Real Estate Daily Digest

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You should have insider knowledge on the “tricks of the trade”. The “tricks” people often refer to is actually the secrets to a successful life. The first you do is have a goal which is reasonable and achievable within a specified time frame. Unless you know what it is you want to do, you will never know the first thing to do. Next is , you have to persevere. Successful people always overcome challenges - which incidentally are always just around the bend. Like they always say, when the going gets tough, the tough get going. Last, understand the process. Patience is a virtue. In real estate investment, the road to success is quite long. Starting with setting your goal to forming your team to finding and evaluating your property to making the offer to managing it when it becomes yours.

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Keep in mind the following:

• Inspect every nook and cranny of the apartment. Are all features in good working condition such as sinks and drainage? Are all systems “go” like plumbing, electrical, heating and cooling systems?
• Be concerned about the age of the building itself, pipes and electrical wires because it could mean safety and convenience issues when you actually move into it.
• Are pests present in the building? if so, what kind and how severe is the problem? Has something been done about it? Is there a weekly/ monthly fumigation being done to the building?
• Determine if you can bring all your stuff when you transfer by checking the actual storage/closet space available. Is the size of your furniture just right or is too big for the floor area? If you think bringing measuring devices will help you, then by all means do so.
• Check the security of the place. Are security guards available 24 hours? How do visitors get in and out of the building? Is there a fire alarm? a sprinkler system?

Some people prefer to build their own home instead of buying an existing one. This way, the home is built to your exact specifications and wants. It will be more demanding and time-consuming, but emotionally it may be more satisfying. It may cost you more than you bargained for, though, especially if you’re not well-prepared. To minimize costs, make sure to plan your budget and determine exactly how much you can afford to spend. Search for the best team who can work with you. Start by asking for referrals from friends who built their own houses. Next, choose the house design that meets your needs and your budget. You may need to hire an architect for this, or choose using stock plans from a catalog. Changes and modifications should be discussed with the builder or designer, as well as the corresponding cost. Lastly, be sure to get a contract from the builder or contractor that will describe the project in detail, the project estimates and bill of materials, and the contractor’s fees and responsibilities.

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Your role in the process is an active role, not a passive one. You should avoid the attorney who is content with simply telling you what to do, and then throwing together some documents to accomplish it. That is the attorney’s plan – not yours.

In summary, if you’re working with the right estate planning attorney, you should plan on being involved in three distinct steps:

1. Develop a plan with counseling-oriented (rather than document-oriented) professionals.
2. Commit you and your family to an ongoing maintenance and education program.
3. Assure that your wisdom is passed along with your wealth.
As you consider those you love, and those material things that you’ll someday leave behind, only a properly designed and implemented estate plan can ensure that your goals for those loved ones are accomplished.

Many estate plans in America don’t work. They often consist of fill-in-the-blank documents, delivered in a one-time transaction, and never updated. If that’s all an attorney can offer, that’s not the right attorney for you. Choose an attorney that is counseling-oriented, values-based, and as strong on relationships as he or she is on the law.

It might seem a little bit silly to be thinking about your potential home’s resale value when you haven’t even bought it yet. However, most of us will not live in the same house for the rest of our lives, or even for a long period of time. If you think that you’ll be moving out of the state or country within the next five or ten years, it makes sense to choose a home with good resale value.

Location is important, but some locations that are desirable today may not be so in the next couple of years. Still, if the house is near schools, services, and seems to show signs of growth, consider checking out that property.

Avoid homes with outdated features like one bathroom, electric baseboard heating systems, and the like.

Consider the buyers in your area. If the majority of the population is made up of families with children, try a house with a large front yard.

Your first priority is to get a home that suits your needs, but you should consider the resale value before making any final decisions. If you make a careful purchase now, you’ll have extra money when you finally have to move out.

Every industry has it own terminology and real estate is no different. Though we may not be an expert in real estate dealings it is good to be familiar with the common terminology used in the industry.

AMORTIZATION
A process of gradually paying off a debt by making equal periodic payments of principal and interest on a loan at equal intervals of time. Eg. ($xx,xxx.00 per month for X years.)

APPRAISAL
An estimate of a property’s valuation by an appraiser.

ASSESSED VALUE
A value placed on a property by a public officer (assessor) or a board as a basis for property taxes.

ASSUMABLE MORTGAGE
A mortgage that is transferred to the buyer who then becomes personally liable for the terms and conditions including payments.

CLOSING
The actual transfer of title for money or other consideration. This is the day that parties actually consummate a deal.

CONVENTIONAL LOAN
A loan not insured or guaranteed by a government.

DEED
A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

DOWN PAYMENT
The amount of cash that a purchaser puts down to buy property.

EQUITY
The value of a property over and above any mortgage indebtedness.

LIEN
A right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor.

LOAN PROCESSING FEE
A flat fee charged by lenders for administration of the loan process. Some banks waive this fee.

MARKET VALUE
The actual value of property at a specific time. Eg. (What your house would sell for today if you were to decide to sell.)

MORTGAGE
A pledge of real estate as security for the payment of a debt. A mortgage is a recorded document that tells the lender that the borrower pledged their real estate as collateral for a loan.

PRINCIPAL
The amount of money that a borrower owes on a loan at a given time.

TITLE
Evidence of ownership.

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In selling a real estate, there are different ways in advertising it. First, through the modern way, the Internet. There are hundred sites where we can post pictures, details and even an online virtual tour of the estate. Second, through Flyers & Newspaper, where a seller post one picture and rough details of the estate. This is usually done locally or within a state and last for about 2 weeks. Third, through TV or Radio announcement, this is usually time limited and sometimes costly on the part of the seller. And last and considered an old way, is through Word of Mouth. This done by the seller telling his neighbors/friends to look for buyers of the estate and usually do an open house.

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When planning to go into Real Estate Trading, here are some guides for a successful transaction.

1. Finalize the place you want to move and look through the internet for possible trade partner
2. Check for the appraisal value of your property as well as your trade partner
3. Do a visual inspection of the trade partner property, it’s much better to do it personally so as not to have any trouble after the trade
4. If your property is still in mortgage, have a sufficient fund to pay it off.
5. If everything is set, finalize all the legal documents of this trade.

There are different companies handling this that could help in having a successful real estate trading.

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Due to the declining pace of real estate in the US, many are now thinking of trading real estate instead of simply selling properties. This kind of deling can be described as an “I buy yours, you buy mine” arrangement, and is very much different from vacation home swapping.

This works if the seller is also looking for a new or another property to purchase, like moving to a new place or state, and you are likewise doing the same, and it just so happens that both of you find each other’s property a good swap or trade.

But before doing a trade, we must take in consideration the other party/owner’s capacity to go into this since in these simultaneous transactions, you have to close the deal the same time, unlike when you’re selling and then buying afterwards.

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If you want to live in your own home, consider renting instead of buying your own real estate. Renting is cheaper in the short term because when you acquire property outright, you would have to shell out cash or take a long-term loan.

Trends from the past several decades indicate that the housing market slumps every 10 to 15 years. Even when home prices rise from 4.5%, your income would still appreciate at 4% every year for a decade before you would save more by owning your house than renting it.

There are also a lot of expenses associated with owning a house, such as real estate taxes, transfer taxes, repairs, and the like but these do not build equity. Renting is more favorable not only because it is more inexpensive in the short term, but also because it saves you trouble, offers you flexibility and may be a stable decision when just starting out.