paid when the offer was accepted.

Line 202 The new loan paid to the borrower by the lender.

Line 203 Loan borrower assumes or takes title subject to an existing loan or lien on the property.

Lines 204-209 Miscellaneous items paid by or on behalf of the buyer (allowance the seller is making for repairs or replacement of items or a note seller accepts from borrower for part of the purchase price)

Lines 210-219 Bills seller has not yet paid, but owes (taxes, assessments or rent collected in advance by the seller for a period extending beyond the settlement date)

Lines 220 Total for all items in Section 200. The total is added to the borrower’s proceeds.

Section 300, Cash at Settlement From/To Borrower

Lines 301 Summary of the total amount due from the borrower.

Lines 302 Summery of all items already paid by or for the borrower.

Lines 303 The difference between lines 301 and 302 representing the amount of money the borrower owes at closing. If negative number the borrower will receive funds back at closing.

Section K, Summary of Seller’s Transaction

Section 400, Gross Amount Due to Seller (amounts added to the seller’s funds)

Line 401 Gross sales price of the property.

Lines 404-405 Amounts owed by the borrower or previously paid by the seller (escrow account’s balance or uncollected rents)

Lines 406-412 Items paid in advance by the seller (prorated portion of city / county taxes)

line 420 is the gross amount due to the seller. Total of Lines 401 through 412.

Section 500, Reductions in Amount Due to Seller (amounts are subtracted from the seller’s funds)

line 501 When a third party holds the borrower’s earnest money deposit, and will pay it directly to the seller.

line 502 Total from line 1400, the seller’s total charges as computed in Section L.

line 503 When borrower assumes or takes title subject to existing liens which are deducted from the sales price.

line 504-505 First and/or second loans which will be paid-off as part of settlement (including accrued interest).

line 506-509 Miscellaneous entries

line 506 Deposits paid by the borrower to the seller or third party other than the settlement agent

line 510-519 Bills unpaid by seller (taxes, assessments or rent collected in advance )

line 520 Total of all items in Section 500. The total is deducted from the seller’s proceeds.

Section 600, Cash at Settlement To/From Seller

line line 601 Gross amount due to the seller, from line 420.

line 602 Total reductions in seller’s proceeds, from line 520.

line 603 Difference between lines 601 and 602. Cash amount paid to seller (if a negative number the seller owes money at closing)

So many luxury real estate marketing professionals attempt to differentiate themselves from their competition by claiming that they have integrity in their advertisements. The majority of real estate professionals who have enjoyed longevity in their field have integrity or they would not still be in the business. And, those few unscrupulous ones are often the ones who use the “I” word in their collateral material and ads.

Integrity is just the price of admission in the highly competitive landscape of marketing luxury real estate. Those who have achieved market leadership in their area simply could not survive at the top f integrity were not a fundamental building block of a highly successful practice.

The urge to be less than forthright, up-front, straightforward and frank with ones clients comes from a scarcity mentality. That is, the idea that there are not enough clients and, therefore, not enough business to meet ones income goals. This is small thinking!

At the core of this scarcity mentality and small thinking is simply a small contact database of potential referral sources. Believing that there is not enough business causes people do things they would not do if there was plenty of business.

Four Ways to Think Big and Get Prosperous While Maintaining Your Integrity

To build a thriving practice while maintaining your integrity it is necessary to set the ethical standards of integrity for yourself that you would expect of a very competent and highly success professional. Think of someone in your profession that you respect and set the goal to emulate that person’s level of integrity.

Here are the four best ways to start thinking big with integrity:

• Extrovert! Get out of your office and meet more people. Build a huge database of potential referral sources. Get over your shyness. The most successful professions have figured out a way to overcome their shyness.
• Delegate! It becomes easy to hide behind the excuse that you do not have enough time in a day to accomplish what you want and still have a life. Delegate everything you can possible think of to an assistant or virtual assistant and free up more time to meet more people. Build a huge contact database. Just about everyone is shy and lazy when it comes to meeting new people. Successful people overcome this obstacle to success.
• Expand! Exponentially expand the boundaries of your marketplace.
• Stay In Touch! Keep in touch with your expanded database of contacts.

This is part of a series of articles entitled, Luxury Real Estate Marketing Essentials. It is dedicated to luxury real estate marketing professionals worldwide.