Don’t Overpay for Real Estate

Isn’t real estate fun? While the commercial and investment marketplace continues to trudge along without much hype and hoopla, the residential marketplace continues to make headlines. Today for example you’ll see the headlines “Stocks tumble on concerns over lenders.” and “U.S. Foreclosures soar.” I find it amusing that generally intelligent people seem to be surprised by these turn of events. They wouldn’t if they would just give it a little thought.

For months we heard about outrageous appreciation in prices, we learned of appraisers who inflate their values to justify the demands of real estate licensees and lenders. We see wild speculation in virtually every market in the nation. However, … we don’t see the population base increasing fast enough to absorb all the building going on and we don’t see incomes increasing fast enough to meet the demands of the higher mortgage amounts. Most people are like race horses, running with blinders on, keeping all that is going on around them out of sight and therefore out of mind.

Too often the real estate business is based on the “One greater Fool” theory. It is common for one person to pay too much with the intent of making a profit when the at least “One greater Fool” comes along and pays even more. Unfortunately, this works more often than it should. The residential single-family market has always been an emotional and irrational market, and it will continue to be. That is why it is difficult to use this market as a long term profit-oriented basis for portfolio development. Yes, intelligent investors will continue to benefit from this market segment. But they must be wise when calculating their entry and exit.

On the other hand, proper and prudent purchasing in the investment marketplace is still generally based on the ability of a property to produce income. The property that produces the most income is inherently the most valuable. It will serve any investor well to be familiar with the economic factors of both the market and the properties in which they invest. If they approach the business wisely, doing their legwork and running the numbers, they should consistently buy real estate that will produce long term revenue and substantial secure profits. Intelligence, education and hard work will pay off. If you have and use those things, everything else will fall into place. You can and should just sit back and smile when the headlines scream doom and gloom while your properties are chugging along exactly as they should because you bought as a professional and not as the one greater fool. The best way to make sure you don’t loose money on real estate is to not pay too much in the first place.

Luxury Real Estate Marketing – Find an Underserved Market Space

Lessons from Local Motors- Part 1-Find an Underserved Market Space

We are often asked by luxury real estate marketing professionals, “What does it take to become the break-away brand in my marketplace?” Our answer is:

Find an uncontested, underserved market space that you can dominate with passion, one that makes economic sense. Make sure you select something that you can do better than anyone else.

For inspiration, look outside of real estate for examples of how other entrepreneurs are doing it. There is an extremely exciting news story emerging in 2010 about a new American car company that is re-thinking just about every rule in the automotive industry by identifying and masterfully serving underserved market niches.

We are delighted to be covering this story in the Language of Luxury blog as we believe that this ground-breaking story will yield tremendous insights for luxury real estate marketing professionals who have set their sights on market leadership. If you have any questions about the future of “Yankee Ingenuity”, which is at the heart of the brand we know as American, you can rest assured that it is alive and well at Local Motors!

When Jay Rogers returned from active duty as a Marine in Iraq in 2004, he came home with the brilliant idea of bringing cars to market in a sustainable manner. That is, a way to produce and sell automobiles that is economically, environmentally and socially beneficial. In Jay’s words:”the cars people want, where they want them, when they want them”. This is what his new car company, Local Motors,accomplishes.

After receiving an MBA from Harvard Business School and raising $4 million in seed money Jay did something that had never been done before in the car industry. Rather than dictating the design of the vehicles, he reached out to the design community and offered a cash reward for the best design. Local Motor’s first “crowd-sourced” vehicle was born: a rugged off-road vehicle that could also drive comfortably on the open road.

The Rally Fighter was created based on the needs of an underserved market niche: the need for a vehicle that can easily traverse desert terrain and also double as a family car that comfortably handles the open road. The winning design provides manually adjustable dual height suspension. It seats 4 adults or 2 adults and 3 children. The Rally Fighter goes into production this summer. The cost is $50,000.

But, the best part of the story is that Local Motors plans to produce their cars only on demand at local “micro-factories” (that also serve as showrooms and service departments) where you, the buyer can watch and even participate in making your own car. With “just in time” delivery of parts and components there is no wasted resources, no inventories languishing on car lots, and no unnecessary shipping.

And, there is much more to this exciting story that we will cover in subsequent posts. But, it all started by identifying an uncontested, underserved market niche. What aspect of your local luxury real estate marketplace is underserved? That is the first place to look for your new niche.

The Fundamentals of Real Estate Appraisals That You Should Know

It is of importance that home buyers know the fundamentals of the complex process of buying properties in real estate. An appraisal, which is an essential part of the whole process, is one of the things you should understand. If you are about to purchase a house you have chosen among the available Holly Springs homes for sale, it’s advisable to be aware of its basics.

An appraisal is the estimation of a home’s value made by an impartial third party. It can be acquired by means of matching up similar homes that were just sold recently to the one that is being discussed, which is known or referred to as the subject property. Real estate appraisals assist in determining the market value of the homes, which is the estimated price it will receive if it was sold in a marketplace that is open and competitive.

There are some buyers who fail to differentiate between a real estate appraisal and a comparative market analysis or CMA, so it is important to be aware of these things. A CMA is used to aid sellers in establishing a rational asking price for a house, whereas an appraisal report assists in determining the market value of a home. An appraiser’s report is more inclusive and thorough; it is the only assessment report that lenders take into consideration when settling on whether or not to loan money.

A real estate appraisal is performed by an appraiser, someone who is licensed by his/her own state after fulfilling coursework, as well as a certain number of hours of internship that make appraisers aware of the real estate marketplaces.

During appraisal, the lender may choose an appraiser from its staff or just use an independent one; also, you might be given permission to select the one you want, but if it is someone who the lender doesn’t know well, the report may be put through an assessment before it gets accepted. You should keep in mind that the appraiser has to be an unbiased third party who does not have any financial link or other association to anyone who is involved in the arrangement. In addition, it is highly possible that you would be the one who’ll fund the appraisal if you’re submitting a loan application.

Real estate appraisals are profound and comprehensive reports. Some of the things stated in an appraiser’s report include, but are not limited to, the following:

– A valuation of the whole real estate marketplace in a certain place.
– Elements of the subject property, together with allegories of three similar homes.
– Remarks concerning badly defective elements (for instance, a collapsing foundation)
– Accounts concerning problems that is deemed by the appraiser as detrimental to the value of the house; for example, a bad entrance to the home.
– The sort of area where the house is located, such as in a development, stand alone acreage, and so on.
– An approximation of the property’s standard sales time.

Purchasing a house in Holly Springs real estate is not that simple. There area lot of things you should be aware of and take into consideration. It can be very difficult, but once you own the house of your dreams, everything would just be worth it.