Over the past several decades, real estate investments have proven to be lucrative and reasonably reliable in comparison with other forms of investment. While real estate investments have no “get rich” guarantee, they can be great ways to earn extra income, provided you have the right guidance. That’s why it’s important to enlist the help of a real estate professional.

Having the professional assistance of a real estate expert can be invaluable, even if you’ve invested in real estate before. A good agent can help you determine which kinds of properties are best for you to invest in and guide you through the entire buying and selling process.

As a potential real estate investor, you’re in competition with buyers of varying experience. I can help you to ensure that this venture is a rewarding one. I’d love to talk with you about how I can be of service to you.

First Time Investor?

Investing in real estate for the first time is an exciting proposition. Even if you’ve been through the home
buying process before, you may be unsure of where to begin.

Having a real estate professional on your side can help. An expert can get you started and guide you
throughout the process. I can provide you with information and advice on topics such as:

• - Tips for starting out
  
• - Investing in Foreclosures
  
• - Fixer-Uppers
  
• - Condos as Investments
  
• - Vacation Homes

Investing in real estate is potentially lucrative and a sophisticated process. Don’t take that first step
alone. If you’d like to talk about ways that I can be of assistance to you, please call. I’d be happy to help you.

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How to Set a List Price for Your Home

Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR^® will help you set your list price based on:

• pricing considerations
• comparable sales
• market conditions
• offering incentives
• estimated net proceeds

Pricing Considerations – Find a Balance Between Too High and Too Low

When setting a list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors:

If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR^® to "Bring me any offer. Frankly, I’d take less." But compared to other houses for sale, your home simply looks too expensive to be considered.

If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

TIP: Never say "asking" price, which implies you don't expect to get it.

Price Against Comparable Sales in Your Neighborhood

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market.

Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your REALTOR^® can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to ask, though, is always yours.

Competitive Market Analysis (CMA): The list of comparable sales a REALTOR^® brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a "Comparative Market Analysis" (CMA). To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.

A CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. Also, an appraisal is done for a fee while the CMA is provided by your REALTOR^® and may include properties currently listed for sale and those currently pending sale. For the average home sale, a CMA probably gives enough information to help you set a proper price.

Formal Written Appraisal: A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn't been much activity in your area recently, if co-owners disagree about price or if there is any other circumstance that makes it difficult to put a value on your home.

TIP: If you do order a market value appraisal, make it clear you don't need an elaborate, or full narrative report, i.e., the kind that's complete with photos of the house and neighborhood. Floor plans and a site map is sufficient in most cases.

Market Conditions – Is it a Buyer’s Market or a Seller’s Market?

A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.

Your REALTOR^® can tell you whether your area is currently in a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.

If You Price High, Set a Schedule for Lowering the Price

Some sellers list at the rock-bottom price they'd really take, because they hate bargaining. Others add on thousands to the estimated market value "just to see what happens." If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with your REALTOR^® and work out an advance schedule for lowering the price if need be.

If there haven't been many prospects viewing your home after three weeks, you may need to lower your list price. If that doesn't bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you're tempted to dig your heels in.

Offering Incentives to Hasten a Sale

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay some or all of a buyer's closing costs and discount points required by the buyer's lending institution.

If you haven't had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be "to the broker who brings a successful offer before Christmas."

Estimating Net Proceeds

Once you’ve been given an estimate of market value by your REALTOR^®, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful when you start looking for another home to buy.

To estimate your net proceeds, from the estimated sales amount, subtract the applicable costs in the three sections outlined below: seller’s costs, buyer’s/seller’s costs and closing costs.

Seller’s Costs: Subtract the following costs as applicable.

• payoff figure on your present loan(s)
• broker's commission
• prepayment penalty on your mortgage
• attorney's fees
• unpaid property taxes

Buyer’s/Seller’s Costs: Additionally, your REALTOR^® can tell you whether local customs or rules dictate whether the buyer or seller pays for the items listed below. Subtract the following costs, as applicable.

• title insurance premium
• transfer taxes
• survey fees
• inspections and repairs for termites, etc.
• recording fees
• Homeowner Association transfer fees and document preparation
• home protection plan
• natural hazard disclosure report

Closing Costs: As far as closing costs are concerned, you and your eventual buyer may agree on any arrangement that suits you, no matter what local practice dictates. Your REALTOR^® will assist you in estimating what your final closing costs will be.

FOR A FREE NO OBLIGATION MARKET ANALYSIS... VISIT

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How to Choose a Neighborhood for Your Home Search

Narrow your home search by identifying neighborhoods that are right for you. This helps keep your search focused and efficient. Your local REALTOR® can offer neighborhood information to guide you in your search.

When evaluating a neighborhood you should investigate local conditions. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others:

• quality of schools
• property values
• traffic
• crime rate
• future construction
• proximity to schools, employment, hospitals, shops, public transportation, prisons, freeways, airports, beaches, parks, stadiums and cultural centers such as museums and theaters

Neighborhood Search Strategies for Limited Budgets

If you’re a first time-buyer with limited financial resources, it's wise to buy a home that meets your primary needs in the best neighborhood that fits within your price range. You can maximize your home purchase location by incorporating some of the following strategies into your neighborhood search:

• Upcoming neighborhoods: Look for communities that are likely to become "hot neighborhoods" in the coming years. They can often be discovered on the periphery of the most continuously desirable areas.
  Check for planned future development such as additional transit; new community services such as pools and theatres; and chain stores planning to move in.
  Look for a home in a good neighborhood that is a bit farther out of the city. If commuting is a concern, purchase a home that is close to public transportation.
• Neighborhood demand: Look at the neighborhood demand by asking your real estate agent whether multiple offers are being made, whether the gap between the list price and sale price is decreasing and whether there is active community involvement. You can also drive around neighborhoods and see how many "sale pending" and "sold" signs there are in a particular area.
• Co-ownership: Look into purchasing a condominium or co-op, rather than a house, in a desirable neighborhood. This way you still may be able to purchase in a prime area that you otherwise could not afford.

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How to Choose a Home

Here are some tips to help determine which house is best for you.

Once you've settled on a couple of preferred neighborhoods for your home search, it's time to pick out a few homes to view. Having a house features “wish list” keeps you focused on which features are most important to you.

When narrowing down your home search, consider the following:

• know what types of home you want to buy
• determine what age and condition of the house you want to buy
• consider resale potential
• use a features wish list to keep focused
• use a home search comparison chart to keep organized
• act decisively when you find the right home

Determine What Type of Home You Want to Buy

There are several forms of home ownership: single-family homes, multiple-family homes, condominiums and co-ops.

Single-family homes: One home per lot.

Multiple-family homes: Some buyers, particularly first-timers, start with multiple-family dwellings, so they'll have rental income to help with their costs. Many mortgage plans, including VA and FHA loans, can be used for buildings with up to four units, if the buyer intends to occupy one of them.

Condominiums: With a condo, you own "from the plaster in." You also own a certain percentage of the "common elements" - staircases, sidewalks, roofs, etc. Monthly charges pay your share of taxes and insurance on those elements, as well as repairs and maintenance. A homeowner’s association administers the development.

Co-ops: In some cities, cooperative apartments are common. With co-ops, you purchase shares in a corporation that owns the whole building, and you receive a lease to your own unit. A board of directors, comprised of owners and elected by owners, supervises the building management. Monthly charges include your share of an overall mortgage on the building.

Decide What Age and Condition of Home You Want to Purchase

Weigh your needs, budget and personal tastes in deciding whether you want to buy a newly constructed home, an older home or a "fixer-upper" that requires some work.

Consider Resale Potential

As you look at homes, you may want to keep in mind these resale considerations.

• One-bedroom condos are more difficult to resell than two-bedroom condos.
• Two-bedroom/one-bath single houses generally have less appeal than houses with three or more bedrooms, and therefore have less appreciation potential.
• Homes with "curb appeal," i.e., well-maintained, attractive and with a charming appearance from the street, are the easiest to resell.
• The most expensive houses on the street, or ones with anything unusual or unique are not suited for resale. The best investment potential is traditionally found in a less expensive, more moderately sized home.

Use a Features Wish List to Keep Your Search Focused

Make a features wish list to clarify which features are most and least important to you when looking for a home. Using this features wish list will keep your house hunt focused and effective.

Use a Home Comparison Chart to Keep Your Observations Organized

While house hunting, it's a good idea to make notes about what you see because viewing several houses at a time can be confusing. Use a home comparison chart to help you keep track of your search, organize your thoughts and record your impressions.

Act Decisively When You Find the Right Home

Before you begin the home buying process, resolve to act promptly when you do find the right house. Every REALTOR® has stories to tell about a couple who looked far and wide for their dream home, finally found it, and then said, "We always promised my Dad we'd sleep on it, so we'll make an offer tomorrow." Many times the story had a sad ending - someone else came in that evening with an offer that was accepted.

Resolve that you will act decisively when you find the house that’s clearly right for you. This is particularly important after a long search or if the house is newly listed and/or underpriced.

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How High Tech is Your Home?

If the latest technology or entertainment options are important in your new home, add the following questions to your buyer’s checklist.

1. Are there enough jacks in every room for cable TV and high-speed Internet hookups?

2. Are there ample telephone extensions or jacks?

3. Is the home pre-wired for home theater or multiroom audio and video? Does it have in-wall speakers?

4. Does the home have a local area network (LAN) for linking computers?

5. Does the home already have wiring for DSL or another high-speed Internet connection?

6. Does the home have multizoning heating and cooling controls with programmable thermostats?

7. Does the home have multiroom lighting controls, window-covering controls, or other home automation features?

8. Is the home wired with multipurpose in-wall wiring that allows for reconfigurations to update services as technology changes?

To rate the home on its technological sophistication, fill out the Consumer Electronics Association’s TechHome checklist at www.ce.org/techhomerating.

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________

Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.

For more help, use Fannie Mae’s online mortgage calculators.

1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries.

2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.

3. Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.

4. Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.

5. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 percent down payment.

6. Keep your job. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.

7. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off the entire balance promptly.

Facing foreclosure? 9 options