Paying the rent: Both tenant and landlord have an agreement about where and when the rent is to paid and the amount of rent. The tenant also has their own opinion about this. To avoid paying, the tenant will come up with an infinite number of reasons on why they can’t pay or shouldn’t pay. The landlord or property manager must be clear on all provisions according to the lease. When following the procedures set out in the lease, it is likely that the nonpayment of rent will end up in court. This sounds clear and concise, except each judge has his or her way of doing business in their courtroom. The judge could throw out the case on some notification that he or she deems was done incorrectly. Then you have to start the process over again from the beginning. A lot of time, energy and money go into doing things the right way and a whole lot of bla, bla, bla go into the other.  So the solution is; continue doing things the right way, explain in advance the remedies for violations of the lease and be firm in your resolve to run a profitable business.

Until next time,

Matt

Until next time,

Matt

Until next time,

Matt

A potential buyer wants another investment property. He also wants to self manage, again to save money. He asked me about where to purchase and what kind of home ect. He lives in Sugar Land one of the best Real Estate markets in the country. I suggested he purchase a single story home in Sugar Land because of the great schools, great location and city’s zoning and planning structure. While he believes what I am saying he still wants to search other areas. So we looked at other areas and he found a house that he liked outside the city limits with a good school district. The house is almost 3,000 square feet with all bedrooms up. I will gladly sell anyone what they think they want. This house with all bedrooms up will eliminate potential renters. The steps will be hard on some people. In our market master bedroom down is a preference. The resale of the home may not be as quick because of all bedrooms up. The house is big and when it comes time to replace flooring, carpet and paint there will always be a lot of square feet to deal with. The cost will be high. The property is 25 miles away so it will not always be convenient to see or maintain.  For investment it important to look at a property differently. Many people look at the house from the stand point of living there. For investment you need to see it differently.

The next investor that I will mention, I have known for years. He has four rental properties a  lake house and a very nice private residence. He also does his own management and maintenance. Over the years I have mentioned to him that I know some good repair people that work at reasonable rates and most important, they do the work quickly. He has thanked me for my input but continues to do it his way. Recently he called to ask the name of the repair man. After using the repair man on what turned out to be a major job he is now using him all of the time. He has figured out that his time may be better spent with his family. He has realized that the contractor can do the job faster and cheaper than he could do by himself.

These three examples are not difficult to understand. Each person wants to save some money, as we all do.  As we age we start to see things a little differently and as capable as we might think we are at doing things we realize that we can accomplish a lot more with proper management skills.

Until next time , Matt

The government foreclosures have an auction. The agent must make a sealed bid within a certain deadline, usually 2 to 4 weeks away. If the offer has any mistakes in the way it was written or presented it gets rejected. The buyer has to wait to see if they are the winning bid. If you are an agent who works with this bid process you know to tell the prospective buyers to pay more than full price to get the home. So the buyer waits and finds out they didn’t win the bid. While they waited they missed out on homes that were potentially better.  A nongovernmental foreclosure often has rules and exact guidelines from the agents in the local Multiple Listing Service. Some of the instruction state that if you do not do exactly as the instructions state your offer will be rejected. As agents we attend a lot of training to keep up with the ever changing markets, but we cannot be expected to know each and every  procedure of different banks in order to facilitate our customers.

Now that I have scanned the potential listings for a buyer and read every detail, I am ready to show homes to prospective buyers. As I prepare an offer I notice that the bank is paying a Realtor fee of two percent of maybe two and half percent. Commission fees are arbitrary and are not set in stone. I understand that but the word that comes to mind is motivation. The bank should be very motivated to get the debt off of their books, shouldn’t they? Many home prices are below 100,000. I recently attempted to sell a house at $70,000. The commission was 2.5%. The half percent is $350 dollars. If the bank offered the house at $71,000 it would sell at that price with no questions asked.

Short sales are long and difficult with no guarantee they will be accepted. My favorite one in today’s market is when a prospective buyer offers cash. This is simple and easy? I wish it were. Every agent is requesting proof of funds. In most cases to show proof of funds you have to show a stranger your bank statement, or retirement account or other forms of personal information. Remember you have to show this before you have an accepted offer. Of course they tell you to black out the account numbers. This is all backwards. If a buyer wants to pay cash, tell them thank you and don’t question them. If the buyer signs a legal binding contract and is a cash buyer who doesn’t perform, they will be in default. If you are concerned that they may not have the cash ask for higher earnest money.

As we all work our way through tougher times is would make sense to make the buying process easier not more complicated. There is a lot of mistrust out there and when you make the sales person talk in three different directions it doesn’t help matters.

Until next time,

Matt

Recently I listed a home at $148,000. This is about $9,000 higher than I thought it should be listed at. This opinion of value is based on the MLS data and the condition of the home. So I suggested to the seller that the list price should be around $144,000. Even though I feel the price should be lower but let’s see what happens . Fast forward a few weeks. We had some initial showings and then nothing. The initial showing gave the seller a false sense of the value. Keep in mind that you could have 100 showings but without an offer there’s something wrong. Now there are more homes listed in the same market and the prices are lower. This house is now the second highest priced in the neighborhood. As the seller continues to pay taxes, insurance, utilities and maintenance on a property  what is true net profit?

So in short, lower the price, sell the property and take the money and move on to your next venture. The money in your pocket is real and other is just a guess.

Until next time,

Matt