What is real estate? That’s a good question! Most people associate real estate with houses, but it’s actually way more than that.
Real estate refers to all types of property, including land, buildings, homes, condos, apartments, and even business properties like restaurants or office spaces. This includes things like free-standing homes, apartment complexes, commercial buildings, and so on.
There are also two other important factors about real estate: how much it costs and what kind it is. More cost effective examples of real estate would be buying and selling cars or personal belongings (like your clothes). It’s not necessarily a house since it can be anything you have space for.
The process is very long and tedious
A lot of people may think that real estate agents are only there to help you sell your house, but they actually do way more! They can be really helpful for someone looking to buy a home or even move into a new area.
Real estate agents have lots of resources at their disposal – from helping with finding homes to offering advice about moving or living in a particular area. Agents also earn money off the houses they represent so it’s not just about making a sale every time.
Agents take some shortcuts by using online tools and apps to check properties out for you. This helps save you time since they have done all the work already. It also gives them an advantage over individuals who would need to do this themselves.
There are many agents to choose from
As we mentioned before, not every agent is the same! Some may advertise themselves as being closer to you than ever while simultaneously advertising lots of services that cost extra.
As such, it is important to do your research and find an agent that fits YOU!
Find a real estate professional who feels comfortable around you and whom you feel will be there for you through all stages of the home buying or selling process. You want to be sure they will stick with you no matter what!
The best way to determine if this is true is by looking at their reviews. Read some reviews and talk to people who have done business with them.
Also make sure to go through some samples of their work so you can get a feeling for how they style houses.
The agent is the most important person in the transaction
As an investor, you can’t afford to forget that your real estate agent will be working hard for you throughout the process. They are paid to help you buy or sell a home, so make sure they get the proper resources and rewards for their work!
As mentioned before, the agents’ responsibilities go beyond just showing you properties and negotiating on your behalf. Agents also deal with lenders, lawyers, and other brokers to ensure everything goes smoothly during the transfer of ownership.
And while it may sound cliché, having an excellent relationship with your agent is one of the most essential parts of investing. When things turn bad or there is a dispute, this connection can keep you from becoming too stressed out.
Agents typically earn more money than sellers’ agents because they don’t have to represent both parties in the sale.
There are many things that can go wrong
As real estate agents, we’re always on high alert for potential problems. We’re constantly looking out for the other party’s best interests, as well as our own.
That means protecting ourselves from fraud, helping to ensure a smooth transaction, and keeping an eye on what is going on during negotiations.
It also means being aware of whether or not the person selling their house is acting like they want to buy your home, and if they seem reluctant, it could be because they don’t really want this property anymore.
It is important to know your potential agent
As mentioned before, agents are not necessarily paid by you, the seller or the other party involved in the sale. Agents are usually paid by either the sellers agency or the buyers agency! This is how they make their money-by charging fees for services.
Agents that are well connected will likely get more business than others due to who they know. People trust these professionals so they are willing to pay them to help facilitate a transaction.
The reason this can be confusing is because it depends on what kind of broker you have. A real estate attorney may only represent individuals, while an investment banker may only work with investors.
However, most good brokers do cater to both types of clients, which is why it is important to find one that does not exclusively focus on one. They must be able to effectively serve each type of client!
Given that we now know that agents are typically not paid by the buyer or seller directly, how do they retain their job?
By going above and beyond for the seller or buyer that hires them, creates a positive relationship, and eventually gets them the best deal possible on the property. An agent that puts in the effort into being likeable and providing excellent service will reap the benefits.
Always get a contract
Even if you’re buying or selling your home quickly, it is still important to have a written contract. This way, there can be no misunderstanding as to what things belong in the house and who gets them.
Landlords must also know their lease obligations so they do not forget any rules or run into legal issues.
A real estate agent will likely help draft your contract, but even if you are going through an online broker, that does not mean you do not need one. You should always have both versions – printed and digital- for your protection.
Contracts can be made slightly shorter than normal due to the speed of the sale, but it is best to follow regular protocol as far as possible.
Know the terms of the contract
A seller can ask any willing buyer to make an offer, but they must have a clear understanding of what their home is worth. They also cannot hold out for more money unless there are serious negotiations or they need the money from the sale to start up with next steps.
The term for this is contingency, it comes before making the offer. This is when the sellers agree to accept your price as long as you include certain things in the contract. These usually contain information about financing, inspection rights, and how quickly the house will be sold after being listed.
Sellers may require that buyers put down a deposit first if they want to make an offer. This is called requiring earnest money. This is not required, however so only feel comfortable doing this if you know each other well and trust one another!
If the deal falls through then the deposit gets returned un-used and the negotiation process begins again. Sometimes this happens because the parties just don’t work out or there isn’t enough common ground, but sometimes due to finances as well.
Know how to read it
As we mentioned before, real estate investing is not like buying and selling a house for profit. That is definitely a way to invest in real estate, but that is only half of what investors do!
The other part is finding undervalued properties or houses and then working with a broker to get them sold so you can make a profit. Or you may work directly with the seller until they cannot sell their home themselves and need you to be the listing agent!
There are many ways to become educated about real estate. You can take courses at universities, attend seminars, listen to podcasts, and read books. There are even some apps that teach you basics of real estate including how to list a property as an investment.
But no matter which route you choose, you must know how to read documents! A lot of people forget this important piece of knowledge when starting out as an investor.
A document is anything from a contract, to a proof of purchase, to a tax form. If you are reading someone’s file, you should have at least a basic understanding of what everything means. This will help you determine if the deal is sound and if there are any opportunities to make money later.