Archive for June, 2011
Remember when you found a good deal back in 2004-2006 or so? You knew that new carpets, fresh paint and maybe a little yard work would be the ticket to sell the house for top dollar and a fairly quick sale. At the risk of sounding like an old geezer, those were the good old days!
But the ”lipstick” rehabs of the past just don’t work anymore. . .
Our economy has changed, the real estate market has changed and so have the buyers. Clearly, it is a buyers market and their expectations are higher than just a few years ago, and why not? They have an ever increasing supply of houses to choose from at very attractive prices.
What makes a property stand out above the competition? What gets the buyers attention? What compels them to make an offer on your property? How in the world do you get the sale faster than the next guy???
Answer: The feeling of NEW, the smell of NEW, the look and function of NEW!
Buyers love driving up to a freshly painted house with new windows and trimmed lawn. ?Oh how cute!? is what you want to hear. Now, get them through the new front door and into the house. Then let the rest of the house shine with new flooring, upgraded trim, new doors, new kitchen with all new appliances and new bathrooms. We’re talking remodeled, not just updated. Then to top it off, stage the house with furniture to look like a new model home!
Now they’re exclaiming their delight and surprise. He’s checking out the new furnace, she’s running her hands over the granite countertops, the kids are claiming which bedroom is theirs. . .your realtor is smiling and pulling out a purchase contract. All is good.
Investors, when you buy right and make your rehab stand out; your investment will pay off with a quicker sale and higher price.
Dare I say it? Today’s rehabs need more than lipstick. . . . when the house is old and tired it needs a full face lift!
About the author…
Deborah Townsend, Investor Relations & Consultant. Mrs. Townsend has over 20 years of Real Estate investment experience, focusing on commercial and residential development projects. Coming from California, she has been the recipient of the highest awards for her successful real estate sales in the Bay Area. Due to her ability to solve complex real estate issues, she has consulted and advised investors on their portfolios for the last ten years. Mrs. Townsend focuses on giving personal investor service for the clients of Jenning Development in King, Pierce and Kitsap Counties.
One of the key members of your team will be your real estate agent, if you do not already have a real estate license. Real estate agents are typically paid by the seller of a property, so as a buyer you usually do not pay out-of-pocket when using an agent. As a seller, you would typically pay the commission for both sides of the transaction, for both a listing agent and a selling agent (buyer’s representative). However, commissions are negotiable, and either party to the transaction may pay commissions. The amount of commission paid is also negotiable, although six percent (3% to the listing agent; 3% to the selling office) is the most common. Commissions are paid to real estate brokers only, and not directly to the sales agent. The real estate agent is an independent contractor, but works under the supervision of a licensed real estate broker (Note that as of July 1, 2010, a licensee will be called a real estate “broker” not salesperson; and their supervisor will be called a “Managing Broker” rather than simply a “broker.”). Most real estate agents will focus on listed, rather than unlisted, properties. But if you make your agent familiar with your investment focus, they may notify you before a property is listed on the NW Multiple List Service (NWMLS), or in the case of commercial properties, on the Commercial Broker Association (CBA) listing service.
There are legal responsibilities that bind real estate agents and brokers. Many of these duties are defined in a brochure called “The Law of Real Estate Agency,” which an agent should provide prior to having you sign any other paperwork with them. It defines ethics and responsibilities towards principals in a real estate transaction. A good real estate agent will be an expert in his or her chosen area of focus. This agent will have a very good idea of values in their focus area, and can provide guidance on any number of related real estate issues for their client. The agent can typically assist a seller insetting a reasonable sales price, based on similar sales in the same general area. The agent can advise you on the home improvements most likely to increase the value of the property. He or she can provide referrals to handymen and contractors that can do the work required.
This agent will also provide an extensive marketing plan to sell the house quickly that may include consultation on staging; professional photographs; flyers; yard signage; listing on the multiple list serve; advertising to other agents, clients and brokers; reverse marketing; open houses; hotlines; internet marketing; direct mailing; virtual tours; website features; blogs; print advertising and more.
A good agent may be able to save his client money by effective negotiation on price. The agent will handle all paperwork to comply with local, state and federal regulations. A good agent is keeping well-educated through required clock hours that help them become the expert you want to hire. The agent will oversee a transaction through pre-approval, loan application, inspection, escrow and right through to closing to make sure that everything is being done in a timely and accurate manner.
A good agent makes all of this look effortless, and it is sometimes difficult for a client to understand why they are paying such a large commission for what seems like easy work. Should you the investor study to become a real estate agent? Keep in mind that a real estate professional is held to a higher standard, and that you will need to disclose to sellers and buyers that you hold a real estate license. Recognize that when you are making a low offer to purchase a property, that you are foregoing the opportunity to list it. Recognize too that a real estate licensee is paying desk and transaction fees to a broker, subscriber fees to belong to the multiple listing service, marketing costs to find sellers and buyers, educational fees to meet clock hour requirements, licensing and business fees, among other expenses associated with getting and maintaining a real estate license. As a real estate broker, I enjoy having the knowledge and expertise needed to be fluent in the laws and language of real estate. I find it gives me an advantage in working with buyers, sellers, and other real estate professionals. I also recognize that it is a commitment of time and money that may be more than what many other investors may be willing or want to do.
If you are an investor who does not have a real estate license, be sure to find a great real estate licensee to cultivate as part of your team!
About the author…
Wendy Ceccherelli is the volunteer membership coordi-nator for REAPS. She has been a full-time real estate in-vestor for the past five years, and is the designated real estate broker for Home Land Investment Properties, Inc. Prior to her career in real estate, she spent twenty-five years as a government arts funder. You can reach wendy at: [email protected]