Three Party Closings In Real Estate

Writen by Raynor James

One of the ways to make money in real estate is to move property as quickly as possible. Jumping from one home to another often leads to a double closing situation.

Three Party Closings In Real Estate

Traditional home sales involve two parties, a buyer and seller. You may, however, run into a situation where there are actually three parties involved. This can occur when you are dealing with a real estate investor. The situation essentially involves a flip of the home by your investor. Here is a closer look.

Assume you list your home for a certain price and accept an offer from a real estate investor. The investor is not really interested in owning your property. Instead, they are looking to make a profit as quickly as possible. The are also looking to move it as soon as possible to free up cash so they can invest in other properties. If they are particularly good at their job, they will often find another party to buy the home from them while they are still in escrow with you! This is where we get the three party closing.

The specifics of how three party closings occur are highly dependent upon the situation. Regardless of how it is done, the third party purchasing the property from your buyer will often submit the funds for payment of your contract. This essentially turns the investor into a middleman who is collecting a fee and profit for doing practically nothing. That being said, you will actually do two separate escrows with two completely separate sets of documents. As the seller, you will only have to deal with your transaction.

There are definite downsides to three party closings. Obviously, the more parties involved, the more chance there is something will go wrong. Three party closings can also make lenders nervous. That being said, there is often a bigger problem.

As a seller, you want to get the top price for your home. In a three party closing, you are confronted with the fact that you did not get the best price. Moreover, you agreed to such a low price that the investor was able to flip the house immediately for a profit. This situation leads to serious seller’s remorse. If you try to pull out of the deal, you can get into litigation and so on.

As a seller, there is not much you can do about a three party closing. Just try not to get to disillusioned about the situation.

Raynor James is with the FSBO site FSBOAmerica.org homes for sale by owner.

Chicago Based SkyPan Opens Office in Miami

Writen by Nicole Lewis

The continual record growth in the South Florida real estate industry has prompted SkyPan, an award winning Chicago based commercial aerial photography company to establish a permanent business presence in Miami. Mark Segal, SkyPan’s founder has announced that the company’s new Florida office will be located at 120 N.W. 25th Street, suite 204 in Miami. It will be the home base of one of SkyPan’s helicopters and will serve as a center of operations for all of the company’s Florida projects.

Since its inception in 1989, SkyPan has earned an excellent reputation through their revolutionary video and still camerawork onboard remote controlled helicopters. Among SkyPan’s clients are many leading developers of high rise buildings. The images SkyPan captures are used to enhance websites, advertising and marketing materials.

With the company’s five foot helicopter hovering high above the future site of the building, SkyPan offers an alternative means to capturing images that are otherwise difficult and expensive to obtain. Segal can capture the panoramic aerial view at any pre determined altitude or floor level with his patented technology, producing museum quality photographic work. Finally, the speed and maneuverability of the helicopter make this approach to photography a superior alterative to a crane setup.

“We completed two exciting Miami projects in rapid succession, the Toscano Residences in Dadeland and Met3 in downtown Miami,” comments Segal recently, “The continuous growth of South Florida real estate translates into enormous potential for SkyPan.”

The list of SkyPan’s distinguished clients include: The Trump Organization, MDM Development, The Minto Communities, EDI and the Fifield Companies.

Nicole Lewis , Director of Media Relations for The Apple Organization. Founded by the legendary Phyllis Apple nearly 30 years ago, The Apple Organization is a full service public relations firm with a client roster of who’s who in the real estate and hospitality industry. The company is based in North Miami Beach and has grown to employ a full time staff of 25 talented and diverse professionals. For further information, call The Apple Organization, 305 937 1581 or visit http://www.appleorg.com

Steps To Consider When You Decide To Sell Your Home

Writen by Raynor James

Deciding to sell your home is not an easy event. Once you have made the decision, there are a few steps you need to follow to make it go smoothly.

If you are thinking about selling your home, there are a lot of issues that come to the forefront. Once you decide questions likes whether it is a good time to sell, the amount of money you will get, where you will move and so on, there are less obvious steps you need to take.

Part of the process in determining whether to sell your home is a review of your current situation. In this case, we are talking about your home loan. You need to determine two things. First, what is the balance on the loan and will the sale price be sufficient to pay it off. The second factor is less obvious, to wit, you need to determine if there are any penalty clauses written in to your mortgage for an early sale. Some loans have draconian penalties, which will stop you in your tracks immediately.

If you are selling your home, you need to find another place to live. This sounds obvious, but many people leave the process to the last minute which adds unnecessary stress to the situation. If you intend to immediately buy another home, you need to sit down with a mortgage loan officer and get pre approved for another purchase. Selling and buying a home at the same time can be hectic, so definitely get pre approved to make everything go as smoothly as possible. If you intend to rent for a bit, make sure you find a place and that it has enough space for your stuff. If it does not, rent a storage facility and start moving things in now.

The third issue is timing. Specifically, you need to determine how long it takes for homes to sell in your area. You next need to determine how that time frame fits into your plan. If you need a quicker sell, your home needs to be offered at a lower price. If you can afford to wait, then you can price it a bit higher and sell on specific benefits the property has that others do not.

Selling a home is not as easy as simply deciding to do it. By following these steps, however, you should smooth out the process.

Raynor James is with the site FSBOAmerica.org FSBO homes for sale by owner.

Turning a Home into a Rental House

Writen by Mark Stone

So you’ve decided that instead of selling your home you want to turn it into rental property but simply putting a for rent sign in the front yard is not enough. Here are a few items to consider before opening your door to renters.

Learn your states landlord/tenant laws.

Every state offers protections for both tenant and landlord, it’s vital that you know and understand both sides.

Is your area zoned for rental?

Of course it’s wise to find out if you can even rent before you go to the trouble of getting anything else done on your list. Your city government, homeowners or condo association or board will have the answers for you.

Once you’ve obtained this information you can now begin to focus on the mechanics of getting you home ready to rent.

What kind of rent can you get?

A rule of thumb is the lower the house appraisal value, the higher percentage of rent to value you can expect to get, and vice versa. Another consideration is what similar home rentals in your area are going for. Also take into account your location, rentals near schools, shopping centers and those with easy access to freeways and main streets have proven to be successful.

A complete home inspection now, means you sleep better later.

Spend the dollars and have a certified home inspector do a thorough inspection of your property. The small things you may not notice will be easily found by an experienced professional and can save you serious problems down the road.

Will you be an absentee landlord?

If you’re not going to be available in person it essential you have a manager that is reliable, honest and trustworthy. This may be the Boy Scout motto but it can be a lifesaver to you. If you can’t be there you will need someone who can handle problems with the house or the renter and make decisions in an emergency if you cannot be reached.

Become a lease expert.

Although there is no standard lease, several items should be considered when writing a lease including:

• Amount and schedule of rental payments
• Term of lease
• Renewal and termination of the lease
• Required deposits
• Miscellaneous fees
• Utility payments
• Repairs and maintenance
• Restrictions on use of property, including subletting.
• Landlord inspection
• Liability insurance
• Death of landlord or tenant

Again seek the help of a professional; in this case a lawyer, to make sure you’ve covered your legal bases.

Are you renting to the tenant from hell?

Check your tenants. It’s not obtrusive to ask for references or at a minimum you should call their previous landlords. A background check is wise as is a credit check because the last thing you need is a rent check that you can play basketball with.

Make yourself accessible.

Even if you are the absentee landlord it’s in your best interest to establish contact with your tenants and leave them contact information should they need to get in touch with you. Of course you’ll want to establish ground rules for contacting you including the chain of command so your property manager is in the loop if an issue arises.

Rental property has long been a successful enterprise for those willing to make the effort to provide a safe, comfortable home for their tenants. If you take the time to properly prepare your home, protect yourself legally and screen your tenants you too will enjoy the rewards of being a landlord.

Mark Stone writes for FindHomeRentals.com a website that lists houses for rent throughout the United States.

Discount Real Estate Brokers

Writen by Thomas Morva

Discount real estate brokers provide all the usual services and expertise as any real estate agent. They specialize in offering houses, condos and other real estates for sale. When a person is selling his property, these services can help in striking a profitable bargain. The brokerage fee charged by discount real estate brokers is negotiable. The brokers take three or four percent instead of charging the standard commission of about six percent. These discount brokers may be trying to establish a clientele, which is why they are offering discounts. Be patient with them, and you might be rewarded handsomely.

For buyers and full service sellers, a discount real estate broker offers all the traditional assistance including inspections and escrow. The seller’s property is opened to buyers and real estate agents by including it in multiple listing services (MLS) one of the most powerful marketing tools existing today to sell properties. Seller representation services also include a competitive market study of the estate, discussing the purchase and sale contract and controlling offers, escrow, title, and closing.

For buyers, the first step is to clearly outline one’s budget and decide what price range can be comfortably afforded. This decision will pre qualify the buyer for the loan to buy a new home. A real estate broker will then begin searching for homes using MLS information. After receiving a list of homes in the price range and area that is demanded, the customer will be given options. The potential buyer makes an offer on a house,” and the seller either accepts or declines.

Discount Brokers provides detailed information on Discount Brokers, Discount Commodity Brokers, Discount Stock Brokers, Discount Real Estate Brokers and more. Discount Brokers is affiliated with Mortgage Brokers.

Blue Chip Real Estate

Writen by Luigi Frascati

All real estate market participants, whether homeowners or investors, look at their purchases as an investment. Whether they feel it is the home of their dreams or a place that will generate a good rental income, property owners want to be able to sell it for more than they paid for. Preferably, for a lot more. It is next to impossible to be wrong in times of price appreciation, as markets all over North America have shown these past few years. During market expansions, buyers typically exhibit the ‘King Midas Syndrome’: like the famous mythological king, in fact, they all display that miraculous ability of being able to turn anything they touch into gold.

When markets hit a snag, however, property purchasers will have to be more selective about what they choose to buy. One segment of the real estate industry which is often overlooked by investors and yet is possibly the most lucrative, involves the purchase and sale of small free standing professional office buildings. In the industry, we refer to it as ‘Blue Chip Real Estate’. The definition is borrowed from the Stock Market, since Blue Chip Real Estate is the general description of interests in land that are well established, with stable earnings and no extensive liabilities – just like Blue Chip Stocks.

Small professional office buildings are typically leased to established professionals business entities such as proprietorships, partnerships, incorporated firms or any combination of the above, as well as to top tenants such as banks. They are valued by investors seeking safety and stability, though prices are usually high. Typically, Blue Chip real estate holdings are perceived to offer reliable returns, high yield and low risk. Additionally, most of them are strategically located adjacent to residential neighbourhoods, yet in commercially zoned strips.

Small professional office buildings are sought after by a variety of professionals, especially in the medical industry, for the amenities they offer, which enhance their practice and professional images. For instance, many of these buildings are built with ancillary storage or utility space that can be used for a variety of reasons, provide rooftop or basement HVAC systems, or even nicely appointed consultation rooms in which clients and audiences will be more relaxed and potentially more receptive to presenters.

What makes small professional office buildings so particularly prized by investors is the fact that there is a shortage of them. As they offer more and better facilities, construction is typically more expensive than normal. The plus side of things is that market values of free standing professional office buildings never fall, because there are not that many and they are always in high demand – specifically because tenants almost never leave.

In addition to generate highly reliable rental income, landlords usually take advantage of other important benefits, all of which are paid for by tenants.

Property Taxes and Utilities

Property taxes are typically higher than the norm but, as in all commercial tenancies, they are apportioned to and paid for by the individual tenants. Care must be exercised to be accurate in the measurements of common areas and passageways, so that a proper apportionment of property taxes can be made among tenants. In some instances, landlords are entitled to estimate the taxes payable for the subsequent calendar year, and to require tenants to pay the estimate in advance, provided that when the actual amount of taxes is known, tenants shall be invoiced by the Landlord.

Operating Costs

Operating Costs refer to the total of all expenses, costs and outlays of every nature incurred in the maintenance, repair, operation, insuring and management of the building all calculated in accordance with generally accepted accounting principles. Operating Costs include cleaning and janitorial, all utilities in the interior and exterior of the building, security, window cleaning, insurance required to be carried by the Landlord, repairs and replacements to the building, heating, cooling, ventilation and air conditioning if provided, outdoor maintenance including landscaping and snow removal, replacement of light bulbs and fixtures, telephone and other utilities, service contracts with independent contractors, supplies, legal or management fees and disbursements, federal sales tax on rent or similar taxes such as the Goods and Services Tax (in Canada), and all other expenses paid or payable in connection with the operation of the Premises and maintenance of the building.

Insurance

In addition to be responsible for payment of the pro rata share of the landlord’s insurance, tenants must carry their own comprehensive general public liability insurance (including bodily injury, death and property damage) on an occurrence basis, with respect to the business carried out in or from the premises and the tenant’s use and occupancy thereof. Such insurance must contain a waiver by the insurer of subrogation against the landlord or shall include the landlord as a named insured, and shall protect the landlord in respect of claims by the tenants.

Furthermore, the tenant must carry insurance in respect of fire and other such perils covering the tenant’s trade fixtures, furniture and the equipment, all leasehold improvements of the tenant and plate glass, and which insurance shall contain a waiver by the insurer of subrogation against the landlord or shall include the landlord as a named insured, and shall provide that any proceeds recoverable in the event of loss to leasehold improvements shall be payable to the landlord.

Leasehold Improvements

Unless stipulated otherwise, tenants bear all costs of alterations and improvements to the premises, and any and all such alterations and improvements, once completed, will become property of the landlord. Whereas free rent or free leasehold improvements are frequent in the leasing of average commercial, retail or industrial space, when it comes to small professional office buildings any such incentives or inducements to lease are unheard of.

The average size of this type of holdings is in the 10,000 to 15,000 square foot range, two or three stories in elevation and private, gated parking. As practically all expenses are paid for by tenants, capitalization rates are typically very high. The capitalization rate is the return an investor requires for investing in a property, so as to receive the annual flow of net operating income. Small free standing professional office building have price tags ranging from CAD $1.5 million to CAD $2.5 million depending on the area, and cap rates as high as 20 percent per annum. Real property annual appreciation has been a steady 8 to 10 percent per annum over the past ten years. This means that a property that sells today for CAD $2 million would have sold for approximately CAD $750,000 in 1996.

Luigi Frascati

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton Centre Realty in Burnaby, BC.

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Sharing the Cost of Luxury

Writen by Myles Lawlor

Fractional ownership continues to thrive in Ontario

In marketing, a little creative thinking goes a long way and the same goes for owning a coveted luxury asset. You’ve most likely heard the term fractional ownership as an option in the purchasing of real estate; the concept has taken off big time with cottage and vacation properties in Ontario. In fact, there are so many popping up on the market, a new company called Media Pull created an entire website dedicated to the topic visit fractions.ca for proof. But did you know that the trend of joint possession includes everything from jewelry to jets?

In fact, the concept of fractional ownership began years ago with passenger jets. It’s easy to understand why private individuals or corporations would pursue owning a jet in a fractional agreement, but people’s ingenuity never ceases to amaze me. The concept received a lot of attention last summer when it made the news that 13 women in California jointly purchased a $37,000 necklace and agreed to share custody of the piece, with each owner having possession of the necklace for four months of the year. Considering that the number of functions to which a person could wear a $37,000 necklace is limited, this was a brilliant idea. Another new interpretation of the fractional ownership phenomenon is the sharing of art with museums! Some collectors now offer their valuable pieces to galleries and museums for part of the year, helping to maximize the value of donors’ tax deductions.

As I mentioned, the popularity of the fractional ownership of vacation real estate has grown tremendously in Ontario over the past four years. According to Michael Stevens of mediapull.ca, the company recognized the need for a central source of information about opportunities in the province. “All developments are listed free of charge or consumers can contact us directly to sign up and then be informed as to new offerings,” Stevens says. Even though the site is fairly new, Stevens says the response has been overwhelming. “Our first of three public information sessions with industry experts is planned for early June.” The website has sections aimed at consumers, the media and builders and contains the only comprehensive listing of fractional ownership properties in Ontario. Visitors will also find articles and other interesting resources.

Sharing ownership of a cottage or vacation property makes sense. The price of real estate in Ontario has skyrocketed, placing it out of reach for many. Even some who can afford it question the return on their entertainment investment, when they will spend only a few weeks of the year enjoying it. Enter the winwin proposition of fractional ownership. A group of people share in the purchase price and cost of maintaining the property and then split up its use during the year. And most of the time, the owners also own the boats and amenities such as docks.

Sharing the costs means owners can afford a more elaborate vacation property than they might be able to on their own. There is also the option of outsourcing the maintenance of the property, so that during the weeks they use the facilities, they can truly relax. You won’t find jewelry, jets or artwork, but the site can open the door to your cottage or vacation lifestyle dream.

Myles Lawlor, of lawlor.com is a real estate Marketing Consultant