Posts Tagged ‘Draft’
Economic Trend of the Indian Real Estate Market
Even though growth rate in India has seen its lowest ebb in the past two years, the trend has still shown a steady increase. This trend for the real estate market in India has been so for the past decade, even if in the past two years it has been particularly low. Home loan rates in the past ten years have seen a dramatic fall of approximately 7.5 percent.
The opening of the flood gates to FDI in real estate by the UPA government in 2005 has further reduced the growth, and yet, it has managed to remain steady. Why it has been so managed in the real estate sector, despite the recession, while other sectors have suffered so greatly is the million dollar question. There are several possible reasons for these unusual trends. For one, the humungous increase in India’s middle class consumer population. This is what has set a stage for a fundamental change in India’s economic growth. This is what that has elevated millions of Indians out of despairing paucity and generated a huge middle class, based in the cities.
For another, realtors create a false impression amongst consumers just to raise the price by claiming about real estate being overbooked. This gives the potential consumers the idea that the market is on the rise and that they need to hurry up and get in line to book and buy property in the falsely raised prices.
The third possible reason is short property holdings. People buy property for short periods of time, let’s say six to twelve months, and then resell the property.
The repeated buying and selling of land contributes to the growth in this sector. This is encouraged in order to restrain the spending levels of the people.
The greatest coercions and extortions that befall real estate is due to inflation. It creates a huge cavity between the buyer and the seller. Firstly, the prices of real estate shoot up. Secondly, the interest rates are then, raised by the government, and that causes the equated monthly installments to rise to an unbearable level. On top of eliminating existing consumers, this also enhances the suffering of previous trustees in the shape of ‘inflation-indexed’ interest rate rises. To assist, and make things easier for the borrower, banks have increased the repayment periods of loans but they too have a deadline after all because no one is ready to stay locked in a deal for some forty years since it is too long and unpredictable a period.
Why You Need A Real Estate Buyers Agent
When you first begin looking for a home, many buyers ask “can’t we do this on our own”? Do we really need to use a Real Estate Buyer’s Agent?” The answer is yes; you “can” do it on your own. There is no law that prevents you, as an individual, from buying property without professional Real Estate assistance. You can search for homes, arrange showings, and even negotiate on your own (although, in some localities, the actual contract for purchase will need to be drawn up by an Attorney). The real question may be “do you want to do it on your own”?
There is a misconception among many first time homebuyers that by using a Buyer’s Real Estate Agent, they will be subject to paying a Broker Fee. In virtually all situations, this is not the case. The seller, not the buyer, pays for the Broker Fee for the sale of a home.
If you do decide to “go it on your own,” your choices will obviously be very limited. The only homes that you can buy without any Agent assistance are those that are “For Sale By Owner” (FSBO), generally a small percentage of the market. These are homeowners who, for whatever reason, have decided not to use an Agent in the sale of their house. It may be because they think they can get more return on their investment by not paying a commission, or it may be because there was no Agent who would take their house listing at the unreasonably high price they thought their home was worth.
Many Real Estate analysts have found that the selling prices of most FSBO homes are equal to, or higher, than those listed by Agents. The fact remains how do you really know what the home is worth, where are you going to get the information that will let you analyze the most current home sales for that model, that tract, and that area? Do you really want to accept the liability, just to save a few thousand dollars? You need to make a determination whether or not the house is worth the asking price, how can you do that without your agent doing the homework for you. There is too much lost money potentially involved to make a “seat of the pants” decision. In this case, you will need to either secure an independent appraisal to determine a realistic price range for the property or develop your own determination of value. Is this something that you have the time and know how to do?
Through e-mail an Agent can automatically send you profiles of all the homes per your criteria once you have been entered into the MLS system. Once you receive all of the homes available in your first e-mail the MLS system up-dates 2 or 3 times daily and will send you the new listings that match your criteria automatically. You “can remain anonymous” and give the Agent just your e-mail address if you are worried about an Agent constantly nagging you on the phone. When you see something that looks good, then give the Agent a call. It’s that simple. If you are serious about buying, then you need to know the minute a home comes on the market. There usually is not a dime to be saved with the strategy of approaching the Listing Agent. The seller is still going to pay a commission that he has agreed to in the listing contract.
Usually the way it works is that at the time the seller lists the property the seller agrees to pay the listing agent a percentage of the sales price of the home, This percentage is not fixed and by law, is always open to negotiation. When the agent puts the property on the Multiple Listing Service, which allows all the other agents in the area to be informed of the fact that this property is now available for sale, he will offer them an incentive to sell his property, most of the time they will offer ½ of the commission rate they have negotiated with the seller, sometimes more. This gives the Buyer’s Agent the incentive to show the Sellers listing to his buyer and subsequently earn his livelihood. If you go directly to the Listing Agent, you run the risk of ending up with no representation at all, since the Listing Agent is duty bound to first represent the seller and be honest and forth coming towards both parties, thats not something that I feel is in your best interest. In some States An Agent, by law cannot represent both the Seller and the Buyer and for good reason. In most cases the seller’s agent will tell you that he can save you thousands of dollars if you just use him as your agent to purchase his listing, but most of the time he will not be representing your best interest when it comes to making an offer on the property, the bottom line is he may have cut you a few thousand dollars off of his commission to give to you, but you will not have adequate representation without your own Buyers Agent, you will almost certainly pay more for the home in your offer than if you had used your own buyers agent to represent you, the bottom line is that you lose money. After all, as the Seller’s Agent is representing the needs of the seller, he is also serving his own best interests, as most of the time his commissions are based on a percentage of the purchase price of the home. The higher price he gets for the home, the more cash he puts in his pocket, its just Human Nature.
Ensuring Your Luxury Home Will Be an Architectural Masterpiece
There has been a growing trend among to-be homeowners that are interested in creating custom luxury mansions to celebrate their financial arrival-many are choosing historical estates designs that emulate the grand and majestic homes found in Europe or from American gentry of the mid 19th and 20th centuries. The homes of American entrepreneurs and like Andrew Carnegie, Andrew Mellon and Randall Hurst are being recreated across the country, and many buyers are including the architectural elements of Tuscan, Italian, and Spanish style homes into their home design.
As a buyer, how to you ensure that your luxury home, whether it is modeled after the homes of American aristocracy or designed to reflect exotic luxury, matches up to your expectations? It all comes down to the architectural firm you work with.
Here are 3 tips to help ensure you are working with the right architectural firm to create your dream home:
1. Architects need to be great listeners. It is their job to make your dream home a reality and a custom luxury home design should incorporate every design detail you have asked for. These are your home plans, not the architects!
2. A great architectural firm will remember that no matter how large or ornate your home design may be, it is still your home and needs to feel like one. Scale and space planning are important elements of luxury home design and a good architect will remember to add architectural details and focal points to rooms in order to warm up individual spaces. A homeowner should always feel at home in the space, no matter how grand the design.
3. Buyers should look to work with an architectural firm that has a thorough understanding and appreciation of historical architecture, allowing them to design new houses that replicate historical estates while still easily incorporating your modern-day lifestyle. It should be a firm’s goal to maintain a balance between history and modern-day life in order to reinterpret the architectural styles you want your home to emulate. You don’t have to live in a museum in order to live in a European home!
The most important thing to remember when choosing in architectural firm is that they have to be able to make your dream become a reality. It doesn’t matter what they have done for other buyers in the past, it only matters what they can deliver for you! The beauty of custom home design is that you have the power to add, edit or completely remove any elements of the design you don’t absolutely love. The right architectural firm should be able to seamlessly mesh various influence and requirements to create your own, custom architectural masterpiece.
Helpful Terms for Understanding Commercial Real Estate
Joint Venture – A joint venture is an agreement between two parties/businesses to develop property. In terms of commercial real estate, these two parties work hand-in-hand to develop commercial property. Often times in these relationships, you’ll see land owners and actual developers working together. These types of agreements are handled by legal professionals to ensure all parties are aware of their involvement in the project.
Tenant Representation – This involves representing commercial tenants, such as a smoothie shop, cell phone store, or salon in a retail plaza. The stores aforementioned are tenants who lease space within the property, which is owned by the landlord. Often times developers are brought on to develop these retail/shopping plaza properties.
Disposition – The sale of property, including commercial, residential, and industrial. This is typically handled by an agent or broker.
Acquisition – The purchase of property, including commercial, residential, and industrial. This is typically handled by a real estate investor or developer who is looking to grow wealth by investing in property.
Property Development – This encompasses an aspect of commercial that includes assembling a team of construction, real estate, land use, architectural, and legal professionals. Together, this team analyzes and determines the use and design of the project, along with carrying out the construction process, and then either selling the property or managing it. This type of development is the most profitable but can also be risky because it is so dependent on the public sector.
Speculative Development – This involves the purchase of vacant land prior to development. This purchase is made with the intention of developing land and is based on the land’s potential. This can be seen often with gated communities and subdivisions, where large amounts of land are purchased to build homes.
Break-Even Point – The amount of money earned in a particular investment to cover recurring expenditure, in which gross income is equal to the amount of normal operating expenses. At this point, a commercial real estate investment is not deemed a loss but is not yet profitable.
Capital Expenditures – The costs associated with property improvements that cannot be written off as operating expenses in tax purposes. This includes fixing the roof, repairing the pavement in the parking lot, etc. These are considered depreciating assets and can be depreciated over the holding period.
Before Commercial Property Clients List With You Make Sure You Cover These Things
In this property market, before clients list with you they have to accept you as the property expert and your agency offerings. That says that they have to believe you and what you can do for them in commercial or retail real estate.
The days of the sales pitch and presentation are still with us and perhaps even more so. Today you must have all the bases and topics covered because your competition will be trying to do the same.
To help clients understand what you can do for them, and how you will approach that, try the following strategy:
- Be prepared to show the complexity and size of your database, including the segments that will apply to the marketing of their property.
- Take the client through their property and show them how you interpret the strengths and weaknesses. Build on the strengths so you can use them in a property inspection with a prospect; strategise the weaknesses so you can lessen or eliminate them.
- Have a selection of comparable properties to talk about so they can see what they must compete with.
- When the client has explained what they want to achieve, restate the facts in your own words; this will give the client comfort that you understand their focus and needs.
- Define the target market that you will be focusing on in the marketing of the property. That will make it easier to sell your marketing solutions and budgets.
- Give the client some alternatives of marketing that they can choose from. A selection of 3 packages is usually enough.
- Define the time on market factors that apply in the property market at the moment. If most properties are taking time to sell, then it is better to convey that fact at time of listing
- Give the client a definite method of sale or lease that you consider is the best in the circumstances.
- Use a “timeline” approach to show the client what happens next and what follows as you proceed. Many clients do not understand the facts and processes of commercial and retail real estate.
- Paint a picture of where you are headed and how you see things happening; tell a story or two of other clients that have had similar problems and how they were helped forward.
Good outcomes in commercial real estate are really the result of great communication. If you control the situation from the start, the client trusts you to resolve their property pain; it helps you to negotiate if and when the time comes.