Author: blogger
Then and Now
Ten years ago, a search for real estate
would have started in the office of a local real estate agent or by
just driving around town. At the agent’s office, you would spend an
afternoon flipping through pages of active property listings from the
local Multiple Listing Service (MLS). After choosing properties of
interest, you would spend many weeks touring each property until you
found the right one. Finding market data to enable you to assess the
asking price would take more time and a lot more driving, and you still
might not be able to find all of the information you needed to get
really comfortable with a fair market value.
Today, most property
searches start on the Internet. A quick keyword search on Google by
location will likely get you thousands of results. If you spot a
property of interest on a real estate web site, you can typically view
photos online and maybe even take a virtual tour. You can then check
other Web sites, such as the local county assessor, to get an idea of
the property’s value, see what the current owner paid for the property,
check the real estate taxes, get census data, school information, and
even check out what shops are within walking distance-all without
leaving your house!
While the resources on the Internet are
convenient and helpful, using them properly can be a challenge because
of the volume of information and the difficulty in verifying its
accuracy. At the time of writing, a search of “Denver real estate”
returned 2,670,000 Web sites. Even a neighborhood specific search for
real estate can easily return thousands of Web sites. With so many
resources online how does an investor effectively use them without
getting bogged down or winding up with incomplete or bad information?
Believe it or not, understanding how the business of real estate works
offline makes it easier to understand online real estate information and
strategies.
The Business of Real Estate
Real estate
is typically bought and sold either through a licensed real estate agent
or directly by the owner. The vast majority is bought and sold through
real estate brokers. (We use “agent” and “broker” to refer to the same
professional.) This is due to their real estate knowledge and experience
and, at least historically, their exclusive access to a database of
active properties for sale. Access to this database of property listings
provided the most efficient way to search for properties.
The MLS (and CIE)
The
database of residential, land, and smaller income producing properties
(including some commercial properties) is commonly referred to as a
multiple listing service (MLS). In most cases, only properties listed by
member real estate agents can be added to an MLS. The primary purpose
of an MLS is to enable the member real estate agents to make offers of
compensation to other member agents if they find a buyer for a property.
This
purposes did not include enabling the direct publishing of the MLS
information to the public; times change. Today, most MLS information is
directly accessible to the public over the Internet in many different
forms.
Commercial property listings are also displayed online but
aggregated commercial property information is more elusive. Larger MLSs
often operate a commercial information exchange (CIE). A CIE is similar
to an MLS but the agents adding the listings to the database are not
required to offer any specific type of compensation to the other
members. Compensation is negotiated outside the CIE.
In most
cases, for-sale-by-owner properties cannot be directly added to an MLS
and CIE, which are typically maintained by REALTOR associations. The
lack of a managed centralized database can make these properties more
difficult to locate. Traditionally, these properties are found by
driving around or looking for ads in the local newspaper’s real estate
listings. A more efficient way to locate for-sale-by-owner properties is
to search for a for-sale-by-owner Web site in the geographic area.
What
is a REALTOR? Sometimes the terms real estate agent and REALTOR are
used interchangeably; however, they are not the same. A REALTOR is a
licensed real estate agent who is also a member of the NATIONAL
ASSOCIATION OF REALTORS. REALTORS are required to comply with a strict
code of ethics and conduct.
MLS and CIE property listing
information was historically only available in hard copy, and as we
mentioned, only directly available to real estate agents members of an
MLS or CIE. About ten years ago, this valuable property information
started to trickle out to the Internet. This trickle is now a flood!
One
reason is that most of the 1 million or so REALTORS have Web sites, and
most of those Web sites have varying amounts of the local MLS or CIE
property information displayed on them. Another reason is that there are
many non-real estate agent Web sites that also offer real estate
information, including, for-sale-by-owner sites, foreclosure sites,
regional and international listing sites, County assessor sites, and
valuation and market information sites. The flood of real estate
information to the Internet definitely makes the information more
accessible but also more confusing and subject to misunderstanding and
misuse.
Real Estate Agents
Despite the flood of real
estate information on the Internet, most properties are still sold
directly through real estate agents listing properties in the local MLS
or CIE. However, those property listings do not stay local anymore. By
its nature, the Internet is a global marketplace and local MLS and CIE
listings are normally disseminated for display on many different Web
sites. For example, many go to the NATIONAL ASSOCIATION OF REALTORS Web
site, http://www.realtor.com,
and to the local real estate agent’s Web site. In addition, the listing
may be displayed on the Web site of a local newspaper. In essence, the
Internet is just another form of marketing offered by today’s real
estate agent, but it has a much broader reach than the old print
advertising.
In addition to Internet marketing, listing agents may
also help the seller establish a price, hold open houses, keep the
seller informed of interested buyers and offers, negotiate the contract
and help with closing. When an agent provides all of these services it
is referred to as being a full service listing arrangement. While full
service listing arrangements are the most common type of listing
arrangement, they are not the only option anymore.
Changes in the
technology behind the real estate business have caused many agents to
change the way they do business. In large part, this is due to the
instant access most consumers now have to property listings and other
real estate information. In addition, the Internet and other
technologies have automated much of the marketing and initial searching
process for real estate. For example, consumers can view properties
online and make inquires via email. Brokers can use automated programs
to send listings to consumers that match their property criteria. So,
some agents now limit the services they offer and change their fees
accordingly. An agent may offer to advertise the property in the MLS but
only provide limited additional services. In the future, some real
estate agents may offer services in more of an ala carte fashion.
Because
of the volume of real estate information on the Internet, when people
hire a real estate agent today they should look at the particular
services offered by the agent and the depth of their experience and
knowledge in the relevant property sector. It is no longer just about
access to property listing information. Buyers and sellers historically
found agents by referrals from friends and family. The Internet now
provides ways to directly find qualified agents or to research the
biography of an agent referred to you offline. One such site,
AgentWorld.com, is quickly becoming the LinkedIn or Facebook for real
estate agents. On this site an agent can personalize their profile,
start a blog, post photos and videos and even create a link to their web
site for free. Once unique content is added to their profile page the
search engines notice!
Some have argued that the Internet makes
REALTORS and the MLS less relevant. We believe this will be false in the
long run. It may change the role of the agent but will make
knowledgeable, qualified, and professional REALTORS more relevant than
ever. In fact, the number of real estate agents has risen significantly
in recent years. No wonder, the Internet has made local real estate a
global business. Besides, Internet or not, the simple fact remains that
the purchase of real property is the largest single purchase most people
make in their life (or, for many investors, the largest multiple
purchases over a lifetime) and they want expert help. As for the MLS, it
remains the most reliable source of real estate listing and sold
information available and continues to enable efficient marketing of
properties. So, what is the function of all the online real estate
information?
Online real estate information is a great research
tool for buyers and sellers and a marketing tool for sellers. When used
properly, buyers can save time by quickly researching properties and,
ultimately, make better investment decisions. Sellers can efficiently
research the market and make informed decisions about hiring an agent
and marketing their properties online. The next step is to know where to
look online for some of the best resources.
Internet Strategies
In the sections that follow, we provide
strategies and tips on how to use the Internet to locate properties for
sale and research information relevant to your decision to purchase the
property. There are many real estate Web sites from which to choose and
although we do not mean to endorse any particular Web site, we have
found the ones listed here to be good resources in most cases or to be
so popular that they need mention. One way to test a Web site’s accuracy
is to search for information about a property you already own.
Finding Real Estate for Sale
Despite the
widely available access to real estate listings, many believe that MLS
databases continue to offer the most complete and accurate source of
real estate information. Most MLSs now distribute content to other Web
sites (primarily operated by real estate agents). An excellent starting
point for MLS originated content is the national NAR Web site,
realtor.com, which is also the most popular web site for searching real
estate listings. Virtually all local and regional MLSs have an agreement
with realtor.com to display much of their active listing inventory.
Some
local and regional MLS systems also have a publicly accessible Web
site. However, to get complete information you will most likely still
need to find a qualified local REALTOR. Many local real estate agents
will also provide their customers (via email) new listings that are
input into the MLS that match their predefined criteria. This can be
very helpful to a busy buyer.
There are also many Web sites that
display both real estate agent listed and for-sale-by-owner properties.
Some of the more popular Web sites include zillow.com and trulia.com.
These sites offer other services too. For example, zillow.com is best
known for its instantaneous property valuation function and trulia.com
for providing historical information. Another source of properties for
sale is the state, regional, and local Web sites associated with
brokerage companies; for example, remax.com or prudential.com. Search
engines like yahoo.com and classified advertising sites like
craigslist.com also have a large number of active real estate listings.
One
key difference between these sites is how much information you can
access anonymously. For example, at trulia.com you can shop anonymously
up to a point but then you will need to click through to the agent’s Web
site for more information. Many new real estate search engines allow
you to sift through listings without having to fill out a form. The best
strategy is to browse a few of the sites listed above to find
geographic areas or price ranges that are interesting. Once you get
serious about a property, then that is the time to find a qualified
REALTOR of your choice to conduct a complete search in the local MLS.
It
also never hurts to search the old-fashioned way by driving through the
neighborhoods that interest you. There is no substitute for physically,
not virtually, walking the block when you are making a serious
investment decision. In this sense, real estate is still a very local
business and standing in front of the property can lead to a much
different decision than viewing a Web page printout.
Valuing Real Estate
As
we mentioned, one of the most popular real estate tools is zillow.com’s
instant property valuation. Just type in an address and in and you get a
property value. It even charts the price ups and downs, and shows the
last date sold (including price) and the property taxes. There are other
sites that provide similar tools such as housevalues.com and
homegain.com. Unfortunately, many people use these estimated values
alone to justify sales prices, offers and counteroffers. However, these
are only rough estimates based on a formula that incorporates the local
county sales information. These estimates can swing wildly over a short
period of time and do not appear to always track actual market changes,
which are normally more gradual. In addition, these estimates do not
automatically take into account property remodels or renovations or
other property specific or local changes. This is not to say these sites
are not useful. In fact, they are great starting points and can provide
a good ball-park value in many cases.
When it comes to getting a
more accurate value for a particular property, there are other
strategies that are more trustworthy. One is to go directly to your
county’s Web site. More often than not the county assessor’s area of the
Web site provides sales and tax information for all properties in the
county. If you want to research a particular property or compare sales
prices of comparable properties, the local assessor’s sites are really
helpful. When you visit a county’s Web site you are getting information
straight from the source. Most counties today publish property
information on their Web sites. Many times you cannot only see the price
a previous owner paid, but the assessed value, property taxes, and
maps. Some county assessors are now adding a market and property
valuation tools too.
Given the importance of valuation to
investing, we are also going to remind you of the two most important
(non-Internet) valuation methods: real estate agents and appraisers.
Working with a local REALTOR is an accurate and efficient way to get
value information for a property. While one of the primary purposes of
the MLS is to market the active property listings of its members, the
system also collects sales information for those listings. REALTOR
members can pull this sales information and produce comparable market
analyses (sometimes called CMAs) that provide an excellent snapshot of a
particular property’s value for the market in a particular area.
Finally,
the most accurate way to value a property is by having a certified
appraiser produce an appraisal. An appraiser will typically review both
the sold information in the MLS system as well as county information and
then analyze the information to produce a valuation for the property
based on one or more approved methods of valuation. These methods of
valuation can include a comparison of similar properties adjusted for
differences between the properties, determine the cost to replace the
property, or, with an income producing property, determine a value based
on the income generated from the property.
The Neighborhood
There
are many ways the Internet can help you get the scoop on a particular
neighborhood. For example, census data can be found at census.gov. You
can also check out the neighborhood scoop at sites like outside.in or
review local blogs. A blog is a Web site where people discuss topics by
posting and responding to messages. Start by looking at placeblogger.com
and kcnn.org/citymediasites.com for a directory of blogs. Trulia.com
has a “Heat Map” that shows how hot or cold each neighborhood is based
on prices, sales, or popularity among the sites users.
Schools
When
it comes to selling residential property or rental properties that
cater to families, the quality of the area school district makes a huge
difference. There are many Web sites devoted to school information.
Check out greatschools.net or schoolmatters.com. Most local school
districts also have their own Web site. These sites contain a variety of
information about the public schools and the school district, including
its district demographics, test scores, and parent reviews.
Finding the Right Real Estate Agent
A
recent addition to the Internet boom in real estate information is Web
sites that let real estate agents market their expertise and local
knowledge by displaying their professional profiles and socially
networking with blogs. You can search to find an agent with a particular
expertise, geographic area of specialization, or an agent offering
specific services. The web site AgentWorld.com lets users quickly and
easily find an agent with the right expertise using keyword searches and
clean and simple agent profiles. AgentWorld.com also enables agents to
post personalized blogs, photos and videos to help consumers find the
best agent for their needs. Plus, many agent profiles include a direct
link to the agent’s web site where you will likely find the local MLS
listings.
Maps and Other Tools
The Internet has made
mapping and locating properties much easier. To get an aerial view or
satellite image of a property or neighborhood, go to maps.live.com or
maps.google.com or visit walkscore.com to see how walk-able a particular
property is. These sites can give you an idea of the neighborhood
characteristics and the types of entertainment, restaurants, and other
facilities that are within walking distance of the property.
Maps.Live.com provides a view at an angle so you can see the sides of
houses and Maps.Google even gives you a 360 degree street-level view for
certain neighborhoods. If you have not tried one of these satellite map
Web sites, you really should if only for amusement.
Final Thoughts on Internet Strategies
The
Internet is a very effective research and marketing tool for real
estate investors but is not a replacement for a knowledgeable
experienced real estate professional. The Internet can save you time and
money by enabling quick and easy property research and marketing
options. Sites like AgentWorld.com also help you efficiently find a
REALTOR who fits your buying or selling needs.
Always remember,
when it comes to Internet strategies for real estate: More knowledge is
better. You need to use the Internet to build your knowledge base on a
target property or to find a real estate agent with expertise you need.
However, the big caution here is that the Internet should not replace
human judgment and perspective, expert advice or physical due
diligence-keys to successful investing.
Banks may not be lending but rent to own homes are booming! Rent to own homes are becoming pretty commonplace, owner financing also known as seller financing is a real estate financing technique where the buyer borrows from the seller as opposed to, or in addition to a bank.
Rent to own homes are becoming a typical way to sell a property due to the fact that it is problematic to sell properties in this economic crisis. Most of these rent to own homes are fsbo, for sale by owner. Frequently, finding a real estate agent who is willing to work with rent to own homes can be difficult for buyers and sellers. Occasionally, finding rent to own homes can be kind of hard to do.
There are various ways in which rent to own homes can come about. Generally, rent to own homes are seller financed by landlords or investors that seek to enhance their financial return by offering purchase choices to their tenants in exchange for a reasonable deposit and a rental rate premium. The majority of sellers of rent to own homes are considerably reasonable when it comes to the down payment. Sellers of rent to own homes will expect you to have bumpy credit and will know how to help. Usually, these owners with rent to own homes can compete and make the best home and terms available for you. Frequently, rent to own homes are in marvelous condition, most homes are less than 5-10 years old and at bare minimum have just been renovated. Any way you look at it, rent to own homes are an immediate answer and an intelligent alternative to traditional loans.
Due to the significant initial down payment and lease payment premium that are unique to lease option contracts, rent to own homes can be considerably risky. Common lease periods for this arrangement are three years long, though longer or shorter leases for rent to own homes are not altogether unheard of. Really, rent to own homes will allow you to finally begin earning equity in a home now. Again, if you are interested in a rent to own program then you can expect to put 5-10% of the loan amount down or if are interested in buying residential real estate properties that are selling below market value then leasing or doing rent to own with tenant buyers then rent to own is for you.
Rent to own homes can be a wonderful way to buy or sell a house in the current economic environment. Rent to own homes are a certain way to increase the financial stability of a person, and help him repair his credit. Rent to own homes are long-term rental agreement that can allow a person to buy a home with minimal financial stress. Rent to own homes are a great way for people to give home ownership a shot without actually having to get a loan. The negotiation routine of rent to own homes will be different from normal home bargaining.
Rent to own homes can potentially be a great or poor deal, depending on the contract obtained at the very beginning of the agreement. Rent to own homes can help the seller still acquire some income from the home when otherwise it may be a constant drain on the seller’s finances. Rent to own homes are a trial run for the tenant as they learn the responsibilities that come with the house. Individuals living in the rent to own homes will be expected to take care of the lawn as if it is their own and pay utilities. Rent to own homes are also a good way for you to build equity before you even own the home.
Rent to own homes can be found advertised online, in newspapers, or on street signs. Besides that, rent to own homes are available in almost any neighborhood or subdivision across the United States, but there could be a hidden risk to your arrangement, and the money you put up for a down payment. Commonly, rent to own homes can also be the perfect solution for those who have gone through bankruptcy, divorce or any other types of financial hardships that may prohibit them from meeting stringent requirements put fourth by banks and other lenders. Rent to own homes can essentially help you get into a house without having to go through all the hassles that are regularly involved.
Fort Lauderdale area real estate prices are on a huge upswing and you can see the news just about everywhere you look. From the Real Estate section of the local Fort Lauderdale newspaper that for year has spent many pages on gloom and doom, to the signs in front of local real estate offices that are covered with positive accolades about the local real estate market. It appears that on many levels the bottom has passed and happy days are here again for the sellers of Ft Lauderdale Real Estate… but maybe, not so fast!
Just like there was a perfect storm of events that burst the bubble on the real estate boom. There appears to be some events that have fueled a quick reversal in prices that simply may not last. I want to get to the point of this Fort Lauderdale Real Estate article before I even explain my theory further.
I don’t expect the exuberant price increases to continue, I expect to see a leveling off and a return to a stable market!
It’s a great time to be a buyer of South Florida Real Estate, and if you are a buyer its time to come to grips with the fact that you missed the bottom. Now maybe the time to start working closely with a Fort Lauderdale Realtor to find a great deal before the next rise in prices, prices you out of your dream home.
Now that we got right to the point, let’s talk about why the quick upswing in prices and somethings that could slow down the dramatic shift. To begin I need to quote Gary Keller, not sure of it was original but it was from him that I heard it, ” the pendulum swings fastest at the bottom”, and that has certainly happened. Large hedge fund investors in the Fort Lauderdale market have been buying property at a feverish pace, and often paying over market value driving prices up? The rumors are they are not renting these homes as quickly as they thought and are slowing down on these purchases. I do not think this will hurt the market in itself as there are many smaller investors ready to buy all the distressed homes that come to market and bidding wars will remain a norm.
Fort Lauderdale Real Estate force #2, the cranes are moving again over the City of Fort Lauderdale. You still can’t sell a condo or a home for what it will cost to build but the gap is closing quickly. In Fort Lauderdale where vacant land is in short supply we have seen the return of the individual home owners willing to build. There are people building their personal dream homes at all levels of the local real Estate market. In addition 1000’s of new rental properties are currently under construction in the city. These can slow down the market by causing a drop in rents, forcing smaller investors to drop their sale prices and creating a chain reaction to help level the playing field. Certainly this is not a good or bad thing; it is just another one of the forces facing our market.
Last but not least in Broward County we still have approximately 40,000 properties at some point of foreclosure. Based on some new laws the banks have had to regroup in order to be successful in their foreclosure actions. But as they do come back to court and these actions do start to move forward, and property does become available it will certainly cause some downward pressure on pricing.
As I see it, great days are ahead for the Fort Lauderdale Real Estate market, but at this point is was time for a little reality check! This is not the time to allow a market very short on inventory to cause you to become a reactive buyer. Its time to identify what you are looking for and wait for the perfect home to come your way.It is thetime to be diligent and watch prices and interest rates so you can make a decision that is right for you and your family.
Across the country big cities are sprouting up their own real estate investors association. Knoxville, Tennessee is no different. Entrepreneurs in East TN have several options for real estate investing education. They can get information from books on the subject, become an apprentice of a seasoned investor or study a course on the topic. The Knoxville Real Estate Investors Association (REIA) is the easiest place to start. It’s like the previous three (book reading, apprenticeship and a course study) ALL ROLLED INTO ONE PLACE. Members learn to use the power of leverage by concentrating their efforts on mentoring, networking and education.
At the Knoxville area REIA (Investors Club Meeting) members discuss topics such as foreclosures, REO’s (bank owned) properties, short sales, wholesale deals, flips, rehab and rentals. Members learn what they all mean and how to use them in their business.
Mentoring –
Club members can become an apprentice to a seasoned investor at the REIA. The mentor can help them decide what is the best strategy for accomplishing their investing goals. A good mentor can shorten the learning curve and greatly accelerate the road to success.
Networking –
Successful property investors at are actively building their business. They are the one’s who are doing deals and making money by investing, because they have a large network of business contacts. REIA members understand the importance of networking and building relationships in the property investing business.
Education –
It doesn’t matter if the members of the REIA are veteran investors or if today is their first day learning how to invest. Real Estate Education is a life long process and it goes without saying that active investors should never stop learning. The Knoxville REIA brings together the best in investing information available in TN to help it’s members earn more in real estate. Their goal is to bring it’s group of investors the most up-to-date education.
Past Speakers –
In the past the Knoxville REIA has been hosted by real estate guru’s such as Lou Brown, and Than Merrill of A&E’s “Flip This House” (just to name a few).
The Knoxville REIA offers education from seasoned investors that are there to speak about their particular area of investing expertise. This is how members learn from their mistakes. It saves them both time and money. Find out how to take the next step. Current meetings are held in west Knoxville on the third Tuesday of every month (subject to change).
South Delhi has two major real estate destinations that were primarily residential in nature but took on a distinctly commercial flavor recently, thanks to a large land auction in early 2000 by DDA.
Vasant Kunj and Saket were both considered premium residential areas with a large number of residential options. However, with clusters of premium retail malls developing here, both Vasant Kunj and Saket have evolved as major retail destinations. The affluent residential populace in the region has led to a high-profile positioning for the malls and a healthy rate of footfalls. Both areas are also on the Delhi-Gurgaon Metro link and are expected to see an enhancement in the number of footfalls to its retail malls.
Vasant Kunj
Vasant Kunj has always been an indemand locality of South Delhi with values remaining high. It has always benefited from good infrastructure and ambience. Its proximity to the commercial hub of Gurgaon and the airport, as well as being at sniffing distance with one of South Delhi’s most affluent plotted areas -Vasant Vihar – has resulted in a sustained positive real estate outlook.
Vasant Kunj has rapidly grown as a commercial hub. With the DDA auctioning land in the area for mall development, it has also become a retail hub now. Malls like DLF’s Emporio and the Ambi Mall, under construction by Ambience Developers Pvt Ltd; Vasant Square Mall by Suncity and DLF’s Promenade or Palace, offers ample shopping options to customers. There is something for each type of buyer. Demand for office space here has also increased in the past few months. Values are either stable or have seen minor changes.
Being the upscale locality of South Delhi, property values have always been high. There has been an increase in the rate of transactions since August 2009 and values have increased by 15% since November 2009.
It is centrally located with good infrastructure and transport facilities. The commissioning of the Delhi Metro rail’s Gurgaon link will enhance its connectivity from end-January 2010. This is expected to further enhance footfalls in retail malls here. Since many malls are expected to be ready by this time, it may well compete with Gurgaon as a retail hub. Local brokers are also expecting a hike in real estate values in the future.
Saket real estate segment
Saket is the other destination in South Delhi that has rapidly evolved as a commercial hub. With a cluster of retail and office spaces coming up in the community centre area it has emerged as one of the most expensive shopping and entertainment centers of South Delhi.
Saket has a large bank of residential populace of its own, besides being in close proximity to densely populated areas like Malviya Nagar, Sheikh Sarai, etc. Therefore, malls like Select City Walk, MGF Metropolis, The Square One Mall, The Courtyard Mall, all within the same complex, have opened multiple shopping options for visitors. Investors also prefer malls compared to local shopping complexes. Rajeev Goel of Comtel Association, a local realtor, says: “Retail values have increased by 20-25% since 2008. In late 2008 and 2009, due to the economic slowdown, investors were moving out of malls. But, now, the situation has improved and retailers prefer malls to local markets. It has not only drawn visitors from South Delhi, but also NCR, like Gurgaon, Faridabad and Noida.”
An interesting result of the cluster of new retail developments is the drop in footfalls in Anupam PVR complex, both in the multiplex as well as the shopping complex.
Residential market has also improved in terms of transactions and values. Due to its proximity to Gurgaon and Faridabad, and also owing to the soon-to-open Delhi Metro station in the locality, residential real estate values have received a boost. The value of residential apartments and builder floors has risen by 15% and plot values by 15-20%. Apartment rental values have remained stable since November 2009.