Monday, February 26, 2007

Correcting the Commercial Real Estate Industry



The real estate industry has experienced both periods of intense growth and periods of recession in recent years. Changes in tax laws, relocation of business due to technological changes and demographic shifts, and new practices by real estate lenders have all contributed to—and been affected by—these boom and bust periods.

In 1992, through changes to the National Banking Act and regulations governing savings and loan assets, the government sought to rekindle real estate investment. At about this time, opportunities for expansion in commercial real estate development appeared in the southern and southwestern areas of the United States. Office buildings with long-term leases to high-growth energy companies offered good tax shelters. Apartment buildings could be financed by housing-bond issues and offered other tax benefits. Obtaining a commercial loan during these times proved beneficial.

Through service corporations owned by the thrift institutions, savings and loans actively owned, developed, and managed real estate. Savings and loans also used joint ventures with developers to invest further in real estate.

Syndicates enjoyed a spectacular growth through the development of tax- shelter partnerships. Even properties that were poorly planned, developed, and managed could be profitable for investors when the losses were sold.

Troubles in the energy industry foretold the end of the real estate boom, however. After 1993, the industry began to slide into a recession. Office buildings and apartment complexes begun during the expansion found fewer and fewer tenants as the industry contracted. Rumors of tax reform slowed further real estate investment as investors waited to see whether their pass- through benefits would be lost. The losses came with the passage of tax reform in 1996.

Unable to lease their commercial real estate or generate tax-oriented sales to generate cash flow, developers began to seek abatements, or surrender their properties to lenders. Savings and loans lost a lot of money through the devaluation of real estate loans and the collateral supporting loans. Through the Resolution Trust Corporation (RTC), the federal government attempted to contain the losses associated with the failure of the Federal Savings and Loan Insurance Corporation (FSLIC) and much of the savings and loan industry.

Periodic overdevelopment of real estate may be unavoidable. The length of time necessary to acquire property, design and finance a project, and bring it to market practically ensures some mismatch of supply and demand. Some theorists believe that the expansion and contraction of real estate markets can be explained through the examination of periodic cycles; others trace waves of supply and demand that peak at different times. The key factor in all markets, however, is the real demand for space—rather than the demand for investment.

Although serious demand-supply imbalances will continue to plague various real estate markets well into the 2000s, in the long run a return to development driven by real demand and real profits will benefit the industry. The recognition that supply and demand do not work in tandem will help banks maintain their important role in real estate financing.

Saturday, February 24, 2007

How to Find a Reliable Real Estate Agent



There really are a lot of real estate agents. People get the idea that it is possible to make money acting as real estate brokers and getting a big commission when a sale is concluded. If you are thinking of investing in Utah real estate or Provo real estate, where there are plenty of buyers and big time deals, you are going to find even more agents than normal. In some desirable parts of the country it is hard to kick over a rock without a couple of real estate agents scrambling out and handing you a business card.

You don't need just a real estate agent; however, you need a reliable one. How much commission the agent makes will be of no concern if your own needs as a buyer or seller are met. You can listen to people when they refer you to a relative or friend who dabbles in real estate. If you do, remember that personal friendships and family are fine but a real estate deal is a serious business matter. What you should be looking for is an indication of past success. You should be looking for signs of someone who has a high energy level, and is working a viable marketing plan. The active and energetic agent will be active and energetic for you, also.

The initial evaluation and first meeting with a prospective agent is extremely important. Try calling the agent, and making a note of how quickly your call is returned, and how urgently it is handled. Listen carefully to your agents plan to market your home, or if you are buying how they will go about locating what you are seeking. People skills are vital to a real estate agent. If they inspire faith and trust in you, you can be pretty sure they will in the other party as well. You should get the feeling you are the most important client the agent has, even if you see signs they are very busy.

When you focus on what the role of the agent or broker really is, it is easy to get a clear idea of what you should be seeking. The role of the agent is to bring together buyers and sellers, and to guide the negotiations to a mutually satisfactory conclusion, but making sure your best interests are considered. The measure of reliability in a real estate agent is not measured by the size of his commission, but rather by the level of your own satisfaction at the end of the deal.

Friday, February 23, 2007

Selling Your Home - What Can Go Wrong With Pricing and Loans

So, you’re merchandising your home (house, townhouse, condo, apartment, land, lot, farm, ranch, etc.), what can travel wrong? The sad fact is that a batch of things can travel wrong. However, don’t despair, there are almost as many solutions as problems. In this article, we look at problems related to pricing and a buyer’s inability to get a loan.

Price Negotiation

A problem that shows up all too frequently during contract dialogues is that the marketer have left no room to negociate the price. If the marketer shows no flexibility, they are liable to chase buyers away. Mad.

The solution is simple and obvious, terms your property a small higher than you experience you have got to get. It needs to be a sensible market terms for your home, but you can begin at the top of the market. Then, if your buyer desires to negociate price, you have got built in wriggle room.

Price isn’t the lone thing that matters to buyers. Settlement and move in modern times are important, too. This is especially true if the move affects a new employment situation, a new school district, etc. If you tin be flexible on those points, that can tip the pick to your property over a rival home.

Another gluey wicket during contract dialogues is encountered when buyers inquire Sellers to pay all, or some, of the buyers’ shutting costs. Often, sellers’ knee joint dork reaction is, “Why should I pay his shutting costs? Mine have got never been paid by the seller.”

Whoa! Don’t concern about what the buyer is getting out of it. Look at what you’re getting. Are your underside line what you desire it to be? Stopping Point to it? Maybe you should see paying all, or most, of what the buyer requested.

No matter what the proposal is during contract negotiations, don’t freeze into a negative position. Think large picture. Think underside line. Your underside line.

The Buyer Can’t Perform

Everything was going along swimingly and then you get a call. The buyer can’t measure up for a loan to purchase your home.

Check to be certain the buyer have approached a lender who will do loans to people with less than perfect credit. If that doesn’t work, compose it off as a mistake. The adjacent clip person desires to compose a contract offer, do certain they have got a missive from the lender saying they’re qualified to purchase your house.

The cardinal to merchandising your home is to remain calm. There will be hiccoughs and bumps, but don’t allow them overpower you. Typically, the buyer really desires the property. Work with them and a solution can usually be found.

Wednesday, February 21, 2007

For Sale By Owner - Use This Tip To Sell Your Home Quicker and At a Better Price

Your house is for sale by proprietor (fsbo), Along with columns of infinite other FSBO's in the Lord'S Day paper. This 1 small fast one will enable you to have got your Ad Noticed by more than potentiality buyers. More buyers intends you to sell your home quicker and at a better price.

Have you ever gone to purchase a car. Did you detect when you negociate the car dealer doesn't state you the terms of the car he states you the monthly payment. What would you rather pay $25,000 or $482.00 (a month).

You can utilize the same principal when it come ups to merchandising your house. You can run an Ad that states 3 sleeping room 2 bath 2,000 Square Foot Home in nice quiet vicinity with Monthly payments of $499.88 for qualified buyers. What would you rather pay for a house $165,000 or $499.88 a month.

Here are 2 more than Ads.
For Sale By Owner Nice House with Monthly Payments under $500 a Month, How much are you paying for rent? Buy your Dream Home for less then a Car Payment on that Fancy SUV. Only $499 a Calendar Month for qualified buyers

You may have got run the mathematics and said how make you get a Payment of less then $500 a calendar month on a $165,000 house, that can't be right. Currently loans are available with a Major National lender at an interest rate of 1.25%. A $165,000 House with a 10% Down Payment would measure up for a mortgage of under $500 a month.