Iran Realestate Blog

“Hot shots” is the name given to jackpot properties that every person who dabbles in real estate part time or full time watches out for. They keep their eyes and ears open to potential deals and jump at the first opportunity as soon as they know that the jackpot property is in the market. Their gut instincts tell them that this property will generate handsome dividends if the deal is handled properly.

Separating the Good from the Bad

Being able to discern the difference between a good and bad piece of property usually comes with insider knowledge and long years of active duty in the real estate battlefield. One writer calls real estate an emotional business. One manifestation of this is that buyers are easily swayed by the appearance of the building or its fantastic location. But Tyler Hicks says that “buying the wrong real estate…can be a mistake. You really won’t be penalized for life. But you may have a few years of tight money. That’s why it’s important that every piece of real estate you buy be a good ‘fit’ for you.”

Finding Hot Properties

Be on the lookout for re-negotiated real estate deals, what Tyler calls the “real estate workouts”. These are deals where lenders, so as not to foreclose on a property, extend the term of the mortgage loan so that monthly payments and terms are easier for individuals. This is how the real estate pros lay their hands on properties about to be foreclosed because the property is being sold below market price.

Want to have fun and get educated at the same time?

Attend local property auctions. This is more for networking purposes and to get potential leads from others who make it a business to attend these auctions religiously. If one leading broker likes you, he/she may steer you to the right deals.

Keep a roving eye on government assistance programs, specifically those geared towards affordable housing programs for seniors and low income families. As governments become more sensitive to the needs of aging populations, they establish housing priorities for those in most need.

Remember that populations everywhere are aging! Seniors will be in a better position to demand more services, and housing is a top priority. Real estate professionals turn these opportunities into a gold mine because of easier financing terms.

Another technique for zeroing in on jackpot properties is to explore tax foreclosure certificates. This is a good way of making money from good properties without actually owning the real estate. These certificates can be bought from local tax authorities for properties on which owners have not paid property taxes.

Hicks points out, “Once you own one of these low-cost certificates, you have the right to wheel and deal to sell the property to others, take it over, or otherwise make money from it. It’s another way to move in on jackpot properties with small cash outlays that can make you rich – soon!”

Read your newspaper everyday and look for bargains. When sellers are on the point of giving up, they transfer their ad from the national paper to the community paper, as a last ditch effort. This is another area where you can tap another hot shot.

Leasing instead of Selling…

Lease with option to buy: a lease option has a longer term than a straight option, usually running for as long as one year or longer. Some will even stretch to three years, depending on the whim of the seller. While your lease is ongoing, you can rent out the property and be in a positive cash flow. The second advantage is, the property is appreciating in value. If you have a long lease option, you can then sell the property for the highest price you can obtain.

One last strategy for hot picks: be on the alert for long leases. Long leases will ensure that a property will be rented or leased for long periods of time, not just a year. Some commercial leases for example go for as long as 5 or

10 years. One example is the government. Take post offices as the best illustration. The government will usually rent space for post offices on a long term basis. If the property you are eyeing has government outlets like the post office, the automobile insurance board or the government-sponsored health centres, these buildings qualify as hot property!

LOCATION!

You’ve heard about the three principal parameters in real estate? One – location, two – location, and three – location. Take that with a capital “L”. One trick in looking for that pot of gold at the end of the rainbow is to buy the worst property in the best neighborhood, NOT the best property

in the worst neighborhood.

This is a cardinal rule that sophisticated inventors try never to break. Robert Allen gets the message across:

“If you buy the worst property in the best neighborhood, at least you have the chance to upgrade the property to match the standards of the neighbourhood, and your property value will increase. In a bad area, your property will only decline in value along with the rest of the neighbourhood.

Remember, you’re buying a neighbourhood, not just a property.”

A Model of Selling Success

Robert Allen’s concentric circle theory makes for intelligent hunting for hot properties. The circle has a small circle in the middle called the “center.”

The circles around it are identified as A, B, C, and D – A being closest to the center. The theory works this way:

compare real estate to student housing. The nearer the student apartment is to campus, the higher the rent is and the lower the turnover is. That student apartment therefore – being in circle A is a good investment. The same applies to houses. Which neighbourhoods are nearer to centers of

employment, education, shopping and conveniences? Try to hunt for properties in the A circle, and avoid those in the D area.

Introducing the Don’t Wanter

Don’t-wanters are people who will give anything to sell their property, to be rid of it completely, and who cross their fingers every minute hoping a seller will buy their property.

Because of this, they can be flexible as you want them to be. How many of them are don’t-wanters? “Even in extremely tight sellers’ markets, there are still plenty of don’t-wanters. Perhaps 5% of all sellers are willing to be flexible enough to be called don’t-wanters. Some new investors get discouraged early because they haven’t learned that 95% of the sellers are not flexible. They need to be dealing with the 5% who are don’t-wanters.”

If your goal is to sell your house at well over the price you asked for and for the whole transaction to be hassle-free from A to Z, then perhaps you should start thinking like a real estate broker or agent.

During times when the real market is rollicking to new, unimaginable heights, and you hear of brokers pocketing enormous amounts of commissions and fees making them millionaires overnight, you’d like to know, deep down in your heart, what makes them tick. This new crop of wealth builders is making everyone envious, including you.

And here you are – all you really want is to learn the tricks to sell your house successfully. Learn from the pros. What makes the pros stand out and the mediocre drop out later in the game? Get inside the mind of the real estate professional and think like him. Who knows, after you do sell your house successfully, you may decide to be a broker yourself, having learned the pitfalls and felt the glory of just this one deal.

Tom Hopkins talks about the true professionals:

“Professionals are highly goal-oriented. They strive for a certain number of homes listed and sold each month, a certain income, a trophy, or an award. They know exactly what they’re looking for and when they’ll achieve it…you see, the successful ones, the true professionals, begin where the failures stop. They do what the failures are afraid or too lazy to do.”5

Attitude is Everything!

A positive attitude tops the list of characteristics that real estate professionals live by. When the world comes crumbling down, as in a depressed real estate cycle, they look at downturns as an opportunity and maximise on that opportunity.

Professionals make every effort to let their image speak for their success: The trappings of success must convey your competence in the field. Do your car, briefcase, desk and office communicate a successful business career? Professionals have an organised and efficient follow-up system. Their success at closing deals depends on returning calls, prioritizing appointments, punctuality and integrity. This is the only way people will entrust the sale of their homes to them. The client’s comfort level is important to a professional – an element he never takes for granted.

A real estate professional stays in tune. He reads the classified ads religiously, and makes it his business to know what’s going on. His networking skills are above average, he attends the latest seminars, nurtures close relationships with people who are directly or indirectly connected to the real estate industry:

• Contractors
• Builders
• Developers
• Bankers
• insurance companies
• settlement agents
• trustees
• other brokers

Reach out and see people. Hopkins says: “There are literally thousands of people in your area who need and deserve professional assistance with their real estate needs. If you don’t take it to them, they might be short-changed by someone less professional. The more people you can meet,

the more you can serve.”

The Steps to Being a Professional Successful real estate selling is based on being wellinformed about the hidden strategies of the trade. If you do

decide that you want to be a real estate professional – a profession that will most likely bring you into the inner sanctum of the cult, how do you get started?

Apart from taking the usual course and getting licensed, Tom Hopkins believes you should take the following steps:

• Have a professional photograph taken. Clients like to put a face to the name, especially the person they picked to sell their house.
• Get a cell phone with voice mail. This is indispensable, if you want to return calls promptly.
• Purchase a good computer with a high processor capacity, and get your hands on software such as ACT!,Goldmine or Top Producer.
• Get email. Who doesn’t need an email address these days? Surveys show that less than 6% of real estate agents with email check their mail twice a day. Be ahead of the pack.
• Get Internet – be familiar with thousands of resources dedicated to the real estate industry: industry news, training opportunities, public records, lead generation, etc. Be sure you have Mapquest (you don’t want to waste time figuring out how to get to a particular address).
• Have a digital camera handy. You’ll want to produce quality photographs of the properties you’re selling.

And don’t forget to have business cards printed.

About Doubts…

Some individuals have doubts about a real estate professional’s competence when they’re just starting out. Experience is, after all, the old reliable – in any profession, not just in real estate.

But the true, beginning professionals don’t let this long-held belief discourage them. They are usually able to demonstrate, quite skilfully, that they are the hungriest and the most willing to do whatever it takes to sell a house. Enthusiasm and zeal go a long way – two traits that older professionals sometimes take for granted because they’ve been in the business long enough to develop a subtle smugness.

Mortgage Planning is very similar to Financial Planning in that your current and future expenses, investment goals, and future plans are all analyzed to prepare a mortgage “strategy” that will best accomplish these goals for you and your family. This is a Specialized service that is offered by very few companies, because it requires a longer commitment of time with the customer, specific training and understanding of finances, and a desire to help everyone you meet.

Most mortgage companies are filled with “loan salespeople” that will sell you whatever product you ask for, regardless of the impact that program will have on your family’s future. Most of them don’t know what questions to ask, so often even well-meaning loan salespeople are just not educated or trained well enough to help you make the best decision.

As a Mortgage Planner, it is my goal to help you understand that your mortgage is the largest and most important investment you may ever make, and it will impact your financial life for years to come. It is a long-term commitment that – depending on how it is structured – can either restrict your financial opportunities, or give you the freedom and flexibility to achieve your dreams for your family.

As your Mortgage Planner, I will ask you questions that most loan salespeople will not. The answers to these questions can save you thousands of dollars in a very short amount of time, and keep you from making big mistakes in how you structure your financing.

I look forward to serving you and your family as your Mortgage Planner, and hope that my service will compel you to refer your friends, family, and co-workers to me to help them as well.

When you buy a home, you also buy part of a neighborhood. The two are inseparable and what neighborhood your new house is in is important to take into consideration before you make an offer.

If the property value of houses in the neighborhood are falling or stagnate, a lower offer may be in order. Conversely, if home values in the area are skyrocketing, then it may be worth spending a little more. Below are some things to consider when looking at a neighborhood.

Neighborhoods have personalities – find out what each one is. Ask some of the people in the neighborhood what they think of it. Ask how they perceive crime, the schools, pollution, noise and traffic. Human input is always better than reports.

A good way to check out a neighborhood is to simply drive around it. Drive through the neighborhood at different times of the day – on weekdays as well as weekends.

Find out what people do, and what there is to do. Get a first hand look at traffic and the stores you will have close to you. See what the area’s schools look like. The condition of the schools and roads will tell you a lot about the area.

Find out the crime report for the area. Start at the local police department and ask them for any statistics they can provide. Check for graffiti and vandalism.

Schools Families with kids often pick a school district before they choose a house. Remember to also check out the schools that your kids will be attending 3-5 years from now, because most people stay in a home about 5-7 years.

Location How long will it take you to get to work? A long commute may not save you money or time. Also, are there any parks around? How easy is it to get to the interstate? What do the other houses look like? Shopping close by? (If possible, try to leave early for work one morning and drive to the property – then drive to your job during rush hour. You will have a real idea of what your commute times will be.)

Property Values It’s a good idea to research recent selling prices for houses in the neighborhood and how much houses have increased in value in the past 10 years. Ask how much property taxes have increased, or contact the county tax assessors office for a history of increases.

Utilities Find out utility costs. Normally the utility companies will give you a 12 month history. Also find out if cable and internet access are available to the house.

Future Development Look for new construction in the neighborhood. Area growth can raise property values. However, it can also raise taxes and traffic congestion. Also look for any planned commercial construction. You really don’t want to move into your home and find out 3 months later that they are going to put in a landfill at the end of your street.

One of the most common mistakes first time homebuyers make is jumping into the emotional frenzy of buying their first home without first analyzing the financial impact and feasibility of the new mortgage payment on their finances.

Not finding out how the mortgage payment will affect your finances can lead to some very hard lessons, and a lot of stress in the household – which is unneeded.

The best place to start is a household BUDGET

DefinitionBUDGET is not just a list of all your monthly expenses. (That is just a list.) A budget is decision that is made by everyone that has access to household funds, agreeing to a set limit for spending each month.

One of the best ways to really understand what you pay out each month is to get your check register or a list of all the bills that you have paid over a year. Include things that are not monthly, such as car insurance or any other insurance, birthday and other holiday presents that you always buy each year, and anything else you can think of that you paid last year. Divide them up into categories, and take all of those expenses from the prior year and divide each category by 12. This is your monthly costOnce

You Have An Accurate Budget In Place, Analyze Where You Are WithoutNew Mortgage Payment.

Are you at a positive cash flow or negative? If you are at a negative or less than $200.00 positive per month, you should probably think twice about purchasing a home at this time until you can get control of your monthly spending, or increase your income. You may get approved for a loan without following this advice, but you may also find yourself in serious financial trouble afterwards, and we would like to help you avoid that if at all possible. Once you have a positive cash flow, take that amount and add it to your current rent payment. Unless something changes in regards to debts, spending, or income increase, this is the very maximum house payment that you will be able to afford. (I suggest keeping a 1 week income surplus each month at the very least if possible.)

Now Take That New Monthly Payment And Put It Into Your Budget. Go to our online calculator at Iran Estate Loan Calculator and play with some sales price numbers, etc. Once you find out what loan amount gives you a monthly payment that is in your budget, you can start looking at home prices in your area to see if that will fit your needs.

Before looking at any homes or contacting any Realtors or sellers, you need to get PreapprovedFew Realtors or sellers will consider an offer without a Preapproval letter, and you want to identify in advance any items that may hinder you from getting the loan program and terms you want.

When You Have Been Preapproved For A Maximum Payment I would take the new monthly payment (including any taxes, insurance, or mortgage insurance) and subtract your current rent. Now set up some kind of “New House” account to put that money in each month so you can experience what impact that new payment will have on your budget. Do this for at least 2-3 months, and you should be prepared for serious house hunting.

By establishing your budget now and preparing for the house payment in advance, you can avoid a great deal of hardship in the future.

Many home buyers get caught up in the frenzy of emotions and excitement, and forget to do the things that will protect them before, during, and after the buying process. 

Here Are A Few Mistakes To Avoid:

1. Not Establishing A True Budget Early In The Process Of Consideration A Home Purchase.
2. Not Making “Practice Payments” Equal to Your New Mortgage Payments Before Purchasing.
3. Not Getting Preapproved For A Mortgage Before Starting Your Home Search
4. Not Using An Experienced And Trusted Realtor To Help You With Your Search And Contract Negotiations.
5. Don’t Be Enticed By Offers For Mortgage Programs That Appear To Have A Lower Rate Or Payment Without Making An Informed Comparison.
6. Don’t Visit A Model Home Without Your Realtor. If You Do Not Have A Realtor Representing Your Interests, Do Not Sign Anything On The Spot. (the person that will greet you is working for the Builder, not you. You may be agreeing to things with no protection for you.)
7. Buying Furniture Or Establishing New Credit After You Have Been Approved. (this could invalidate your approval)
8. Making An Offer On A F.S.B.O. Without Full Knowledge Of All The Contingencies Needed In The Contract To Protect You.
9. Making A Buying Decision Based On Emotion Vs. Information.
10. Not Having A Home Inspection – Even If It Is A Newly Constructed Home Not Having Your Homeowner’s InsuranceIn Place At Least A Week Prior To Closing.
11. Using The Builder’s Or Seller’s Requested Title Company (this is like being a defendant at a trial and using the plaintiff’s attorney to represent you. There is usually a long-standing business relationship or friendship involved, which would likely cause the title company representative to be biased towards representing the interests of the Seller/Builder.)
12. Making Large Deposits Within 60 Days Of Closing. (it will trigger requests for documentation of the source of the funds)
13. Not Purchasing An “Owner’s Title Insurance Policy” At Closing -only $35.00 more. (this will save you 30% when you sell or refinance in the future)
14. Closing On Your Purchase Even When All Of The Repairs Or Punch List Items Have Not Been Satisfied. (once its done, its done. Therefore, make sure you have some kind of agreement signed in writing that these items must be completed with an escrow holdback)

Most home purchases can be very smooth, provided all parties handle their responsibilities in a timely manner, and everyone is acting with integrity. Call us if you need help understanding any of these items.

Call us if you need help understanding any of these items.