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Updated: Friday, September 25, 2020

When Is “For Sale By Owner” The Right Option?

When you put your home on the market, one of the first decisions youll make is whether to hire an agent to represent the property or to go the for sale by owner route.

While a portion of homeowners initially goes into selling their home on their own, they end up ultimately hiring an agent.

Some of the big reasons homeowners decide to try and sell their home on their own are because they think it will save them money and time. Some homeowners also feel like they understand their home better than a real estate agent will.

So when is it the right option to try and sell your home on your own without an agent?

The Basics of For Sale By Owner FSBO

FSBO means that as a homeowner, you list your home for sale without a real estate agent, making you responsible for the process from start-to-finish. Some of the things youll have to do include pricing and listing your home, staging it, negotiating, and closing.

The standard real estate commission fee is around 6, and trying to save that is one of the primary motivators for people to go the FSBO route.

Along with avoiding the listing commission, there are other benefits of FSBO.

Youll have full control over the price at which you list your home.
You can schedule your open houses and showings, so youre not stuck at the last minute trying to leave the house.
Youre going to be motivated to get the highest possible amount for your home.
You know not just your home but also your neighborhood best.

What Are the Downsides of FSBO?

Some of the potential downsides of trying to sell your home on your own, aside from the commission youll pay, include:

A real estate agent understands how to properly price a home to sell based on fair market value. You may be emotionally attached to your home, which can be problematic. You may think your home is worth more than it is, or you might be offended if someone criticizes your home. A real estate agent doesnt have that emotional connection so they can be objective.
Real estate agents have access to local listing portals, the MLS, networks, and other agents.
Some agents wont show a home thats FSBO.
Real estate agents understand how to efficiently manage the procedural aspects of selling a home, such as the paperwork.

When Does It Make Sense To Sell Your Own Home?

In many circumstances, working with an experienced, professional real estate agent is best.

There are a few cases where it can make sense to opt for FSBO, however.

If you already have a qualified buyer whos interested in your home before it goes on the market, you may not need a listing agent. One of the big roles of an agent is marketing, and if you have someone who plans to buy your home, you wont need an agents expertise in that area. It is important to separate interested buyers from qualified buyers in this case.
Is there a lot of demand in your market? If youre in a high-growth market and inventory is limited, you may be able to sell your home quickly and for top-dollar without an agent.
Can you take your time? If youre in no real hurry to sell your house and you can wait, then you might be able to sell it on your own successfully.

If you do the research and think FSBO is best for you, remember to price it accordingly, based on market research rather than emotions.

Create a listing thats high-quality with professional photographs and an optimized description.

Finally, if you arent going to have a real estate agent, you should work with an experienced real estate attorney early on to protect you and help guide you through the process.


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Ask the HOA Expert: Counting Ballots, Long-Standing Policies & Club House Remodels

Question: What is the most efficient way to count ballots at an Annual Meeting? Our group has a large membership and vote counting bogs down the meeting.

Answer: With many ballots to count, preparation is essential. The ballots should be preprinted with names of all candidates and a checkbox next to each. A couple of blanks should be left for nominations from the floor at the meeting. After the ballots have been completed, they should be collected by the election tellers none of whom should be running for election and divided into equal parts.

Using several teams of two, one reading the results and the other tallying, ballots can be counted simultaneously by the teams and the final tallies from each team can then be added together for the final results. A Head Teller should check the math, circle the names of the winners and hand the results to the president to announce. Using this technique should allow the process to be completed in 5-10 minutes during which other business can be handled. The counted ballots should then be batched and stapled to the tally sheets and retained in the annual meeting file should questions about the election arise.

Question: Can the board cite a "long-standing policy" to prohibit construction of an enclosed patio beyond a side privacy wall in my own back yard, although there is no written rule or regulation in the documents which would prohibit that?

Answer: In general, it is the HOAs right to dictate the exterior appearance of the homes. So, as a rule, an owner should always get approval of exterior modifications before proceeding. Even though the city may issue a permit, the HOA may have restrictions that override local zoning and building codes.

If the board has enacted broader architectural design restrictions than are found in the governing documents, these need to be documented in writing. It is not reasonable to expect owners to know these things by ESP. Also, such restrictions need to be reasonable. If your proposed enclosure is not visible from the street, what difference should it make to the board or the neighbors? Based on your description, this restriction does not seem reasonable and unless the board can produce an Architectural Design Policy that specifically prohibits it and the reasons for it, you should not be restrained from moving forward.

Question: Is it a problem if we are remodeling our clubhouse and a board member charges the materials to her personal credit card?

Answer: As a rule, HOA expenses should be billed or charged directly to the HOA so the record is clear about what was bought and why. It will also keep the record straight for warranties that are included with the purchases.

For more innovative homeowner association management strategies, subscribe to www.Regenesis.net.


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What Should Your Credit Score Be to Buy a House?

What credit score do you need to get a home loan? While specifically, it can vary, there are certain things you should know before you apply for a mortgage to ensure youve put yourself in the best possible financial position.

Factors Impacting Your Credit Score

Before you explore specific loans, pull your credit report. You can look for errors that may need to be corrected and get a better idea of what you can do to improve it.

The factors that play a role in your credit score include:

Payment history: This is the main factor of a credit score, making up about 35 of your score. Your payment history is simply whether you pay your bills on time or not. Any creditors you have will report your activity every month to major credit bureaus. One or two late payments probably wont have a big impact, but a pattern of late payments will.
Debt: The amount of debt you owe across the board makes up around 30 of your score. Debt is also called your credit utilization ratio, and it looks at how much debt youre using versus whats available to you.
Credit age: Making up around 15 of your score is credit age. The longer you have accounts on your credit history the better, as long as theyre in good standing. If you have old accounts, keep them open if possible because this will affect your average credit age.

Other factors that are >

Your credit score is important not only because it determines whether you get financing for a home, but also the interest rate youre offered.

The following are typical ranges for credit scores:

Anything below 580 is considered very poor A fair score is one ranging from 580 to 669
A good credit score might range from 670 to 739
An excellent score is between 740 and 799
Anything 800 and above is considered exceptional

Conventional Loans

If youre applying for a conventional loan from a bank or a similar type of lender, you will usually need at least a 620 to qualify.

Conventional home loans follow Freddie Mac and Fannie Maes standards.

While 620 is the minimum, having that score doesnt mean youll be approved for a home loan. An excellent score is usually considered 740 and above, and with an excellent score youll likely not only qualify for a conventional home loan but youll also get a competitive interest rate and you may have a lower down payment requirement.

VA Loans

The U.S. Department of Veterans Affairs insures VA loans. Theyre available to certain servicemembers and veterans of the U.S. Military, as well as spouses of military members who died while on active duty.

The minimum credit score for a VA loan is likely to be around 620, although this can vary, and theres no set minimum score.

FHA Loans

Insured by the Federal Housing Administration, FHA loans are less risky for lenders so you may find its easier to qualify. The minimum score for an FHA loan with a down payment of 3.5 is 580. If youre paying at least 10 for your down payment, theres no minimum required credit score.

If you have an FHA loan originated by a private lender, each will have its own minimum requirement for credit scores.

Other Factors Lenders Consider

Yes, your credit score determines whether your quality for a home loan and also what your interest rate will be, but other factors are >

Lenders will look at your income to ensure that you can afford your mortgage payments if you get a loan. Theyll also look at your existing debt in comparison to your income.

The more of a down payment you can make, the more likely youll qualify for a lower interest rate.

Lenders also want to know if you have savings if your income ends for a period of time. You should be able to show that you have enough money saved to cover at least two months of your mortgage payments.

Finally, employment history is >

If you have a low credit score, you could potentially still get a loan, but youre a riskier borrower.nbsp; Youll have to offset that risk, which means youll have to have a larger down payment, and youre also going to pay a higher interest rate.


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Before You Leap In…

The world may be on pandemic pause but real estate professionals continue to work hard whether they are in a hot real estate market or a very troubled one.

After a careerand, for many, a lifetimeof serving others, its going to take more than a pandemic to keep real estate professionals from finding a way to help home-buying prospects and clients connect with their real estate dreams.

Which of the current real estate trends describes your next dream step?

Less Expense amp; More >

Residents of crowded, expensive cities like New York City and San Francisco move into low-stress, less-costly areas, like a move from California to Idaho.

A recent survey revealed that 39 percent of urban Americans are considering a move to a less crowded, less expensive location as a result of the pandemic. Theres a lot to choose from since the median population density of Americas 324 largest cities with over 100,000 residents is just 3,419 per square mile, about 80 percent less crowded than New York City.

Less Flu amp; More Sun Trend

Those who fear Covid-19 and the also-dangerous flu during winter months when cold forces people inside together are moving to warm, less confining areas like Florida.

The 2020 Miami Report states that roughly 950 people a day move to Florida and many come from cold Northern cities in New York, New Jersey, and Connecticut.

Less Cost amp; More Security Trend

Adult children move in with parents or >

A recent analysis of government data by Zillow stated that there were 32 million adults living with their parents or grandparents in April 2020, the highest number on record. More than 80 percent of those who recently moved back in with their parents are Gen Zers who pay an estimated 726 million in rent each month. Those payments to landlordsabout 1.4 of the total rental marketcould be at risk if moving home becomes permanent.nbsp;nbsp;nbsp;nbsp;

Less Location amp; More Work Flexibility Trend

Employers have allowed employees to work from home to protect them during the pandemic.

We see an incredible 42 percent of the U.S. labor force now working from home full-time, said Stanford economist Nicholas Bloom. About another 33 percent are not workinga testament to the savage impact of the lockdown recession...So, by sheer numbers, the U.S. is a working-from-home economy. Working from anywhere has become a reality. That means no longer paying premiums to live near work. Real estate anywhere would be a great workplace and a hot market

These trends and more are evolving in our change-a-minute pandemic world. Micro-local trends, like moving within a neighborhood to improve access to a pool or other amenities, pop up in local markets. All this creates a whirl of confusion that can distract buyers and sellers from what makes good sense. This frenzy of options superimposed on social-distancing limbo and pandemic-driven stress may catalyze inadvisable decisions and action in some when wait and see or take a long cool look may be better strategies as economic shifts appear.

We are followers not leaders. Trends are reflections of what people are actually doing, not what is best or smart for you to do in the long run. Following friends, social media, or any other group behavior may not always, or perhaps ever, be the best move for youpresent and future.

Buyers and sellers are free to reach out to real estate professionals for answers, even when buyers or sellers are not quite sure what the right questions are.

Originally, people said were all in this together. Now, its clear that we are all experiencing the pandemic, but how varies greatly with individuals and families. For instance, in many areas natural disasters including wildfires and hurricane flooding are exacerbating pandemic effects and ramping up stress for everyone concerned.

Real estate professionals are experiencing extremes, personally and professionally, as much as others. Some are in hot Covid-escape markets while others work in areas hard hit by industry layoffs and shutdowns or even full-on natural disasters. Regardless of market conditions and in spite of continued up-rooting change, real estate professionals remain intent on buyers and sellers making confident decisions they can live with now and once the pandemic subsides.

Before you leap in as a buyer or a seller, your real estate professional has questions theyd like you to consider:

How Solid Is Your Decision?

Solid, confident, well-examined decisions move life forward. Avoid impulsive swings, emotional shifts, or a plunge into panic which can undermine everything you hope to achieve. Learn to control your emotions so you dont jump in before first considering key implications and ramifications.

How Reversible Is Your Decision?

When the driving need for change suddenly ends, would you want to revert to your original life>

How Many Other Options Do You Have?

Dont limit yourself to the options you know. Ask your real estate professional to call on their expertise to help you discover alternatives. Learn how to always be prepared with a new plan when things change unexpectedly.

What Is The Worst That Can Happen?

The Worst must be what you consider devastating, not what others might insist cannot possibly happen. Dig deep to decide what loss would be irreversible and how it could be avoided.

Ask your real estate professional about alternatives that allow you to leap in and restart or refresh your real estate dreams.


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What Should You Know About Homeowners Associations?

If youre thinking about moving, there are a lot of factors to consider aside from the house itself.

Homeowners associations are one example. Living in a community with a homeowners association can have its benefits but also its downsides.

Its important to be well-aware of the implications of living in a community with a homeowners association before you make an offer on a house.

The Basics: What Is An HOA?

An HOA is a governing body in a community, and youll often find theyre present in gated neighborhoods, planned communities, and apartment and condo buildings. An HOA is funded and operated by residents, and theres a board of directors.

HOAs have meetings, create budgets, and are responsible for enforcing regulations and rules. The rules set by an HOA are legally enforceable.

A well-run HOA can improve property values because they work to make sure the community maintains a certain standard as far as how homes and lawns look. Poorly run HOAs can be expensive and make it difficult to own a home in the neighborhood because of the bureaucracy.

If youre a member of an HOA, you might pay dues monthly, quarterly, or yearly.

The dues are meant to go toward keeping up common areas like clubhouses, pools, walkways, and lighting.

Fees vary significantly depending on location and the neighborhood or building itself. HOA fees might be 50 a month to thousands of dollars a month. nbsp;

How Do the Rules of an HOA Work?

HOA rules are referred to as conditions and restrictions, or covenants. If there is an HOA in a community where youre thinking about buying a home, you need to understand them well.

The majority of HOA rules are going to be >

For example, you may be required to maintain your lawn in a certain way. You may only be able to paint your house in particular colors. In condos and apartments, the rules might be >

If you dont follow the rules of HOA, initially, youll be asked to comply. If you dont, you may have to pay fines, and then if it gets beyond that point you may face a lawsuit.

Additionally, if you dont pay HOA fees, the board can put a lien on your home or even require you to foreclose, depending on the state where you live.

What to Find Out About an HOA Before Buying

If youre looking at a home with an HOA, the following are things to find out or ask your real estate agent to find out for you:

Ask if you can attend an HOA meeting, or if thats not possible, request a copy of the most recent minutes. This will give you a feel for the behavior of the board members and whether their top priority is resident well-being.
Your HOA should be in good financial standing. Otherwise, you may be hit with an unexpected assessment that you have to pay if work needs to be done in the community.
Are there are a lot of issues between the board and homeowners?
Youll have to consider how well the HOAs rules will fit with your life> Go over, in detail, what HOA fees will include.

Finally, along with thinking about how HOA fees and rules will affect you now, you have to think about how its going to affect the resell value of a home you buy. There are a lot of buyers who simply dont want an HOA, and if you do want to sell your home, your pool of buyers may be limited.

Over time, as HOA fees go up, it may put living there out of many peoples price ranges, making it tough to sell your home.


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How Lenders View Installment vs Revolving Debt

One of the more important functions a mortgage lender performs is determining affordability. Primarily, this is accomplished by comparing monthly credit obligations with gross monthly income. Dividing debt by income results in a percentage, or a ratio. Debt ratios fall into two basic categories, a housing ratio and a total debt ratio. The housing ratio is the total monthly mortgage payment which includes the principal and interest payment and a monthly allotment for property taxes and insurance. Mortgage insurance is also figured into this number when needed.

Debt ratios are typically not hard and fast rules, although some loan programs do prescribe a maximum debt ratio in order to qualify for the loan program. If for example the recommended housing ratio is 33, then a house payment or 3,300 would be 33 of a gross monthly income of 10,000. If a total debt ratio is 43, then the housing payment of 3,300 plus other obligations are included to arrive at that number.nbsp;

What types of debt are included in the total debt ratio? Pretty much anything that appears on a credit report, for starters. These other obligations include credit cards, student loans and auto loans. However, when these debts are paid off to a zero balance, mortgage lenders treat such a move differently depending upon the type of debt.

Most debts fall into either an installment or revolving category. With an installment loan, the monthly payments are set each month and do not change throughout the life of the loan. When the loan is paid off, the monthly amounts are no longer considered in the debt ratio calculation. Further, if there are less than 10 months remaining on an installment account, lenders can ignore the amount when calculating debt ratios knowing the monthly payments will soon vanish. When a car loan is paid off there are no monthly payments and the owner keeps the car.

Revolving debt on the other hand is treated differently. Revolving debt is where the balance can rise and fall when credit is used and when payments are made. Your credit card is a >

Consumers can pay down monthly debt in order to help qualify for most loan programs. However, when the balance is paid down, it might take up to 30 days for the new balance to be reported to the credit agencies. The consumer would have to keep a paper trail of the payments and new balance and work with the lender or credit agency directly to update the report with the new information.nbsp;


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Real Estate Attorneys: A Benefit in Home Purchases

The costs associated with buying or selling a home can add up quickly. Many buyers and sellers opt not to retain an attorney to save the several hundred dollars it costs to have one review the contract, deed and title, respond to inspection issues, and make sure the contract is performed according to its terms.

But the cost of an attorney is one that should not be eliminated in an effort to save money, in the end the lack of legal representation in the sale or purchase of a home could cost you much more than the money you saved.

It is common in some areas not to have an attorney involved in a real estate transaction, but consider the legal education or experience the closing or title agent, real estate agent or brokerage has >

nbsp;

Retain an attorney who specializes in residential real estate.

You might know an attorney who is a friend or >

nbsp;

Acquire a blank copy of the local real estate contract and review before you sign one.

Most local real estate boards have a form contract that has blanks for contract price, terms and conditions. You will feel more confident if you review a real estate contract long before you are asked to sign one. Ask your real estate agent for a blank contract after your first meeting. If you have questions about the contract ask your attorney to review it with you.

nbsp;

Have your attorney review all real estate contracts that you sign.

After both parties have executed a real estate contract, deliver a legible copy to your attorney promptly. Most contracts allow for a attorney review period of at least five business days. During this time your attorney can review and request certain changes to the contract or if need be void the contract.

nbsp;

Request a title insurance policy.

Your attorney will request a title insurance policy from the property seller. This policy insures you against any prior clouds on the title. The chain or history of title will be provided and will be reviewed by both sides attorneys to look for any possible irregularities before the title insurance is delivered. The buyers attorney can request that questionable items be removed or insured over by the title insurance provider.

nbsp;

Confirm and update legal descriptions on your property.

This is one of the most important reasons to retain an attorney. Legal descriptions that are recorded in title and deed government records should accurately state the current and updated legal description of your property. These descriptions are difficult for lay people to read and take an experienced legal eye to catch mistakes which could impact the property your buying or selling.

nbsp;

Review property survey.

Your attorney should receive and review the property survey before closing or escrow to check for encroachments when an adjoining property intrudes on yours, easements the limited right of another to use your property and verify parcel or lot dimensions.

nbsp;

Require your attorney to attend closing or escrow. From contract to closing is a marathon and the closing is the finish line. Your attorney should attend the closing or escrow to verify the smooth transfer of your property. Last minute glitches with possession, final throughs and mortgages need the finesse of an experienced real estate attorney.

nbsp;

Review post-closing documents.

Most attorneys want to review all recorded documents >

nbsp;

Administrate and evaluate problems in contract to closing period.

The time between contract and closing can include some problems that only an experienced real estate attorney can respond to adequately. Unreasonable requests after a property inspection, weak mortgage ability of the buyer, missed earnest money payments and quite a few additional issues can bog down a contract after acceptance. An attorney that has handled and most likely seen it all in real estate contracts, is your best asset when a contract get bogged down.

nbsp;


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Disaster Preparation To Keep You Safe In a Catastrophic Storm

A natural disaster can happen anywhere, at any time. Whether you live in earthquake country, tornado alley, or in a hurricane zone, there are important steps you can take.

Get an inspection

Its a given when buying a house, but you can schedule one in your current home, too. An inspection can turn up items that need fixing or replacing, which can save you money and also eliminate dangers from your home that could prove dangerous in a powerful storm.

Hire an engineer

A Texas-based engineer touring tornado damage found "examples of horrific construction in tornado wreckage," said the Dallas Morning News. Timothy Marshall, "a forensic engineer and meteorologist who volunteered as part of a damage survey team created by the Fort Worth office of the National Weather Service" following deadly Texas tornados, "says he saw rampant irresponsibleness in the way many homes and buildings were constructed."

That included "improper attachment of the walls to the foundations, which just made walls fall either in or out," in numerous structures, including Donald T. Shields Elementary in Glenn Heights, shown below. An engineer can help identify structural issues that could affect your home in a powerful storm.

Get prepared

The Texas tornadoes hit in the middle of the night, when vision was compromised. Earthquakes hit with no warning, whatsoever. No matter what type of storm is likely to hit your area, proper preparation is key.

Develop an emergency plan for your family

Bob Vilas tips for creating an emergency plan at home include:

Have an escape plan - "Decide on reunion spots via foot or car, depending on the type of disaster. If it is an emergency isolated to your house or block, choose a nearby rallying point that will allow a headcount. If the emergency involves a larger area, decide on a destination further away - perhaps a > Learn evacuation routes - Doing a few "practice drills" will get the family familiar with exit routes, when needed.
Establish an emergency place to stay with friends or family - And learn the locations and rules of local public emergency shelters.
Make a plan with neighbors - "If a flood occurs or a tornado hits when you are not at home, have a plan with neighbors, sitters, or > Bone up on first aid skills - Its a good time to take a CPR >

Know your disaster

Its not always easy to predict what kind of storm may hit your area - flooding can happen almost anywhere. But knowing the basics of storms that are common to your city and recommendations for what to do in an emergency can help keep you safe.

In an earthquake:

According to Earthquake Country, "In MOST situations, you will reduce your chance of injury if you:

DROP down onto your hands and knees before the earthquakes knocks you down. This position protects you from falling but allows you to still move if necessary.
COVER your head and neck with both arms, clasping your neck with your hands. If a study desk or table is nearby, crawl beneath it while keeping one arm over your head. If there is no shelter nearby, only then should you get down near an interior wall or next to low-lying furniture that wont fall on you, and cover your head and neck with your arms and hands.
HOLD ON to your shelter or to your head and neck until the shaking stops. Be prepared to move with your shelter if the shaking shifts it around."

Experts warn that the most substantial danger to people in an earthquake is from falling objects. This is a great time to secure bookcases or any other items that could fall or be catapulted off of a wall or shelf. "Secure top heavy furniture to walls with flexible straps. Use earthquake putty or Velcro fasteners for objects on tables, shelves, or other furniture," they said. "Install safety latches on cabinets to keep them closed." Get more info here.

In a tornado:

"The best shelter from a tornado is a basement or storm cellar. If neither one is available, go to an inside room without windows on the lowest level of the building," said News 9. "Cover yourself with something, such as pillows, a mattress or blankets. Place as many walls between you and the outside as possible."

Other tips include:

Avoiding structures like mobile homes if at all possible
Staying away from windows
If a tornado is approaching while youre in a car, "get out immediately and go to the lowest floor of a sturdy, nearby building or a storm shelter. If there is not a building nearby, lie flat in a ditch or depression and cover your head with your hands... and do not get under an overpass or bridge" they said.
Use a weather radio or local news station app to keep track of the storm and warnings in your area.

You can get information on safe rooms on the FEMA website and learn about storm shelters in your area on the National Storm Shelter Associations site.

In a hurricane:

In addition to checking your insurance coverage, said MNN, youll want to "protect your property by installing the following items in your home:

Hurricane shutters or keep inch outdoor plywood boards for each window. If using boards, be sure to install anchors and pre-drill holes so you can put them up quickly.
Head and foot bolts on doors for extra protection.
Hurricane straps or clips to help hold the roof to the walls of your home.
A safe room that can withstand high winds and flying debris.
Also, be sure to keep up with your landscaping; diseased and damaged tree limbs can become serious hazards in high-speed storm winds.

An evacuation plan is also key, as is an emergency supply kit with food; water; medications; pet supplies; items like toilet paper, soap, toothbrushes, and toothpaste; a basic first-aid kit; flashlights with extra batteries; and blankets and pillows.

In a flood:

Flood waters can rise quickly. According to FloodSmart.gov, you can stay safe during a flood by:

Getting to higher ground and "avoid areas subject to flooding."
Staying away from flowing streams and flooded roadways.
Escaping rising water in your home by gong to the top floor, attic, or roof.
Listening to a battery-operated radio for the latest storm information.
Turning off all utilities at the main power switch and close the main gas valve if advised to do so.
If youve come in contact with floodwaters, washing your hands with soap and disinfected water."

If youre suffered a flood, learn the steps to take toward recovery here.


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Less Stress – Managing Your Cash Flow As A Real Estate Agent

2020 hasnt been the best year for property sales. The market has experienced its biggest decline in almost a decade, slashing agents earnings dramatically. For many, this has led to cash flow issues as income has dropped or dried up altogether.nbsp;

The role that commission plays in the real estate industry means that you need to prepare for unexpected dips. The best way to do this is to take a proactive stance on money matters so that future downturns dont dent your pocket.nbsp;

Draw Up A Plan and Budget

A cash flow plan and a budget are two essential tools for managing income and expenses. Your plan and budget must cover 12 months, and rather than making it a once-off exercise, revisit those documents regularly, adjusting them as required.

When drawing up your budget, include cash contingency plans that offer some >

Be Realistic

Income, expenditure, and cash flow forecasts are not an exact science, but that doesnt mean you should give in to fantasy. You may be tempted to predict property sales will increase by 70 during the year. Even though this may be possible in theory, its highly unlikely.

Its important to be as realistic as possible about yourself and your real estate agencys current and future positions. The best approach is to be conservative in your predictions and projections. If you find yourself with surplus funds, you can use them for extras that are surplus-dependent or put it toward cash contingency plans.

Keep Track Of Income and Expenses

As a real estate agent, good financial management requires that you keep track of income and expenditure meticulously. Take note of everything, no matter how small or trivial some expenses may seem.

You need to stick to your budget if you want to realize your cash flow plan. If you dont keep an accurate record of how much money comes in and goes out, budgeting correctly will be impossible.

Review your budget monthly, and when doing so, pay close attention to fixed costs and overheads. You may be able to find ways to save money on at least some of them.

Plan For The Best - and The Worst

When forecasting and planning, put the extra time and effort into drawing up plans for best- and worst-case scenarios. This way, you can try to cover all your bases.

Create your best-case and worst-case plans when you have completed your cash flow plan. Using the plan as a guide, take the best case to be approximately 25 higher than the most likely scenario. Calculate the worst case at 25 lower than the main plan.

Stay On Top Of Taxes

Remember to include taxes in your financial plans. This will help you manage your money and ensure you never fall foul of the IRS or incur penalties.nbsp;

A smart business strategy to apply here is to pay tax every three months rather than once a year. Theres less paperwork to deal with, and the tax amounts should be manageable. Another way is to put a percentage of your commission into an account thats dedicated to taxes. Alternatively, you can combine these approaches.

Prepare For Cycles

Like many industries, real estate works in cycles. There are times when the property market is hot, and when its not. While these trends arent always predictable, estate agents need to develop the habit of being ready for them at any time.nbsp;

One way to prepare for a downswing is to purchase a few short-term certificates of deposit. You cannot touch the money you invest until those CDs mature. When theyre ready, youll get more out than would be possible with a regular savings account.nbsp;

Another option would be to set up a savings account that you can access at any time, but you add to monthly. If your commission for a month is higher than usual, you can save a larger amount. This way, youll have extra capital for the leaner times, and your cash flow wont be stunted.nbsp;

As you can see, managing your finances as a real estate agent requires foresight and dedication. By applying those qualities to the tips above, you can put yourself on the path to good cash flow management.


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Move Over She-Shed, Make Room for the Backyard Office

March ushered in a new way of life for many people due to the coronavirus pandemic. One of the first things that happened in many states was workers were asked to telecommute from home whenever possible.

Now, even though shutdowns are technically over in many places, it seems to be a trend thats sticking around.

A lot of companies arent calling employees back to the office anytime soon.

Working from home has had big implications for real estate. For example, after spending an increasing amount of time at home, many people are opting to move from cities and into the suburbs where they can have outdoor space and square footage.

Theres also a demand for home offices, but if you dont have space for one, you can get creative.

One option is the backyard office.

Benefits of a Backyard Office

A backyard office can be a shed that you transform into a workspace. The benefits include privacy as well as natural light. You might even have a bit of a view from your outdoor office.

For a lot of people, theyve found working from home leads to no work-life balance, but having a dedicated space separate from their living areas can help with the distinction. Its easier to not only separate work and home life with a differentiated space, but you may find it helps you focus when youre working.

Do You Need a Building Permit?

If youre thinking about an office-shed, one of the first things youll have to determine is whether or not youll need a permit.

Where you live and the size of the structure you plan on building or putting on your property are the main determinants of whether or not youll need a permit.

If applicable, you may also need to check with your Homeowners Association and get their approval.

If you go the prefabricated route, meaning you buy a shed or shed kit from a company, some are marketed as being small enough that youre unlikely to need a permit.

Placement

When you scope out your backyard for a location for your office shed, look for somewhere flat with good drainage.

If you arent sure or your backyard needs clearing or cleaning up before you can place your shed, you might want to work with a landscaper who can help you with planning.

Prefab or Custom-Build?

Many companies are now offering prefabricated office sheds. You can find them as kits, meaning all the pieces come to your home and youre responsible for putting them together. You might also find an office shed thats already built and arrives at your home almost ready to go.

When you choose a prefab shed, it may be more expensive than building your own, but also more convenient.

Theyre available in different >

Some kits include doors, windows, insulation and flooring, and others dont, so read the fine print.

Building Your Own Office Shed

There are other options that may be less expensive than a prefeb shed.

One is converting an existing shed into an office. In that case, your focus might be primarily on making an old shed into a comfortable, stylish place to work and perhaps adding power.

You can also find plans online and build your own shed.

Design Tips

Regardless of the route you go, you want your outdoor office to be someplace you feel comfortable and content.

Try to create an office with plenty of natural light.

Add comfortable furnishings, and surround yourself with things you find visually appealing. Add a rug to warm the space up.

Consider whether or not youll have meetings in your office, and if so, how you can have a space where guests feel comfortable.

Youll need to ensure you have electricity in your office, and also Wi-Fi.

Finally, create a landscaped path leading from your home to your office.

A shed-office is one of the biggest trends when it comes to working-from-home design. It can give you a space thats separate from your home and family so you can remain productive and focused, and also maintain a work-life balance.

Creating a separate area thats detached from your home doesnt just work as an office. Its also something homeowners are looking to so they can have a home gym, a guest room, or even a learning area for their kids.

Its one more representation of the move toward spending more time at home thats impacting all of us.


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