Useful Real Estate TipsBefore venturing out to purchase real estate, whether it is vacant land or existing homes, get pre-qualified by the lender of your choosing. Nothing pains me more than to watch perspective buyers find exactly what they want, only to find out that they are not qualified for the purchase. Not to mention that, in this day and age, many sellers are requiring that an Offer To Purchase is accompanied by a pre-qualification letter.Talk to a Mortgage SpecialistDO NOT GO IT ALONE, sit down and talk to a loan officer, whether it is at the bank where you do business already or with a company that specializes in home mortgage lending. When you have this sit down, be frank and honest, do not embellish on any of your financial details. The loan officer can only help you if they have the correct information. When you leave this meeting, you should be armed with the knowledge of knowing exactly where you stand. If you are capable of purchasing, you will have the number that you can spend, and if you are not capable of purchasing at the moment you should have the information and a step-by-step approach to get yourself to where you can buy. Keep in mind that during this initial conversation it is not necessary, nor should you give permission, for your credit history and other vital stats to be verified. Most loan officers will give the information you need to begin your search without verifying those details. If the mortgage broker or loan officer will not do this for you, find a different mortgage broker or loan officer.Find a Buyer’s AgentYour second hurdle to cross, is to find an experienced real estate agent, knowledgeable in the selected area’s real estate market, to represent you and help in your search. Speaking of search, your buyers agent must also be a member of the National Association of Realtors in order to have access to the MLS system. DO NOT GO IT ALONE! In this day and age of the internet, many buyers take it upon themselves to do all their own searching and investigating of the real estate market in an area. If you are just looking around a city or area to see what it has to offer, that’s great. If you are serious about buying a home, find a Realtor in that market and put them to work. Having a buyer’s agent in most scenarios costs you the buyer absolutely nothing and the seller of a listed property has their agent aggressively representing them. Remember that all listings in the Multiple Listing Service already have an agreed upon commission split between the Realtors involved in the transaction that is paid by the seller.How Real Estate Agency WorksHere is how real estate agency works. A listed property that you have found on an area MLS search or through some other form of advertising has the commissions the real estate agents are to be paid already built into it. When that property is sold the listing agent and the buyer’s agent split this commission, which is paid by the seller of the property. The fee is already included and being paid out whether you have an agent representing you or not. Sometimes you and your agent look through what is currently listed without finding a suitable property. However, we still have the For Sale By Owners (FSBO’s) to go. In the event, you look at FSBO’s, having a buyer’s agent becomes even more beneficial because the seller is not under any obligation to disclose facts to you. While you may end up having to pay your real estate agents commission, he/she will earn every penny of it by making sure the price you pay is relative to the fair market pricing. They will assist in drafting the Offer To Purchase and Contract that protects you in the transaction, make sure all the appropriate home inspections are completed on time, help you hire an attorney to close the transaction and help you avoid all the stress.Hiring a Real Estate Agent• What should you look for in choosing a Realtor? That’s a legitimate question, and there are numerous answers that apply. First and foremost, make sure your real estate agent is a Realtor, because Realtors are held to a higher standard and a strict code of ethics and are the only real estate agents with access to the MLS.• Secondly, find an agent that you communicate well with and that listens to what you are saying. You’ve all seen the commercial where the real estate agent keeps taking the clients to the same type of homes even though they have already expressed their desire to see something else. We all chuckle, but this happens. If the agent you are currently working with is not listening to you, find another agent. There are a lot of real estate agents in any market.• Thirdly, and in a tie with second, find an honest agent. Does your agent tell you what they honestly think about a property? Both the good and the bad. Does your agent play devil’s advocate, or just sit there and try to talk you into a house you know is not right? While it may sometimes cost your agent the sale, they are working for you and are helping you find what you want. If they cannot objectively play this role, find another agent. This brings me to a extremely crucial point. DO NOT sign a Buyers Agency Agreement until you have spent a little bit of time with that real estate agent. They might tell you it is company policy or that they have to, but they do not and neither should you.• Find an agent that brings more to the table than the ability to fill out a form. You will find that many real estate agents have extensive backgrounds in home construction, home inspections, home design, etc. These professionals are not only trained as real estate agents and can bring a wealth of knowledge to the table when considering your next home. There are many other answers to the question, but these I have mentioned are the most important.These tips outlined above are just some of the basic tips to follow to help your purchase of real estate be a good experience. As I always tell my client, “buyer’s remorse on a car is bad, buyer’s remorse on six figures is the worst.”
One of the best, most secure, most certain to grow investments you can make is real estate, but with an IRA, investing in real estate never seems to be an option offered. That’s not, however, because you’re not allowed to invest in real estate with your retirement cash; rather, it’s because most IRA funds don’t take advantage of a little-known IRS rule that allows for it.If you’re like most people holding IRA account, you have your funds invested with a bank or a brokerage. That means you’re limited to stocks, bonds, annuities, and other paper securities – not real property. In today’s market, that may mean your IRA funds are tanking, and it certainly means that they are not growing as robustly as they were five years ago. The real money to be made right now is in real estate.You can get into IRA real estate investing by looking for custodians that specialize in real estate IRAs, using the rules contained in Section 408 in the Internal Revenue Code. These special IRAs build a portfolio around all kinds of cash-generating and appreciating real estate: commercial, residential, rental, industrial.It is not legal to hold your own 408-based IRA; investing in real estate with your retirement funds must be done by special custodians. However, you have freedom in many ways to work with your IRA real estate. For one thing, your custodian holds your property, but doesn’t necessarily administer it, select properties to purchase, or even set and collect rents. These may all be your tasks, and they give you a great deal of leeway in how your own money gets invested.It’s easy to see that an IRA investing in real estate gets very complex. Do rents get re-invested in your IRA? Can you charge yourself for administering your own properties and make cash from your IRA in that manner? What kinds of property can you purchase to include in your real estate IRA? Is it possible to hold foreign real estate in your domestic IRA? A good custodian can tell you the specific rules governing your IRA; real estate investing through this route is more complicated than just doing it yourself but the tax advantages make it worth it.While if you work it properly you can benefit to a certain degree from IRA real estate investing beyond the simple IRA, you cannot put your own home into your IRA, nor can you lease space in one of your IRA properties for your own business. You also can’t put properties you or your immediate family already own into your IRA.IRA investing in real estate rules do allow you to purchase property in conjunction with others to put into your fund, and it allows you to include some leveraged property as well, provided your custodian allows for it. You can also sell properties while they are in your IRA, provided you don’t sell them to yourself or to a family member.One of the best ways to realize a great benefit from IRA investing in real estate is to hold a property that will become your retirement home in a Roth IRA. Upon maturity, you have the custodian distribute the property in-kind – assigning the title of the home directly to you. If you did this with a traditional IRA, you’d be liable for income tax based on the value of the property at the time of distribution; with a Roth, you owe nothing outside of costs associated with the transfer. There are few nicer gifts to give yourself to celebrate retirement.