Hurdles In A Real Estate Project Investment

Investing in real estate is a very lucrative business. Analyzing the property market where you are going to invest your money is very important. Despite what many people believe, becoming a real estate investor can help you earn huge profits. As long as you go about the business the right way, you can reap huge rewards and achieve the goals that you have set for yourself.

However, as with every great business opportunities, there are some difficulties to overcome in order to be a successful investor.

Research is the most important thing when it comes to investing in real estate. Good research always plays a vital role in property investment. With the advent of technology today, it is not as time-consuming as it used to be. There are several websites available on the internet that helps a great deal in finding a suitable property, location as well as reasons to invest in it. Take your time to conduct the research and search for the best location. Check for the specifics of the region you are considering to invest in. Analyze the buyers, sellers, rental, and investor in the area. If need be, contact the property agents of that particular location through any means possible and send them quires to find out any question you have about buying, selling and renting of any property in that area. These things may give you enough knowledge about investing in real estate in that particular area. Ultimately, you will be able to get a full picture property business in that region.

Below are things you need to know about an area before considering investing in property in that region.

• Population,

• Tax and ownership law,

• Buyer and Sellers of that particular region,

• Temperature and Environment,

• Future projects and Developments,

• Rents of property,

• Management cost,

• Insurance policy,and

• Tourism Industry.

These are some basic things that must be considered before buying property in any region. These things may help to reduce your risk and give you handsome return on your investment. Aside from all of these, you may need to enlist the service of a professional property agent that has the full knowledge of that particular area. This might be necessary because when you are going to buy any property, there are some legal agreements and contracts that you may need to sign. To avoid running into crisis in the process, a professional help is a good option for you. In addition to helping you find a very profitable property, the professional real estate agent will also guide you in making the best choices that will be favorable for you. Also, whenever you want to sell or rent out your property, the help of a professional will ensure that you get a great return on your investment.

All in all, when you educate yourself about the latest market trends and learn various hints and tips on being a real estate investor, you are on your way to success. This will help you break through all the hurdles and ensure your survival in the competitive but lucrative real estate.

Selling My Inherited Property Quickly

When you inherit a home from a loved one, you have many decisions to make. While some people choose to move into the property, the majority are looking to sell the property as quickly as possible. Not only will this give them peace of mind, but also generate a sizable profit that can be used for other things such as financing a child’s college education, paying off various debts, and other important tasks. However, many people who inherit properties don’t know where to begin to get the selling process underway. Therefore, it’s crucial to work with a company that specializes in these sales, which often makes the process to sell your house much smoother and profitable.

Tax Implications

Because emotions are usually running high in these circumstances, many people fail to sit down and discuss the potential tax implications. However, since there may be issues related to inheritance taxes and estate taxes, it’s always best to work with an agent who specializes in selling inherited properties, rather than go it alone or simply work with friends or family members, who may not have the knowledge needed to sell your house in the best possible way.

Prepare for the Sale

Prior to putting your inherited property on the market, make sure it’s ready for prospective buyers. After all, when many buyers and investors know a property is up for sale due to inheritance, they are expecting to get a good deal, since they realize the seller likely wants to rid themselves of the property as soon as possible. To be prepared for the sale, make sure all personal belongings are cleaned out of the home. Along with this, it’s often a good idea to hold a yard sale or estate sale after dividing up cherished belongings among family members.

Pricing the Property

As stated earlier, since buyers will know the property is for sale due to inheritance, they will likely try to purchase the property for as low a price as possible. However, it doesn’t necessarily have to be this way. When selling your inherited property, working with an agent who specializes in these sales can make all the difference. By having in-depth knowledge of the current real estate market, trends in the local area, and asking and selling prices of comparable properties nearby, your agent will be able to get you the price you want. By using this knowledge, along with their negotiating skills honed through years of experience, they’ll make the process far easier than you expected.

Don’t Go It Alone

Rather than let your emotions lead you astray during this difficult time, put your trust in a company that has knowledge, experience, and your best interests at heart.

Are Real Estate Agents Due Commission

The right of an Estate Agent to earn commission is enshrined in common law. In general, commission is due when the Estate Agent has perform a client’s mandate, regardless of the amount of time or effort it took to perform the mandate.

In South Africa, there is no limit to the amount of commission an Estate Agent can charge. In the upper end of the market, this often results in impressive earnings. These facts, combined with the public perception that an Estate Agent is often seen to do very little in comparison with the handsome rewards received, has encouraged many people to join the Estate Agency industry. At last count there were more than 72,000 Estate Agents registered in South Africa. Although, in practise, not all are actively working as Estate Agents. Many Estate Agents are active only when the property market is buoyant and go dormant when the market slows down. Nevertheless, they are qualified to act as Estate Agents and may resume activity whenever they feel, with the provision that they comply with the requirements of the Estate Agencies Affairs Act.

Giving rise to commission dispute

Before we go on, it should be noted that most property deals go through without dispute. However, this does not mean that of the deals that go through there was no reason for dispute. Simply not knowing is often a cause for valid claims not being made, mostly on the side of the client. For such cases there is nothing one can do in retrospect, since all wrongs committed by Estate Agents are automatically made right upon date of transfer. No need to repent or visit confession, all sins are just magically wiped away.

In most cases commission disputes arise simply as a result of misconception by the public as to their rights and duties when they give an Estate Agent a mandate. However, dispute also arises due to misconception of Estate Agents as to their rights and duties in performing a client’s mandate. Both types of misconception can be easily avoided if Estate Agents spend more time being “frank” about discussing commission before accepting a mandate. In practise, this does not always happen, whether because of forgetfulness, lack of diligence or because of pressure to get the mandate. Discussion surrounding commission is often relegated to a mandate form, placed in front of the client with the expectation of signing. This document merely serves to capture the basic details and rarely elaborates on definition of terms, rights or duties at length.

While it is sound business practise to record in writing the amount of commission and under what circumstances the mandate will be considered fulfilled, some mandates omit small points that are not in the Estate Agency favour or the document itself serves to cover “conditions of absence in agreement” covered by common law. For example, under common law, in the absence of an agreement to the contrary, an Estate Agent is not entitled to commission simply because, over a period of time, there has been a conscientious effort to carry out a clients mandate.

Compliance requirements

We have noted that certain common law principles govern an Estate Agent’s right to commission and that standard contracts are employed to cover such rights. We have also noted that such documents can fail to explain terms and can even be employed to protect the agent from common law principles that are not in the Estate Agents favor. Our remedy to reducing the potential for conflict is to encourage more open discussion and consultation of commission with clients by Estate Agents.

However, assuming such discussion were to take place, how is a person know whether or not an Estate Agent is due commission when they themselves do not have enough information to ask the right questions during such discussion.

In this section we cover some of the points clients should know, compliance points that are often neglected or forgotten by even the most seasoned and professional of Estate Agents.

The first thing to know is that the Estate Agency Affairs Act and the Code of Conduct both have a direct impact on an Estate Agents right to receive commission. One of the most important stipulations of the act is that an Estate Agent may only receive commissions on transactions concluded during a period for which the Estate Agent is in possession of a valid Fidelity Fund Certificate.

Second thing to know is that Estate Agents who have not complied with the prescribed training requirements are not allowed to receive commission on agreements where they have drafted or completed clauses in a sale or lease agreement.

In addition to these requirements section 8 of the [Code of Conduct] sets forth conditions under an Estate Agent shall not be entitled to commission.

The implications of these three points are often not made clear to clients. Rarely, if ever, is a client furbished with a copy, or presented, an Estate Agents Fidelity Fund Certificate or a copy of the Code of Conduct. Incidentally, the Fidelity Fund Certificate is printed with a business card sized tear-off capable of fitting into a wallet where it can be easily kept like a drivers license and presented when required. There should be no reason why a professional Estate Agent with a valid Fidelity Fund Certificate should not wish to present it.

The act goes one step further. In addition to an individual Estate Agent having to hold a valid Fidelity Fund Certificate, the Agency Company, all participating directors and any person promoting or canvasing immovable property are also required to hold a valid Fidelity Fund Certificates. In the event that an Agency does not have valid Fidelity Fund Certificate, or any of the Estate Agents or employees of the Agency, all people employed with such agency are not entitled to claim commission.

In an industry with more than 72,000 agents, the public can easily be convinced to mandate the services of non-valid Estate Agents. Such persons, while operating illegally are not bound to operate under the Estate Agency Affairs Act or the Code of Conduct. As a result the Estate Agency Affairs Board, the organisation responsible for protecting the consumer, can only bring a criminal case against such persons and has no power to sanction any conduct. Whereas, if the Estate Agent is operating with a valid Fidelity Fund Certificate, failure to comply with requirements constitutes conduct deserving of sanction that may see the Estate Agents license to operate revoked.

Performance of the mandate

Terms of mandate differ, but in general terms a mandate is seen to be fulfilled when:

1. A buyer is introduced to the seller who is both legally and financially able to buy the property.

2. A binding contract of sale is concluded. It is worth noting that a contract with suspensive conditions is not binding until such time as such conditions have been met.

3. A transaction and its terms are substantially in accordance with the clients mandate.

Point 3 is interesting. The word “substantially” gives rise to a special twist. Since it means that, unless a client makes express note that commission will only be paid when the contract is concluded on “exact terms stipulated”, an agent is not required to execute a mandate to the exact letter. For example, if the client wants 500, 000 for a property and the highest offer attainable is 450, 000, the client cannot refuse to pay the full commission agreed.

A further twist of this case can evolve where an introduced buyer does not enter into a sale, but instead enters into a lease agreement. In this case, despite a lease agreement being in place, the Estate Agent is not deemed to have substantively completed the mandate and is not due commission as a different transaction to that which was mandated has resulted.

In practice we see this problem occurring all the time. An Estate Agent concludes a contract of sale at a price less that what the buyer was prepared to accept. Then the seller wishes to negotiate the commission down.

Effective Cause

Many people are under the impression that all they need do to qualify for commission is introduce a buyer and seller from wish a contract of sale is concluded. This is possibly one of the most common misconceptions shared by both Estate Agents and clients alike.

In fact an Estate Agent is required to do the above and be capable of demonstrating that he or she was the effective cause of the resulting transaction, north withstanding other factors. In reality many factors must be considered in order to demonstrate effective cause, including:

* How much effort did an agent put in. Simply giving a buyer and seller each others telephone numbers is not enough.

* The time between introduction and sale. If buyer and seller conclude a sale shortly after introduction, the argument that the Estate Agent was the effective cause is strong. However, if the sale agreement took place after a considerable period of time, the argument would be more difficult to prove.

* The extent of consultation provided by the estate agent. If through an Estate Agents consultation one or more obstacles to conclusion of the sale where removed, then the effective cause is in favor of the Estate Agent. However, if the obstacles were removed without the help of the Estate Agent, then the effective cause is most probable to lay with the buyer and seller.

* Frequency of interaction. How often did the Estate Agent communicate with the buyer and did the agent cease negotiations with the buyer at any point in time.

Conclusion

This article has briefly highlight a few of the main points concerning the rights and duties of Estate Agents and clients using their services. While some may see the information provided as a means to try avoid paying Estate Agents commission, the ability to do so legally is not easy. However, clients that feel they have genuinely not been served by an Estate Agent are not without recourse, if they have the information pertaining to their rights and duties as clients.

Having said this, it should be noted that Estate Agents are not paid for good intentions or hard work, only for bottom-line results. As a result it is not possible to measure an Estate Agents performance by the amount of work they put into a deal. Many Estate Agents do put a tremendous amount of work into their deals and take great pride in adhering to professional conduct. By the same token, an Estate Agent can earn considerable amounts of commission for relatively little work, but in this case runs the risk of getting nothing whatsoever if the mandate is neglected.

In closing it could be argued that the expectations and needs of clients would be better served if clients were better informed about both their own rights and duties and those of Estate Agents. However, in order for service levels to be improved, clients must also be willing to enforce their rights and not accept invalid Estate Agents or negligent service.

Different Methods Of Selling Your Commercial Property

The information we provide you below will assist you in understanding as to what it takes to adopt a particular method so that you can finalize a method most suitable to you.

You should appoint only one agent

You can enter into exclusive agreement with just one property investing agent. The benefit here in this type of arrangement is that the agent will work with more dedication and focus to locate genuine buyers for your property at possibly best price. You may also have to spend less of your money and time in marketing and advertising for your commercial real estate sale.

Appointment of one agent but with a Multi-List Agreement

Here, the agent you appoint will be working with several other agents in the market for selling your property but cost to you remain the same as in the above discussed method. The main difference here is that agent you appointed in the first place shares the commission he will get from you with the other agents in the field who help him in securing the buyer for your commercial property

Selling the Commercial Property by an Auction

In this procedure there is no set commission to be paid to the agent. There is obviously a time limit for auction and this creates a time bound competitive environment for the real estate agent. Here the agent works even harder and you earn more profit in less of time.

Appointment of many real estate agents

In this method, you usually rope in many real estate agents to execute the sale. Buy you need to pay commission to only that agent who introduces you to the purchaser of you property.

Selling the commercial property on your own

Here you can decide to sell your commercial real estate by yourself in order to save on the commission you usually would pay to the real estate agent. However it is not easy as you will have to handle advertising and marketing for searching the prospective buyers. Above all you need to have sound knowledge of all legal formalities required for property transfer.

I am not in the favor of this method and would not recommend it as I firmly believe that your main goal is to be a real estate investor, so you should act in a smarter way.

Hence, as we see, there are many methods to sell your commercial real estate. Appointment of an agent is safe and the easiest way to achieve the results and it is always nice to go with just one agent.

Realtors Vs The We Buy Houses Cash Companies

When deciding to sell your home you have two options. You can either use the services of real estate broker or you can sell it yourself to a “We Buy Houses Cash” company. Each scenario has its pros and cons which we have outlined for you below. Every situation is different and we want to make sure you make the best decision possible. We have also outlined some key questions you should ask yourself before making this big decision.

Realtors. Realtors are the best source for selling your property. It’s a proven fact that realtors will get at least 10-20% more for your property than you would if you sold it yourself. It is also a proven fact that you will sell it 50% faster using the services of a local real estate agent. Since most agents are current on up to date trends they will be able to guide you in what items need to be addressed in order to get maximum price for your house. With an agent who specializes in your neighborhood they may have connections to buyers through colleagues and past clients that you do not have access to. An agents network is a very powerful tool to getting your house sold fast. I recommend using bigger cooperate brokers such as Berkshire Hathaway or Coldwell Banker Gundaker.

With any service provider their is a cost of doing business. The average expense for a realtor is 6-7% of the sales price of your home. For example if you sell your home for $200,000 it will cost you anywhere from $12,000-$14,000 at closing. If you decide to use a real estate professional to sell your property then you will more than likely be dealing with financed buyers which means you might possible have to pay seller commissions ranging anywhere from $3,000 – $5,000. Selling to a financed buyer also means once you sign a contract to purchase you will usually have to wait anywhere from 30-60 days to close. Let’s also not forget the cost of inspections. Most cities require the house pass an occupancy inspection. When the city sends there inspector out there may be items that don’t meet city requirement which may get costly to fix. The potential buyer will also hire a private inspector due to there own due diligence to see what the house may need. This can also get costly if the buyer has high demands before deciding to move forward with the purchase. The extra money you make hiring a real estate professional may cancel out with the expense of broker fee’s and inspection expenses.

We Buy Houses Cash Companies. These companies often get a bad wrap in the area. They are often thought of as scam artists or dishonest people when in reality these companies can be of great service to people. Just like anything there are pro’s and cons to taking this route. Since these ugly house buyers are investors they are not going to give you full price for you home. They are usually buying properties anywhere from 50-60 cents on the dollar.

But before you kick these guys out of your house take a moment to think about the benefits of selling to a cash investor. Fast Cash! In most cases these buyers have the cash to buy the property immediately. Not only will it be a cash sale but you don’t have to worry about paying any seller concessions. Often times they will even cover your closing costs which will save you additional money. These cash buyers will also save you on those hefty realtor commissions. Since your property is a for sale by owner there will not be any broker involved. No broker = NO FEE’s! Did I mention there will not be any inspections done. Since it will more than likely be an AS-IS cash sale the buyer will not bring a city or private inspector through which means you don’t have to do any repairs to the property. So even though you may not get full price for what you think your home is worth you will be saving tens of thousands of dollars in fee’s and repairs. It makes the deal even sweeter knowing they can close in as little as 7-10 days if needed. The best part about selling to a cash investor is that you can leave the unwanted items in the property so you can save even more money on moving expenses.

This is a big decision that should not be take lightly. There are some questions you need to ask yourself before deciding which route to take.

1. Does the home need repairs?

2. Is the home outdated to today’s standards and what other similar homes look like?

3. Do I need to sell immediately?

4. Is the repair list too much for me to handle right now?

5. Will a fast sale take the burden off my shoulders of dealing with this property?

If you answered yes to any of the questions above then you will probably want to consider selling to a local real estate investor who has the cash to close right away. A fast cash offer with no realtor fee’s, closing costs or hefty moving expenses may be the best fit for you. If the home has been kept up and maintained pretty good over the years and you can afford to sit on it for a while then your local real estate agent will be the best option for you and your bank account.

Click the following for more information on Berkshire Hathaway or Coldwell Banker Gundaker.