Real Estate

The Latest Skinny on SBA Loans and SBA LendersA buddy of mine in the SBA loan business called me today, and we chatted about a number of very important changes to the SBA loan program.  The Federal government is trying to get credit flowing again to the economy, so they have made SBA loans much more attractive. First of all, until the end of the year or until money runs out, the SBA is now waiving its guarantee fees (points) on 7a loans and on the debenture portion (the second mortgage portion) of 504 loans.  You will recall that the 504 loan program involves a conventional first mortgage loan from a bank up to 50% loan-to-value and a piggy-back second mortgage loan from a certified development corporation up to 90% loan-to-value. The second thing the Federal government has done to make SBA lending more attractive is that the SBA has increased its guarantee of SBA loans from 75% of the loan amount to 90% of the loan amount.  This should encourage SBA lenders to start approving more deals. The third incentive is the SBA has effectively extended the repayment term of its loans.  In the past, the real estate portion of an SBA loan had a term of 25 years, but that portion of the loan used to finance the acquisition of machinery or equipment had a term of just 10 years.  If the borrower also wanted some working capital, the repayment of this portion of the loan had to be amortized over just 7 years.  A weighted-average loan term was used.  Now, if more than 50% of the loan is being used to acquire real estate, the entire SBA loan can be amortized over 25 years. The SBA also announced two weeks ago that 504 loans can now be used for refinances, as opposed to just the purchase, of real estate and/or equipment.  The announcement was somewhat unclear, however, and further clarification is expected from the SBA. In general, the volume of SBA lending is way down.  CIT Financial, the largest SBA lender in the country, is back in the market.  CIT is now a national bank with one branch in Utah.  More importantly, CIT, as a bank, now has access to the discount window at the Fed. Banco Popular, the second largest SBA lender, has severely trimmed its SBA lending infrastructure.  While the bank is still in the market for SBA loans, their SBA loan volume is down by more than half.  So is the SBA loan volume of Bank of America and JP Morgan Chase. Former giants in the SBA lending market – Temecula Valley Bank, UPS Financial, Small Business Loan Source, and Business Lenders – have all closed down their SBA lending divisions. The secondary market for the conventional portions of 504 loans has completely dried up.  These attractive first mortgage loans used to sell for 6 to 15 point premiums because of the implicit guarantee of having the SBA in a second mortgage position.  The good news is that the Obama administration has earmarked a sizable amount of money aimed at buying up these 504 first mortgages in hopes of jump-starting this market.  The second mortgage portion of 504 loans are being written at a fixed rate of 5.67% today (3/31/09) for 20 years.  The underlying first mortgages are typically written at an interest rate that is 1% to 1.5% higher than the 504 second mortgages.  Wait a minute?  Higher than the second mortgage?  Yes, because unlike the second mortgages, these first mortgages are not credit-enhanced by the SBA. I learned today that SBA 7a loans have a modest prepayment penalty during the first three years.  It’s a declining prepayment penalty of 5% in year one, 3% in year two, 1% in year three, and no prepayment penalty thereafter.  The SBA 504 program has a stiffer prepayment penalty.  The bank making the underlying first mortgage is not allowed to charge a prepayment penalty.  The second mortgage, however, has quite a stiff prepayment penalty – 10% in year 1, 9% in year 2, 8% in year 3, and so on.  There is no prepayment penalty on the second mortgage after 10 years.  Gas station loans are still not being guaranteed by the SBA.  ( Blackburne & Brown is happy to finance gas stations right now.) While the SBA will still guarantee hotel loans, very few SBA hotel loans are being made by SBA lenders.  SBA lenders are worried about declining trends .  In other words, they are comparing this year’s revenues to last year’s revenue – and the trend is usually too negative.  The expression – declining trends – is the hot, new buzzword in SBA lending. If an SBA lender were to finance a hotel today, it would probably be a hotel highly visible from a busy highway.  Many more business travelers are driving rather than flying because of the recession.  The hotel lucky enough to get SBA financing would probably be a limited service hotel , typically without a restaurant and with far lower nightly rates.  It would probably have less than 100 units. The more expensive full service hotels , typically close to airports, are suffering far worse than the cheaper limited service hotels off of busy highways.  These full service hotels would also require large loans, and lenders are loathe to make large hotel loans today. Finally, if an SBA lender were to finance a hotel today, it would probably be a hotel with interior corridors .  Older hotels and motels usually have exterior corridors, and women traveling on business today are likely to avoid such hotels due to security concerns. The maximum SBA 7a loan is $2 million.  Therefore, if a borrower wanted more than $2 million or if he wanted a fixed rate loan, the SBA 504 program would be the right program. C-Loans recently received a loan that otherwise would have been perfect for the SBA; however, the borrower was a non-profit organization.  The SBA will not guarantee loans to non-profit organizations. Conventional commercial real estate lending is down by more than 80% from early last year.  SBA lending is also down by 60% or more.  The Federal government’s efforts to increase SBA lending is a noble effort.  Let’s hope it works. Need an SBA loan?  You can apply to dozens of different SBA lenders in just four minutes using C-Loans .  And C-Loans is free! See Also C-Loans Commercial Mortgage Lender Databank Free Commercial Loan Portal to 750 Commercial Lenders

The recent economic stimulus bill lets first-time home buyers take a substantial tax credit — either on their 2008 or 2009 taxes! This can work even if you haven’t bought your house yet. You’d need to either file for an extension now or file an amended return later this year, after the purchase. The exact amount of the credit is either $8,000 or 10% of the home’s value, whichever is less. For an excellent set of instructions on how to take the credit in 2008, see USA TODAY finance columnist Sandra Block’s article, ” Claiming this year’s first-time home buyer’s tax credit is easy ,” in the Tuesday, March 31st edition of USA TODAY . And for other details, see the CNN article, ” Final score: $8,000 for homebuyers .”

San Diego County is home to one of the largest concentrations of military bases in the United States. In fact, the San Diego area contains 12 major Marine Corps and Navy bases and facilities. If you’re in the military and moving to San Diego, one of your biggest decisions is whether to buy a property, live on base housing (if this option is available to you), or rent a home or apartment. If you choose to buy a property, there are many issues to consider before taking this step.

BUY OR RENT?

The decision to buy or rent is more complicated for military personnel because you may be assigned to San Diego only for a limited period of time. If you plan to purchase while in San Diego and then sell when you transfer, the condition of the real estate market at the time you sell will make this either an easy or difficult process. In a seller’s market (when demand exceeds supply), properties tend to sell quickly and at or above asking price. In a buyer’s market (when supply exceeds demand), properties usually take much longer to sell and may sell below asking price. Individuals in the military should consider this issue in determining whether to buy or rent real estate in the San Diego area.

For those who choose to buy, the major other consideration is the likely appreciation rate of your property during your tenure in San Diego. If you plan to sell your property before you depart to your next assignment, you should remember that there are expenses (e.g. realtor fees, taxes, etc.) associated with selling your house, and any price appreciation you realize by owing the property for a few years, may or may not be offset by these fees.

Some individuals choose to keep their property even after they transfer to a new assignment outside of San Diego. In these cases, you can rent out the property, leave it empty, or find another acceptable use of the dwelling. If you choose to hire a Property Manager to oversee the renting and maintenance of your property, keep in mind that the fess for this service will cut into any monthly profit you realize on the property.

GETTING A HOME LOAN?

If you decide to purchase a property, obtaining a home loan is one of the tasks you must undertake. Many active-day members, retirees and other service veterans are eligible for special loan programs guaranteed by the Veterans Administration (VA).

To be eligible for a VA guaranteed loan, you must have served on activity duty and have a discharge status of other than dishonorable after a minimum of 90 days of service during wartime, or a minimum of 181 continuous days during peacetime. There is a minimum 2-year service requirement for veterans who enlisted after September 7, 1980. The 2-year requirement also applies to Officers who began service after October 16, 1981. There is a minimum 6-year service requirement for National Guard members and Reservists, and surviving spouses are also eligible under some conditions. There are other special conditions in which a person may be eligible, so contact your local VA office to get more information.

WHAT IS VA GUARANTEED LOAN?

The VA loan is a federal guarantee of a maximum of 25% of a home loan amount but not to exceed $104,250. This formula allows eligible members to obtain a maximum loan amount of $417,000 (as of 2006). However, service members must meet other eligibility requirements. Individuals borrowing using this type of loan must intend to be occupants of the purchased property.

Private lenders are the source of funds for VA guaranteed loans. The guarantee provides these private lenders assurance that the federal government will reimburse the lender up to the maximum allowable amount if the borrower fails to repay the loan. Because of this guarantee, lenders are more favorable to offering loans without a requirement for a down payment.

VA CERTIFICATE OF ELIGIBILITY

Individuals desiring a VA guaranteed loan must first obtain a Certificate of Eligibility from the Veterans Administration (VA Form 26-1880). Contact your local VA office to obtain this form by calling 1-888-244-6711. You will need a copy of your military discharge document (DD-214) to submit with your application. Once you have the Eligibility Certificate, you can then select a lender or mortgage broker to work with on getting the loan.

CLOSING COSTS

In addition to the purchase price of your property, there are closing costs that must be paid to process your home loan. These closing costs are fees that are charged by different service providers to help complete the loan process. For example, your lender will require an appraisal of the property to make sure that its value is at or above your purchase price. Other charges commonly included in closing costs are: recording fees, credit report fee, prorated taxes and assessments, hazard insurance, flood insurance (if required), survey, title examination, title insurance, postage and shipping fees, and the VA Funding fee.

WHAT IS THE VA FUNDING FEE?

The VA charges a fee to individuals utilizing the VA guaranteed loan. This fee is a percentage of the loan amount and is linked to the size of your down payment on the home you plan to purchase.

For active-duty personnel or veterans who put no money down, the funding fee is 2.15% of the loan amount. This rate increases to 2.4% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment greater than zero but less than 10% of the loan amount, the fee is 1.5% of the loan. This rate increases to 1.75% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment of 10% or more of the loan amount, the fee is 1.25% of the loan. This rate increases to 1. 5% for National Guard/Reserve.

The rates listed above are for first time users of the VA loan guarantee program. Individuals who have used the VA guaranteed loan program before pay higher rates than first time users. The rates above are subject to change. In some limited cases, individuals are exempt from paying the funding fee. You should contact your local VA center for current information.

CHOOSING A VA LOAN VS. A CONVENTIONAL LOAN

You must carefully evaluate the terms of the VA guaranteed loan vs. the terms of a conventional loan. One advantage of a VA guaranteed loan is that many lenders will not require you to put a down payment on the purchase of the property, assuming you meet their other lending criteria (e.g. credit scores, sufficient income, adequate debt to income ratio, etc.). There are also many zero down payment conventional loan programs. In some cases, the VA guaranteed loan will offer a lower interest rate and better terms, and in other cases, you can obtain a better deal through conventional financing. A good loan officer can help you evaluate the advantages of either loan, given your particular situation.

FINDING THE RIGHT HOME

If you are familiar with the San Diego area, then you probably already know where you want to live. If you are less familiar with the communities in San Diego, your Realtor can serve as an excellent resource to answer your questions. There are many steps to take during the home search process, which include:

1. Work with your loan officer to identify how much you can afford.

2. Determine what type of property you want to buy (single-family home, townhouse, condominium, other). Your Realtor can advise you about the differences between these types of properties.

3. Determine how many bedrooms, bathrooms, square footage, etc. you need.

4. Determine what areas of San Diego you would consider living in.

5. Calculate the drive time (with and without traffic) to your job.

6. Identify the quality of schools in the neighborhoods that you are considering.

7. Locate the crime statistics for the neighborhood that you are considering.

8. Identify the location of local community resources such as libraries, shopping centers, athletic centers, etc.

9. Ask your Realtor to advise you about the resale potential of the home you are considering.

Although there are many other factors to consider, the above is a good starting point. Your Realtor should be able help you get answers to the questions above as well as provide you many other resources. Keep in mind that most Realtor’s who assist homebuyers and paid by the home seller, but make sure to ask your Realtor about this.

HOW MUCH SHOUD I PAY FOR A HOUSE?

Your Realtor should be an excellent source of information to help you understand a fair offer price. The Realtor should provide you information about what other similar properties in the same community have sold for recently, current pricing trends for the community, as well provide you a recommendation based on their experience in the local market.

DO I NEED A HOME INSPECTION?

There are many other issues besides the offer price to consider when making an offer. For example, many buyers find it advantageous to get an inspection of the property by a qualified inspector. The inspection typically covers the major systems of a property. Check out the National Association of Home Inspectors web site for more information about what is covered in a typical home inspection. Getting a home inspection is generally a good idea.

HOW LONG WILL THIS TAKE?

If you want to use the VA guarantee, then make sure you have obtained the Certificate of Eligibility far in advance of your relocation to San Diego. Whether or not you are using the VA loan program, be sure to obtain a loan pre-approval (sometimes called loan prequalification) from a lender or mortgage broker. This lets home sellers know that you are a serious buyer and are ready to act quickly if needed.

Prior to moving to San Diego, get a sense of the local real estate market. Your Realtor can set up an automatic email notification system that will send you descriptions and pictures of properties that meet your criteria. Doing this type of research should save you a lot of time when you arrive.

Once you have your loan pre-approval, the next step is to locate a property that meets your needs. Your Realtor should show you a variety of available properties that meet your criteria. Once you find a house you an interested in, your Realtor will prepare the purchase offer documents, and guide you through the loan and closing process.

In summary, it’s simply a process of getting a loan, finding a house that you like, making an offer that is accepted, and going through the closing process, which can occur in less than 30 days.

CONTACT A SAN DIEGO REALTOR

If you are moving to San Diego, contact a Real Estate agent who is familiar with VA guaranteed loans and has experience working with military buyers. Many agents have prior military service themselves, and are very familiar with your situation and needs.

What do the letters behind a real estate agent’s name stand for? Real estate agents, like doctors, lawyers, and other professionals can ear designations, certifications, and other credentials. These are usually shown by putting a series of initials after the agent’s name. The most common designations and certifications are: Broker, REALTOR, e-Pro, CHMS, GRI, ABR, and CRS.

What does an agent have to do to obtain the designation or certification?

e-Pro requires an agent take a class on basic computer skills. It has no real estate content, but ensures your agent can use email and the web. It should really be a bare minimum bar for the technology aptitude of your agent.

REALTOR is the one of the easier credentials to obtain (but one of the hardest to live up to). A REALTOR is a real estate agent that belongs to the National Association of REALTORS and agrees to follow the Realtor Code of Ethics. You can read about the code here http://www.realtor.org/mempolweb.nsf/pages/Code?OpenDocument

Broker is a bit harder to obtain than REALTOR. In Texas, for example, a broker license is required to be able to operate your own real estate company. An agent must have their license for 2 years and complete over 600 hours of real estate education prior to applying for a broker’s license. The broker’s license is granted upon completion of an exam administered by the state. Brokers are basically real estate agents with advanced educations.

GRI stands for Graduate Realtor Institute. Less than 50% of agents have this designation. The GRI requires 12 days of continuing education with passing grades on three exams. There are no production or time requirements so an agent can literally earn this designation by sitting in class for 12 days and passing the tests. This designation is in no way a measure of real estate sales experience.

ABR stands for Accredited Buyer’s Representative. Less than 30% of agents have this designation. This designation combines 2 days of classroom work and an exam with the requirement that the agent show proof of at least five buyer sales. This designation shows that the agent has had both formal classroom time and in the field experience.

CRS stands for Certified Residential Specialist. Less than 4% of all agents have this designation. This is the most difficult designation to obtain and is a measure of a high degree of formal education and real world transactional experience. To obtain a CRS, the agent must attend three 2-day classes, pass three exams, and provide proof of 25 closed transactions within the last 24 months. While the transaction experience isn’t a huge amount, it does weed out the inexperienced agents and the classes weed out those agents who aren’t dedicated to continuing education.

Other designations are out there, but for the most part they are issued by inconsequential groups and have no real bearing on the agent’s abilities and are used more for marketing purposes than anything else.

Commercial real estate investing is a kind of investing which is used for business purpose. The commercial real estate investing property is different from other real estate investing like agriculture, residential and other industrial purpose. Commercial real estate investing property provides reasonable price consideration from the investment property and also provides income for long period. In real estate investing, real estate investors make investment on commercial real estate investing. Commercial real estate investing is made by most of the real estate investors, because it fetches more profit for the seller at the time of sale of real estate investment property.

The main purpose why people prefer to make their real estate investing is that commercial real estate investing provides stability and high return in the market. The other advantage we obtained from commercial real estate investing is that it provides investment securities for the real estate investment property purchased from the real market. Real estate investing market is said to be the stable market and it also carries high returns on investment for the property purchased. It is the obligation of the real estate investor to see that the real estate investing property fetch more profit among the customer and it realize more profit. Some of the standard features of commercial real estate investing are

High return

The main advantage of commercial real estate investing property is that it carries high return on investment. More number of people procures real estate property because of its returns provided. Real estate investor enjoys the benefits provided by the real estate property with high return and turnover during the period of sale of real estate investment property. Real estate sector is the wide sector where it carries huge number of properties required with desire prices.

Stability

The other unique feature of commercial real estate investing property is that its stability and consistency with the world market. When though more number of real properties are available in real estate investing market, still commercial estate investment obtains more demand among the customers for reasonable price consideration. Real estate investing benefits are provided more in real estate investing and it is due to the stability provided in the real market.

Commercial estate investment provides long term security of cash flow for the real estate investors who had made their real estate investing. Commercial real estate obtains more demand among the customer and they provides more return on investment with principal and interest. This kind of investment obtains more demand, growth, return and stability compared to other real estate investment property in the real estate market.

DIP Financing Can Be Used to Maintain a Property During BankruptcyDebtor in possession financing (DIP financing) is a special form of financing granted to companies in financial trouble.  Usually these companies are in a Chapter 11 bankruptcy.  The unique feature of a DIP loan is that the bankruptcy court usually grants a super-priority status to the new loan.  This means that the new loan gets to jump in front of any mezzanine financing and any senior mortgages in the debt stack. "Gee, George, does this mean that if I have a first mortgage that some crazy bankruptcy judge can just push my loan back into a second mortgage position and allow the DIP lender to be the new first mortgage?" Bankruptcy courts don’t just approve debtor in possession loans willy-nilly.  Usually the debtor has to obtain the permission of the existing lenders. "Gee, George, why, if I had a first mortgage position, would I ever agree to be pushed back into a second mortgage position?" Let’s suppose that your bank had a $10 million first mortgage on a huge RV manufacturing facility in Elkhart, Indiana.  As you know, the RV industry is in shambles and there are millions of square feet of empty industrial space in Elkhart right now.  If you’re the bank, you could easily be looking at seven years before you’ll ever be able to sell or lease the property. Now let’s suppose that, right before the RV manufacturer went into bankruptcy, the company received an order from FEMA for 1,000 movable trailers that could be rushed to disaster areas as emergency housing.  The RV company was poised to make millions of dollars on that order, but they didn’t have the dough to order the parts and supplies.  All of their suppliers had put them on a cash-only basis. A DIP lender might come in and make the RV company a DIP loan of $1.5 million, secured by a first mortgage on the property.  The company could then use this new money to fill the FEMA order and to restore itself to financial heath.  The bank might very well agree to subordinate their $10 million first mortgage loan to this new debtor-in-possession financing because it would prevent the company from a total dissolution. "But George, why wouldn’t the bank just agree to increase the size of its first mortgage?" There could easily exist at the bank an unwillingness to throw good money after bad.  In addition, many banks are short of lendable funds right now because few of their existing loans are getting paid off at maturity. Blackburne & Brown is happy to make debtor-in-possession loans (DIP loans).  Simply complete this mini-app . See Also Blackburne & Brown Mortgage Company, Inc. Debtor in Possession Financing

Own a co-op? Then you probably won’t be happy to know (or remember) that residential buildings are a major offender when it comes to releases of carbon dioxide emissions. But as you also know too well, doing something about it will require enthusiasm, or at least buy-in, from other owners. For inspiration and advice, check out Mireya Navarro’s article, “It’s Not Easy Turning Co-Op Boards Green,” in the March 26, 2009 issue of the New York Times . One of the most interesting factoids was that you don’t need to go all out with solar panels to have an effect on the bottom line — the greatest bang for the buck comes from simple conservation measures like insulating pipes and weather-stripping doors. Another interesting suggestion comes up in the article ” Start Greening Your Building ,” from The Cooperator: The Co-Op and Condo Monthly : installing a device that measures every owner’s individual energy usage — that can certainly wake up some people who weren’t too concerned about energy costs when they were spread among all owners. And for more information for New York City residents, check out the website of Green Home NYC , a volunteer-run organization whose mission is to facilitate the adoption of sustainable building methods and materials by owners of small residential and commercial buildings in New York City.

There are many ways to become a real estate investor and one of the best ways is to invest in real estate notes that you have located.  Once a real estate note is posted, the biggest problem is that it is usually snatched right up.  Still, there is a technique to both obtaining those real estate note leads and changing them into a profitable sale.

What is underrated and under used by most real estate investors is this one method.  What I”m referring to is telemarketing!  This is a great way of finding real estate notes at a great price.

If you get a note seller interested on the phone, and get him to send you a copy of the documents, then you can usually close on 2/3 of those that are interested.  Most real estate investors avoid telemarketing for fear of knowing what to say to a real estate note holder over the phone.

The truth is that telemarketing in real estate investing is just like telemarketing in any other type of business, as in it is a numbers game.  So the more real estate note leads you call, the more likely you are to find someone who wants to cash out their real estate notes.  You will be able to purchase a list of real estate note holders, after this you will need to follow the four  following  steps when you go to contact them:

The first step needed is to create credibility between the real estate note holder and yourself.  Your best bet is to act just like everyone else and do it just as soon as they answer the phone.  It is essential to find a common ground with the person, perhaps in how you greet them, or how you talk about local areas.  When an individual shows a liking to you, you may get a good deal on the real estate notes you want to find.

Studies have shown that people can tell whether you have a positive or negative attitude by the way that you come across on the telephone.  Keeping the phone atmosphere warm and friendly is of high importance.

In your opener you can mail things to people like information on how they can profit on their real estate notes.  You can ask them if they would be interested in getting this type of information for free.

• You may want to approach them as if you are doing a market study on note holders.

• You can approach them with an offer they cant refuse

On your quest in finding real estate notes through telemarketing, you will need to explain what you can do for the note holder.  Good listening skills will give you the confidence and information you need to close the deal with the real estate note holder.  All you have to do is listen to why he needs money.

The most crucial point about using a telephone to get real estate notes is not being concerned about the potential seller committing to a contract right now, but searching for the first note and mortgage as well as promising to send you a copy by faxing, in person or mailing.

Most of the time when a note buyer gets the seller to find the original contract it is usually a done deal.  When a person is interested enough in going in and looking for the real estate note, then they are more interested than you might think in selling the real estate note.

eNoteWorld.com is developed exclusively for buyer and seller of real estate notes, mortgages, contract for deeds, and other financial instruments. The site can also help you in finding real estate notes, and other financial instruments. To know more about  real estate investing, go to http://www.enoteworld.com.

Real Estate Agents…..

Who Are They…

Real estate agents are professionals instrumental in connecting the buyer with the seller.

Additionally, many real estate agents manage rentals wherein they introduce tenants to landlords and oversee the maintenance of the property on behalf of the landlords.

In most areas real estate agents are required to be highly educated, licensed and are regulated by a governing body.

Some real estate agents are also Realtors.

To use the title Realtor, a real estate agent must be a member of the National Association of Realtors which in addition to a number of other requirements, requires Realtors to adhere to a strict code of ethics and offers Realtors additional educational and designation opportunities.

Though not required by rule or law, it might be a wise decision to seek the services of a Realtor.

What Do They Do….

Real estate agents bring together two or more interested parties, perform those steps necessary to successfully conclude a transaction and charge a commission for their services.

For sales transactions, they charge commission to the seller while for rentals, commission is typically charged the landlord.

Real estate agents generally calculate their fee as a percentage of the selling price (in the case of a sale) and as part of the rent for rental units.

How Do They Do It…

People who want to sell or rent their property leave details of their property with the real estate agent.

Along with all property details the real estate agent will typically have keys to the house to facilitate showings.

The other interested party (i.e. the buyer/tenant), gets access to this information and to the property by contacting the real estate agent.

That’s how the real estate agent becomes a hub of information.

Contrary to some common misconceptions, real estate agents typically represent the seller or the buyer but rarely both.

Why Should I Use One…

First and foremost, to protect yourself. Real estate transactions are highly regulated, highly paper (document) intensive transactions.

The real estate agent possesses an in depth knowledge of the laws, rules, regulations, disclosures and documentation necessary to successfully complete the transaction to the satisfaction of the buyer, the seller and the law.

Because real estate agents are most familiar with local real estate market conditions, it is wise and makes sense to seek the advice of one to get an idea of the current trends and pricing for properties within that market.

A good real estate agent will know the prices (or price range) of various properties of different types and at various locations within the region.

Because of the real estate agent’s knowledge and expertise, property sellers often get a few thousand dollars more for their property.

Many home seekers, including seasoned real estate investors use the services of real estate agents to locate the best real estate bargains in the easiest and quickest manner.

Furthermore, the best agents analyze the wants and needs of a home buyer/tenant and provide valuable input as to the kinds of properties available to them within their budget. Therefore, a good real estate agent will not just present a list of available properties to the buyer/tenant but will actually discuss their needs and make suggestions.

The good real estate agent, working in this manner benefits in at least two ways…

First and most obviously, when the real estate agent is able to successfully complete the transaction the commission is earned and the real estate agent is paid…

and secondly, if they make the customer/client happy they earn a good reputation and often receive referrals (hence more business).

Worth Noting…

It is worth noting that there is a myth floating around that real estate agents only work on behalf of the seller, buyer beware.

This is not written in stone nor is it always the case. Real estate agents are, in most regions, highly regulated.

With few exceptions, real estate agents work either for the seller (as is the case with many listing agents) or for the buyer (as is the case for a buyer’s agent).

Additionally, some areas allow for dual agency where an agent can work for both the seller and the buyer or as a transaction broker where the agent represents the transaction itself and neither the seller nor buyer individually.

However, in the case of dual agency/transaction brokerage, note that rule, regulation (law) and ethics do not permit the agent to act in favor of either party while in detriment to the other.

If you are unsure of the relationship between you and your real estate agent, do not hesitate to ask.

That’s right, I’m now the owner of a new (but old, made of recycled wood), Audubon-specification-compliant wren house. Actually, I think I spent more time with this choice than with the house I’m living in. As with human houses, the particular bird houses I was checking out were all unique, made by Berkeley Rustic Birdhouses . I had to carefully consider price range, size (the entry, in particular, can’t be too big if you want to attract wrens), aesthetics, and — trying to get into the mindset of a small bird here — which one might feel like “home.” Sound familiar? Mounting it became another lesson in home ownership — there’s nothing so valuable as a friendly neighbor with power tools ! (Thanks, Joe.) Now I’m suddenly shifting into the mindset of a home seller. Will any birds take a look? Will they peer inside in delight and say, “This is it!” or just look for signs to the next open house? I’m told it could take a year or more (for one thing, the birds need to feel sure I’m not going to move this new object tomorrow), but of course I want some to move in right now…