High Tension for the Buyer and Seller of Real Estate Can Be Reduced

Tensions can run high in both the selling and buying of real estate. After all, there is a lot of money and emotion involved! There are also time pressures and numerous privacy issues to deal with. The sale and purchase of real estate can be a lengthy process involving numerous professionals from many fields.

The Real Estate Center at Texas A&M University asked 3,000 Texas home buyers to describe their recent purchase, about 400 replied. Their responses showed how stressful buying a home can be, for buyers and sellers. The Realtors and attorneys who try to keep all tensions at bay in order to complete the transaction also feel the burdens of stress!

"The process is grueling in the best of circumstances, and the severe sellers' market of recent times only increased the stress," says Dr. Jack C. Harris, Center research economist. "In conjunction with Lawyers Title Company, the Real Estate Center asked recent home buyers about their buying experience and what changes they think would make the process more buyer friendly." (quote from Real Estate News Information Service Feb. 24, 2001)

The final question on the survey was, "If you could change anything about the home buying process, what would that be?" Almost a third answered the question, and most of them expressed dissatisfaction about some phase of the process.

Understandably some of the complaints were about circumstances beyond anyone's control. This included high prices, interest rates, the lack of listings in a specific area, where they wanted to buy, etc.

However, all of us Realtors can learn much from some of the things that WE can, and should, do something about. Many of the folks surveyed felt that the Realtor did not perform up to their expectations. They were especially miffed when the Realtor assumed too much, that they understood what was going on, and didn't keep them well enough informed. In such a pressure cooker of financial and time constraints, the unfamiliar territory of buying and selling a property can be nerve wracking!

Many buyers and sellers need to be reassured and comforted. It is sometimes hard for the Realtor to know which of the dozens or even hundreds of people they are working with at one time need the most attention. Some of the Realtors' clients felt the agent did not take enough time with them. This was true even for some buyers who had a Buyer's Agent under contract to work on their behalf alone.

We Realtors should alert and educate our clients, whether they be sellers or buyers, to the complexities and details of the real estate transaction. Some buyers feel that they are rushed through the looking, choosing, buying and settling process, and sometimes they are.

More and more buyers, especially the most savvy ones, are using Buyer's Agents. When there is a Buyer's Agency Agreement signed, most buyers expect far more service. Some feel that they don't always get it. In fact, according to the survey, 70% of those who had a Buyer's Agent wanted even more care, concern and service from their agent than they felt they had received.

The sellers, too, felt they had received too little service, care and attention in many cases, for the commission involved. Some seller's felt that the selling agent was not responsive enough to them, that calls were not returned promptly enough, or that not enough assurance, information, concern and communication was forthcoming from their agent.

Even though it is legally the seller who pays the Real Estate commission, it is really part of the overall transaction. Many buyers feel that they are the ones who are really paying that commission. They feel that the several thousand dollar commission is just tacked onto the selling price by the seller and thus it is they, the buyer, who is ultimately paying more for the property than they should! Buyers often feel that sellers inflate home prices to recover the cost of the commission.

Some purchasers want more contact with the sellers of the property; before, during and after they decide on the property and place a contract on it. Many wanted to develop a relationship with the seller of the property and have direct communication with them between the time of the contract and the settlement. Some felt that an agreement would have been more easily arrived at if the sellers and buyers could have hammered out details in person.

Other buyers had met with the sellers and considered that it had been the biggest error of the entire process. Most folks felt that the insulation of the Realtor(s), keeping the sellers and buyers apart and in communication only via written offers and changes to the contract was appropriate as it gave them the advantage of advice and discussion with their Realtor and time to think and discuss things before responding.

A huge part of the work and value that a Realtor or all the Realtors involved bring to the transaction is the mediation, conflict resolution, refereeing and monitoring of communications between buyer and seller. Often that is a huge and difficult task. Sometimes it is just too monumental to achieve satisfaction on the part of their client. Often it is those clients who are most difficult to work with that are the least satisfied with their Realtor. That is all part of the job we do. We do our best, from our own viewpoint, we try to satisfy the personality of our clients, and usually that is well appreciated!

After all, the natural flavor of a buying and selling transaction is adversarial. The Realtor is like a Gladiator in most cases; going to battle, in an honorable way and according to the rules, on behalf of their backer -- their client. There are many behind-the-scenes conflicts on behalf of clients that never are divulged and shouldn't be. It is the duty of the Realtor to put all parts of the transaction in the best, although truthful, light possible. A Realtor who transfers the natural adversarial animosities between buyer and seller does a disservice to his client no matter which side of the transaction is being represented.

Most buyers and sellers comments on the survey evidenced the importance and value of the agent in the transaction process. However, it is important that all of us Realtors learn from our buyers and sellers, especially to responses they give about our profession when they are being surveyed on our service.

Nearly every week in our office, at Long and Foster Realtors, Rehoboth Beach, our manager reads one or more glowing comment letters from our thankful, satisfied and sometimes elated clients and customers. In fact, Kate was the overall Service Award Winner for the entire year of 1999.

From the survey results of the Texas A&M University, we as Realtors, are well advised to learn that respondents praised especially helpful agents. It is reasonable to assume the majority who wrote nothing when asked to comment on any dissatisfaction, on this anonymous survey, were well satisfied with the service they received from their Realtor(s).

"We had a great experience," wrote one buyer. "The agent made all the difference. She kept us well informed almost daily. This was so important to us." While a majority of survey respondents had no comment regarding agents, 85% said they would use or recommend the agent again. (paragraph taken from Real Estate News Information Service Feb. 24, 2001)

According to the survey report, complaints about the complexity of the home buying process fell into one of three categories: too complicated, too time-consuming or too costly. Many felt the process involved too much paperwork. Undoubtedly, they were reacting to the numerous, lengthy legal forms they had to sign before, during and after the contracting of the property as well as the seemingly almost unconfrontable stack of documents requiring a signature at closing.

It can take a terrific amount of time to find and buy a home. We often work with buyers for months seeking the right home. Some of them we've been working with, staying in touch with, and showing properties to -- for years. Those with some particular interests may find that a "possible" choice for them might only come on the market once in a great while! It is not an easy or comfortable situation for anyone involved, but the finding and buying or selling of a home or property can be made a MUCH more comfortable process with open, full and honest communication between the agent and the client at all times.

Many of our sellers would like us to find a buyer in a week or less for their property. Interestingly enough, it is often the property that is most difficult to find a buyer for that has the most impatient seller.

Even after a property is chosen by a buyer, there is a lot of time and work still needed from all those involved. The time, the continued negotiations, the inspections, reports, and evaluations needed, all the calls and appointments that need to be made on behalf of all parties involved almost always take far more time than anyone not directly involved can realize. This is usually frustrating to everyone. The sellers as well as the buyers often feel they are stuck in quicksand, unable to move or do anything without sinking further into the mire. At the same time -- that same quicksand of details required to complete the transaction seems at times to be filled with alligators ready to bite and take them down anyway. In some ways, that is all too true. And, it is the duty of all the Realtors involved to keep our clients and customers as comfortable as possible during these trying times of details and difficulties.

The Realtor usually spends a good deal of time trying to manage the lender(s) and get the money required to bring the deal to closing. Often this is the most difficult part of the transaction, even when the buyers and sellers are easy to work with. Usually, the first contact with a lender is all roses and sunshine. All too often however, the clouds and thorns of problems are soon evident. We Realtors are often fully employed trying to get all the requirements fulfilled for the lender and the purchaser and when those are complete we work to make certain the promised funds are still available, approved and ready for closing, ON TIME.

At the closing, there is another 2% to 3% or, in some few cases, even more of the purchase price involved at closing for each the buyer and the seller. The long list of expensive items often seems too costly to both the buyer and the seller. Some folks find this irritating and feel it to be unfair. Some wonder why there are so many fees and services that find their way to the settlement table and may wonder if the fees and services were even necessary.

The myriad details involved with the finding, selecting, negotiating, contracting and transferring of ownership and funds at final settlement is time consuming, detailed, and often challenging.

People are accustomed to buying most things instantaneously and getting instant gratification for their decisions. Especially for those of us who use the Internet a lot. In a recent survey it was shown that most people who purchase via the Internet want the purchase delivered to them via overnight service. Although Kate and I do most of our promotion, marketing and communications via the speedy Internet -- we are not usually able to deliver the completed sale in less than a month or two.

Many (let's be more honest and blunt) actually MOST buyers do not appreciate the legal complexities of taking title to real estate. They most often, simply do not understand why it should be so complicated to buy a piece of land or a home, nor do they understand the complexities of getting them approved for the best rate and terms in the mortgage obligation -- even if they have done it before.

The real estate industry has made great and consistent accomplishments in speeding up the entire buying process; from searching via the Web to getting mortgage approvals in sometimes an hour (as is the usual case with our in-house broker). Even title searches, lien searches, judgment searches and the typing of the dozens of pages of legal documentation has been streamlined with modern devices and techniques. However, there is another bundle of issues that slow the process while the aforementioned have sped it up. The litigious society we live in, the relatively recent and growing list of written disclosure requirements and legal contingencies have adversely affected the time and ease involved. It has limited the progress and speed of the individual parts of the transaction steps at nearly every point.

We, as Real Estate Professionals should, in fact we must, pay special attention and take special care in helping buyers and sellers understand what is going on at each step of the selling and purchasing process. We need to make it clear why the various expenses incurred at closing are ordinary and necessary. We need to alert our clients and customers to the potential consequences of each place where they can be financially and legally harmed or put at risk by cutting corners. We do our best!

Based on every available survey, it is evident that the Internet is growing and soon to be of utmost importance to buyers searching for a home. For the month of January, 2001 a review of 37 major search engines showed that Real Estate related searching and use was the third major use of the Internet, world wide. In America, it was second except for a temporary flurry of interest in searching for information on digital cameras which barely put it in third place here also.

The Internet is, however, not the only factor in the overall search. At price ranges of $300,000 and more; about 90% of the first contacts are to a Realtor with an attractive, informative, workable and fast acting Web site. As the price of the home descends, the percentage of buyers using the Web decreases. For homes under $100,000, only about 25% of our personal response is a result of our Web site presence and expertise.

Simultaneously, fewer Realtors instead of more, are finding the Web useful according to our recent survey. The reason is obvious to some of us; most users want sites to be far more informative, more private, and want the sites to have a lot more content. They want more pictures, better descriptions, related sales, crime reports, etc. Some of these things are not even available yet for our market area but the buyers still want them. People would like to rule out those homes they are not interested in before they even contact a Realtor in most cases -- especially for the more expensive properties.

Users want the sites to come up faster and to be more intuitive of their interests and needs. People are also reluctant to show what they don't know as it makes them feel vulnerable. Thus we try to have lots of data on our site so the sellers and buyers can educate themselves before they contact a Realtor; hopefully us!

Some clients seem to realize and appreciate that Realtors are also dependent on other professionals to make the home buying transaction go more safely, more legally proper and in all ways more smoothly. Buyers do expect the agent to keep them informed about progress and to effectively, quickly and professionally handle any obstacles to their goals and purposes in the transaction.

The entire process of selling and or buying a property, especially a home, can be nerve wracking and full of tension for everyone concerned. Some problems are unavoidable, some are unpredictable, some are created out of nothing by some party to the transaction. Many problems can be resolved or avoided if the sales agent provides information, reassurance and support to the buyer.

In the final analysis, it is up to you, the buyer or the seller to be the "squeaky wheel in need of oil" and call, write, e-mail and otherwise let your Realtor know immediately when you feel needy of more communication, care, solace or help. Our job is about 98% invisible to our customers and clients. Even when we tell everyone what we are doing, it is almost always hard for them to believe the time it takes for what seems, to them, a simple task. We usually have a few dozen customers and clients at any one time that we are trying to service as if they were the only person in our professional lives.

If you are our customer or client, PLEASE let us know any time you need us! Simultaneously, we will attempt to anticipate your every need and difficulty and be working on solutions before you even tell us. We are partners in this profession with our customers and clients, and the success of every partnership is open and honest communication!

Now, please let us know how we can be of more service to you!

Copyright 2000-2005 by www.JodyHudson.com

Source Page for this article is: http://www.kate-jody.com/essays/hightensionreduction.html

Tax Deferred Exchanges of Investment and Business Real Estate

The Primary Residence taxation, the Residential Replacement Rollover, Sec. 1034 exception is gone. Previous capital losses still apply, if the property is held as investment property and sold at a loss and that loss can be carried over for up to 7 years. For those over age 55 the primary residence or residential sale exclusion of taxation is gone. Tax deferred exchanges remain a viable way of deferring taxation on investment real estate.

It is required to analyze and pre plan prior to transaction. That analysis must be done by an updated tax deferred exchange professional such as those we have on retainer. Not only do you need a tax attorney, but a real estate attorney, and an expert attorney working with them - that is a specialist in only tax consequences; especially those of tax deferred real estate transactions. There must be proper forms and written documents before the transaction is done. This requires planning and a review of limitations as well as a formal and professional critique of assumptions and decisions.

Most Realtors, Attorneys and CPAs do not have sufficient expertise to guide you in a legitimate and defensible tax deferred exchange. The key here is defensible, as the IRS will usually audit the tax deferred transaction and if it's done correctly so that it is easily defensible you will sail right through the audit for little or no money. Your personal tax profile and that of your other business and family identities must be factored in the decisions. It may be necessary to legally refigure, adjust, and compartmentalize your purchase or sale - and document that appropriately, BEFORE you begin to put any part of the transaction in writing. Planning is legally done BEFORE and if it is done after the transaction you can be liable for fraud. The IRS does not take kindly to fraud especially regarding real estate.

For instance you must know your straight line depreciation factor; for investment property that is currently 39 years. For instance: Any depreciation taken during the ownership of the property will be picked up in a recapture tax upon the sale of the property.

Federal and State taxations must be combined properly, according to numerous factors that must be researched by your team of advisors. Since the total taxation on the gain is approximately 35% of the gain plus the recapture tax - your fees to professionals can be well worth it to you if they better your tax situation. The tax deferred technique can defer till later or eliminate your tax payment and consequence. Of course the only real and usual way to eliminate the tax is to die. There are ways to defer the tax however until that death. Tax deferred strategies are sometimes called alternative strategies or alternative tax deferment strategies.

Note: if you are speaking with anyone and they speak of TAX FREE EXCHANGE or TAX FREE SALE of your property, they are not well informed and thus you should be wary of any other advice they give you. There is, effectively, no such thing as a tax free sale or tax free exchange of real estate.

Exchanging is an effective tax planning tool. Large potential tax liability can therefore be deferred. And, there are savvy investors who have deferred taxation on millions of dollars of properties for decades and thus given themselves many millions of dollars of additional investment money with which to leverage their wealth.

Like kind exchange can now be defined as: any kind of real estate in exchange for any other kind of real estate.

We hear of qualifying property or properties - yes there can be more than two properties involved, in some cases there can be several and you don't have to ever see or even know about the other properties involved. You will need good advice however, professional advice. This exchange of any kind of real estate for any other kind of real estate was not always true. This tax deferment alternative is not for everyone. Some owners should not defer.

We must realize, as well, that there is ALWAYS a risk of audit. The larger the dollars involved and the more suspect (according to the IRS) that the participants in the transaction are, the more likely an IRS audit of the procedure is. If there are several million dollars in tax deferment involved, and especially if one or more of the participants are considered audit targets by the IRS for any reason, you may become involved in an expensive tax audit. The cost of the audit, even if you are successful in defending your decisions, can be far greater than the tax deferments. And if the deferment is disallowed there WILL be penalties, fines, interest and even more substantial legal and accounting fees - plus an amended return in some cases which may trigger more consequences and even more audits. I hope I've made myself quite plain here - get good advice from legal and accounting specialists on these exchanges.

There is a time line, for several of the acts and consequences in exchanges according to the IRS. In addition to timing there are other qualifying or disqualifying situations and these situations include the use of the properties, before, during and after the transaction by those involved or their families, friends, associates, etc... In addition to the normal criteria for the exchanges, if Realtors, investors, attorneys, or those who buy and sell real estate frequently are involved in exchanges; the IRS makes special, more restrictive rules that will result in more scrutiny by the IRS. In fact the IRS can make up reasons why they think a person needs more scrutiny; that can include political affiliations, relationships to politicians, your social position, your affiliation with judges, and conspicuously wealthy or well known people and even your religious affiliations and charitable giving recipients. In fact, there can be a tax deferred exchange that will work for one side of the exchange and not for the other person or entity involved.

In addition the tax court looks at intent for use, investment, or purchase and sale -- not only the use; past, present and future; of the properties involved but what they think may be or could be the uses and consequences based on all sorts of criteria and even hunches they may have. They also have extensive rules on what like-kind exchanges are. The exchange must also be interdependent. There may not be any receipt or control of cash or other liquid assets from the sale by any of the exchangers. This can be inclusive of debt relief as well. Any of these things will be taxed. In fact, a refinancing of any property involved within two years or less will disallow the tax deferment as well. There are also several time limits and timing criteria involved which must be allowed for and honored.

There are some specific terms; relinquished property and replacement property are the most important terms; after the most important definitive phrase of all: Like Kind Property Exchange. Large potential tax liability can be deferred; that is: NO tax is due upon receipt of the proceeds; from your investment in qualifying real estate, whether buying or selling, can be maximized by deferring the tax liability, the consequences, and using the deferred expenses. That is; you are saving and have the use of the tax money you don't have to pay now, and you can invest that money in the next property, giving you a multiplied ability to invest and reap further benefits of appreciation and income. Therefore, you will have the additional money, and therefore additional down payment, to invest in an even larger property or pay cash for a more expensive property. This can change your life; your life as an investor, your business life, at least.

The exchange does not have to be simultaneous. You must in general; identify the property within 45 days and settle within 180 days.

There are also delayed exchanges, non simultaneous exchanges, which are sometimes called Starker Exchanges. There can be a buyer assisted, delayed, Starker exchange. This buyer assisted, delayed exchange, is done with the help of the buyer - by letting the buyer possess or even live in the property for a while. This is almost always a bad idea, a very bad idea. There is also such a thing as a reverse-Starker exchange. In a Reverse Starker Exchange the replacement property is acquired before the relinquished property is sold. These are rare, unusual, possible and legal - but not to be considered lightly without adequate counsel involved in your every planning facet.

For the protection of all involved; the contracts, all exchange documents and paperwork should be prepared by specialists in tax deferred transactions. The Realtor should never, ever, prepare the exchange documents!

There are some additional factors and rules. You can name up to three possible properties in that first 45 day period. There is also a rule called the 200% aggregate rule where you can name several
properties up to but not more than 200% of the value of the relinquished property. Property held by a person who deals in property does not qualify. Personal residential use property does not qualify. Partnership interest in property does not qualify. Refinanced property will not likely qualify if it has been refinanced in the last two years. The property must ordinarily be held for investment and generally acquired and held for appreciation and for production of income such as rental income.

Let's now look at the sale of personal residences. The gain on a personal residence has no tax due on the first $250,000 of gain for one person or $500,000 tax relief for a couple. A principle residence is one that a person resides in for 183 days per year or more and no other. Factors which determine a person's principle residence are four; each showing the same residential address of that being claimed: A Driver's License; Magazine, Newspaper, and Internet Subscriptions, Utility Bills such as Cable TV, Telephone, etc. that are mailed to and show the address as residence, credit card bills, checking and savings accounts, voter registration card, personal telephone listing in the white pages.

There are many pages of rules, regulations, code, determinations, tax code, rental and vacancy rules, abandonment according to prescription, determinations of intent, various capricious factors known only to particular IRS agents, time lines, divorce issues, temporary use, rental, vacancy, or abandonment issues, documented or discoverable intentions on the part of participants in the transactions, multiple dispositions in short periods of time, work related occupancy and vacancy requirements, personal business use of property, income streams, family uses, health related and documented residential move or vacancy requirements, court cases and other recorded facts, all manner of special requirements and issues, land installment contract provisions, miscellaneous extenuating and defensible contingencies - which will affect the bona fide legality and defensibility of a tax deferred transaction. There are many points upon which your planning should be based. There are some emergency planning techniques as well.

You can even take some improvement expenses and take a fix up expense for work done to sell the house. You MUST have: Written affirmation of necessary expenses that are needed to sell the property. Be able to prove the work was done within 90 days of the executed contract of sale. There is also, now, a maximum of 20% taxation on the taxable portion of the net gain on the home. Generally tax laws are applied separately to each individual owner or co-owner of the property and each must meet requirements separately and individually.

Take care. Be prepared. Educate yourself and ensure that your advisors are as well. Be legally and financially, well represented and very professionally and personally wary.

===

End Note: The above article was written in the form of notes during a class I attended on exchanges that was delivered by SEVERAL full time professionals in the business of ONLY these types of exchanges. These notes are to be considered guidance in the form of alarming you to the point of getting proper counsel only. You may know the exchanges of Real Estate as Starker Exchanges, 1031 or 10-31 exchanges or even as "tax free" exchanges. They are NOT tax free, they are tax deferred! Be careful.

Do not use the information in this article to make your final tax or selling or buying decisions. This information here is to give you enough data to begin thinking about deferred tax - exchange of real estate.

Do not make any decisions or write any documents based on this information. Get specialized legal advice from experts in this exact business; not from unspecialized attorneys or accountants - and especially NOT from general Realtors such as myself.

Ask to see the credentials of anyone who seeks to advise you, they will have them or not, exact and specific credentials, in writing, of their professional ability to serve you. If not, chose another professional to help you. In fact feel free to contact me and I'll get you in touch with those senior professionals who are full time in this exact profession.

There are law changes frequently on these forms of transactions and as I write this 10-31-2001 there are several laws being discussed and perhaps voted on today that will change many of the factors involved here - hopefully for the best - in order to help bolster our economy even more and support the real estate business in which I work.

By<>

Thank you: Jody Hudson www.JodyHudson.com

Jody Hudson has been a Realtor for 35 years in America and Delaware

The source page for this article is: http://www.kate-jody.com/essays/taxdeferredexchanges.html

Real Estate, Real Property and Leased Land; Definitions, Discussion and Explanations

Delaware, and the rest of the original British Colonies, has some land that is leased rather than owned by the residents of that land. Much of it is not evident to the casual observer.

The land on Lewes Beach is leased, not owned by the home owners. The land of Lewes Beach is owned by the Town of Lewes. The lands of Rehoboth by the Sea and Dewey Beach include leased land too. Most of the leases on that land will NOT be renewed but will return to the owners and the homes on top of that land will be removed by the home owners at their expense. Much of the land in Riverdale, on Indian River Bay, adjacent to Oak Orchard is leased as well. In Riverdale the leased land is owned by Chief Clark of the Nanticoke Indians.

We have about half the inhabitants of Sussex County living on leased land; most of that leased land is found in what people call mobile home parks or communities. However, in those communities there are seldom any homes that are truly mobile and there are even two story stick built homes on some of the leased lands in those communities. Condominiums and town houses are sometimes found on leased land as well. Some folks find all this rather difficult to understand.

We Realtors and Attorneys use the term fee simple to describe land that is being sold as real property; that is real estate. We used the term leased land or leasehold interest to describe land that is not transferring as real estate.

This rather lengthy text is regarding Leased Land, Real Estate, Private Property, Chattels, Mobile Homes, Homes on Leased Land and a legal dissertation to define, describe and determine the differences.

Terminology is important when discussing Real Estate, i.e. real property.

Black’s Law Dictionary is the recognized, definitive source for legal definitions under our American Law; which is derived from English Law

PROPERTY: In the strict legal sense, an aggregate of rights which are guaranteed and protected by government. BL6, p. 1216.

PERSONALTY: Personal property; movable property; chattels; property that is not attached to real estate. BL6, p. 1144

PROPERTY: (personal property) - In broad and general sense, everything that is the subject of ownership, not coming under the denomination of real estate. A right or interest less than a freehold in realty, or any right or interest which one has in things movable. BL6, p. 1217

Therefore personal property, is that which can be easily removed from the real estate, and is not real estate. Personal property includes crops, trees, shrubs, trailers, sheds, cars, mobile homes, manufactured homes that have a Department of Motor Vehicle title instead of a deed, and the contents of a home or building. In a home or business the personal property includes drapes, lighting fixtures, rugs (not installed carpeting) free-standing cabinets and cupboards, furniture, and all the contents of closets, drawers and buildings. Buildings without a foundation, that is sheds that are just supported by blocks are chattel property, that is personal property, and not part of the real estate. Such chattel includes dog houses and particularly the little storage buildings that are so common outside of homes today.

LANDS: In the most general sense, comprehends any ground, soil or earth whatsoever... Black's Law dictionary 6th Ed. (BL6), p.877

PRIVATE PROPERTY: As protected from being taken for public uses, is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. Property of a specific, fixed and tangible nature, capable of being in possession and transmitted to another, such as houses, lands, and chattels. BL6, p. 1217. Private property is land, houses, and chattels. Private property is protected from being taken for public uses. Private property is owned absolutely.

REAL ESTATE synonymous with real property" and p.1218 REAL PROPERTY ... A general term for lands, tenements, hereditaments (those things which are hereditary); which on the death of the owner intestate, passes to his heir." BL6, p1263

ESTATE: The degree, quantity, nature and extent of interest which a person has in REAL and PERSONAL property. An ESTATE in lands, tenements, and hereditaments signifies such interest as the tenant has therein. BL6, p.547 The definitions here all refer to: real estate = real property = estate = lands, tenements, and hereditaments. At first, one might think that ‘real property' is the proper term for 'all lands'. But it doesn't state the manner of ownership as clearly as the definition of estate. We just had a huge instance of this when the thousands of leased land lots under the homes of several thousand people, in Angola, Pots Nets, and Long Neck areas owned by the Robert Tunnel family was inherited by the children.

IN OUR AREA THERE ARE NUMEROUS LEASED LAND PROPERTIES AND THOSE PROPERTIES ARE THE REAL ESTATE OF THE OWNER OF THE LAND – NOT THE OWNER OF THE HOME WHICH IS UPON THAT LAND. If you examine the definition for ESTATE it refers to an interest in the same articles defined in real property and real estate.

What is this LAND and WHO owns it and HOW is it owned? Land can be private property OR estate, i.e. real estate. Estate is an interest in “real property" by a person or a tenant. Private property is owned absolutely by an individual.

INTEREST: More particularly it means a right to have the advantage of accruing from anything; any right in the nature of property, but less than title. - BL6, p.812. By this definition it's clear that INTEREST cannot be TITLE, since it is less than title. Interest may be a property right to land, but it's not a right to absolute ownership of land. Those who live on leased land, thus, have only an interest in the land; and that interest is a lease-hold interest. Is there a definition of property that says it's land held in absolute ownership, as does private property's definition? We can delve into this more.

ABSOLUTE TITLE - As applied to title to land, an exclusive title, or at least a title which excludes all others not compatible with it. An absolute title to land cannot exist at the same time in different persons or in different governments. BL6, p.1485

PRIVATE PROPERTY - ... is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. BL6, p.1217

OWN - To have a good legal title; to hold as property; to have a legal or rightful title to; to have; to possess. BL6, p. 1105. To "own" is to have title. An interest is LESS THAN TITLE.

ESTATE: The degree, quantity, nature and extent of interest which a person has in real and personal property. An estate in lands, tenements, and hereditaments signifies such interest as the tenant has therein. - - BL6, p.547 From these definitions, it's plain that we can't absolutely "own" real estate. We can only have a qualified ownership of qualified and described ownership of Real Estate. Thus, we need that Deed Description to describe it and qualify it. That ownership is also qualified by various government rights, decrees and laws, from antiquity, such as rights against trespass. That ownership is qualified by taxation, zoning, rights of way, and a myriad of other entailments. We need, therefore, a title search to determine those entailments, some of which are invisible.

Therefore there is NOT as much difference in the rights and privileges of ownership and interest as one is led to believe. I have no problem with those who live on leased land instead of owning the land. Usually they are paying far less than it would cost them to own the same property. However, they don’t often get any appreciation of the land; the landlord gets the appreciation in real value, while the resident can appreciate the lifestyle for less cost per month or year.

However, since an interest in leased land is not automatically transferable and is NOT Real Estate and since the chattel property upon it, the mobile home is personal property, without a deed but instead has a title – Realtors are not by law supposed to be involved in the sale of such – but we are. We are supposed to only be selling real property. It gets all cloudy and foggy doesn’t it. That is why there are people and companies who sell mobile homes on leased land who are not realtors and don’t need to be. In fact, although no one will discuss it, Realtors are not supposed to sell mobile homes on leased land. We don’t need to engage in that battle any more than I just did by describing it.

OWNERSHIP: The complete dominion, title, or proprietary, including right in a thing or claim... Ownership of property is either absolute or qualified. The ownership of property is absolute when a single person has dominion over it, and may use it or dispose of it according to his pleasure, subject only to general laws. The ownership is qualified when it is shared with one or more persons, when the time of enjoyment is deferred or limited, or when the use is restricted. - BL6, p. 1106 Such sharing is common with husband and wife, partners, families and corporations, etc.

DOMINION - Generally accepted definition of "dominion" is perfect control in right of ownership. The word implies both title and possession and appears to require a complete retention of control over disposition. - - -BL6, p. 486 I think you'd agree that zoning, building codes, home owners association covenants, condominium documents of use and business licensing is a restriction on the use of land (if it's Real Estate). And there is obviously the fact that failure to pay property taxes on real estate will result in loss of said property. That's definitely not absolute ownership. But private property is defined as ABSOLUTE OWNERSHIP, not qualified (interest).

PROPERTY (tangible) - All property that is touchable and has real existence (physical) whether it is real or personal. - - BL6, p. 1218 In summation, it takes a good attorney, and one well versed and experienced in real estate to understand the complex definitions, rights, liabilities, and privileges of real estate ownership. I have been buying and selling real estate for myself and assisting others in the buying and selling of real estate for thirty years. I have taught courses on real estate and real estate law. And, I would NOT consider purchasing a property, or purchasing property on leased land without the professional and paid assistance of an attorney who is a real estate specialist in the exact county in which the property is located. Other attorneys from other areas are not valid choices at all.

Copyright © 2001 - 2005 by www.JodyHudson.com

Jody Hudson has been a Realtor for 35 years.

Source Page for the above article is: http://www.kate-jody.com/essays/realrealleased.html

Real Estate Local FAQs.

There are many frequently asked questions and any local real estate area. In our area here at the local Delaware Beaches, the most frequently asked questions are how to get a good deal and if there are any fixer-uppers available.

We are constantly asked if there any good deals available. The ironic part of this is the person who asked that would not have enough data or awareness or knowledge or information to know if a property is a good deal or not. In our area fixer-uppers are seldom good deal. Frequently the land value of real estate here is 75 to 100% of the price of the property.

We have a cute little cottage for sale now in the second block from the ocean for $1 million, and the land is worth $1 million. Ten miles west of the beach we have a home for sale a large lot for $180,000. The lot is worth $200,000. However, the house needs to be torn down, so we have reduced the price of a lot by the amount you will take to remove the house. Is either one of these homes, a good deal? No! In each case, the land is a good deal. In the first case, the home is worth zero and in the second case, the home is a liability.

Another question, I am asked us if we are buying at the top of the market now. I have been asked that question for 35 years, and I have heard it asked for 30 years before that. When I first heard the question, beach lots were selling for $25 that are now going for $1 million or more. Every year, there have been people who think the market has topped out, and they will wait and get a better purchase price.

My answer to the question of whether the market will go down or not is that it will not go down. And if you want a good deal the best deal is to buy now before the price goes up, because it will continue to go up, as it has in the past.
Copyright 2005 by Jody Hudson www.JodyHudson.com and www.Kate-Jody.com

Jody Hudson has been a realtor in America and Delaware for 35 years.

Maximizing Curb Appeal and First Impressions to Sell your Home

We all know that a home or property of any kind, in order to sell faster and at a higher price, should have what is known as curb appeal. Frequently, it is not the expensive things that make a difference. Here are some things that can be done.

Keep the grass cut, not too short, but well groomed and frequently - you never know what day a prospective buyer will drive by. Include edging along all sidewalks, driveway, and other trim items. Use the weed eater around all areas where the weeds grow up. Use hedge clippers on every possible hedge and bush. In particular, trim down any and all hedges that block views from any windows or cut down on light coming in the windows. Use lots and lots of thick, fresh, mulch. Mulch is inexpensive but does wonders in dressing up a home. If your yard or acreage has been let go too long, start with a professional service the first time and then keep up the property yourself if you want. If you have to hire a lawn and gardening service to keep the property in pristine shape, during the for-sale period, please do so. Well maintained grounds are key to best selling and a few hundred dollars during the sale period will bring you thousands more in price.

Make the property and the home inviting and showcase it by using bright colored flowers; red and yellow flowers of the brightest colors are the best. Keep the flowers well maintained and the beds well kept. Buyers won’t likely see other homes in your price range with similar floral treatments and your home will rise to the top of the buyer’s list.

Repair, paint, and renew, all outdoor furniture, porch furniture and decorations and all decorative items on the property. This includes the mailbox, if there is one. In fact, a bed of mulch, flowers, shrubs, to decorate the base of the mailbox can be a great first impression if it’s well done and well kept.

Open the windows daily or turn on all the vent fans in kitchen and baths to freshen the air in the home. Many people are allergic to perfumes, spices and aerosol sprays so don’t do the old tricks of potpourri, aerosol air fresheners, etc. Vanilla extract is usually safe. You can use some REAL vanilla extract, a few drops, on a piece of bread and put it in the oven on lowest (about 100 degrees) heat for 20 minutes or so before the house is shown. You can buy or rent electronic room deodorizers to freshen the air with filtration. If you have pets, a thorough cleaning and daily vacuuming and constant running of air cleaning units is a great idea. There are lots of people who are allergic to pet dander and the slightest smell of cats or dogs will kill the sale.

Rent a storage unit if needed, have at least one and better yet two or three yard sales and get rid of more and more of the stuff that you no longer need or use. Clean out the attic and TOTALLY organize it. Clean out the garage and out buildings and totally organize anything left inside. The more stuff you have OUT of the garage, attic, storage buildings and out of the yard (if it’s not a landscaping asset) and the more you get out of the closets the more spacious the home seems to buyers.

Even a cleaned out, emptied out and fully organized garage, looks far larger and better if the cars are out of it. Before the showing, move ALL of the cars to another location, down the street (not in front of the house) or to a neighbors house or driveway. There should be NO cars in the garage, in the driveway or in front of the house when the buyer arrives with the agent.

Go through the entire home and get rid of most of the nick-knacks and about three quarters of everything else. Go to a model home or a furniture show room and study, perhaps even take pictures, of how they are decorated. Clean the home, clean the shelves and tops of things – until your property shows like a model home. This goes for every room in the house! Clean off the counters in the kitchen, clean up or put in storage MOST of the stuff in the kids rooms (everything that they don’t use a lot) and get rid of any old paperback books or unsightly books on the book shelves. If the book shelves are packed, open up the shelves by putting over half of the books in storage, or sell them at the yard sale. Remove a lot of the furniture and sell what you don’t want to keep at the next home, or put lots of it in storage. Dust and polish everything!

Remove all of the family pictures from the walls and furniture tops. Remove all of the non-professional pictures and art from the walls. Mend the holes. Family pictures, a very few, in the master bedroom and in the kids rooms, however, make the home seem like a happy home.

If you have a fireplace. Clean it up. Clean it out with concrete and brick cleaners and clean all the bricks and the inside of the fireplace with the appropriate professional cleaners from the fireplace store or building supply stores. In the winter, especially if it’s cold or dreary and overcast outside, light the fire before the showing. In this case, stay with the fire until the Realtor gets there and then just go a short space away, to a neighbors house for instance, and return (for safety sake) as soon as the Realtor leaves. Just be certain that if you get ANY smoke in the home when lighting the fire, air out the home fully before the showing. It’s great to build and establish the fire a half hour before the showing.

Make certain to wash all the windows inside and outside the home, this includes second story windows, storm windows and pressure washing or brushing and soaping all the screens too. If there is a screened porch, make certain all the screens are in perfect repair, well stretched and well cleaned. Keep every piece of glass and mirror inside the home sparkling clean.

Flower boxes are a great and profitable touch. The perennial favorite is bright red geraniums in outside window boxes, under all the windows that can be viewed from the street. There is very little that can elevate the curb appeal of a home like geraniums in window boxes, and they are inexpensive to do!

Clean, organize and clean out all the cupboards, drawers and cabinets in the kitchens and baths. Buyers frequently pull out drawers in the kitchen and bath and open cupboards to better see the size and quality of construction as well as the quality of drawer runners, whether there are pull out shelves, etc. Wow them with the quality of your inside cupboards and drawers in the kitchen and baths.

Note: You should leave the home during the time the agent is showing the house. Leave just before they get there or immediately upon their arrival. Sellers in the home are deal killers. The prospective buyers are uncomfortable speaking about the property to the agent and uncomfortable even looking too carefully at the home, if the seller is present.

Fencing is another area where you get far more back than you spend, with increased sales price and reduced time on the market! The new white vinyl fencing is a great investment to increase the value of your home, above the cost of the fencing, and set your home apart from all the others on the market.

Even condos and townhouses need to have curb appeal. If there is no yard; make certain that every bit of the steps, sidewalk, and entrance is clean, neat and in good repair. Check with the condo association to see if they will immediately and professionally repair anything that needs to be done. It is to the advantage of every owner in the complex to have your home sell for as much as possible and as fast as possible; that increases the value and salability of every unit in the association. Make certain your entrance door and surrounding areas are LOOKING GOOD!

Check all around your unit; check the parking lot and surrounding grounds; check the community landscaping too. If something needs to be done, find out if the association will attend to it, or if you can do the work yourself in some cases. For instance, if edging and weed pulling need to be done, you may be allowed to do the work near your unit. If you have concrete sidewalk and steps, for instance, just brushing on and scrubbing them with bleach will do a lot to improve the looks and first impression.

Bleach does wonders. If there is ANY mold and mildew on the outside of the home, a pressure washing with bleach will clean it and kill the mold and mildew. In case of wood siding and shingles, pressure washing with bleach (consider the double or triple strength Sodium Hypochlorite, same as bleach but stronger) will clean up wood shingles and make them look renewed. You can also use oxalic acid wood bleach or one of the professional wood and shingle cleaners. Pay attention to the labels these are effective chemicals and strong!

Proper and efficient landscaping and image enhancing techniques like these will usually add at least 15% and as much as 25% to the perceived value and thus the sales price and appraisal value of a home. Most of these techniques will bring you at least $4 back for every $1 spent.

Curb appeal should be suitably powerful that it causes people driving by the home at ten to thirty miles per hour to stop or at least turn their heads to look at your property as they go by. With a sale sign from the Realtor on your property, and great curb appeal, you should get lots and lots of people stopping, writing down the sign information and picking up brochures from the brochure box attached to the sign. Curb appeal sells!

Maximize your curb appeal and improve your first impressions when you want to sell your property. Otherwise, you will be selling slower and for less money than you will with the use of these tips.

Copyright 2000-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor for 35 years.

Source of this article is: http://www.kate-jody.com/essays/MaximizingCurbAppealandFirstImpressions.html

What We Do To Sell Your Property!

Once you have contracted us to sell your property we go to work for you to bring you the most money and best price for your property as quickly as possible. Some properties are faster selling than others based on the location, condition, size, price, of course, and type of the property.

Price is always a consideration but proper marketing and selling techniques will usually garner you, at least, an extra 15% to 20% and that is where we shine! We go into action quickly with all of the modern and traditional methods of marketing, promoting and advertising your property. Our purpose in doing what we do is to find YOU a number of willing and able purchasers in order to encourage at least one to purchase your property -- quickly and at the highest price.

We send out "JUST LISTED" postcards to 200 homes and businesses in the surrounding area about of your property. This card directs them to the web site we set up for your home with numerous pictures, a full explanation, and all the data they want to know about your home; including the price. Those folks who live close to a property are happy to pass the word on to friends about anything new on the market. They are also the most knowledgeable and the most interested in your home selling for the top price, possible. After all, they know that the more YOUR home sells for, the higher theirs will appraise and sell for.

We publish a professional brochure or flyer for your property; distribute them in numerous ways and keep them updated and fresh in numerous local businesses and in the local restaurants. We already have flyer holders in many locations. We will mail out and deliver these flyers to other Realtors by mail and in person. If there is another Realtor who is likely to have an occasional buyer for a property such as yours, they get our special attention; we invite them for a private showing, print up special flyers just for them to mail out to their prospects, in their name, or whatever it takes, and if appropriate we assign a courtesy key to them as well.

In fact, we even go so far as to let other Realtors send THEIR customers to us, we'll show the property, and still let them have the full commission. This is not done by anyone else in the business as far as we know. The advantage is YOURS!

Your property will be added IMMEDIATELY to the Multi-list computer search service for other Realtors to see and get all possible data from our listing. Our listings are known as the most informative in the area and that helps all the other agents sell your property too. That way if any of the Realtors have a customer for a property similar to yours they will find it.

The Internet and World Wide Web are the greatest single source of Real Estate business for those who use them effectively. Web sites are virtual-color-brochures which prospective buyers can view at their leisure; then call or write us when they are ready to see your property in person. Over 97% of our prospects come from our multiple award winning Web sites. Most Realtors get only a few % of their business from the Web, but they don't have sites like this one.

We advertise our web sites in thousands of other locations on the Net. We have spent many thousands of hours and thousands of dollars to get our site to come up in the major search engines especially www.Google.com the TOP search engine on earth. Google does over 95% of the search work done on the Web, but we also pay to use another 37 of the most popular search engines as well. People LOVE pictures, especially when searching the Web. We have more pictures than any other Realtor I can find.

Most other sites have one, or perhaps two or three pictures of homes and land (at the most) on the MLS and on their web sites. We have twelve or more for most of our properties. One of our properties, a 5.5 million dollar one, had over a hundred professionally taken pictures on several web pages. Internet and MLS submissions are done as soon as the property is listed for sale with us and while you are getting the work done in the real world. This puts your property in it's best appearance while you are doing the finishing touches.

One of our sellers was not quite certain that painting the entire inside of the home and putting in all new carpeting was really important to sell their home. We did the work first on a picture-fixing program on one of our computers and they agreed with us and got the work done right away. They saw how less than $20,000 in painting and carpeting raised the value of their home at least $50,000. The did a magnificent job and it was done in a couple of weeks AFTER we had all the work done on our site here.

Another seller had an motel-apartment complex that had a fire and was burned very badly, it was almost a complete loss. With picture fixing software and a lot of time, we repaired the burned off roof, rebuilt the walls, put in new windows and doors, new sidewalks, new grass and parking and made all the improvements, on our web site, before he could repair the damage. The pictures were done several months before the work was done. Before the motel was even complete in the real world, the seller decided he liked the looks of the property on our web site so much he decided to keep the property and raise the rents to get and keep a better class of tenant. Oh well, we lost the sale but our community was improved greatly.

We place digital classified ads in all manner of periodicals, to direct people to your property on our Web sites; these ads are placed in dozens of Real Estate On Line publications. Many people search the Internet for property in special locations and are interested in recreation, lodging and real estate in our area. We have numerous ways for them to find us in Web Searches in addition to the above: we have paid to have our sites listed under tens of thousands of different search criteria with the major search engines. This is done to help buyers find us and to help sellers get more exposure. Most web sites are only listed in the search engines under one, two or ten key words and search strings, instead of the nearly 900,000 terms and search criteria that we use!

Web based marketing is responsible for well over nine tenths of the calls we get each day and is the MOST EFFECTIVE WAY TO PROMOTE A PROPERTY. For properties over $300,000 about 98% of the e-mail and calls are from our various Internet marketing activities. We also send out periodic newsletters and entice those thinking of purchasing Real Estate in the future.

As other Realtors in the area develop more professional and workable Web marketing sites; we allow them to place your property on their sites also for even more exposure. Professional real estate advisors tell us to expect over 80% of ALL real estate business to come from Internet marketing within the next two years. Our experience is already well beyond that figure!

Print media advertising is certainly not dead, but far less effective than it was a few years ago. We use it a lot. We advertise extensively in the local publications. The print media have been, until the Web, the primary source of prospects for local real estate. And they are still an effective way to get people to our Web sites. Most people who are interested in real estate pick up the local papers for the area where they want to be, as they go TO the area first, usually several times, or are advised by friends who live there. Once people are convinced to live or buy in a particular area they often subscribe to the local papers of that area.

We keep you advised and informed on local market activity and changes. We also follow up with any other Realtors who show the property to ensure that they have our complete and speedy help in getting their purchasers to buy your property instead of some other one.

There will be a For Sale Sign on your property, a nice large one, with information and pictures on a professionally done flyer which will have copies kept in a clear plastic and waterproof box attached to the sign. Our web site is listed on the sign as well. As you can see, we consider our web site to be a huge color catalog that is far too large to print otherwise - and our web sites are available all the time not just one day.

We will personally call, deliver and mail flyers to the most successful Realtors in the area who have a track record of selling properties like yours. They will ordinarily find the property on-line anyway -- but these busy Realtors still get our special and repeated attention. Other Realtors are fully in every way possible, this is not usually done in this area. We owe and give our allegiance to YOU when you list your property with us, and we are always helping others to sell your property too.

All in all, we ARE The Cutting Edge Realtors, and we're far ahead of any other Realtors in our experience, ability and activity to promote, market and sell your property.

Your best choice is to have us represent you. Are you ready! If so E-mail us.

Copyright 2000-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor for 35 years in America and in Delaware.

The source page for this article is: http://www.kate-jody.com/essays/whatwedo.html

Where Does Your Real Estate Commission Fee Go - Why is The Commission so HIGH?

Many who have bought and sold properties through Realtors numerous times; even many real estate agents themselves, don't know where the commission money goes. After all, when a property sells for hundreds of thousands of dollars and the commission is tens of thousands of dollars, it seems like there is a terrific amount of money charged as commission -- and there is.

Even many attorneys, who have spent a decade or more in expensive colleges, fought to get through the Bar exam, and then spent years in their profession -- seem concerned that the commission fee is far larger than the attorney fee when all the fees are paid at settlement.

Let's start with the part that few real estate agents understand. It costs the real estate company they work for, between $19,000 and $45,000 per year for each agent to have a license, desk, and the use of company building, parking, real estate, taxes, insurance, utilities and professional support services -- whether they sell anything or not. Since the real estate brokerage commission is split between the company and the agent, an agent must make three to six thousand dollars every month in commissions for the company to break even on that agent with the company share of the fee. And, most importantly, the less productive agents in the office raise the cost for everyone. The other agents therefore, must each earn more to carry the share of the less productive. Many agencies will ONLY allow high quality, top producing agents to work at the company, so that the less successful agents don't pull down the average income of the company investment.

The total commission is split between the listing company and the listing agent ; and the selling company and the selling agent. Usually the commission is split four ways, sometimes it is more. Splits are arranged within each company and for each agent; sometimes there are numerous different percentages and split arrangements in each office.

The company part of the commission is spent on office rent or mortgage, taxes, property insurance, maintenance, signs, radio and TV advertising, bill boards, magazine and newspaper ads, cleaning, supplies, phones, paper, desks, utilities, legal fees and legal insurances, management and support staff as well as numerous memberships, dues, legal fees and expert professionals. Many companies also pay a fee to a franchise company or home office for the right to use the company name. Fees are also paid to regional and national home offices to defray national and regional advertising, management, staff, etc.

In the final analysis, an office that has 10 licensed agents must require those agents to bring in at least forty to seventy thousand dollars in commissions every month to keep the office bills paid!!! I don't know any real estate agents who actually understand or believe this, unless they have personally been responsible for office expenses for a year or more. Responsible, meaning writing the checks out of an account that costs THEM money. Even then it's hard to understand how it all adds up to such a huge figure, but it does. Offices that earn less than these amounts per agent are disappearing fast, few remain as it is.

Computer purchase, maintainance, training and software expenses are now one of the larger expenses. Many offices feel squashed financially, by the financial pressure of adding the purchase of computers, printers, digital cameras, and the maintenance, networking, repair, software and constant management of computers to the already high cost of doing business. In fact, there are even a few of the larger companies who specialize in purchasing other real estate companies who can't keep up with the expense and responsibility of this digital age. Any company or agent who is not keeping pace with digital realty and digital real estate, is not likely to be around much longer.

More and more people rely on the Internet to pre-shop for real estate. You know that. You are one of them and we welcome you to our site.

The purpose of our Web Site is to allow you to educate yourself and pre-shop for real estate before you call us. Let us know if you want us to have anything else on our site for you. We'll listen! As the Internet becomes the favored tool it is also the most important tool for buyers -- radio, print and sign ads become less workable. Smart sellers now want to see what a Realtor is doing on the web before they choose which Realtor to list their property for sale with.

Advertising and marketing expenses have grown tremendously over the years. For instance, when I first got into the business, thirty years ago, I started out helping to manage a real estate, building and developing company. At that time, over 60% of our phone calls came from signs on the property. Also at that time, bulk mail cost an average of thirty cents a piece to create, print, post and send and our response rate was often 3% or more!!! Now less than 10% of our calls come from signs on the property. Bulk mail averages over a dollar a piece and mail response is far less than half of one percent. In fact according to one national Realtor's marketing research team, real estate mailings now range in response from one in a thousand to one in three hundred. The best results costing the most to obtain because of expensive mailing pieces with full color, pictures, etc. One recent survey showed that average cost per resonse to a mailing was $2,000 - whether it was a lot of cheap postcards or fewer nicely printed color pieces.

Since 1971, I have studied and researched marketing and sales via schooling, reading and keeping good records of expenses and results. Thirty years ago the average cost of newspaper advertising to get a phone call was seven dollars. One in every ten calls coming to a top agent, resulted in an appointment. One in five appointments resulted (for a top agent) in a sale! Of course these were averages based on the best advertising, telephone and selling techniques that were available. Often the averages were not as good in other companies or for other agents. So the average cost of a sale using just print ads was about $350 thirty years ago. For my office of 50 agents in 1979, the average print, signage and bulk mail advertising cost had risen to $500 per call.

Now the average cost of one phone call from a print ad is from two thousand to five thousand dollars and that is growing by the month! So even if one could get one in ten calls to result in an appointment, and one in five appointments to result in a sale, the cost of advertising per contract would be phenomenal.

The nicer the property, the more attractively priced it is or the better it is located the more response the ad will get. Luckily for print ad salespeople and newspapers, few Realtors keep records of what advertising costs and results are. Singage is still a factor in obtaining calls and used to be the most cost effective. Therefore many Realtors will seek to get a listing in a hot area, no matter what the listed price, just to get a sign on the property! Can you blame them?

Print ads are done mostly to please the seller. After all the seller wants to see something tangible as proof that the Realtor is spending some money before that big commission is paid out at settlement. We certainly can't fault them for that either, can we? Interestingly enough, those sellers who price their property highest for what it is and who are located farthest from where the most buyers want such a property, are quite often the ones who most want to see their property advertised expensively!!! In the case of an overpriced property that is not well located -- thousands of dollars can be spent in advertising with not one phone call resulting! It's just part of our business and always has been. Ironically those sellers who have property priced the highest for it's location and want the most advertising, are often the ones who want to pay the least commission too.

You may find this all unbelievable! It is! I've been doing this business all my adult life, going to courses every year, working in the business in many parts of the country as a property specialist -- and I still can't believe the costs and conditions of this business. I am amazed every day by all this!

Each company pays their agents differently but the overall or gross commission as it is called is split in some fashion between the company and the agents. The expenses are split too. The most productive agents usually get a larger split of the commission, relative to the company. Some companies offer top agents the right to rent office space, usually at least twenty thousand dollars a year, and keep all the commission! And, top agents almost always spend a far larger percentage of what they earn for advertising, marketing, education and other business expenses that are designed to bring them future sales and income.

The best agents, the best ones for the seller to have, are those who do everything possible to let all the rest of the Realtors in the area know everything possible about the property they have for sale so that other Realtors can try to sell it too. When two Realtors from different offices are involved in the sale the commissions are split in half again. Typically each of the two companies involved would split the commission and then each of them would split with the agents involved. Often there are other commission splits payable as well to a referring agents; an agent who referred the listing or one who referred the buyer. To give you an idea of what all this means, when I averaged all the commissions I made over the last several years I averaged three quarters of one percent of the sales price for the properties I sold - BEFORE expenses! Now you can see why we all try to sell millions of dollars of property each year!

In most areas there is another expensive service that the companies and the agents use -- the Multiple Listing Service or MLS. This is where all the agents have agreed to put everything they have on a centralized and searchable computer so that all agents can have access to all properties. Once you choose your Realtor that person can access everything in the central computer files if they are a member of the MLS. Some of the smaller companies are not members because of the cost.

From the proceeds of commissions earned by the sales and listing agents, they then pay for their auto expenses, MLS fees, annual county, state and national Realtor dues, commercial licensing fees, business licenses, electronic lockbox keys, advertising, insurance, legal fees, computer related expenses, phone bills, etc. In the final analysis a Realtor who sells two million dollars in real estate a year is usually working diligently and effectively for his clients for only average earnings in area where she lives after all these expenses. And there are others; client gifts, professional dinners and luncheons, Chamber of Commerce dues, and numerous charities who consider that Realtors are the most likely to donate heavily to all the charities... since they have so much money.

Selling Real Estate is a life style and profession most of us would not trade for anything. And there are some of us who have made a nice living over the years at this wonderful job. It's all about helping others. If we do it well, we are paid well, and if we do it very well we are paid very well! Happily I have been working as a Realtor since 1972 and I LOVE it.

We know that for us we have the best job on earth and we do it our way. We use primarily the modern tools of the Net, Multiple Web sites, all the latest devices and techniques, MLS, several computers, as well as selected traditional mailings, some print ads and several professional assistants all to help our clients better and faster!

May we help YOU? We hope so! And, we hope to get paid when we do!

Copyright 2000-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor in America and in Delaware for 35 years.

The source page for this article is: http://www.kate-jody.com/essays/commissionfee.html

List Your Property Correctly & Make More Money!

Selling Real Estate is an ART - not mathematical rocket science. There are no rules, no absolutes, no equations to determine an exact price in most cases, and no way to determine the time needed to sell the property, or where to find the buyer.

There are however lots of tips and techniques that can be used, by someone who understands the business - to sell your property.

Sure there are things we call RULES such as the maxim that value is determined by location - location - location.

There are averages regarding the "numbers system" and how much advertising it takes to get how many people to contact us and how many contacts for an appointment and how many appointments for a contract and the average commission and the average price per property... And, there are communication skills, marketing, advertising, and promotion skills, negotiation skills, phone skills, email skills, writing skills and the list goes on. But there is no science.

Underneath the abilities of a successful Realtor are thousands of hours of training and years or decades of experience; built upon that is attitude and professionalism, ethics, legal knowledge and skill, math skills, computer skills, research skills; and built up that are abilities and skills of planning, goals attainment, management, teaching skills, and leadership skills.

At all points there must be proven abilities in all these things and many more because theoretical knowledge means nothing. Finally there is the art of pulling it all together quickly, efficiently and the constant, daily quality control of making planning become actuality! Then, usually the Realtor is paid some fee.

Selling your property:
When you decide to sell your property you want the most money you can get for it; as fast as you can get it, so do we. We get paid based on the ACHIEVED sales price; but neither of us gets paid if it doesn't sell. If it doesn't sell both of us lose money. You lose money by paying a mortgage too long or by having the property require more repairs as it physically depreciates. All property except raw land does depreciate unless you spend time and money to keep it up.

Very few people accept what the Realtor knows is true about the actual value of the property; let's be honest; we've not had one person take our word for value in decades. Even my own family, all of whom are professionals in various factions of the Real Estate industry, are never willing to sell a property for what it's really worth. We all want just a little, or a lot more than the market allows.

We can push the values up, up, up, with aggressive marketing and salesmanship - that is what we do - we push, market, advertise and sell to get the value and selling price of your property UP to far more than what it would sell for without us. That is what we get paid for. Even Realtors who assume they know a geographi market or a type of real estate they are not proven expert in, are usually rudely awakened when they attempt success.

We are expert Technicians - NOT magicians! We can not ordinarily take a $30,000 property and sell it for $100,000 or a million dollars; although we are expected to be able to do almost that at times. If a property is going to be listed above the market value it will take better marketing, a longer time to market it, and it will have to be showcased to its maximum potential. The showcasing is the responsibility and cost of the seller, the rest is our responsibility and cost.

Usually the FIRST FACTOR in a buyer's equation, as far as which property to look at, is based on price. Second is the buyer's perception of the relative value of the property; which they gain from the Web sites and from printed pictures and from driving by the property. They could care less that you WANT to sell your property for. The buyer wants to buy it for less than market value not more. and if your property is obviously priced above the market, nothing we can do will get it shown or sold. Herein lays the difficulty of our profession.

Yes, we can ask any amount of money for your property. You can direct us to ask any amount that you want to ask; however it is the purchaser that determines how much the property will sell for, not us, not you. That being said, there are things you can do to increase the price and perceived value of the property. You can dress up the property to place it in its most attractive light.

We can do a lot to get maximum price as well. We can market the property to expose it to thousands of people and hundreds of other Realtors; we always do that and we do that well, very well, far better than most. We have hundreds and thousands of people and out of town Realtors who are coming hourly to our web sites just for real estate. We put your property on the Multiple Listing Service, just like most other Realtors, to expose it instantly to all other Realtors in our area.

The prudent and service oriented Realtor, and we are - carefully write the copy for the Multilist and we carefully enter your property in all the possible ways it can be entered to make it easier for others to find your property. We do this far better than most others do, far better! We go out of our way to help all the other Realtors find your property and sell it for you in addition to ourselves. We go out of our way to include all the information a buyer or another agent needs and wants to know so that they are knowledgable and interested in the sellers property, before they contact us.

We have signs to capture the dozens of people looking for property in the exact location as yours, who may be riding by. Since we show your property location on the Web with a location map, the sign helps assure a person who has seen the web site and wants to drive by and check it out. We contact all the neighbors, at their home address (wherever that may be) so that they can invite friends and family to purchase something in the neighborhood they love and where they have purchased. Signs are valuable but we do all the rest as well. Print ads are the least effective form of advertising these days; but that is another article. Our thousands of informative post cards that are sent out each month are a major factor in getting people to know about your property; the cards and sign, of course gives them our web site address where they can see your property showcased to maximum advantage, with all the pictures, price and full information.

Let's get back to the point. Pricing a property correctly will make more money for you.

Your Realtor should bring you a Comparative Market Analysis which will show you how much other properties have gone for in your nearby areas that are in some ways similar to yours. We all know you want MORE than that amount and in your position so do we. The way you make more money is to price it to sell in 30 to 60 days or more if you wish. If your property sells in less than thirty days, it is possibly priced to low; however in some markets if it doesn't sell in a day or two, it is priced too high. Your Realtor, a top agent in your area - Knows. If it sells in more than four months, it is possibly priced too high or does not look like it's worth the asking price from the prospective purchaser's point of view.

One of the worst problems in pricing a property too high or not having it on the multilist properly is that it does not attract other Realtors to bring their clients to buy your property. Property pricing, done sensibly, does result in a faster sale. Property pricing, done properly, does result in more interested calls and thus gives us more of a chance to talk up the property honestly and enthusiastically, to get someone out to see it. Pricing a property too high makes the property boring to other Realtors and to the market in general.

Most buyers ask how long a property has been on the market at the asking price and if any offers have been made. They know that time on market and price or a reduction, is a direct gauge of how well it's priced. Typically properties, especially homes that are priced most correctly to begin with -- sell for more than those that are priced too high to begin with.

There are several reasons a seller prices a property too high:

The primary reason is that the Realtor takes the direction of the seller after advising them correctly and prices the property higher than it should be. We are supposed to do that. We are supposed to price a property exactly the way the seller tells us to after we advise them. The second reason is that the Realtor prices the property too high in order to not lose get the listin so that another agent won't get it. There is always another Realtor who will take it at the higher price the seller hopes to get.

We also have some real estate agents who will do what is known as "buying the listing" by pricing the property too high on purpose so that no other real estate agent will be considered competitive by the seller. Whenever you see a Realtor with most of the signs in an area where there is a very competitive market place you should check to see if they customarily price their listings way too high. If the signs stay up for more than a few months, the prices are probably way too high for the current market.

Another reason for pricing a property too high is that the seller wants room to negotiate. The purchaser will always be willing to negotiate. down, but if the price it more than 5% above market value most buyers will just pass you by and never make an offer.

Most of the action on your property will ordinarily occur in the first few days or weeks after placing it on the market. There is a pool of prospective purchasers who are waiting for a properly priced property - just like yours. If yours is priced to high, they will just keep on looking and we'll not find out who they are or that they are even looking. These buyers have seen most or all of the properties in the market in your price range and general location. They know values to within a couple of percent, at most, and they are looking for properties under-listed not over-listed in price. They will not even take a look at an overpriced home.

Sometimes a price reduction will still fail to attract interest as the property is no longer fresh on the market. Realtors especially, are hard to attract to your property, with the buyers they have who have been looking for a property just like yours. Those Realtors know the buyers they have are very savvy regarding prices and values and they don't dare call them on an overprice property and lose the delicate allegiance they may have, of a prospective purchaser.

Overpriced properties do one thing very well. They help the other, more correctly priced properties in an area to sell more quickly - while the overpriced one languishes. It is our duty, the duty of any Realtor, to provide you with a comparative market analysis - which is a comparison of recent homes in your area that are in the categories of; sold, still on the market and have been taken off the market, along with the times they spent on the market.

There is no exact price and no exact formula. Every property is worth exactly what a buyer will pay for it. Thus, the market place determines the value. The seller determines the asking price with the advice and help of the Realtor. If the asking price and the market value are equal - the property is SOLD. If the seller thinks he can just price a property foolishly high and find a fool with money... so far in 35 years I've not seen it happen.

Realtors have no control over the market, only the marketing plan. The seller determines the asking price - don't blame the Realtor. And, never select a Realtor to sell your property, based on what asking price that Realtor is willing to put on the property.

There is a corollary here. Some Realtors charge less commission and some sellers want the Realtor that works for the least commission. Real Estate sales and marketing is extremely competitive and exceedinly expensive. The best service costs more money not less and the best service takes the best agent. The best agents don't have to work for reduced commissions. You get what you pay for there too.

Copyright 2001-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor in America and Delaware, near Rehoboth Beach, for 35 years.

The source page for this article is: http://www.kate-jody.com/essays/listyourproperty.html

I have a buyer for your property and I can sell it now!

A Realtor has just talked to you and said, "I have a buyer for your property and I can sell it now; perhaps for more money than the price your current real estate agent has it listed for." Have you heard this or a version of this? Or, "I have a buyer for your property and I can sell it now; for Big Bucks (with an incredibly high figure named) perhaps for more money than that."

In the fiercely competitive real estate business, it is a too common practice for one real estate agent to entice a seller to re-list their property with the new Realtor. It is also against the Realtors regulatory requirements in several ways.

If the Realtor will break the rules in his own professional organization where he has been and will be for years perhaps... how honest and ethical will he be with YOU a one time relationship? Frequently, the wording used to entice is vague and the idea insinuated rather than spoken plainly – but the intent is clear. Realtor B suggests or insinuates to the seller “Get rid of Realtor A and list your property with ME as I have several buyers who will buy your property right away.” As a seller you want to sell your property and for more money, right? BUT, Do you want a liar to represent you?

This practice of enticing a seller to change listing agents is more common in some places than in other places. There is another version of this which occurs when the seller communicates with several Realtors to decide which Realtor to list his property for sale with. One of those Realtors being interviewed or spoken to by the seller may offer to list the property as much as double or triple the market value in some market places. In others it may be only 2% or 5% more than the others are suggesting. Usually, with more unique properties, at least one Realtor will offer to list the property at 20-40% above market value, in order to get the business. Those are the same Realtors who, knowing the value of billboards, have signs all over the place that are erected to stay for a while. Those same Realtors may have no signs on their properly priced properties as a rule; so that they can sell those properties without splitting the commission with another Realtor in a co-brokerage arrangement. If you hear this type of language or see this type of operations from a Realtor; realize you have just connected to one of the 2% or less who are not fit to deal with and move on to another; don't let your own greed cost you dearly.

A property should be listed very close to market value or better yet, at market value. There IS such as thing as market value and that value can be found by a competent appraiser to within less than 2% and by a competent Realtor too in most cases - but not as an appraisal, as an opinion of value. Market value can also be shown with an honest comparative market analysis, done by a Realtor.

Nearly all buyers are intimately aware of market values for the type, location and price range of property they seek and buyers want property that is below market value not above it. Or at least they want a better property at market value. In other words most buyers are expert at the price range and location they have decided on and they will just ignore properties that are overpriced.

It is not only the Realtor who is isolated from factuality. Frequently the seller pushes the listing agent to put the property on the market far above the market value; in fact that is the case about 70-90% of the time, if a property is overvalued. An honest Realtor will advise the seller of the real value of his property and suggest that he list the property for sale, within 10-15% of the market value.

For a slower sale the property can be listed at or above market value. For a quicker sale, which saves monthly mortgage payments if the seller still makes payments, listing the property at or even a tiny little below market may be what the seller needs. It is the Realtors job to advise the seller honestly and then to abide by the sellers decision.

Now back to those who encourage sellers to change Realtors so that the buyers they have will buy the property. They are liars. If they really had a buyer, other than themselves, they would sell that property to the buyer right now and not dare wait to get the property relisted and risk losing the buyer as timing is everything. IF they did really have a buyer they would sell the property to that buyer now and co-broke with the sellers current Realtor. And if they say they can get more money than your current Realtor has it listed for or more than market value – then if they were not misleading, they would go ahead and sell it now for the lesser amount and be a champion to their buyer -- wouldn’t they?

THINK ABOUT IT!

Copyright 2000-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor for 35 years across America and in Delaware.

Source for this article is: http://www.kate-jody.com/essays/whatdidyousay.html

Why Do Realtors Advertise Your Home in Print,on the Radio, on Television, etc.?

Why Do Realtors Advertise Your Home in Print,on the Radio, on Television, etc.?

Realtors represent a huge part of the national advertising expenditure each year in newspapers, magazines, radio and television. Every seller would like to see their home in a large, impressive ad. The seller wants the Realtor to run the ads large and constantly until the home is sold. Realtors on the other hand know, if they keep good records, that few buyers purchase as a result of any print ad. The advertising is done to find a person, any person, who is seeking to purchase some sort of property at some price. A prospective purchaser may call on a large, expensive, waterfront home and end up buying a small cottage in the country.

Prospective purchasers sometimes come to our area and pick up some, or even all, of the local papers and sales periodicals of all sorts. At last count I found 29 different newspapers, magazines and real estate sales sheets that promote real estate in our local and surrounding areas. As a buyer is going through the several hundred real estate ads, that buyer then decides on perhaps a dozen to call about. That buyer is only calling to find out which property to eliminate from his list of possible purchases. Most of the time the prospective purchaser will eliminate all of the properties he calls on or all but one or two. For this reason the expensive ads bring in very few calls and far fewer appointments to show properties. Add to this the fact that sellers who want too much money, want the most advertising.

Here is a little inside trivia for you: the average cost per phone call from print advertising is well over $5,000 per call in our area. More than 80% of those calls will not give a phone number or contact data. And most of those calls are not qualified, ready, willing, or able to buy the property they call on. Shocking isn't it? I kept the records for two years for a 55 person office recently and the cost of print advertising to get ONE purchaser as a direct result of the ad was over $100,000... perhaps well over that because we only had two in two years so that is not a big base to support an average upon.

The average percentages for this area are that for every four thousand dollars in advertising expense, of any kind, a Real Estate agent can expect 1 to 5 calls, if the ad is well presented and if the property is priced right, and advertised with full particulars and it's in one of the most popular areas.

As a general rule for each 10 calls received the Real Estate agent will set 1 to 3 appointments - seldom is that appointment set for the property that was called on. And then the very best agents will be able to convert 20% of the appointments into sales. So let's see how this works out in a budgetary sense. The most effective ads on the most popular properties which are priced the most attractively; can result in twenty thousand dollars in ads obtaining perhaps 20 calls, resulting hopefully in 5 appointments and five appointments to get one sale. What a dream this business would be it that were always and predictably true. Most ads, no matter how big, beautiful and attractive get no calls, therefore no appointments and no sales. And, if you remember your math, zeros don't average well. :)

So why do Realtors spend so much money on advertising. The most important reason is that sellers demand to see their property in the paper - hopefully in a large ad and in every paper until it's sold. In fact it is well known that the more overpriced the property is, the more the seller wants it advertised and the less calls are obtained. The Realtor wants to advertise only the most attractive properties that are the most attractively priced. However, we all know that the bigger the ads and the more advertising that a Realtor does - the more the sellers like it and the more they want to be affiliated with the most well advertised Realtor. Thus the Realtor gets more listings, not more sales!

Most properties are sold because of the MLS and a response from one of the other Realtors, or from a Web Site, OR in more rare cases, the real estate agent calls, writes or speaks to someone about the property that is for sale to someone that the real estate agent has been working with, often a customer the Realtor has been working with for weeks, months or even years.

Real estate agents spend most of their time and energy repeatedly getting back to prospective customers, contacting those who have already looked at properties and found nothing they like - to tell them of a new property and contacting other Realtors to alert them or remind them of a property for sale. We also send out thousands of postcards, letters, and e-mails. The more successful agents may have as many as a dozen people behind the scenes just sending out communications, of various sorts and constantly following up, with the intention of keeping the one senior partner, the visable selling partner busy with appointments.

Each ad, letter, postcard, call, e-mail or personal contact can be called a "Presentation Impression". It takes several thousand "presentation impressions" as we call them for each appointment and tens of thousands of these presentation impressions per sale.

One of my close friends sold her own house. It took her about a year, holding an open house almost every day, advertising it frequently in the various papers and presenting her home one way or another to perhaps three thousand people in the process. She is quite a good salesperson, her home was very attractive, very well located and finally sold as the market came up PAST the price she was asking for the home.

She found out after she sold it that there had been such unusual appreciation for homes like hers in her neighborhood that she actually sold her home about 15% too cheap after all that time and work and expense. She LOST over $30,000 in sales price in order to save $4,000 in commissions. Although she loved meeting all those people and showing them through her home; she would have saved over a year's mortgage payments and gotten about 15% more for her home if she had listed it with a local Realtor.

She probably won't use a Realtor the next time either; she loves selling her own home - it's like one long house party for her, in my opinion. More power to her! I suspect that with the signs, ads, and those she met at the open house every day - she may have set a new record for the most number of presentation impressions for one house sale. But, then she had no other home she could sell to those who came ready to buy a home and didn't fit her home. From listening carefully to her talk about her advertising, she spent about 8% of the total she got for the home in newspaper ads, more than the commission would have been. We won't count her time, she loved showing her home to all those thousands of people!!! She didn't use a realtor, saved about $4,000 and it cost her at least $50,000 to save the $4,000.

Realtors advertise to find sellers more than buyers, when they use conventional means of print, radio, TV, etc.

There is a new game in town however. Web marketing. Advertising on the Internet with a PROPERLY DONE, Real Estate web site is the most effective way to find buyers we have ever had. Realtors, for that reason, are the second highest user of the Internet.

The most effective real estate web sites have lots of pictures, lots of information and are the most user-friendly to the Internet visitor. Although it is very expensive to have an effective web site - most of that expense is in hours rather than money. Only about 2% of the real estate web sites are effective - actually it looks to be like less than 1% of all the real estate sites that work for the Realtor... according to my observations and experience.

Few Realtors spend the time and money to give the buyers what they want. We hope we are giving our prospective sellers and purchasers what they want to see in every way. We get 2 to 10 emails and about 20 calls a day about our properties and many of them result in appointments to see the exact property they have reviewed on our site. Because we have all the data, maps so they can drive by and numerous pictures of the inside.

If YOU can figure any way that we can be more helpful and better for our prospective purchasers please take a look at the rest of our web site and check it out thoroughly. Write me and let me know if there is something you feel we can do better to help you make a property selection or feel more ready to purchase.

We wish you all the best, and thanks for taking the time to read this.

Copyright 2000-2005 by www.JodyHudson.com

Jody Hudson has been a Realtor for 30 years across America and in Delaware