How to Resist the Lure of Real Estate and Make a Schooled Decision

Real Estate

The Lure

The thought of Real Estate brings to mind dreams of riches and power. The lure to own property is enticing and powerful in that land and property are seen as being the everlasting all time business investment. While this may be true, everything isn’t always coming up roses in this market. Resisting the urge to follow the rest of the “fish” in the pond may seem to be foolish until you understand exactly what you may be getting yourself into.

 

There are at the very least, three different viewpoints that you can perceive the real estate market from. Each view can be a singular view or a view with multiple panoramas. This article covers some of the basic pros and cons of each position you can take if you do decide to get involved in the business of land and property ownership, (flipping), buying, selling and mediating (agent).

 

Note: In a low interest market with high interest rates you can sell your home every two years to make a profit. Use the profit to buy a better house and repeat your steps until the profit margin is where you want it to be.

 

The Reel

 

The main attraction of buying real estate is that it is usually an extremely appreciable asset. Even in harsh financial times, real estates proves to be the bread winner of many major industries.

 

Pros

 

As a buyer you may have complete control to buy as you wish especially you own a real estate agency or fianancial institution.

 

As a sell by owner oprerator you may have complete autonomy to sell as you wish unless you are an agent.

 

As an agent you forego many of the hassles inherent to buying and selling and keeping to the ideals of your agent training.

 

Cons

 

As a buyer you may have to contend with many factors in order to make a purchase, such as taxes, paperwork, financing, inspections, and other legalities.

 

As a seller you must face the fact that you may not get your asking price or find that you must sell sooner rather than later depending on the market and your own financial status. You should make it a point to find out exactly what your property is worth.

 

As an agent you are subject to the whims of buyers and sellers whether you are independent or not. If you are an independent agent you must deal with the business matters that will result in you running your own business as well as keeping up with any industry affiliations that you belong to.

 

Making a Schooled Decision

 

Before making a choice as to whether you want to enter the real estate market, decide which role or combination of roles you will play. Devise a goal and create a plan based on that goal, only after careful and meticulous research into the market and its niches. Ask pertinent questions of others who have the information and experience you are trying to gain what there most common problems were and are and how they solved them or plan on solving them. Most of all, keep learning everything that you can about your chosen field. Remember, if it sounds to good or easy to be true, it most likely is. Anything worth having, especially success, is hard earned and not easily gained.

 

For more detailed information on real estate go to

 

http://en.wikipedia.org/wiki/Real_estate

 

Shinnelle L. Queensbury is a work at home mom who varied interest inspires her involvement in many activities. Visit her blog at http://www.anonymous.componga.com for a lighter and less serious touch of writing.

5 Key Things to Learn Before Investing in Real Estate

Investing in Real Estate can be profitable. It can also get real ugly, real fast too. You just have to know what you are doing. Like in everything else, you need to know what to avoid. There are countless stories of investments gone wrong; The stories of the landlord that could not manage his property or the couple that ran their well dry because they rushed into investments.

Thereby, if you wish to enter the wheeling dealing world of real estate investment, you should not be entering it all blind eyed or with blind optimism for that matter. There are a lot of good deals out there at the moment, but there are some bad ones that will cripple your finances. In this article you will find 5 of my key learnings from my exposure to real estate during my time working in the bank and my own personal experience.

 

First and foremost, this will be your full-time job. I do not mean that it will consume all your time and that you do in life. You just to be aware of all your opportunities and be prepared to grab them. Real estate is knowing about you opportunities and follow through. You never know who your next client will be. You need to build your network and the most basic thing you need is to have your business card on you all the time. No one can sell their property to you if they cannot contact you or buy that lovely little property that you have on hand.

 

Rentals may give you continuous cash flow, but you may have to consider the various type of complaints that the tenant come to you for. Tenants will come for you for everything under the sun, from blocked toilets to noisy neighbors and they have the right to do so. You may have a management company running things for you, the tenant will always come to see you in the end. After all, you are the person that rented the place out to them and not the management company. There are so many laws that protect the tenant’s rights, just be mindful that you may end up paying more than you are getting.

 

When hiring a contractor, take one that charges by the job rather than the hour. Unless you plan to oversee the project for the whole duration, it is more likely than not you will be paying more than you bargained for. Ensure that you sign a contract with a must be completed by clause. The very least, you will get some compensation in the form of discount or penalty payments if the contractor does not complete in the stipulated time.

 

This is common sense, but always make a thorough inspection of the property before purchase. The repairs that need to be done to the property need to be lower than the profit that you intend to make. Foreclosure properties that the bank get, may be very good investments. You may get them for cheap and you are allowed to inspect them beforehand.

 

Finally, take the advice from someone that does not invest in property with a pinch of sale. They might say that they know where the next big thing is, but they would not know the pitfalls of investing in property until they do. They will sometime make an emotional case for it and you would be sucked into the hype. Before you know it, you will have a piece of property that is depreciating faster than a third world country’s currency.

 

These are just a few of my learnings and I am still learning. There is still a lot that I have to learn. Hopefully, the 5 learnings that I have will help you along the way to becoming a great investor and to give you food for thought on some the aspects of real estate investment.

A No Cost Real Estate Investment

Real Estate

Several years ago a friend of mine called to say that an old friend of his and his wife were looking to purchase a small home. Nothing fancy, a couple of bedrooms and one or two bathrooms would work out just fine. After all, it was just for the two of them and they really wanted to get out of the rental trap and have something that they could call their own.

A few days later I met with this couple and they gave me all of the details and information that I needed in order to help them find what they were looking for.

 

They had some cash saved up and after visiting with a lender, they knew that they could qualify for a new loan and also what their price range was. They were pretty excited about all of this, so within the next two days I furnished them with a list of potential properties to drive by and to call me on the ones that they might be interested in seeing.

 

Four days had gone by when I received a call from the wife and she said that of all of the houses that they had driven by, there was only two of them that they would like to see. Because of each one of them working different hours and her having such a hectic schedule as a nurse, we picked a day and a time that we could get together and take an look inside of these homes.

 

Entering the first home, they were somewhat disappointed because it was just to dark inside for them. Although it was a beautiful setting on the outside, the darkness on the inside was caused by the tall, mature tress that completely surrounded the property and they certainly didn’t want to cut the trees down.

 

The second home we visited was much brighter and more cheerful, but neither one of them liked the floor plan. It just made a person feel cramped. I told them not to be discouraged and that I would research another list of homes this evening to see if anything new had come on the market. Unfortunately, there was nothing new.

 

They were becoming a little disgruntled at this point, but I explained to them that if we didn’t change their search perimeters, that we’d just keep looking and something would eventually come up. Though they agreed, I could see in their eyes that, ‘right Jim, probably any moment now, right?’

 

I kept my eyes watchful on the market and sure enough, a few days later, a new listing became available. Although it wasn’t in the two areas that they were wanting, I told them that it sounded like a nice home in a nice neighborhood and since they hadn’t found anything of any interest up to this point, that it wouldn’t hurt for them to at least drive by it.

 

They agreed and two days later they called me.

 

She was excited as she spoke on the phone and said that the home was just gorgeous from the outside. We made arrangements for the next day to see the inside. Upon entering, they were just blown away from it’s appearance. I have to admit that I was very surprised as well. It was immaculate. It showed liked a model home.

 

Not a thing was out of place, nor could you find a speck of dirt anywhere.

 

It was just beautiful. They walked around checking everything out and the more they looked, the more they fell in love with it. It had everything that they were looking for. We spent a good hour there with her saying over and over again that, ‘we want this house!’

 

We drove over to my office and after comparing prices with other similar type homes, they were able to come up with a purchase price that they felt was fair to both them and the sellers. We made an offer based around the existing FHA loan that they could assume and therefore they could bypass having to obtain new financing. It would be much quicker and easier to go this route and that’s what they elected to do.

 

There wasn’t a large amount of equity in this property ($3500), so these folks used their savings to put down the difference between the sales price and the existing loan, therefore, cashing the seller out completely. They also agreed to share closing costs 50/50, which was a minimal expense.

 

The sellers liked what they were being offered and after a few concessions on their part, accepted the offer within the next several days.

 

We closed escrow within 14 days and everyone was happy.

 

About 3 years later, I received a call from this gentleman explaining that he and his wife had gotten a divorce some time back and because of a job transfer, he wanted to sell the house. I was sorry to hear about the news because I remembered her as being a very lovely and spirited woman. I told him that I could help him with the details and so we set a day and time to meet at his home.

 

Pulling up to the front of the house, it still looked as nice as it did several years ago. Once inside, the cleanliness still dominated throughout the entire home and I could quickly see where her female touch still took it’s presence.

 

As we discussed the facts and figures, he informed me that he really wasn’t interested in receiving any money

 

right away. He just wanted to get out, put everything behind him and move on with his life.

 

Although it was a smaller house, it had still appreciated through the years. I showed him the new value and he was comfortable with all of the information that was presented.

 

I told him that I would be interested in purchasing the home and he was all for it. He just wanted out as soon as possible.

 

I opened my briefcase, drew out a blank purchase agreement and together we went line for line creating an offer that would work for the both of us.

 

We agreed that I would assume the same existing FHA loan that him and his wife had assumed originally and that he would carry back a 2nd deed of trust secured by the property in the amount of any remaining equity.

 

I explained to him that I would be using this as a rental property and in order for me to make the financing work, I would need to construct the payments to him in an amount that would be at least equal to, or less than the amount that I would be receiving from the tenant in the way of monthly rent.

 

The rental market was strong and that helped us to derive the amount of money that he would be receiving.

 

We would split the closing costs 50/50 and close the transaction in a timely manner that would coincide with his transfer.

 

He didn’t have any problem with this and even agreed to pay all closing costs up front.

 

I offered him a fair interest rate on his second deed of trust and I used a longer than normal amortization to help lessen the amount of monthly payment to him, therefore keeping the financing in a positive cash flow.

 

After several years, the 2nd deed of trust was paid off and today the property has an even greater cash flow, along with an increase in equity.

 

In summary:

 

(A) I had used my sales commission in lieu of paying down most of the equity that he had in the property, therefore creating an even smaller balance on the 2nd deed of trust.

(B) He paid for all of the closing costs, eliminating me having to pay any out of pocket expenses.

(C) In essence, I purchased this property at no cost. No cash down payment and without any cash of my own.

Real Estate Repo Tour: Broken Dreams at a Bargain

Dream

Bill Dwyer, a Medford Oregon realtor wants to show you the latest foreclosed homes in the Rogue Valley. In California, they are calling them “Repo Tours”, but Bill chose a softer name, “The Tour of Hot Deals”. On specified weekends he fills up a tour bus with prospective buyers or “repo tourists”, feeds them lunch and shows them several homes with loans that are priced below market value. The tour lasts several hours.

He says there is no pressure. “We want everybody to kick back and have a good time.”

 

It is becoming a growing trend as the real estate market has plummeted. On one hand foreclosures and the downward drag on real estate prices is bringing affordability back into the housing market, but the other side of that coin are the people losing their homes due to job losses, and a repressed economy.

 

For buyers, a repo tour is an opportunity to see multiple properties in one afternoon and perhaps find something they care to buy. The realtor is right there to answer any questions you might have. The downside is having to see homes you are not interested in at the same time. Foreclosures often need repair, but for someone with the time and money needed to make improvements could possibly be tantamount to a bargain.

 

Although the bus gimmick is relatively new, hyping up foreclosures is not. Salespeople have used late night infomercial to advertise government and privately owned foreclosures for years. For a fee some will sell you information on how to find foreclosures and how to “flip” or sell them for profit (or loss, as many home buyers would attest to). Across the United States, realtors are looking for new ways to entice buyers at a time when many people view buying real estate as a risk. Realtors are simply doing what they have to do to attract new buyers to sell homes to. Some think of it as creative marketing. So far, it is exclusive to realtors–car dealers are not bussing people to see car repos. Could this be the future of real estate?

 

According to housingpredictor.com, Medford Oregon real estate sales are down 11.5% and are predicted to continue as more homes head into foreclosure.

 

Not everyone shares Dwyer’s vision.

 

“Is this what we’ve come to,” wonders Nick Williams. “A tour bus brings an air of joviality to what might be someone else’s broken dream. There is something inherently wrong with that.”

 

Source:

Housing Predictor LLC, Housing Predictor Independent Real Estate Market Forecasts, http://www.housingpredictor.com/oregon.html

5 Simple Steps to Starting a New Career in Commercial Finance and Real Estate Investing

Career

Have you ever heard of a business that you could operate from home, work part-time, and easily earn 5 to 6 figure income from each effort? I have and it is commercial financing and real estate investing. Like most entrepreneurs, I have experienced the gamut of business opportunities. From multi-level marketing, independent distributorships, and mortgage banking to residential real estate investing, club  amp; concert promotions, and more. I have seen my fare share of success and failure in business, but along the way I have learned there were some things I would prefer in my future ventures.

My “wish list” developed as I gained a better awareness of what type of lifestyle I wanted to lead. I found that I preferred a business capable of building multi-generational wealth, that was not time or labor intensive, and relatively easy to learn. Also, I desired a business that could be operated anywhere, with little to no staff, and did not require excessive startup expense. For me (and many other entrepreneurs), the ultimate life would be 100% stress free, spent traveling and enjoying time with my loved ones.

 

Commercial finance and real estate investing is the one business opportunity that meets or exceeds my “wish list” requirements in a business, and can create a lifestyle that most people only dream of having. Whether you are an experienced CEO-type, a stay-at-home mom, or a college dropout, brokering commercial money and/or investing in income-producing commercial properties can be done on a part-time, “as money’s needed” basis and leads to 100% debt-free living. Just imagine- for every $1 million in financing brokered, you earn $10,000.00 in commission.

 

Now, many naysayers will tell you that you need a real estate degree or a MBA in Finance to broker commercial money or invest in commercial real estate- but that simply is not true. Others will also tell you it is so hard to get started or only “certain” kinds of people are successful in this business, and that is a lie told to bully you from believing it is possible or even trying. I do admit it is not for everyone, but let me be brutally honest- the only thing I know that’s good for everyone is air and water.

 

So, what actions must you take to begin a new career in commercial finance and real estate investing?

 

  1. Make the decision and take ACTION! Every physical “thing” in existence began as a thought and became a decision. Your decision will manifest in your life as action taken towards your chosen goal. But, you must first decide what you want and what exactly you will do to get there.

 

  1. Do your research. Learn what is out there for investors and where you want to be in the transaction. Money is made by providing solutions and you need to decide what problem you would like to solve.

 

  1. Become active in a local group or online forum that specializes in commercial real estate investing  amp; finance. Talk to other investors and money brokers to find out industry standards and possible pitfalls. Call lenders to determine what traits the most successful money brokers share.

 

  1. Study how other money brokers  amp; investors develop leads. Rank each strategy and select the strategies most suited to your circumstances. If you can afford to place an ad in a prominent industry magazine or website- DO IT. Also, contact commercial real estate agents and brokers to find out how they work with financiers/consultants.

 

  1. Setup your “office”. You will need to file any necessary paperwork to setup your business entity or DBA. Also, you need a dedicated business phone number  amp; fax machine (or service). It is also a good idea to have a website.

 

By following these steps, you can develop a few key relationships that will have a lasting impact on your business. If you are lucky, you will meet someone willing to mentor you through the process and hold your hand when you are scared. At the very least, you will have created a multi-tiered referral system of industry professionals and acquaintances and will be well on your way to your first million dollar commission check.

The Economic Impact of High Risk Investing

Risk

My husband and I live in Miami. This was a hot real estate market just two years ago–white hot. The one bedroom condo that my husband had purchased just a couple years before doubled in value. Expecting our first child, we needed more room. Fortunately for us, real estate was moving fast and mortgage brokers were giddy with big commissions.

Unfortunately for us, when real estate is moving quickly, it’s considered a sellers market. In a sellers market, eager buyers are competing for the same property making it difficult to get a contract much less a great deal. Pre-construction homes were selling out in hours with buyers waiting in line for days. Determined to find just the right house, at just the right price, we celebrated our daughter’s first birthday just days after moving into our new home. Getting the mortgage was easy; it was outbidding the other buyers that proved to be difficult.

 

Then the market cooled. The amateur investors who had been driving the prices up panicked. Sell! Sell! Sell! It was like watching online investors dump everything when the stock market has a bad day. What some might call a housing slump, others viewed as a dive.

 

Amateur investors operated under the false assumption that the Miami real estate market was a sure win. Watching their friends and neighbors make money hand over fist (and lulled into false expectations by 30 minute real estate shows) amateur investors over extended themselves to cash in on the lucrative “real estate flip”. Flipping is the practice of buying a property, making minimal upgrades and reselling for a profit. Flipping is also the term used when investors buy at pre-construction prices and then resell once the property is ready for occupation.

 

Many of these amateur real estate investors signed high, interest only loans to keep the payments low while they negotiated a quick turn over. Often they would sell to a new investor, who was confident the market would go even higher. Many of these individuals signed multiple mortgages with high risk lenders.

 

When the housing market went into a slump, buyers (mostly amateur investors who where no longer interested) stopped competing for contracts. As a general rule, homeowners aren’t really fazed by housing slumps. Like investors who hold stocks long term, they can ride it out. If now is not a good time to sell, they simply take the sign down and wait.

 

For amateur investors, a housing slump can be their worst nightmare. Generally, amateur investors can not afford to pay a full mortgage on their investment properties. When the market begins to cool, when head lines read “housing bubble about to burst” they need to get out fast. The sell, sell mentality drives the market down as “for sale” signs go up.

 

When the neighborhood is littered with for sale signs, buyers realize the market has changed in their favor. The property feeding frenzy comes to an end. Welcome to the housing slump.

 

But it gets worse. The housing slump also creates a renters market. Amateur investors desperate to at least rent the homes they can no longer sell must compete against each other, often renting below the monthly mortgage just to offset some of the cost.

 

Unable to sell their investment properties, or even keep them rented, some over extended investors find themselves in foreclosure. The flood of foreclosures drives the market down even more, and the high risk lenders who founded it all are faced with bankruptcy.

 

This down turn has little effect on professional investors. Although the value of their portfolio might take a temporary hit, unless they’ve over committed their resources, they’ll be able to ride out the housing slump just like the average home owner. It’s the investors who took the biggest risks that are now in the biggest trouble, stalling the market for everyone.

Subprime Mortgage Crises Could Hurt Many More Than Those in the Real Estate Market

Mortage

The news has been filled with reports about foreclosures and bankruptcies due to subprime mortgages that were signed in previous years. Everyone knows this is affecting the housing market. What they fail to realize is the other effects it is having on other industries. With the crisis that is facing the housing industry there has been a trickle down affect to many other markets. The effect has been severe enough, that in general Americans are looking to spend less in the coming months. This could be bad news to retailers with the holiday shopping season just around the corner. This information was provided in a recent press release from TNS.

As the housing market suffers, many times it is a predictor of the overall financial spending of consumers in the country. The survey conducted by TNS indicates this assumption is likely to be correct once again. The survey was conducted from September 20th through the 23rd and included 2,500 adults in the United States over the age of 18 years old. The results are not encouraging for the upcoming holiday spending season.

 

Overall, one out of every three adults were planning on cutting back on spending in the coming months based on the subprime mortgage crisis. Areas that many people are considering cutting their spending the most in are home improvement and furnishings, travel and entertainment. Survey participants also indicated they are expecting to reduce their purchases in the technology sector of products.

 

Parents are planning on cutting back on luxuries but still support the education of their children. Over one out of five parents expect to cut their spending in home improvements (23 percent) and travel (21 percent). Parents will not be cutting on the savings they are putting away for their children’s education. Only 2 percent of the survey participants said they would reduce the amount of money they would spend on their children’s education.

 

So, what are the survey participants blaming for this need for a reduction in spending. The large majority feel the economy has been hurt by the subprime mortgage lenders, and feel that those organizations have creasted this crisis. 70 percent of the survey participants felt that way. Meanwhile sixty percent of the participants also names the real estate and housing industry as a whole as responsible. Survey participants also thought the subprime borrowers and investors had large roles to play in this situation as 58 percent laid the blame on the borrowers and 57 percent on the investors.

 

Overall 76 percent of the survey participants felt this subprime mortgate crisis was as sever as the dot-com issues and how they affected the market at the end of the last century. If this is true, then it is becoming clear that the upcoming holiday spending season will see Americans being much tighter with their budgeting and their hard earned money.

 

SOURCES:

 

Prnewswire.com. “New Study From TNS Reports One-Third of Adult Americans Plan to Cut Back Spending Due to Subprime Mortgage Crisis”.

URL: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109 STORY;=/www/story/10-15-2007/0004681884 EDATE;=

Investing in Real Estate – Start Out Small

Small

Investing in Real Estate has been known as bringing in a great return on your money. Many people have monthly income coming in from owning then renting out the real estate. If you have several homes that you rent out every month you have quite a bit of money coming in every month. Not only will you be getting a monthly income from the rental monies but also the real estate is hopefully rising in values. You can buy a mobile home and land in some areas for under $25,000.

There are ways that you can start out owning real estate even on a small budget. It’s something that many people don’t even consider. But it’s mobile homes. Mobile homes are inexpensive and many people live in them as inexpensive homes. They are now built on permanent foundation and if they are on land as a permanent home the values really aren’t decreasing as quickly as they did at one time. Sometimes you can buy a fixer-upper mobile home for next to nothing, as the young couple had only purchased it to live in while saving for a home when they buy their home they will sell the home just to get rid of it. This can be a great savings for you. You can many times buy the homes already set up on land in neighborhoods or mobile home parks for less than it’s worth.

 

Some mobile homes that you buy will need some work, which can be as easy as laying tile floor, or just painting and putting down carpet. This is basically cosmetic work that won’t cost allot of money or take much time but can be a great payoff for you. Since you don’t have allot of money tied up in the real estate you can use the money that you saved to fix it up and resell it or just rent it out.

 

It is fairly easy to find renters to rent your property. This will give you the monthly income every month that you won’t have to turn around and pay a huge mortgage note with that money. Since you have picked up the land and home for very little money the monthly income will be going to you. Rent for mobile homes are usually a little less than an apartment and way less than a home in the area. So it’s easy to find potential renters quickly.

 

Finding financing for homes that you don’t live in can be difficult especially for mobile homes, so you may want see if the sellers would consider owner financing if you don’t have the cash to pay for it. Buyers may consider this option to move on with their lives and sell quickly. If you have cash that you can use to pay outright you have a better chance to get a better price.

 

While buying and investing in mobile homes may not be for everyone, it can bring you a great income monthly for very little cash and get you started in the real estate market.

Can You Make a Profit from Buying a Fixer-Upper Home?

Profit

It used to be fairly easy to flip a house, provided you had the capital to purchase a fixer-upper in the first place. You’d buy a home that needs some work, put five or ten thousand dollars into remodeling it, then sell it for a large profit. Real estate investors have been dancing the same waltz for decades, but many investors fear that the days of easy profits in real estate might be over.

Can you make a profit from buying fixer-upper homes? That depends. Some say that the state of the market has no bearing on whether or not you can profit from flipping a house, while others feel that the market is the key to all real estate transactions. If you have a truly spectacular home, chances are you’ll be able to sell it, and you might not have to take too much of a dive compared to recent years. Nevertheless, the rise in foreclosures does tend to scare your target market, and flipping fixer-upper homes might not be the most stable source of income.

 

First of all, a fixer-upper home is not a dump in a seedy neighborhood. You don’t want to wipe out your chances of reselling by purchasing a house that has no potential. If you’re going to make a profit from buying fixer-uppers, you have to have an eye for potential in real estate. Ideally, you won’t need to put more than six or seven thousand dollars into the repairs and improvements before you attempt to flip it, just in case you can’t sell it at all.

 

Major problems like cracks in the foundation or lack of insulation should be red flags to all real estate investors. You can wind up spending tens of thousands of dollars before the house can even go on the market, and by that time you’ll probably have lost money. If you want to make a profit, you’ll probably have to sell all investment properties below market value, just to move them out of your acquisitions folder.

 

It is also a good idea to choose a fixer-upper home with repairs you can do yourself. If you don’t know how to paint walls or repaint floors or install fixtures, you’ll spend far too much money hiring a contractor. The purpose of buying a fixer-upper is to make a profit as quickly as possible, not to hang on to the property until it needs even further repairs.

 

As long as there are families and singles looking for homes, you can make a profit from buying fixer-upper homes. You just have to be smart about your methods and pay attention to local trends. To increase your chances, review the following tips:

 

Rent until you flip. If you’ve already finished the repairs and improvements on a fixer-upper home, you can generate some revenue by renting it out until you can sell. Some houses take several months to find an interested buyer, so consider renting on a month-to-month basis until you’ve closed on the deal.

 

Look at the neighborhood. When buying a fixer-upper for profit, you need to look at more than just the condition of the structure itself. Homes in good school districts with plenty of community parks, shopping, restaurants and well-maintained landscaping will sell much faster than others. If you want to make a profit at this, be smart about where (and not just what) you buy.

 

Make smart improvements. Research the area where your fixer-upper is located and find out what local residents want. Installing new counter tops or hardwood floors can skyrocket the interest in a home. Pay careful attention to the landscaping, as well, because curb appeal is high on the list of attractive amenities for prospective home owners.

Seven Ways to Protect Yourself Against Real Estate Scams

Scam

Most of us have heard about real estate scams, which can cause problems not only for individuals, but also for the real estate market in general. If you’re going to be buying a home, selling a home or investing in real estate, it helps to know how to protect yourself against scams. Following are seven of the most important tips I’ve collected from my father and my own experiences.

1- Join an Organization

 

In many cases, the best way to protect yourself against real estate scams is to have a solid source of accurate information. When you join an investment club, you gain access to experts who can answer your questions when a deal seems “off”. In other words, don’t make decisions until you run it by your fellow members.

 

2- Request Identification

 

Before you show a property to a prospective buyer, and before you look at a property with a seller or real estate agent, verify they are who they say they are. Requesting valid identification is your best defense against real estate scams, and has become so common as to be considered the “norm” these days. If they don’t have I.D., go with someone else.

 

3- Safeguard Your Money

 

Your closing agent is your strongest ally when closing on a real estate deal, so avoid those scams by placing your money in the agent’s escrow account. This way, if you discover that you’ve been involved in a scam, you can yank your money from escrow immediately rather than struggling to find out where exactly it is. Remember, scam artists work together in teams, so it’s easy to be fooled.

 

4- Hire an Attorney

 

Your real estate agent might be experienced in handling contracts and negotiations, but an attorney has him or her beat on all counts. Before you sign anything, have your attorney look over the documents to ensure you are protected against real estate scams. It’s better to be overly cautious than to make a very costly mistake.

 

5- Locate Liens

 

Before you invest in or purchase a real estate property, make sure there are no outstanding liens against it. Real estate scams often involve trying to sell properties with hidden liens, especially when the lien was placed recently and doesn’t yet show up under title searches. This means using all of your city’s resources to locate potential problems.

 

6- Obtain Title Insurance

 

This tip is worth its weight in gold, and will go a long way toward protecting you from real estate scams. Unfortunately, this is an expense that shouldn’t be spared, even if you don’t think it’s worth the money. It only takes one sour deal to put you in the poor house, so start shopping around for title insurance immediately.

 

7- Compare on Your Own

 

Some real estate scam artists will provide fraudulent comparison reports when trying to sell a property. They will claim that similar homes or businesses in the area are worth twice their actual value, and will have a partner in appraisals or research to substantiate their claims. Do yourself a favor and research your own comparisons.