Real Estate: What You Need To Know

People generally get confused with the term real state and real estate Business. Real estate itself is not related to business as it represents a property of land and building that too, including the natural sources, such as flora, fauna, crops, parks, pools etc. that are immovable and lies in the property’s premises. Whereas real estate business is the profession of selling, buying or renting these properties.

Real Estate Agents

It’s a tough task to match the needs of buyer and property sellers, as buyer may not get his dream property and at the same time the seller also may not get the price of his wish. To establish a good connection between buyer and seller and to find the right buyer for a seller and vice versa, Real Estate Agents can be hired that are easily available in the market. Real estate brokers or agents are the ones, who acts as an intermediate between property buyer and seller and tries his level best to match their demands. Buyers for buying and property owner for renting or selling their property get in contact with the agent. The agent listens to their demands and try hard to fulfill them, for a property sold or rented in his supervision, the agent charges some percent of the price of that property from both the parties, i.e. the owner and the buyer. Agents use websites to promote the sale of properties, often work at nights and weekends busy in showing properties to buyers.

Things you should know about Real Estate Agents

Although agents are such a bliss to those who are struggling to get a property or a price of their interest, but we have to be wise when it comes to choosing an agent. Agents are not bound to show you best properties or tell you all the things they know, they might get greedy sometime and show you properties that are going to profit them more than you. On the other hand, for property owners they might end up, leaving you with paying guest that can trouble you in future, in fact, as the general goal of an agent is to sell the property as soon as possible, they may excite you and ask you to sell your property at comparatively lower prices than that you expected, and would be getting after some days. It’s better recommended to choose your agent and the other party to buy or sell wisely, after taking your time, and not to get excited on every other offer you get.

New Real Estate Business Mediums in market

Now-a-days many online sites and applications have been developed to remove the work of agents. Both the parties contact with each other directly and choose the deals of their interest. Though, this move has increased the transparency between both the parties, but because of being fully online, may result in misleading each other. That’s why it is highly recommended to see the property in person before booking it. As the thing that seems to be good and satisfying online can be completely opposite from that what you will be getting in real.

Slightly Surreal: Strange Trends in Real Estate

For most people, the word “house” conjures certain images found in childhood drawings. If you have a building with mostly right angles, a single front door, a few chest-high windows, and a chimney, you’ve probably got a prototypical home. However, real estate is a changing field, and people are seeking unique housing options that don’t quite fit inside the box.

Tiny Houses

By all definitions, tiny houses possess most of the features of their more spacious counterparts, just in a much more condensed way. A favorite in both rural and urban areas, tiny houses are as much a choice in dwelling as a statement of one’s principles. While there is no presently agreed-upon size restriction before a domicile is no longer “tiny,” 500 square meters is an accepted point in some circles. Got a few too many boxes of t-shirts weighing you down? Tired of walking such great lengths to get to the light-switch before bed? Trying to keep your real estate tax down to a minimum? A tiny house might be for you.

Passive Houses

Not entirely in another world from tiny houses, passive houses are for those trying to reduce their environmental impact. Less a set of aesthetic rules and more an internal set of standards to maximize energy efficiency, this enterprising style is making considerable in-roads in the real estate market. Originating in Germany in the late 1980s, the style has slowly found a niche amongst people with a penchant for all things “green.”

Staples of these energy-efficient dwellings are superinsulation, airtightness, advanced window technology, solar techniques, and many others. Passive houses incorporate the entire system of real estate, so even the landscaping is efficient. For example, trees that shade parts of the dwelling appropriately and wind-reducing hedges can be a part of the design.

Treehouses

Perhaps living in trees will never constitute a substantial amount of the real estate world, but there is no question that they are gaining popularity. From increasing prevalence as an airbnb destination to a full-time paradise for more intrepid souls, life in a treehouse offers a lot of simple perks, as well as some drawbacks. Clearly for the more adventurous, many treehouses are entirely off the grid, and many of them are not quite up to code. Even a cursory internet search will reveal numerous forums on the subject of whether or not certain dwellings are legally allowed to be inhabited. Treehouse owners have to contend with being mindful of protected trees, wildlife protection acts, and other tight restrictions. If all of the criteria are met, however, the resulting home is something of a nature-lover’s paradise.

These alternative designs and ideas scratch the surface of present trends in housing. While they aren’t likely to replace conventional homes any time soon, they might be an indication of where things are headed.

Real Estate Statistics Explained

Basic Real Estate Statistics Explained

We are going to define some of the basic real estate statistics that get thrown around on a regular basis. To do that, we will use one real estate market, located in Hood County Texas. Even more granular, we will use the single family numbers for homes in Granbury Tx, a small town of approximately 8,000 residents which has seen substantial real estate growth in the past 12 months. It is important when reviewing real estate statistics to use a group of numbers large enough for consistency, but granular enough to tell your story.

The statistics that we will be referencing are true and accurate for the year discussed but are being used to define the real estate statistic itself.

We have chosen Granbury Tx as our example because the growth of the local real estate market there make the statics stand out.

Anytime you are evaluating statistics, especially in real estate, the source of the numbers are extremely important. In most instances, the MLS (Multiple Listing Service) provides the most accurate numbers when referring to real estate. This is because they have all listings by all local real estate brokers in their database. For the sake of explanation of the data, we will be looking at the numbers for home sales in Granbury Tx, directly from the MLS. These numbers are meant to give an example of how to read the statistics themselves. Anytime you evaluate real estate numbers, its important to pay close attention to how the numbers are gathered. In this instance, we will be using ONLY single family properties in the city of Granbury.

Basic Real Estate Statistics

    • Number of Sales – This one is pretty self explanatory. It is simply the number of single family homes sold in a particular month. In January of 2015, they had 51 single family homes sold. One thing to pay attention to when looking at this statistic is are they using the Under Contract date or the day the property actually went to closing. These two dates are usually between 30 and 60 days apart, so its critical that you know which one is being referenced. In addition, many of the homes that get calculated, if you are using the “under contract” number may not actually close! In our example, we are using the number of homes that actually closed. In January of 2016 they had an increase of over 49% which brought the total to 77 from 51. Growth of that level is very seldom ever seen.
    • Sales Volume – Sales Volume is simply the total amount of dollars spent on single family housing within that month. Once again, when reviewing this statistic, its important to keep the property types consistent. If you are comparing two areas to see which one has grown more and you include vacant land in the number for one area, you must include it in the other too. As previously mentioned, our examples only include single family properties. With Number of Sales looking at the units, you would expect the Sales Volume to go up appropriately, but in this instance, it went up even more than the units (by percentage). The total Sales Volume of single family homes in Granbury in January of 2016 was $15,191,500 as opposed to the January of 2015 number of $9,281,915. That is an increase of over 63%. Because the Sales Volume went up at a larger rate than the number of units, this reflects the average home sale being much larger in 2016 than 2015.
    • Months of Inventory – This is a commonly referred to statistic when examining a real estate market. This statistic refers to at the current rate of sales, how long will it take to sell through the existing level of inventory. This reflects the supply and demand for the market. In our example, in January of 2015 the level of inventory was 9 months and in January of 2016 it had dropped to 6 months. That is a 33% drop in available inventory! This means if you are looking to buy a home in Granbury Tx, it will be a little tougher in 2016 as there is less inventory available to buy.
    • Median Days To Sell – This stat simply refers to how long it takes for single family properties to be put under contract. Don’t let the “to sell” confuse you. To accurately show the demand for active homes, you really want to track how long it takes to go “under contract”. The process of acquiring final lender approval, insurance and getting to a closing can vary on a variety of factors. In January of 2015, the Median Days to Sell was 88. That number dropped by over 30% to 61. Once again, this tells you if you are looking for homes in Granbury TX, you better get your offers in quickly as the most desirable homes are going fast!
    • Average Price – This statistic can be derived in a variety of ways. We are going to use it in its most raw form and simply be the Average Price of Homes Sold within that month. Be careful when looking at this statistic printed anywhere as how the user defines the date sold can vary. Needless to say, Average Price can be used for active homes for sale or for the homes that sold. The Average Price of ACTIVE homes for sale is generally a pretty useless number as you can list a home for any price, without any possibility of it ever selling. Many homes listed for sale are at unrealistic prices thus the Average Price of Active homes for sale can fluctuate dramatically and give little insight into the market. You will want to look at the Average Price of SOLD homes. In January of 2015, the Average Home Sale was $181,998 and it jumped to $199,888 in the same month in 2016. This is an increase of almost 10%. This is not a number that truly tells the increase in home values across the board, but simply of the homes sold in that month, what the average was.
  • Median Price – The Average Home Sales Price can be skewed by a variety of factors. All it takes is one 5 million dollar home sale to throw those numbers off. To get a better view of the overall increase in value, it can be better to look at the Median Sales Price. Median Sales Price takes the number that is perfectly in the middle. For instance, if you have 11 homes that you are using in your statistic, you would take the sales price of the 6th one. This leaves 5 homes sold higher and 5 homes sold lower. In this instance, they are pretty close as the Median Sales Price increase from January 2015 to 2016 was 9.69%. This shows that we didn’t have the Average Price skewed too much because of an extremely large or extremely small sale.

There are hundreds of ways to look at the same numbers, when referencing to real estate, so be very careful to read the fine print on exactly what numbers they are using. When making comparisons, you will want to make absolutely sure that both are referencing the same property types, dates etc. It like the old saying says… there are lies, damn lies and statistics.

Time to Get Out of Real Estate

Talk about exquisite timing.

Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities.

But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. “Is he cashing out too early?” asked a Bloomberg headline when the deal was announced.

We all know the answer, of course.

Billionaire Sam Zell deftly sidestepped the coming real estate carnage. Then, with prices at generational lows a few years later, Zell bought hundreds of apartment complexes at dirt-cheap prices.

And today? Well, that’s the ominous part…

Once again, Zell is selling his real estate holdings. Last fall, he unloaded a quarter of his portfolio, buildings totaling about 23,000 rental apartments, to Starwood Capital Group for more than $5 billion.

Zell next sold off apartment buildings in South Florida and Denver, with complexes in Phoenix, Boston and other metro areas expected to be sold before the year is out.

“No one has ever accused me of not being a realist,” Zell told CNBC’s talking heads recently.

Reality Bites

Few things are more real than the threat of rising interest rates. Concerned about the Fed’s late-to-the-party threats and distorted capital markets drunk on years of zero-interest-rate policy, Zell is getting out while the getting is still good.

In the past few months, new-home sales hit their highest level in eight years. Pending home sales rose by the largest percentage gain in a decade.

Even home flipping is back in vogue again. RealtyTrac, measuring 2015 data, estimated a 75% increase in active home flippers – the highest since 2007.

Nationally, the average gross profit on a flipped home was $55,000 – the largest since 2006.

But for the realists like Zell, the widening cracks in the facade are plain to see.

For instance, apartment rent is starting to come down in New York and San Francisco – two of the hottest markets in the country. There is simply too much supply and not enough demand.

A few weeks ago, the head of the Federal Reserve Bank of Boston warned about overheated speculation in the commercial real estate market. “We care about potentially inflated commercial real estate prices,” said the bank’s president, Eric Rosengren, “because they might risk a bout of financial instability.”

Translated from “Fedspeak,” Rosengren was saying: Get out now.

Even those ultra ultraluxury homes in the $100 million and up range aren’t selling. It’s a rarefied market, for sure, but The New York Times recently noted that a record 27 properties, each with a nine-figure price tag, are languishing unsold on the market. According to figures kept by Christie’s International Real Estate, 19 such homes were on the market in 2015 and 12 in 2014.

Late last year, I wrote about one of those massive palazzos here in Florida – the beachside $159 million, 60,000 square foot Le Palais Royal. It’s still for sale.

Perhaps the extra gold leaf they painted on the front security gate will help.

Beware the Peak

I can’t see Sam Zell taking up residence in Le Palais Royal. But then again, he sold his office properties in 2006, and watched the market crack wide open a year later. Now he’s unloading his real estate portfolio again, so, who knows?

If history repeats, Zell just might find his next great distressed real estate bargains in the palatial homes of the (once) superrich – dazzling jewels of the “new” gilded age now past its prime.

4 Daily Habits to Adopt for Success in Real Estate & Life

Good habits are the foundation of wealth. If you watch successful people you will see their day is filled with consistent habits that save time, improve focus and ultimately help accomplish more daily. Successful people get up early, learn daily, make lists & set goals and track their progress.

• Get Up Early.

Make the first two hours of your day the most important. It will not only set the tone for the day but will give you a game plan for everything else that follows. These two hours can be used for activities you enjoy such as exercise, meditation or completion of a project or activity from the previous day. The early morning is free from distraction allowing you to do more of whatever you enjoy.

• 20 Minutes Of Learning Daily.

It is important in any business to know what is going on at all times. Trying to master every aspect of the business may seem intimidating but is less difficult if you spend some time on it daily. Regardless of how busy you may be you can squeeze twenty minutes of learning into your daily routine. You can find this time on an audiobook driving to or from an appointment or on the treadmill as you get some exercise in.

• Make Lists & Set Goals.

Success is often easier if you plan exactly what needs to get done. Before you go to bed you should plan for the next day. Tackle the toughest task first and go from there. Planning your goals not only makes you efficient but gives you a sense of direction and purpose. The most successful people in the world have one thing in common, they all say their goals out loud three times daily. This helps to reinforce their direction and keeps them on track in accomplishing their goals. Try it and see how much closer you get to reaching your goals!

• Track Progress.

If you don’t know what is working, is impossible to gauge the results? At the end of every day you should take some time to evaluate what you did to build on your progress. If you failed to do anything, you need to ask yourself why and then develop a new plan to stay on track.

How to Value a Freehold Property

There are no yardsticks to measure the value of a freehold property. This is because evaluating a freehold is not an accurate science. However, you can follow certain guidelines on what you need to take into consideration when valuing a freehold, which is produced by the advisory services that give free advice to leaseholders. You must also take these three factors into consideration:

1. The current value of the property

2. The annual ground rent

3. The number of years currently left on the lease

Also, evaluate the expected percentage increase in property value that results from extending the leases of different lengths, along with forecasted long term interest rates and inflation rates.

Take help from an expert valuer rather than trying to work out a figure all by yourself, to present before the freeholder. An expert valuer will be able to give you the best advice, which will enable you to make a practical offer.

You will find expert valuers online. They will help you with the entire process of negotiation and buying the freehold.

For the benefit of the freehold, most surveyors add a little extra to a property’s value. This is done after comparing it with similar property with the same number of years on the lease but no freehold.

First, approach your freeholder informally, before you serve him with a first notice. This document should include your preliminary offer for the freehold, which starts off the legal process of buying it.

A word of caution. Never produce an initial notice without obtaining an expert valuation. If you make the wrong evaluation in the initial notice you won’t be able to take back the offer. After the initial notice, wait for the freeholder to reply to it with a counter notice by a date that you have given. The freeholder must be sanctioned at least two months from the date the initial notice is served.

If the freeholder is not sending his counter notice within this period, the leaseholders can take matters into their hands. They can apply for a vesting order at a court. It is now up to the court to move the freehold to the leaseholders. So freeholder’s should respond on time to the initial notice for their own benefit.

Buying a share of freehold will make little profit if you already have had a decent length lease. You would still have to give the same authorized costs as someone with a short hire, but would lead to a drop in the value of the property.

Make a Fortune With Real Estate

Property consisting of land and the buildings, as well as with its natural resources such as minerals or water, crops, immovable assets of this nature and buildings or housing in general. The business of Real Estate is the profession of buying, selling, buildings or housing and renting land. Before going ahead, some important factors about estate should be kept in mind to do your job well.

Types of Real Estate

• Residential:

Containing either a single family or joint family, that is available for non-business purposes. There may be different types of housing tenure also, and the size of an apartment or house can be described in meters or square feet. But the area of “living space,” excluding the garage and other non-living spaces may differ in some countries.

• Real Estate Investment

This Investment is the thing that generates income or is otherwise intended for investment purposes. Investors own multiple pieces of real estate, which serves as a primary residence.

• Commercial:

It is a property that is used the design for business solely. For instance, commercial estate includes restaurants, offices, parks, malls, gas stations and convenience stores

• Industrial:

The property that is used for industrial work. But it covers a vast range of business types and comes in all shapes and sizes.

Industrial Real Estate includes single or double-storey buildings. Small industries have flexible interior space. Large industries include medium to large warehouses and factories that are designed to store goods or manufacture.

To become.

Fortunate Real estate agents, need to be familiar with their locality, reasons to increase or decrease property prices. For instance, if a new airport or road is to be built this can increase the price of nearby houses. Equally, improvement of an area can enhance prices. The agent must be aware of recent sale prices or rental for comparable properties of the area.

To become estate agents or professionals, dealing with all residential, agricultural and commercial property. They should adhere to a code of conduct, which includes regulations about looking after their clients’ money.