Real Estate Ethics Needed For a Better Market Scenario

In the aftermath of the U.S. housing bust, one California woman recently sued her real estate agent for fraud, blaming him for getting her into a home with an inflated price. The woman claimed that other comparable homes in the area were selling for much less, but the agent concealed the information from her in order to collect a hefty commission on the higher sale price.

Unfortunately, this is not an exceptional tale from the now-past housing boom. With home prices appreciating at light speed in many areas of the country, greed took over for not only real estate agents, but homebuyers, speculators, mortgage lenders, home appraisers, and Wall Street investors. The traditional rules that guided the home-buying process were tossed out the window as people on all sides of the deal saw ways to get rich quick.

So whose fault is it? Who created the mortgage mess and is there still a place for ethics in the real estate market? The answer is varied and complicated, but two things are clear. One is that many different participants share the blame for the housing crash. The other is that the real estate scene can only properly function with the ethical cooperation of all involved.

Where does the guilt start? Let's begin with speculators. Several years ago, investors across the country started pouring money into homes in order to fix them up, rent them out, or sell them for greater profits. This led to a buying frenzy as people heard tales of the financial killing that was to be made from flipping houses. The result was an abundance of homebuyers. Homebuilders stepped up to the plate by overbuilding in many areas to capitalize on the housing frenzy.

As homes were being bought up after only minutes and hours of being on the market, the prices started to increase. Increased demand equals scarcity and higher prices, right? At that point average homebuyers started to have difficulty getting into the market as their incomes were not growing as quickly as were home prices. In order to get around this, many lied to their mortgage lenders, claiming higher salaries and greater assets.

Banks and mortgage lenders were willing to go along with the fraud because home prices were escalating so quickly that most buyers would be able to refinance or take out home equity loans with ease if they needed more cash to pay for the mortgage. Largely forgotten were the time-honored requirements of 20 percent down payments and good credit reports. Lenders created and pushed creative financing programs that included little or no down payments, risky adjustable interest rate plans, and plenty of no-income documentation loans.

Borrowers gobbled up these loans like crazy, barely pausing to read the fine print or find out how much they would be paying for their mortgage after the initial low interest period.

And of course real estate agents and housing appraisers got in on the act. They inflated appraisals to make more commission money and steered buyers into homes that were not worth as much as they were selling for.

Don't forget Wall Street. Investors across the country and the world invested billions into these risky loans because they seemed like a sure bet with the housing market on fire. With more investors, demand for these loans increased, causing many lenders to guide borrowers into exotic mortgages even when they were not a good fit.

The result is that millions of homeowners are facing high resetting interest rates and payments, hundreds and thousands of homes are in foreclosure and default, and the stock market has plummeted with the related losses.

Rebalancing has already begun in the real estate market with lenders reverting back to strict standards of good credit and large down payments. Borrowers now have to wait and save instead of diving into huge purchases and stock investors have started looking elsewhere for safer ventures. The process will likely take several years to complete and many have suffered and will suffer financial ruin in the mean time. Only ethical and wise behavior on the part of all involved can save the market from another devastating crash.

Recently experienced phases in the real estate market have created a need for strict standards of good credit and ethics to be followed. Real estate Asheville NC helps you understand the real estate scenario better. You can visit http://www.preferredrealestatecenter.com for more information.

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Real Estate Inventory

Real Estate inventory is at an all time high PLUS Interest rates are low. A large number of buyers remain in the market, but their behavior is decidedly cautious. For those of you selling in this market, it's important to remain patient, to plan for a longer sales cycle, and to avoid overpricing your home. Buyers in the current market will have a variety of choices, and will have the ability to negotiate favorable contract terms. Get expert representation from an agent who will talk straight about the value of a house or the condition of the local market.

With inventory close to all time highs, anemic sales volumes, rising inflation and banks about to unleash a wave of interest rate hikes; inventory is at the highest levels ever seen. Bargain purchasing will be gone when undervalued strong markets snap back to fair value or even earlier when the knowledge becomes commonplace. The values that went up with the rising tide are now going down with the ebbing tide and there isn't much that sellers can do for the time being. When the market turns, and it will, housing will once again be increasing in value almost everywhere. Real estate has always been a good value and will regain that position again shortly. Property values are rising everyday and the pressure on real estate inventory is always there.

Buyers are anxious to buy, but they want to make intelligent purchases. Buyers are not able to qualify or are unwilling to pay for the mortgage at higher rates. Buyers control the value of the real estate marketplace, not sellers. Buyers, not sellers, determine what the value of a home will be. Buyers return when the risks are accurately priced into the market. The result is a slowdown in sales activity, as the disconnect widens between sellers holding out for high prices and buyers looking for a bargain. But ultimately, more choices for buyers leads to fewer deals being made. Because most buyers in this market are not having to compete against other buyers for the same home, buyers are not having to waive their right to inspections in order to make their offer more attractive. Today, buyers can enjoy more affordable homes, because of the fewer number of investors active in the market.

For more information about Myrtle Beach Real Estate or about Myrtle Beach Condos visit at myrtlebeachrealestatemarket.com

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Real Estate Email Marketing

For a real estate agent, it is extremely important to be aware of the maximum potential of online marketing. The internet provides you with ample opportunities to contact prospective home buyers, or for them to contact you. One of these methods is that of email marketing. It is a true fact, that the success of your business depends upon your ability to access the target market and understand the clientele's needs. Many home buyers begin the search for their ideal home with the aid of the internet. A study by the National Association of Realtors has proven that almost 71% belong to this category of home buyers.

Explore the possibilities of online marketing through the simplest form of e mail marketing. It helps you reach people easily. Provide them with things they need- such as a free electronic text on the process of buying real estate in turn for their name and email address.  

Once you have procured their desired details on your 'opt in' list- start by sending them relevant materials. With the help of auto responders you can set off a big real-estate promotional campaign. If they have signed up, send them a message thanking and welcoming them. Send them your contact details and encourage them to contact you when they need to. Offer brief and helpful answers to their queries concerning the fundamentals of real estate.

The next step involves sending them immediate updates when new listings related to real estate are registered. Once they see your name time and again in their inbox, they will be attuned and accustomed to your website. If you can provide a monthly newsletter service, that will be great. It must be informative and helpful for buyers who are interested in doing their bit of research before approaching a real estate agent.

This will help you earn a creditable reputation and these people will start visiting your website. Now, you must remember that the content of your website is far more important than its style quotient. Navigation should be made easy and hassle free- and try to keep the look minimalist instead of showy, as it may put off buyers.

Avoid using programs like flash which prolongs the time required to open the website. Upload as many photographs as possible as this will help the buyers to zero in on the desired property. Employing flash also means that the photos will take longer to appear which might frustrate the buyer instead of impressing him/her.

Use the merits of internet marketing instead of avoiding it. As the internet continues to expand its circle, more and more people are becoming interested in buying their desired property with the help of real estate agents who have been contacted online. With marketing tools like social networking sites, the business blog and email you will soon realize that this method is far more effective, less time consuming and extremely cheap as compared to traditional methods.

All it requires is a bit of patience. Once you have built your prospective clientele list, there's no stopping you!

If you are interested in much more information on how to market your real estate business online, visit http://www.ProfitSystemsForAgents.com

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Real Estate Verses Stock, Part 4 - Inflation Hedge

In the first three articles, we discussed your ability to leverage large real estate assets with very little of your money and have all your expenses paid with other people's money (OPM), so you can reap huge profits as your real estate investment appreciates.   Unfortunately, no discussion of money can avoid the subject of INFLATION. 

Inflation is the increase in the prices of all goods and services, which is realized as a decrease in the purchasing power of your dollars.   Because of inflation, today's dollars are worth more than tomorrow's dollars.  Typically, the Consumer Price Index, All Urban Consumers, All Items is the best measure of inflation.  Inflation can steal your investment profits unless you have the right investment, real estate.

In Part 2 we discussed the actual appreciation rates for the various investments.  Those rates were not inflation adjusted. The actual annual appreciation for a saving account since 1963 was just 0.6% as measured by the return on 3-month US Treasury Bill.  But over the same time the annual inflation rate was 4.4%.  Investing in a savings account is like throwing money away.  It loses buying power.

The value of stock, a financial instrument, is based on the fortunes or losses of the corporation issuing the stock.  The value of a company will decline as inflation erodes the profits of the issuing corporation.  Over time, as inflation is reduced, the fortunes of the company may improve and subsequently the value of its stock.  The annual appreciation of stock since January 1963 is 7.98% as measured by the S&P500 index including splits and dividends.  During the years between 1963 and 1983, the value of stocks actually declined when adjusted for inflation.  It took the longest economic expansion in US history, starting in 1983, to make stock out perform inflation.

Real estate is durable good, which means it yields services or utility over time.  The investment value is intrinsic to the real estate because it is not to a piece of paper backed by the performance of a company.  Real estate investment, as a durable good, will increase in value as inflation increases its replacement cost.  In many ways the bottom of the real estate correction is the cost of new home construction. 

Unlike a savings account and stocks, real estate investment is the only true hedge against inflation. The annual appreciation of real estate since January 1963 is 6.16% as measured by the average price of a US home.  Like stock this is above inflation rates.  However, at no time did real estate lose value relative to inflation and this is assuming that OPM only covers 90% of the expenses including the mortgage!  This inflation hedge is protected in large part by the massive leverage enjoyed in real estate investments.  Historically, real estate is the only investment hedge against inflation!

Real estate investments have made more millionaires than perhaps any other form of investing and there are eight powerful reasons why.

YellowMustang Holdings has helped many of our clients achieve their investing goals by first understanding these eight basic investing advantages that has made real estate the most successful investing method of all time. In the first four articles we showed you how enormous these benefits can be and we are only half way through these articles. The next article is on taxes.

Mary Thomsen

YellowMustangHoldings.com

Owners of numerous rental properties around the United States, Mary and her husband have spent many hours helping others get started with buy and hold investing. With the change in the market, we are changing our strategies to maximize the advantages waiting for investors. Our exposure to various markets has led to a real estate marketing business. Available properties may be found on our web site http://www.yellowmustangholdings.com or visit our blog at http://www.my-us-wholesaleretaildeals.com/

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Real Estate Attorney or Lawyer's Role When Selling FSBO

The role that the Real Estate Attorney/Lawyer plays in the selling of your home by for sale by owner makes him/her a necessary addition to your team. Like any other aspect of the law, real estate law should be left to the professionals. Unless you are legally entitled to practice Real Estate law in your State/Province you need professional help. Below are some of the details that your Attorney/Lawyer will take care of.

Your Attorney/Lawyer will review the contract of purchase and sale and advice of potential problems. The seller is typically responsible for preparing the transfer, which is the document that transfers the title of the land from the seller to the purchaser.

They will review transfer documents received from the buyers lawyer, which includes the statement of adjustments which shows credits and debits for seller and buyer, for items such as purchase price, property tax, strata fees where applicable, water account, tenant rent or damage deposits, commissions to be paid to Real Estate Agents, down payment paid by buyer and transfer of title.

They will converse with the buyers Lawyer if necessary and resolve any problems or concerns regarding title issues and or accuracy of figures. Obtain a mortgage balance statement from the seller's mortgage lender to determine the amount necessary to pay and clear the mortgage balance on the day of closing.

If you are selling one property and purchasing another property with closings on the same day, you may need to arrange interim financing. This is a temporary loan to ensure that monies are in place to complete your purchase.

As you can plainly see the Attorney/Lawyers role is vital to the sale of your home. Make sure you have one on your team before you attempt to sell your property.

Hans Anderson is a Real Estate Investor, whose passion is helping people purchase their own investment properties. Visit: http://thetruthaboutforsalebyowner.com/index.php and http://realestateinvestingfacts.com/blog.

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Real Estate Bird-Dog - 3 Good Reasons to Start Your Services in Real Estate

Becoming a real estate bird dog has never been easier as there are so many online e-course that teach you how to start this business without having to have huge capital and the know-how.

Some of these courses are free and some may require you to sign up and pay for certain amount of fees before you begin the course.

Below are 3 good reasons to start a bird dogging business:

Zero risk and no investment

As you may be aware, there is no risk of locating profitable property leads for potential investors because you don't need to purchase or enter into a contract with the seller. What this means is, you have zero risk by being involved in this business except the gas that you incur when driving around your neighbor-hoods scouting for distressed or ugly properties for sale.

Work in your spare time

There is no need for you to start this business on a full time basis because you don't need to. Actually this is an ideal part time work for those who are holding a full time job and the best thing is you can control your own working hours.

Learn the ins and outs of real estate investing

If you don't already have the know-how of real estate investing, the best place to learn is to become a birr dog because not only that you can earn some extra money during your spare time, but you get the opportunity to learn the technical aspects of real estate investments from your investors.

By working for your investors, there will be some form of informal mentoring happening and you can pick up the ins and outs of real estate investments in the process.

If you are serious of bird dogging real estate, sign up for 100% free e-course on how to become a real estate bird dog at http://www.property-profiler.com

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Real Estate Agents And Brokers - The Ultimate Real Estate Wholesalers?

Real estate agents and brokers can be the ultimate real estate wholesalers. This is one of the reasons why, after many years of investing without a real estate license, I decided to finally get licensed. Let me explain.

Let's take a look at what a typical wholesale deal might look like for a real estate investor that is not licensed. You find a deal and get it under contract from the seller at a price that you can sell it for and still make a profit. Then, you start marketing the deal to your contacts, which include other real estate investors. You also market to the general public to find new investors or maybe a retail buyer who will live in the property.

In many cases, as a real estate wholesaler, all you have is a contract to buy the property at a fixed price and you are looking for someone to assign this right to purchase the property to for a fee.

Well, isn't that similar to what a real estate agent does? There is a contract with the seller where the seller has agreed to sell at a certain price (the listing agreement). The agent then tries to find an investor buyer or simply a home-buyer interested in purchasing the house. The "wholesale" fee that you get from selling the house is the agreed upon commission.

Now, if you are a real estate investor, you are probably thinking, but the commission is only a couple percent and my wholesale fees are usually much more than that. I will concede to you on that, but, and it is a big but, as an agent you have hundreds of houses that you can wholesale and not just the ones that you get a contract on yourself.

You can, with a real estate license, go out and sell any house that any other real estate agent has gotten the agreement of the seller to sell for them. This means that you have a lot more inventory that you can decide to market so that you can spend more of your time building your buyers-list of investors and retail homebuyers and spend less of your time putting houses under contract.

Alternatively, if you like hunting for houses to tie up, then spend your time trying to list houses and let a network of hundreds of other real estate agents and brokers sell your properties for you.

This is how I look at the role that a real estate agent/broker plays and why I ultimately decided to get my real estate license after all of these years.

James Orr is a professional real estate investor, marketing expert and founder of the LearnToBeRich.com on-line investment game.

He works with a network of real estate agents, brokers and real estate investors across the United States with the AnalyzedDeals.com website.

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