"Business, that's easily defined - it's other people's money." -- Peter Drucker
"It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and I just love real estate." -- Donald Trump
"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." -- Warren Buffett
Investing in real estate is about using other people's money to increase one's own personal wealth. It is not hard to hear a well-known business figure wax poetic about real estate. Robert Kiyosaki has said that he loves real estate because it is dumb as dirt. Meaning real estate is easy to understand and that anyone can master the fundamentals and build wealth using real estate.
The tax advantages alone make real estate a worthwhile addition to anyone's wealth portfolio. Imagine having a property that pays you $6000 per year positive cashflow and imagine that that income is tax-free. What if you had 5 such properties? What about ten?
If these things are true, why do so many personal finance blogs steer clear of the topic of real estate investing while extolling the virtues of long-term investing in the stock market? And why have so many investors lost their investments through foreclosure because of this most recent real estate bust?
There are a myriad of ways to invest in real estate from mortgage-backed securities to REITs to tax liens. As a single investor, partner or part of a syndicate. Through properties bought for appreciation or cash flow. There are so many ways to interact with a property or group of properties for profit that the individual investor can get lost in the quagmire of information, courses and advice and end up going out with the tide, pushing up financial daisies or suffering any of the other terms used to describe financial catastrophes in today's economy.
Because investing in real estate is a lot like specializing in a particular branch of medicine, this article is geared to the person who wants to own a tangible piece of property for investment purposes.
The Risks of Real Estate:
The risks of real estate are the same as any business and they are 1) liability 2) under capitalization 3) economies of scale 4) economic down turn 5) unknown exit strategy
Liability:
Unfortunately in America legal action is considered one of the acceptable ways for people to increase their wealth. If a property carries a mortgage, the bank will insist that the property owner carry liability insurance, but it doesn't stop there. The savvy investor will explore the options of legal entities, LLCs and limited partnerships, before investing in even that first property.
Under Capitalization:
The most common reason that businesses fail is the lack of capital. Too many real estate investors are looking for the "no money down deal" which too many people take to mean free, free real estate. Whether or not an investor is able to acquire a property with no money down, that investor should have sufficient access to funds to cover taxes, insurance, 6 months of mortgage payments and repair costs.
Economies of scale:
Real estate investing can be and often is a capital intensive business and the costs are fixed. What this means is that a small investor must spread fixed costs over a few units and a large investor must spread fixed costs over a larger number of units. Vacancies, repairs, tenant damage that exceeds usual repair costs will affect a smaller investor to a much greater extent than a large investor. How do smaller investors become large? By systematically acquiring more properties, trading up and by partnering with other like-minded investors.
Sabtu, 12 Desember 2015
Colorado Springs Real Estate - Black Forest Homes
Find your dream house property in the Colorado Springs real estate area of the Black Forest. This part of the Colorado Springs real estate area is located in northern El Paso County. The Black Forest is a rural area that is situated on approximately 200,000 acres of land. The area is heavily wooded with mostly Ponderosa Pine trees. Black Forest is a mix of older homes and newer homes. The northwestern Black Forest real estate area includes: High Forest Ranch established 2001-2004, Walden established 1965-2002, Hawk Ridge established 1994-2000, Wissler Ranch established 1996-1999, and Elk Creek Ranch established 1980-1993.
Home Prices & Descriptions
Many of the homes for sale in the Black Forest real estate area are 5 acre house properties. There are mostly ranch style homes and 2 story homes. Some of the homes are custom homes and reflect "country style" living and some of the homes resemble houses that blend into "city living". Many of these Colorado Springs real estate subdivisions include features such as: multiple decks and fireplaces, slate floors, barns and garages, granite counters, and theater rooms.
The minimum sales price for homes in 2008 in the Black Forest is $375,000. The minimum size Black Forest home for sale is 3,408 finished square feet. The minimum home for sale is 3 bedrooms, 3 baths, and a 3 car garage. The average sales price in 2008 is $650,000 and is 4,527 finished square feet. The average size home for sale is 4 bedrooms, 4 baths, and a 4 car garage. The maximum sales price in this Colorado Springs real estate area is $925,000 and is 5,646 finished square feet. The maximum size home for sale is 5 bedrooms, 5 baths, and a 5 car garage.
One of the newer communities in the Black Forest real estate area is the prestigious High Forest Ranch. The Ranch has rustic custom homes for sale. There are close to 20 different custom builders to choose from. Some of the homes in this Colorado Springs real estate area are situated on 2.5-5 acres of land. Residents in the High Forest Ranch area have community lodge at their disposal for those special occasions. The custom homes for sale in this Colorado Springs real estate area range from $499,900-$3.5 million. Amenities for some of the homes include: multiple fireplaces, slab granite counter tops, vaulted ceilings, great rooms, family room, master retreats, theater rooms, billiard rooms, wine rooms, travertine flooring, outdoor covered decks, and wet bars. Many of the Colorado Springs homes for sale in this area have extensive timber and stone features.
The Walden real estate area has beautiful custom ranch style homes with lots between approximately 1/2 acre and 1 acre in size. Many of the homes have stucco exteriors and resemble more of a "city look." Some of these Colorado Springs real estate neighborhoods include: custom cabinets, molding and trim, granite slab kitchen counter tops, hardwood floors, multiple fireplaces, 5 piece master baths, vaulted great room, stucco exteriors, perennial gardens, offices, recreation rooms, game area, formal dining rooms, wood decks with hot tub, walk-out rancher, and gourmet kitchens. Homes for sale in this Colorado Springs real estate area range from the high $200,000s to just under $600,000.
In the privacy of the pines is the prominent Hawk Ridge real estate area. Hawk Ridge has homes for sale on approximately 2.5 acres or less. Many of the homes are custom homes with features like: hardwood floors, walls of windows, multiple fireplaces, French doors, granite kitchen islands, custom cabinets, hand crafted banisters, ponds, walk-out dining area, and large decks. The homes for sale in the Hawk Ridge community range from the approximately the mid $500,000s to 1.3 million dollars. This part of the Colorado Springs real estate area borders the Black Forest area.
Home Prices & Descriptions
Many of the homes for sale in the Black Forest real estate area are 5 acre house properties. There are mostly ranch style homes and 2 story homes. Some of the homes are custom homes and reflect "country style" living and some of the homes resemble houses that blend into "city living". Many of these Colorado Springs real estate subdivisions include features such as: multiple decks and fireplaces, slate floors, barns and garages, granite counters, and theater rooms.
The minimum sales price for homes in 2008 in the Black Forest is $375,000. The minimum size Black Forest home for sale is 3,408 finished square feet. The minimum home for sale is 3 bedrooms, 3 baths, and a 3 car garage. The average sales price in 2008 is $650,000 and is 4,527 finished square feet. The average size home for sale is 4 bedrooms, 4 baths, and a 4 car garage. The maximum sales price in this Colorado Springs real estate area is $925,000 and is 5,646 finished square feet. The maximum size home for sale is 5 bedrooms, 5 baths, and a 5 car garage.
One of the newer communities in the Black Forest real estate area is the prestigious High Forest Ranch. The Ranch has rustic custom homes for sale. There are close to 20 different custom builders to choose from. Some of the homes in this Colorado Springs real estate area are situated on 2.5-5 acres of land. Residents in the High Forest Ranch area have community lodge at their disposal for those special occasions. The custom homes for sale in this Colorado Springs real estate area range from $499,900-$3.5 million. Amenities for some of the homes include: multiple fireplaces, slab granite counter tops, vaulted ceilings, great rooms, family room, master retreats, theater rooms, billiard rooms, wine rooms, travertine flooring, outdoor covered decks, and wet bars. Many of the Colorado Springs homes for sale in this area have extensive timber and stone features.
The Walden real estate area has beautiful custom ranch style homes with lots between approximately 1/2 acre and 1 acre in size. Many of the homes have stucco exteriors and resemble more of a "city look." Some of these Colorado Springs real estate neighborhoods include: custom cabinets, molding and trim, granite slab kitchen counter tops, hardwood floors, multiple fireplaces, 5 piece master baths, vaulted great room, stucco exteriors, perennial gardens, offices, recreation rooms, game area, formal dining rooms, wood decks with hot tub, walk-out rancher, and gourmet kitchens. Homes for sale in this Colorado Springs real estate area range from the high $200,000s to just under $600,000.
In the privacy of the pines is the prominent Hawk Ridge real estate area. Hawk Ridge has homes for sale on approximately 2.5 acres or less. Many of the homes are custom homes with features like: hardwood floors, walls of windows, multiple fireplaces, French doors, granite kitchen islands, custom cabinets, hand crafted banisters, ponds, walk-out dining area, and large decks. The homes for sale in the Hawk Ridge community range from the approximately the mid $500,000s to 1.3 million dollars. This part of the Colorado Springs real estate area borders the Black Forest area.
Real Estate Leads
What They Are, How to Acquire Them & Everything Else a Realtor Needs to Know
No matter which line of work it is that you are in, you naturally would want to stay on top of things. This means having all the tools and information that you need at your disposal. The same thing applies when it comes to the real estate business. Whether you're a Realtor who's flying solo or if you're part of a real estate firm with a team of colleagues all working together - you need to stay informed so that you can be on top of your game.
Real Estate Leads: The Basics
One of the most important aspects of being a Realtor that you need to acquire skills for is generating leads. Lead generation is a marketing term which refers to the creation or generation of a prospective customer's interest, inquiry and eventual consumption of a particular product or service. This means that acquiring leads is all about generating interest from a prospective buyer or seller of a real estate property.
If you're a Realtor who is working from home, you can perform lead generation steps for the purposes of list building, acquiring a list for a newsletter or simply winning over existing and prospective customers who will take advantage of the real estate services that you are offering.
Learning How to Recognize Quality Leads from Junk Leads
Next, let us delve a bit deeper into how agents can acquire good leads. The first thing that you need to do is learn how to recognize high-quality real estate leads from ones which can be considered as 'junk leads'.
Take a look at a few tips on how you can recognize quality leads from the junk sales leads:
- Make sure that the seller who you will get in touch with is motivated.
This is one of the challenges that most agents face on a daily basis: home sellers changing their minds at the last minute. If you want to generate quality real estate leads, make sure to only follow up on those who you think are the real, motivated sellers.
- Know what junk sellers leads exactly are.
More often than not, most agents will stumble upon junk sellers leads - a mere collection of names, outdated contact information and property listings. Junk leads are considered such because the homeowners have either no intention or no urgency in selling their property.
No matter which line of work it is that you are in, you naturally would want to stay on top of things. This means having all the tools and information that you need at your disposal. The same thing applies when it comes to the real estate business. Whether you're a Realtor who's flying solo or if you're part of a real estate firm with a team of colleagues all working together - you need to stay informed so that you can be on top of your game.
Real Estate Leads: The Basics
One of the most important aspects of being a Realtor that you need to acquire skills for is generating leads. Lead generation is a marketing term which refers to the creation or generation of a prospective customer's interest, inquiry and eventual consumption of a particular product or service. This means that acquiring leads is all about generating interest from a prospective buyer or seller of a real estate property.
If you're a Realtor who is working from home, you can perform lead generation steps for the purposes of list building, acquiring a list for a newsletter or simply winning over existing and prospective customers who will take advantage of the real estate services that you are offering.
Learning How to Recognize Quality Leads from Junk Leads
Next, let us delve a bit deeper into how agents can acquire good leads. The first thing that you need to do is learn how to recognize high-quality real estate leads from ones which can be considered as 'junk leads'.
Take a look at a few tips on how you can recognize quality leads from the junk sales leads:
- Make sure that the seller who you will get in touch with is motivated.
This is one of the challenges that most agents face on a daily basis: home sellers changing their minds at the last minute. If you want to generate quality real estate leads, make sure to only follow up on those who you think are the real, motivated sellers.
- Know what junk sellers leads exactly are.
More often than not, most agents will stumble upon junk sellers leads - a mere collection of names, outdated contact information and property listings. Junk leads are considered such because the homeowners have either no intention or no urgency in selling their property.
Making Money in Real Estate
Making money in Real Estate is the most popular strategy to build wealth. If you're not currently making money and building wealth in real estate you need to start. I have been making money using four very simple strategies that are very simple to duplicate.
All of the millionaires I have learned from make money and build wealth in real estate. That's right, all of them! These real estate strategies can set you free for life!
If you learn and implement them you can build a massive amount of wealth in a very short period of time. I use a system for all four of the strategies that all go hand in hand.
These strategies can easily make you rich in a very short period of time. I use the first strategy to make money fast, the second strategy for making money in chunks and the third strategy is for building wealth and creating income for the rest of my life. The last strategy I use to buy real estate extremely cheap.
I use a step by step system for all of these money making systems. The first strategy requires in many cases no money and no credit. It's the strategy I use to create anywhere from three to fifteen thousand dollars in profits per deal in a short period of time without ever even buying real estate. This strategy is known as wholesaling.
It's easy to begin making quick money. You don't need money to make money with this strategy! If you have bad credit don't worry, you don't need good credit to make money with this strategy. My goal is for you to have a check in your hands of $5,000 or more in 30 days or less!
I can show you my exact system on how to do it. Wholesale is nothing more than making an offer on a piece of real estate, getting that offer accepted, then simply assigning to contract to someone else. Don't worry, making an offer on something doesn't mean you'll be forced to buy it".
Making offers on Real Estate is easy! You can do it two ways. Through a realtor or directly to sellers who don't have their homes listed with a realtor.
I developed a specific step by step system to find listed and unlisted properties to make offers on. Most of my deals are through listed properties. I use a realtor to make offers for me on properties that are listed.
There are a lot of realtors who won't understand what you're trying to accomplish. I'll teach you exactly the process I use to find my realtors as well as how to get them on the same page as you with what you want to accomplish.
There are so many properties for sale. You need to learn how to find the best one's to make offers on. Learning how to wholesale is the first step in becoming a real estate investor and getting out of the rat race! In all of my money making strategies I believe it is the easiest one for both beginners and advanced investors.
All of the millionaires I have learned from make money and build wealth in real estate. That's right, all of them! These real estate strategies can set you free for life!
If you learn and implement them you can build a massive amount of wealth in a very short period of time. I use a system for all four of the strategies that all go hand in hand.
These strategies can easily make you rich in a very short period of time. I use the first strategy to make money fast, the second strategy for making money in chunks and the third strategy is for building wealth and creating income for the rest of my life. The last strategy I use to buy real estate extremely cheap.
I use a step by step system for all of these money making systems. The first strategy requires in many cases no money and no credit. It's the strategy I use to create anywhere from three to fifteen thousand dollars in profits per deal in a short period of time without ever even buying real estate. This strategy is known as wholesaling.
It's easy to begin making quick money. You don't need money to make money with this strategy! If you have bad credit don't worry, you don't need good credit to make money with this strategy. My goal is for you to have a check in your hands of $5,000 or more in 30 days or less!
I can show you my exact system on how to do it. Wholesale is nothing more than making an offer on a piece of real estate, getting that offer accepted, then simply assigning to contract to someone else. Don't worry, making an offer on something doesn't mean you'll be forced to buy it".
Making offers on Real Estate is easy! You can do it two ways. Through a realtor or directly to sellers who don't have their homes listed with a realtor.
I developed a specific step by step system to find listed and unlisted properties to make offers on. Most of my deals are through listed properties. I use a realtor to make offers for me on properties that are listed.
There are a lot of realtors who won't understand what you're trying to accomplish. I'll teach you exactly the process I use to find my realtors as well as how to get them on the same page as you with what you want to accomplish.
There are so many properties for sale. You need to learn how to find the best one's to make offers on. Learning how to wholesale is the first step in becoming a real estate investor and getting out of the rat race! In all of my money making strategies I believe it is the easiest one for both beginners and advanced investors.
Can TIC's Survive in the Existing Real Estate Market?
TIC Investors
In this very dynamic real estate market TIC (Tenant in Common) investors have suffered as the market has weakened. In particular, those real estate investors that joined TIC investments in the last four years, (at the top of the market) are finding that in some locations, high vacancy rates and plunging rental rates are squeezing their cash flow and their ability to pay their mortgages.
Who bought TIC investments?
As baby boomers have aged, they wanted to reposition their assets into investments that did not take up as much of their time and that did not involve their day to day attention. These investors wanted to escape management intense investments and buy into real estate investments that guaranteed them a "safe and consistent" return.
They had typically sold other investments and traded into the TIC using a 1031 exchange, pooling with other investors which seemed like a safe bet. Unfortunately, many (not all*) TIC investments were organized by syndicators who purchased the properties at one price and then marked up the properties to resell to their investors. In many cases they used short term "interest only" loans to get their deals to pencil, betting that real estate appreciation as well as increasing rents would increase the value of the properties quickly and allow the properties to be refinanced.
As a result of the large number of investors (TIC syndicators, REITS and others) competing for the same inventory, the price of assets went sky high thus lowering the yields of the investments. CAP rates as low as five and a half were not unusual and CMBS loan originators and other financial institutions were willing to lend to TIC syndicators and their investors on a non recourse basis.
The Real Estate Market was not as strong as investors expected.
Market appreciation, and rent increases did not occur. In the majority of American markets most property vacancy rates have increased, making it difficult for TIC's to have enough money to cover their expenses. In many cases the properties performed to proforma, but when the time came to refinance them the rules had changed and the lenders wanted to see more equity in each investment. Nervous lenders have moved their investor equity requirements from 25% to 40% and even 50%.
This has forced many TIC investors into the unpalatable position of significantly increasing their cash investments in properties to save their existing equity positions and furiously attempt to get new financing for their deals to replace the existing "interest only loans". These new equity requirements are stretching the resources of TIC investors.
Today
In the past two years DBSI and Sunwest Management two major TIC syndicators have dissolved and filed for bankruptcy. As these cases move through the courts, questions have emerged about the future of TIC property sales. It seems likely that real estate TICs sold by real estate brokers will disappear and most likely be replaced by securitized TIC's for larger investments and real estate partnerships for smaller investments. (TICs can be sold as real estate investments or as securities, but Real estate TICs are not held to the same high standard of disclosure as securities investments).
A reflection of this trend, is that the Tenant-In-Common Association (TICA) changed their name to Real Estate Investment Securities Association ( REISA). In the last year REISA recommended that all TICs be structured as securities.** Some TIC syndicators are still in business such as RealtyNet Advisors. Realtynet Advisors have adjusted to changes in the market place with their special approach to TIC's where there is no debt just equity invested, in other words they do not borrow money to make a deal. They find enough investors to contribute equity for the full sales price.
In this very dynamic real estate market TIC (Tenant in Common) investors have suffered as the market has weakened. In particular, those real estate investors that joined TIC investments in the last four years, (at the top of the market) are finding that in some locations, high vacancy rates and plunging rental rates are squeezing their cash flow and their ability to pay their mortgages.
Who bought TIC investments?
As baby boomers have aged, they wanted to reposition their assets into investments that did not take up as much of their time and that did not involve their day to day attention. These investors wanted to escape management intense investments and buy into real estate investments that guaranteed them a "safe and consistent" return.
They had typically sold other investments and traded into the TIC using a 1031 exchange, pooling with other investors which seemed like a safe bet. Unfortunately, many (not all*) TIC investments were organized by syndicators who purchased the properties at one price and then marked up the properties to resell to their investors. In many cases they used short term "interest only" loans to get their deals to pencil, betting that real estate appreciation as well as increasing rents would increase the value of the properties quickly and allow the properties to be refinanced.
As a result of the large number of investors (TIC syndicators, REITS and others) competing for the same inventory, the price of assets went sky high thus lowering the yields of the investments. CAP rates as low as five and a half were not unusual and CMBS loan originators and other financial institutions were willing to lend to TIC syndicators and their investors on a non recourse basis.
The Real Estate Market was not as strong as investors expected.
Market appreciation, and rent increases did not occur. In the majority of American markets most property vacancy rates have increased, making it difficult for TIC's to have enough money to cover their expenses. In many cases the properties performed to proforma, but when the time came to refinance them the rules had changed and the lenders wanted to see more equity in each investment. Nervous lenders have moved their investor equity requirements from 25% to 40% and even 50%.
This has forced many TIC investors into the unpalatable position of significantly increasing their cash investments in properties to save their existing equity positions and furiously attempt to get new financing for their deals to replace the existing "interest only loans". These new equity requirements are stretching the resources of TIC investors.
Today
In the past two years DBSI and Sunwest Management two major TIC syndicators have dissolved and filed for bankruptcy. As these cases move through the courts, questions have emerged about the future of TIC property sales. It seems likely that real estate TICs sold by real estate brokers will disappear and most likely be replaced by securitized TIC's for larger investments and real estate partnerships for smaller investments. (TICs can be sold as real estate investments or as securities, but Real estate TICs are not held to the same high standard of disclosure as securities investments).
A reflection of this trend, is that the Tenant-In-Common Association (TICA) changed their name to Real Estate Investment Securities Association ( REISA). In the last year REISA recommended that all TICs be structured as securities.** Some TIC syndicators are still in business such as RealtyNet Advisors. Realtynet Advisors have adjusted to changes in the market place with their special approach to TIC's where there is no debt just equity invested, in other words they do not borrow money to make a deal. They find enough investors to contribute equity for the full sales price.
Real Estate Marketing in a Luxury Market
As the real estate market in the U.S. slowly continues to regain its footing, many agents are looking at this time as a chance to redefine their market. With so many agents abandoning-or at least significantly cutting back-their marketing systems to save money, others are jumping in to take advantage of the marketing void. In other words, they are taking an offensive approach in order to put themselves in prime position when the market starts to upswing.
In most parts of Canada, on the other hand, the market continues to stay hot and agents are looking for the best way to grow their business. They are looking to expand the reach of their marketing and maximize income opportunities. Whether it be in the U.S. or Canada, a number of agents we are talking to believe that now is the time to make the transition into the ultra high-end market.
Traditionally, luxury real estate is one of the hardest market segments to try and break into. Why? There are a few common reasons. It might be the presence of a dominant agent already ensconced in the community or the fact that everyone already has a peer in the real estate business. It may be because the agents themselves don't have the patience to work in a generally slower-paced market (less transactions to go around, tougher competition and slower sales process). It could be that they are simply not prepared for the unique challenges a high-end market poses.
Agents often make a blind leap into luxury real estate because they think that's "where the money is." Of course, it's simple math. If you get the same split, it pays to list homes with higher selling prices. In theory, you can make more money by doing fewer transactions. On one hand, that's true, but if you go into luxury real estate with this mentality, you are probably destined to fail.
Yes, your income per transaction goes up significantly. That's great, but there is often a new set of challenges introduced when working a high-end market: the competitive stakes are much higher, social circles are much more closed, politics are different, and there are many other factors which I will detail throughout this article. In addition, marketing and servicing costs are generally more when dealing with luxury homes and clients. Both buyers and sellers expect more and demand more and the properties themselves need even more attention (marketing, staging, photography, etc.) to appeal to a more sophisticated crowd.
Carol Barkin of Toronto, Ontario has been a successful Sales Representative for 20 years, but it took her some time to build her business in her high-end markets (both in the city and in a lakefront recreational market about an hour outside Toronto). "For me, the biggest challenge was making that first connection," she says. "They already have tight social connections and know how to get what they want, so building relationships is a matter of trust. It's important to relate to clients as a friend and a helpful peer, not just present yourself as a service provider."
In most parts of Canada, on the other hand, the market continues to stay hot and agents are looking for the best way to grow their business. They are looking to expand the reach of their marketing and maximize income opportunities. Whether it be in the U.S. or Canada, a number of agents we are talking to believe that now is the time to make the transition into the ultra high-end market.
Traditionally, luxury real estate is one of the hardest market segments to try and break into. Why? There are a few common reasons. It might be the presence of a dominant agent already ensconced in the community or the fact that everyone already has a peer in the real estate business. It may be because the agents themselves don't have the patience to work in a generally slower-paced market (less transactions to go around, tougher competition and slower sales process). It could be that they are simply not prepared for the unique challenges a high-end market poses.
Agents often make a blind leap into luxury real estate because they think that's "where the money is." Of course, it's simple math. If you get the same split, it pays to list homes with higher selling prices. In theory, you can make more money by doing fewer transactions. On one hand, that's true, but if you go into luxury real estate with this mentality, you are probably destined to fail.
Yes, your income per transaction goes up significantly. That's great, but there is often a new set of challenges introduced when working a high-end market: the competitive stakes are much higher, social circles are much more closed, politics are different, and there are many other factors which I will detail throughout this article. In addition, marketing and servicing costs are generally more when dealing with luxury homes and clients. Both buyers and sellers expect more and demand more and the properties themselves need even more attention (marketing, staging, photography, etc.) to appeal to a more sophisticated crowd.
Carol Barkin of Toronto, Ontario has been a successful Sales Representative for 20 years, but it took her some time to build her business in her high-end markets (both in the city and in a lakefront recreational market about an hour outside Toronto). "For me, the biggest challenge was making that first connection," she says. "They already have tight social connections and know how to get what they want, so building relationships is a matter of trust. It's important to relate to clients as a friend and a helpful peer, not just present yourself as a service provider."
Real Estate Marketing in a Luxury Market
As the real estate market in the U.S. slowly continues to regain its footing, many agents are looking at this time as a chance to redefine their market. With so many agents abandoning-or at least significantly cutting back-their marketing systems to save money, others are jumping in to take advantage of the marketing void. In other words, they are taking an offensive approach in order to put themselves in prime position when the market starts to upswing.
In most parts of Canada, on the other hand, the market continues to stay hot and agents are looking for the best way to grow their business. They are looking to expand the reach of their marketing and maximize income opportunities. Whether it be in the U.S. or Canada, a number of agents we are talking to believe that now is the time to make the transition into the ultra high-end market.
Traditionally, luxury real estate is one of the hardest market segments to try and break into. Why? There are a few common reasons. It might be the presence of a dominant agent already ensconced in the community or the fact that everyone already has a peer in the real estate business. It may be because the agents themselves don't have the patience to work in a generally slower-paced market (less transactions to go around, tougher competition and slower sales process). It could be that they are simply not prepared for the unique challenges a high-end market poses.
In my experience, it's usually a combination of these reasons that prevents most agents from becoming successful in luxury real estate. There are many things you need to know before you make the quantum leap into the next price range. We've put together a list of five factors that will help you decide if a move to luxury real estate is right for you.
#1. Know What You Are Getting Into
Agents often make a blind leap into luxury real estate because they think that's "where the money is." Of course, it's simple math. If you get the same split, it pays to list homes with higher selling prices. In theory, you can make more money by doing fewer transactions. On one hand, that's true, but if you go into luxury real estate with this mentality, you are probably destined to fail.
Yes, your income per transaction goes up significantly. That's great, but there is often a new set of challenges introduced when working a high-end market: the competitive stakes are much higher, social circles are much more closed, politics are different, and there are many other factors which I will detail throughout this article. In addition, marketing and servicing costs are generally more when dealing with luxury homes and clients. Both buyers and sellers expect more and demand more and the properties themselves need even more attention (marketing, staging, photography, etc.) to appeal to a more sophisticated crowd.
Carol Barkin of Toronto, Ontario has been a successful Sales Representative for 20 years, but it took her some time to build her business in her high-end markets (both in the city and in a lakefront recreational market about an hour outside Toronto). "For me, the biggest challenge was making that first connection," she says. "They already have tight social connections and know how to get what they want, so building relationships is a matter of trust. It's important to relate to clients as a friend and a helpful peer, not just present yourself as a service provider."
In most parts of Canada, on the other hand, the market continues to stay hot and agents are looking for the best way to grow their business. They are looking to expand the reach of their marketing and maximize income opportunities. Whether it be in the U.S. or Canada, a number of agents we are talking to believe that now is the time to make the transition into the ultra high-end market.
Traditionally, luxury real estate is one of the hardest market segments to try and break into. Why? There are a few common reasons. It might be the presence of a dominant agent already ensconced in the community or the fact that everyone already has a peer in the real estate business. It may be because the agents themselves don't have the patience to work in a generally slower-paced market (less transactions to go around, tougher competition and slower sales process). It could be that they are simply not prepared for the unique challenges a high-end market poses.
In my experience, it's usually a combination of these reasons that prevents most agents from becoming successful in luxury real estate. There are many things you need to know before you make the quantum leap into the next price range. We've put together a list of five factors that will help you decide if a move to luxury real estate is right for you.
#1. Know What You Are Getting Into
Agents often make a blind leap into luxury real estate because they think that's "where the money is." Of course, it's simple math. If you get the same split, it pays to list homes with higher selling prices. In theory, you can make more money by doing fewer transactions. On one hand, that's true, but if you go into luxury real estate with this mentality, you are probably destined to fail.
Yes, your income per transaction goes up significantly. That's great, but there is often a new set of challenges introduced when working a high-end market: the competitive stakes are much higher, social circles are much more closed, politics are different, and there are many other factors which I will detail throughout this article. In addition, marketing and servicing costs are generally more when dealing with luxury homes and clients. Both buyers and sellers expect more and demand more and the properties themselves need even more attention (marketing, staging, photography, etc.) to appeal to a more sophisticated crowd.
Carol Barkin of Toronto, Ontario has been a successful Sales Representative for 20 years, but it took her some time to build her business in her high-end markets (both in the city and in a lakefront recreational market about an hour outside Toronto). "For me, the biggest challenge was making that first connection," she says. "They already have tight social connections and know how to get what they want, so building relationships is a matter of trust. It's important to relate to clients as a friend and a helpful peer, not just present yourself as a service provider."
My Real Estate Agent? Just Who Does the Real Estate Agent Represent?
This article is not intended to be legal advice. Legal advice depends on each and every person's particular circumstance. If you have a related issue, you should consult with your lawyer who practices law in your state regarding your particular circumstance. This article is for informational purposes only.
Whoosh... SLAM!
He marched into my office after he slammed the door shut behind him.
His face was grim and his fists were balled up. He plopped down in the chair across from my desk, and he took several deep breaths and exhaled slowly. After he calmed down, he looked at me and flashed an apologetic smile.
After a few seconds, he then demanded: "Just who did he represent?! I thought he was representing ME!"
I smiled at him cautiously. Then, I carefully asked him: "Who? Who did you think was representing you?" "The Realtor!" he bellowed. "I was the buyer-and he called himself the buyer's agent-but he was not representing me! He was supposed to be representing me!"
"What made you believe that he was representing you?" I asked.
"He's a real estate agent. He was the agent for the buyer-and I was the buyer. That means he was representing me, right? He had to protect my interests over everyone else's right?"
"It's... not... that.... simple...." I replied slowly, attempting not to anger him further. "Let me see your contract with your real estate agent and all the disclosures your real estate gave to you."
After reviewing his paperwork, I replied "No, your real estate agent was a transactional broker-he did not owe you a duty of loyalty. In other words, he did not have to put your interests ahead of his own."
"You've got to be kidding!"
"No. I'm not...."
WHAT IS THE PROBLEM?
Many potential buyers and sellers work with real estate agents. These buyers and sellers hire realtors with the thought that these professionals "represent" them. These buyers and sellers believe that these professionals must protect their best interests over everyone else's in the transaction.
However, this is simply not the law in states like Florida. In Florida, Florida Statutes §475.278 clearly provides that the presumption is that a realtor acts as a "transaction broker"-and does not owe a fiduciary duty to its client.
Just what is a fiduciary duty?
A fiduciary duty is the highest standard of care at either equity or law. A fiduciary (abbreviationfid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. Wikipedia, http://en.wikipedia.org/wiki/Fiduciary
Therefore, generally, since a realtor is not a fiduciary in states like Florida, a Florida realtor (1) is not legally required to be loyal to its customers, (2) can legally put its own interests ahead of its customers, and (3) can legally profit at the expense of its customers.
As we witnessed in the above scenario, since most of the public believes otherwise, a real property transaction can go unexpectedly wrong at the expense of the buyer and/or seller.
Whoosh... SLAM!
He marched into my office after he slammed the door shut behind him.
His face was grim and his fists were balled up. He plopped down in the chair across from my desk, and he took several deep breaths and exhaled slowly. After he calmed down, he looked at me and flashed an apologetic smile.
After a few seconds, he then demanded: "Just who did he represent?! I thought he was representing ME!"
I smiled at him cautiously. Then, I carefully asked him: "Who? Who did you think was representing you?" "The Realtor!" he bellowed. "I was the buyer-and he called himself the buyer's agent-but he was not representing me! He was supposed to be representing me!"
"What made you believe that he was representing you?" I asked.
"He's a real estate agent. He was the agent for the buyer-and I was the buyer. That means he was representing me, right? He had to protect my interests over everyone else's right?"
"It's... not... that.... simple...." I replied slowly, attempting not to anger him further. "Let me see your contract with your real estate agent and all the disclosures your real estate gave to you."
After reviewing his paperwork, I replied "No, your real estate agent was a transactional broker-he did not owe you a duty of loyalty. In other words, he did not have to put your interests ahead of his own."
"You've got to be kidding!"
"No. I'm not...."
WHAT IS THE PROBLEM?
Many potential buyers and sellers work with real estate agents. These buyers and sellers hire realtors with the thought that these professionals "represent" them. These buyers and sellers believe that these professionals must protect their best interests over everyone else's in the transaction.
However, this is simply not the law in states like Florida. In Florida, Florida Statutes §475.278 clearly provides that the presumption is that a realtor acts as a "transaction broker"-and does not owe a fiduciary duty to its client.
Just what is a fiduciary duty?
A fiduciary duty is the highest standard of care at either equity or law. A fiduciary (abbreviationfid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. Wikipedia, http://en.wikipedia.org/wiki/Fiduciary
Therefore, generally, since a realtor is not a fiduciary in states like Florida, a Florida realtor (1) is not legally required to be loyal to its customers, (2) can legally put its own interests ahead of its customers, and (3) can legally profit at the expense of its customers.
As we witnessed in the above scenario, since most of the public believes otherwise, a real property transaction can go unexpectedly wrong at the expense of the buyer and/or seller.
Questions To Ask Before Enrolling In A Real Estate Investment Education And/Or Coaching Program
If you are like me, then you have an interest in real estate investment and want to do the right thing by educating yourself so that you can obtain your first real estate investment cheque. I have spent thousands of dollars over the years trying to find the company that would help me accomplish this goal. So what did I do? I watched various infomercials on the television with amazing testimonials of real estate investment success. I quickly found that once I registered to attend, my information was sold to various marketing companies, and I was in receipt of invitations to other investment opportunities that I didn't even know about. Okay. Now I have sifted through all the invitations and I am on my way to a one-day seminar.
For the most part, the information delivered is tantalizing and I am hungry for more knowledge and the opportunity to start working on my first deal. I also find that the information delivered in the one-day seminar is in bits - for a beginner investor, it is not enough material to be useful. But what do I hear? I now have to register for a weekend workshop to learn more. Full of excitement and determination, I pay the $1500 to $2500 cost for the workshop and off I go. Again, the information presented is titillating and at least one of the presented methods is immediately implementable. The other participants and I followed the instructions given, but no results - we could not find a property matching the given search criteria. Therefore, the audience was not taught what the next steps would have been had we done so. Still filled with hope, I took careful notes and listened intently for the remainder of the workshop. What's this I hear? I can have advanced training if I want, a coach to work with me one-on-one, and the almost guarantee that I would make money at that level? What's the cost? Oh, only between $10 000 to $100 000. This is where I hit the proverbial brick wall. Where was I to find all that money, and for some of the workshops, the money had to be paid the very weekend! The long and short of the model is this; one has to spend anywhere from $1500 to about $100 000 without even doing your first real estate deal! It didn't make sense.
Wait a minute. I now found that most of the real estate investors, who were calling themselves and each other gurus, were doing a massive on-line marketing campaign during the market's downturn, only this time downplaying the 'guru' title. They were all offering one-on-one coaching. Why? No one was attending the conventions and workshops as before. The personal coaching idea sounded good. I decided to check out a few of them and tried one of them. I tell you the truth, because I was a rookie, I didn't know what to ask for or what to expect from this coaching. As you can imagine, I did not get my money's worth. By the way, the coaching was through e-mail and sometimes instant messaging only, at a cost of USD $1000 per month. Now, I could have allowed all these disappointments to derail my vision and cause me to be bitter. I refuse. Instead, I decided to use the experience to help others in similar situations make better decisions, spend less, and actually make money in real estate investment.
FAQs Every Home Seller Should Read Before Hiring a Real Estate Agent
Before you hire a real estate agent, read the answers to your most important questions.
Will a property I sell myself be at a competitive disadvantage compared to properties sold by real estate agents?
No-and in many ways, you'll have an advantage. First of all, today's buyers find their homes on the Internet on their own time. If they like your home, they're going to contact you no matter what-and the odds are good that they'll be happier dealing with you than with an agent. It is no secret that a huge number of homes are not selling and expire before the agent ever gets the home sold. Do a Google search and you'll see the amount of training material the real estate industry offers to teach their agents how to persuade sellers to renew their listings for a year. There is no magic in what a real estate agent does.
To give you an example of the advantages of selling your home yourself, think about signs. When you list with an agent, they get to place a mini billboard in your yard that includes a tiny bit of advertising for your home and a huge amount of advertising for their company. The whole industry should have moved on to customized signs a long time ago-but they haven't. You'll have a significant advantage by tailoring your on-the-ground marketing plan to your home, including your FOR SALE sign.
Do homes sell for more when listed with a real estate agent?
That's what the National Association of Realtors funded by real estate agents says, but there's no independent data to support their statistics. If a real estate agent tells you they can get you more money for your home, ask them to bring you a buyer; if they can't, they need to leave you alone to sell your house. Far too many listings handled by agents expire, unsold.
An agent's opinion is not going to get your home sold. It's easy for people to make guesses and conjectures, but to win in today's market, you have to deal with hard facts.
How much time and effort is this really going to take?
It takes about as much time to sell your house as it takes to plan a long vacation. The marketing side requires the most time up front, but once you've gathered your facts, it shouldn't take you more than a few hours to get your marketing plan started. You'd have to gather that same information for an agent, if you used one. And the process has been streamlined for you on sites like simpleandsold.com.
If you're skeptical, take the amount you'd pay in commission to a real estate agent and divide it by the number of hours it takes to plan a vacation. The result should help you see that time you put into selling your house will be time well spent.
A real estate agent told me it would be dangerous to sell my own home, since I'd be letting strangers in my house all the time. Should I be worried?
Unfortunately, you're going to have to let strangers in your home to sell it. But you would have to do this with or without a real estate agent, so this is almost a moot point. Remember that you can open your home any way you want: you can take down information for safety purposes; you can schedule your viewing appointments so that you won't be alone in the house; and you have the right to stop the process if you ever become uncomfortable with a person's presence. This is something even real estate agents face.
Do I need to use a Multiple Listing Service (MLS) to get the exposure I need for my home?
First, you should understand what MLS is. It was not designed as a marketing venue for homes; rather, it's a simple way for brokers to negotiate compensation with each other, so that Real Estate Agent A can tell Real Estate Agent B, "Sell my listing and I will pay you X." Period.
My local MLS, which was named #1 in the country, is still way behind the times. It allows me to upload approximately eight tiny (two-by-two-inch) pictures and about three sentences of description. I'm not even allowed to link to anything. How is that a viable marketing tool?
Look at Zillow, Trulia, and Yahoo! Real Estate and you'll see how much the MLS has been eclipsed. It's become just an outdated method for real estate agents to protect their turf. Some systems are not even Mac compatible.
With Simple and Sold, you can put your home up for viewing on hundreds of websites, and you can add up to thirty-six large, high-definition photos in your listing. You can have paragraphs of description about your home. You can attach listing brochures and other files, which interested buyers can view online or download. You can add background music or a voice-over about your property's features; you can provide links to area schools and anything else you want.
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