Should Investors Obtain a Real Estate License?

Whether real estate investors should get a license or not is debatable. There are arguments both in favor of and against the idea. Many investors start without a license. Some of them obtain it after working in the industry for several years. For many people, the biggest motivation to get a license is that it gives them access to MLS. It also allows them to work more closely on short sales.

The risks are relatively lower when you remain an unlicensed agent. Once you obtain a license, you will be judged by a different standard and you need to follow certain norms. If you are an investor buying a property, you will perhaps just want to remain as an anonymous individual. The risk mainly arises when you find yourself involved in representing the seller(s) in a short sale, although you want to buy the listing. Since you have to follow some fiduciary responsibilities, it is imperative that you act in your best interests. The seller should do the same. This will make the deal less complicated.

Advertising

You will probably have to include your logos and disclosures in your emails. You will also need to follow legal guidelines set by the government. This might cause your mail to land in the trash. If the recipient thinks that you are just another realtor trying to promote their listings, your efforts fail to produce the desired results.

On the other hand, if you are an unlicensed person, you can employ simpler marketing strategies that tend to get better results. That said, there are still ways to advertise your service, even if you are a licensed buyer of properties. However, you will have to ensure that your message complies with the legal regulations.

Alternative solutions

A license will get you access to MLS. However, you don't necessarily have to obtain a license just to have access to MLS. If you are lucky enough, you can connect with a generous realtor who will provide you access to the service through their portal.

If you are trying to list homes, there are several brokerage firms that charge a low fee for adding your listing to the MLS. There are also agents who will readily represent your listing for a fee.

Having a license certainly helps your business and it will not be a hindrance on any of your deals; however, your license can be a burden when you prefer anonymity. On the plus side, if you really want, you can hire another real estate agent as your listing or buyers agent.

In order to figure out whether you need a license or not, you should have a thorough understanding of your business model.  You should decide whether the licensing and accreditation will do more harm than good. Once you get a good understanding of the structure of your business model, weighing your options becomes easier.

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Unusual Real Estate: The Sleeper House in Colorado

One of the most interesting and unusual pieces of real estate in the United States is located on Genesee Mountain in Jefferson County, Colorado. It’s referred to as the Sleeper house because it was featured in Woody Allen’s science fiction flick Sleeper. It’s also known as the Sculptured House, and its design features an elliptical curve and a spaceship look:

 

Once listed as one America’s Ugliest Mansions by Forbes, this home was built in 1963 by architect Charles Deaton. The budget for building the Sleeper house ran out before the house was even finished. The home sat vacant and unfinished until 1999 when it was finally purchased. The interior was completed in 2003 by Deaton’s daughter. It was sold in 2006 to a Denver entrepreneur, and by 2010 the owner could not make the payments. The home was sold again under a foreclosure auction that same year.

Here’s a great view of the Sleeper House featuring the beautiful Front Range:

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Should Real Estate Agents Discount Their Fee?

Do you really believe that your service is better than the service offered by your competitor? Have you got anything to prove that you can sell the property for a higher price or in less time? Can you prove that you can provide better value? If so, the value of your service exceeds the fee you charge.

Unless you are convinced that you are worth what you charge, you may find it difficult to defend your fee.

Prove it with concrete evidence

Agents will not have to reduce their fee if they can defend what they charge with solid proof. The service offered by an agent has many components and each one of these components has a value in dollars. When agents compare the value of their service to their fee, they will not have much difficulty convincing the client that they are worth what they charge.

Agents who want to earn like champions can't give away their fees. Still, many agents don't demand even a decent fee. They readily offer discounts to attract clients. Remember that when you adjust your fees, you are giving away your net profit.

Risks associated with being an agent

Consumers as well as agents often fail to realize that in the real estate industry, the agent assumes all the risk. The agents risk their time, energy, money and knowledge despite knowing that all that effort may lead to nothing. If the sale doesn't happen, the agent won’t get the fee. Note that the agent is not paid for showing the home or negotiating with potential buyers. The agent is paid only when the property is sold. And when agents assume all the risk, their commission should reflect the risk they bear.

An agent may show hundreds of homes in a year, but the actual number of sales may be much lower. As a result, agents have to amortize the cost of their service over relatively fewer transactions.

Expenses

In addition, in most cases, the agent doesn't receive 100 percent of the commission. That amount is usually split with a co-op agent. The agent's broker may also receive a certain percentage of the fee. The agent should also take into account other expenses associated with running a real estate agency.

Take tax liability into account

The agent has several tax liabilities as well. In fact, many agents pay over 50% of their net income after deducting the expenses to taxes. And when you calculate your real earnings after deducting all of these expenses, you will understand why you cannot adjust your fee.

Discounted fee equals inferior service

What is more, you cannot cut your fee without compromising on the quality of your service. It simply isn't possible to provide exceptional service for a discounted fee.

In fact, agents who charge lower commissions also offer somewhat inferior service. Most consumers who hire an agent who charges a lower fee do not realize that the quality of the service will be low. They expect great service for low fees. But this is not possible. In short, a seller who chooses a discount agent will unwittingly compromise their safety and their chances of getting the best possible price.

If you want to be a successful real estate agent, you should believe in the quality of your service and fee structure. You do not have to discount your fee just because some other agents do it. You need to tell yourself that you are worth every cent you charge.

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Google Capital Invests $50 Million in Online Real Estate Marketplace

Google Capital has recently invested $50 million in Auction.com, an online real estate marketplace. Google Capital is a capital arm of the search engine giant Google, and it launched in 2013.

Auction.com boasted $7.5 billion in sales last year, mostly in commercial sales. According to an article on CNBC, the investment will involve no product integration. Auction.com is expected to level the playing field for investors of small properties by changing the way real estate can be bought and sold.

It was also recently announced that David Thompson was named chief marketing officer of Google Capital. His duties will include marketing to the company’s business-to-business clients, which make up at least 80% of their business. He also faces the task of marketing to and growing the small percentage of business-to-customer business.

What Renovations Have the Biggest Impact on Housing Values?

When it comes to renovations some projects add value and some actually take away from the value of a home. When looking at spending money on home upgrades it is wise for consumers to consider the impact on resale value.

The top five renovations that build home values:

Updates kitchens. The kitchen is where the center of activity takes place in the home. Any improvements made to the kitchen will generally payoff. This can be as simple as cleaning the grout and replacing the door knobs on the cabinets. In the mid-range it could include updating appliances to stainless steel and putting in new countertops. Large renovations can include new cabinets or opening up the space to an open concept that is popular with buyers.

Bathrooms, like kitchens, are a great place to upgrade, update and renovate. Simple updates can include things like re-glazing the tub, updating light fixtures, or putting in a new sink or toilet. Larger renovations might include enlarging the shower, adding a separate tub, and re-tiling the shower area. All of these improvements will add value to the home.

Going green. Over the past decade green home improvements have added substantially to property values. Cost effective solutions include adding ceiling fans to each room or installing storm doors. More expensive but valued options can also include updating windows to double or triple pane providing a high level of energy efficiency. When upgrading appliances or HVAC systems, purchasing energy star appliances add value. Upgrades like solar water heaters, solar panels and other more expensive measures, homeowners should seek recommendations to consider resale value. These upgrades will add to the value of the home, and save money while the homeowner is in the home, however, the return might be lower than desired.

Adding curb appeal. Realtors often advise customers to provide good curb appeal. This means different things to different homeowners. Sometimes adding lots of flower beds and high maintenance gardening is actually a turn off for buyers. Adding a sprinkler system, a deck, or a sitting area with a hardscape can provide more value to a buyer. They are low maintenance options that provide entertainment without a lot of upkeep.

Technology. Buyers love technology as do most homeowners. Adding surround sound in the area where the television is, provides a great investment. Adding new programmable door locks, programmable thermostats and other advanced technology will add value to the home.

Top renovations don’ts would include adding a pool, over renovating a garage into something other than a garage. In general buyers want to be able to keep bedrooms as bedrooms, and garages as garages.

Homeowners should always be looking for ways to maintain their homes while they are living in it, not just when they are ready to sell. The better homeowners do this, the less must be done to attract buyers, when the time comes to sell the property. While homeowners want to be able to personal their space, it is always wise to consider the impact of renovations and improvements on potential buyers. Doing this will not only help the home sell faster, but will provide the highest resale possible.

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How to Save Money by Building a Low Cost Home

Even if you are not an expert, there are still ways to save money on home construction. Here are some cool tips to keep your home building budget within reason.

Split the costs

If you feel that you can’t afford the property because it is too large, you should consider buying it with a family member or friend. After purchasing the lot, you can split it into smaller lots. This saves money. Better still, you will be able to get a great lot for an attractive price.

Choose a problem lot

Some lots are less desirable than other lots. For example, a narrow lot or a hillside lot will have fewer takers. As a result, these lots are usually sold for much lower prices. If you can find such a 'problem lot' for a great price, don't hesitate to buy it. With the right floor plan and a great contractor, you can build the house of your dreams on any lot.

Waterfront lots

If you are looking for a waterfront property, you should opt for a lot facing a bay or a canal. These lots are much less expensive than lakefront or oceanfront properties. You will still have easy access to a water body.

Use low cost materials

Choose building materials that require less maintenance. Examples are: metal roofing and vinyl siding. Of course, these materials are more expensive, but they will easily recover their costs because you will not have to spend money on repairs or replacement.

Visit demolition sites

You will be able to collect used bricks, wooden doors and old barn wood from demolition sites. These materials are perfectly usable and usually don't cost anything. Of course, you will have to haul them away on your own.

Don't splurge

Avoid the temptation to splurge except for those truly important items. You can't, for example, skimp on doors or windows because they are important for the safety of your home.

Bigger isn’t necessarily better

Don't build a house that is bigger and better than any other house in the neighborhood. These monster homes are unlikely to command a good price when you decide to sell them.

Monitor all the materials used for construction

Don't let the contractor use low quality materials unless they are ready to make a cost adjustment.

Hire a certified contractor

An experienced will have established good relationships with subcontractors and suppliers.

Avoid site preparation

Site preparation can be expensive. Avoid lots that require extensive preparation work. Blasting rocks and clearing trees can be expensive.

Don’t alter blueprints

Don't change materials or blueprints during the building process. These changes can cost a lot of money.

Add width not depth

If the depth of the home is more than 32 feet, you will have to use specially designed roof trusses. This can be expensive. If you want a large house, add width or extra stories.

Consider vinyl flooring

If you feel that you can't afford to have hardwood flooring or ceramic tile at the moment, use vinyl flooring. You can add tile or wood directly on top of vinyl at any time.

Use a stock plan

Getting a plan custom-drawn can be expensive. Instead, choose one of the readily available stock plans. You will be able to customize it to get what you want.

Don’t build huge garages

If you have just two cars, you probably don't have to build a garage that can accommodate three or more vehicles. If you are looking for storage space, you should consider putting up a shed in the garden.

Great Small American Cities to Live in

With homes in the metros of America becoming unaffordable for most people, it’s time to consider moving to the smaller cities. Here’s a list of the best small cities with a population of under 60,000 on the basis of demographic and other criteria.

Read on for details regarding the economy, housing scenario, and crime stats of each city.

1. Rowlett, Texas

This is a Dallas suburb. The median household income is 56% above the national average.

The crime rate is low at 42% below average and the residents sleep peacefully in homes costing 19% less than the U.S. average. You’ll find one home for every 164 persons in the city. Rowlett’s unemployment rate is 6.3% which is 12.5% below the average in the country.

2. Idaho Falls, Idaho

The city of Idaho Falls was called Eagle Rock till 1891. This city stands out with respect to the cost of living which is 12 points below average. This is above all the cities in the list. The crime rate is 5% lower than the average, and the median home price is 37% lower than the national average. There’s one marketable home for every 92 persons. The median household income is 13% below the nation’s average. The unemployment rate at 5.6% is 22% below the average in the country.

3. Cedar Park, Texas

Cedar Park near Austin has a lower crime rate than any of the small cities in my list - 51% below the nation’s average. The median home price is 30% above the U.S. average and the median household income is 34% above average. There’s one house up for sale for each group of 182 people, so it may be more difficult to find homes here than in other cities on the list. The employment rate is second-lowest at 28% below the average in the country.

4. Noblesville, IND.

Noblesville, near Indianapolis lies in the center of the nation’s Corn Belt. This small city has a crime rate 38% below average. This comes at a premium with the cost of living being 7 points above average. However, the median household income is also 27% above average. The median home price is 6% lower than the national average, and the market has one home per 84 people. As far as unemployment goes, it’s 11% below average at 6.4%.

5. Hendersonville, Tenn.

The Nashville, Tenn. suburb of Hendersonville has a median household income which is 18% above the national average. Cost of living is 8 points lower than the average. The crime scene is much lower, at 37% below the national average. Regarding housing, the median home price is 25% above average, and there’s one marketable home for every 101 people. Unemployment rate is 9.7% below average at 6.5%.

6. Mansfield, Texas

This is a Fort Worth suburb in Texas and is equidistant from Dallas. It’s possibly one of the most competitive real estate markets with one home up for sale for each group of 239 people. Prices of homes are 12% over the nation’s average. There’s a low crime rate at 43% below average and the cost of living is 3% above average. In Mansfield, the median household income is pretty good at 74% above average. There’s an impressive unemployment rate of 5.4% which is 25% below average. The median home price is 7% lower than the national average and on an average, for every 127 people, there’s one home up for sale.