I was a witness to a time that they were packing for a trip that involved traveling through Australia on a motorcycle. He had his wife place the items that she wished to carry on the bed in the spare bedroom. When he saw all the items that she planned to carry, he stated that she would have to severely reduce the amount of stuff. After the second and third reduction, he said “for us to make this happen, you are going have to be ruthless”. At the end of the day the contents were reduced to a single backpack each and they had a great trip in Australia.

There are several applications to being ruthless in the current real estate market.

Sellers

If you want to sell your property in this market, you need to make sure that you consider the following advice.

1. Price the property to reflect today’s market. Take a serious look at what sales have occurred in your area in the last few months and what your competition is with regards to other properties that are for sale. I have watched communities sit with little activity because a property owner set a price on their property and everyone else based their listing price off of that price. They do this without knowing the process or reasons used to set the price on the original property. Conduct due diligence before setting the price and keep a sharp eye on the market data so your price level does not become stagnant.

2. If you are in current financial trouble or on the cusp of it, do not wait until you get behind on your mortgage to put the property on the market. With the current property inventory and the subsequent credit crunch, real estate agents need more time to find a qualified buyer. If you are in this position, you need to be frank and honest with your real estate agent and be absolutely ruthless in setting the price. Neighboring property owners will attempt to discourage you from do so. They do not want their perceived property values to drop if a property sells below what they believe is the value of their property. Just remember, it is highly doubtful that those owners will chip in and pay your mortgage if the property does not sell in time to prevent the foreclosure.

3. If your property is currently for sale or lease in this market, make sure that it is clean and ready to be shown at any time. Make your property as available and accessible as possible for agents to show to potential buyers. Appointment only listings will reduce the amount of times that your property is exposed to the pool of buyers. Take a serious look at the maintenance, cleanliness and general appearance of the property. Be ruthless in reducing the amount of clutter in the closets and storage areas of the property as well as the main living areas. In a market with numerous choices, you may only get one chance at a potential buyer before they move on to another property.

4. If you receive a low offer on your property, do not make the mistake of failing to counter the offer. The low offer may come from a person who is capable of paying a price that you will accept. If you fail to counter the offer, you will never know what they might have paid.

Buyers

If you are a qualified buyer that has the ability to purchase a property, quickly and without financial contingencies, this market is full of opportunities that can be “cherry picked” at price levels that have not been available for a long time. The chances to successfully acquiring a value based property in this market are as sure as the sun rising from of the east tomorrow morning.

If you are an unemotional investor in this market, you can be ruthless with offers on properties that are for sale. The probabilities of a seller accepting your offer decreases as the ruthlessness of your offer increases. I recently had an investor who placed four contracts on potential properties in a five week period. One of the offers was rejected without a counter offer, two properties failed the inspection and he successfully acquired the fourth property.

This market has more to offer to buyers than it does to sellers. However, all markets are cyclical, and we will reach a point when the market will settle, inventory levels will stabilize and property prices and values will again increase.

James West

Image via Wikipedia

I found an interesting article that I wanted to share regarding the current situation in our country.  If I had written the article I would have added one additional person/reason, you and your individual power of choice.  There are many altars where we could lay the blame for our current economic situation, corporate and individual greed,  excessive lifestyle choices, gluttony, worries regarding social standing, and intentional ignorance of a changing world, just to name a few.  However, we should never forget to search inside ourselves to see what contributions we made to this situation.

When credit is free flowing and good employment is just a phone call away, we tend to live outside our means and not follow a sensible budget and then curse the day when things are not going our way.  We elect politicians and fail to hold them accountable for their actions, and for the direction that we allow them to take us in. When we get in a bind we turn to the people who created the situation and ask them for help to get out of it.  When they decide to help, they wash away the problem with a bar of soap made from taxpayer money and personal freedom.  Just remember, every time you use a bar of soap, there is a little less of it when you lay it back down than there was when you picked it up.

I hope the following article will at a minimum cause you to think about choices and may cause you to question and hold accountable the parties at fault.

545 PEOPLE
By Charlie Reese

Politicians are the only people in the world who create problems and then campaign against them.

There are no insoluble government problems.

They, and they alone, should be held accountable by the people who are their bosses provided the voters have the gumption to manage their own employees.

We should vote all of them out of office and clean up their mess!

Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

It’s Not Personal, It’s just Business

There are many cities around the country where there is a considerable amount of residential inventory for a potential investment buyer to sift through. The metro Atlanta area is certainly no exception to this rule. When investors are pursuing opportunities in Atlanta real estate, they will often make an offer that is way below what the seller had anticipated. It is the adverse play that car salesmen use when quoting prices on a car. The term “peel them off the ceiling” is used in the car business when a salesman initially quotes a substantially higher price than what a buyer should be willing to pay. The desired effect is the prospective buyer gets so mad they “hit the ceiling”. After the buyer calms down, a reduction in the price tends to look more reasonable than the initial quoted price. The “low ball” offer is designed to “pick them off the floor” a increase in the offer price tends to look more reasonable after the seller calms down. In some cases a true “low ball” offer is used to quickly establish a floor in the price that is acceptable to the seller. It is easy to understand that some property owners and their agents could be offended or at least mildly perturbed when they receive  a offer is so low that its “offensive”.

Low Offers Are Opportunities

Some sellers and their agents refuse to counter a low offer. I have heard  people say “we did not like that offer, will the buyer submit another one?” or “we are so far apart that we could never come to acceptable terms”. In my opinion this is not the best way to handle this situation. It takes just a few minutes to fill out the paperwork that is required to counter an offer. What do you have to lose? If you do not take the time and effort to counter the offer, the prospective buyer will likely move on to the next property and you may never get another chance to negotiate with them again. Sellers need to realize that many investment buyers have as much emotional attachment to their money as the sellers do to their property. Set the emotions aside and simply counter the offer. At least you won’t stay awake at night wondering if they would have paid more to purchase the property than was initially offered.

Call me today to begin your search for Atlanta real estate.

Investing in tenant occupied  commercial properties with a decent CAP rate is a viable alternative to investing your money in the stock market. This form of investing requires extensive due diligence but has the ability to grow your investment dollars steadily. Its no secret that we are experiencing a down turn in the real estate market. If you purchase a property in a down market with a good rate of return, as the market recovers, your property will likely increase in value. This lines up with the old adage  of “buy low, sell high”. The object of this type of investing is to obtain a good return on your investment dollar and have the possibility of picking up a decent rate of appreciation as the market recovers.

Over the past few years, many commercial developers retained ownership of some of their properties and leased them to tenants. A portion of these developers are now selling their tenant occupied spaces to obtain cash to purchase or finance other deals in this market. If you are interested in earning seven to eleven percent on your investment dollars, please contact me (James West) at Maxsell Real Estate 678-741-2060 to learn about the opportunities in your area.

1.    Go to each of your outside water faucets and remove the garden hose. Removing the hose will allow any excess water to escape from the faucet and will help to prevent the faucet from freezing. If there is a cutoff for the outside faucets on the interior of the house, it is a good idea to trun the water supply off there as well.

2.    Make sure your HVAC system has a clean filter in it. This will allow the furnace to work more efficently.

3.   Many modern furnaces produce condensation during the summer using the AC side of the unit and in the winter using the heat side of the unit. On the outside of your house where the HVAC pressure lines come in from the compressor, there will often have a clear plastic tube that is used to drain the excess condensation from the system. When the temperatures are cold like they were today and tonight, ice can form at the end of this tube preventing the furnace from draining off the excess condensation. The furnace will often recongize that there is a line blockage and will shut itself down to prevent water from flooding the house.  If you have not experienced problems with your furnace in the past and it suddenly ceases to provide warm air, check the condensation line for a ice blockage. You can always call a qualified HVAC technician to come check your furnace if other problems exist with your HVAC unit.

4.  If your house has a crawl space or basement, take the time to visually check the space for water leaks after a spat with cold weather. You might catch a small leak that could amount to serious trouble over time.

I hope everyone makes it through our winter weather without incident. But remember, if you suspect a problem, the quicker you fix it, the less costly it will be in the long run.

Here are a few tips that have nothing to do with real estate that will make your experiences in 2008 better.

1. Find an old friend that you have not kept in touch with and renew that friendship.

2. Travel, even if it’s to place that you have been before. The cost of getting there and back will be small compared to the memories that you obtain while making the trip.

3. Forgive someone who has wronged you in the past and realize that it’s more beneficial to you to do this than it is to them.

4. If you want to work to make something happen this year, write it in a place that you see everyday and you will work harder to make it happen.

5. We all have a list of things that we intend to do before we die. Make it a point to accomplish at least one of those things this year.

6. Work hard, play hard and realize that a lot of the enjoyment that can be derived from life can not be purchased.

7. Take pictures, have them printed and placed in an album.

8.  Keep a daily journal even if it’s just on a legal pad.

I wish the best for each of you in 2008 and look forward to helping you with your real estate needs this year.

James West
Sales Agent
Maxsell Real Estate

 I live Cherokee County because this is where my significant other and most of her extended family live. I decided that traveling more than an hour each way was consumming too much of my time and was accumilating too many miles on my vehicles. So my choice for living here is convience and being near the people that I care for and spend most of my free time with.

While the office location for Maxsell is convient, the reason that I work at Maxsell Real Estate was not made from a convience stand point. A couple of years ago, I was searching for property within Cherokee County to build a barn on to house the toys that I have collected over the years. I wanted a location close to Woodstock or Canton and the property  zoning had to allow for the type of structure that I wanted to build. The required zoning ruled out most residential areas and the commercial areas were too pricy for me. I search through FSBO’s, classifieds, MLS,  FMLS and every other resource that I could think of. I spoke with numerous individuals that included both property owners and real estate agents. I drove to see many properties that were drastically different than what I had been lead to belive they would be while discussing the properties in phone conversations. Through this process I found I individual that provided realistic and factual information on every property that he listed. This individual is Dan Thorton and he works with Maxsell Real Estate. When I drove to a property that he had provided detail on it was what he had described it to be. He consistently displayed the qualities in a Real Estate Professional that I wanted to be associated with. So I chose Maxsell Real Estate as a place to work  based solely on the integrity of people that are associated with the company and in the ability to make a living doing something that I enjoy.

James West,  Sales Associate, Maxsell Real Estate

If we accept that a rising tide lifts all boats, it is easily assumable that a falling tide would ground some boats. When a grounded boat is observed by onlookers, many individuals would say that boat should have never been moored there in the first place. Other individuals would look at a grounded boat and determine a way to profit from the situation. The current residential inventory in the Atlanta area has some grounded “boats”, meaning distressed properties in it and other properties that are quickly heading for a distressed status. The term distressed properties does not only apply to properties that are in a state of ill repair but also applies to properties where the owners have maintained the properties but currently find themselves in bad financial waters.

 There are more properties for sale in the Atlanta market now than there have been at previous points this year. Some sellers are trying to get out of houses that they can no longer comfortably afford, while others are trying to capture some profit from the growth in value of their property over the last several years.  There are also numerous residential builders in the Atlanta area that are carrying more inventory than they are comfortable with. They’re potential profits are decreasing daily because of the overall cost of maintaining the expenses related to their inventory and they are making deals today that they would not have considered earlier this year.  The market is becoming increasingly more fertile with deals for savvy investors in real estate.

 Investors of residential property have the ability to make higher profits on their capital in times when the inventory of properties is at a high level. They realize that some of the properties will be sold at distressed levels and sift through the inventory to find the deals with the best rate of return. Many of these investors turn to the local real estate professionals to help them gather a list of potential properties to look at and to help determine the value of an individual property based on today’s market. Many real estate professionals accumulate contacts with bankers, mortgage agents, and attorneys, and in doing so often obtain knowledge of distressed properties prior to the general public. When these contacts have a property that is distressed or is becoming distressed, they will reach out to the real estate professionals to determine if they know of an investor that is capable of quickly making a purchase on a distressed property. In many cases the agents have a limited amount of time to review the potential property and to determine if they have an investor who would be interested.

To obtain information on distressed properties in your area, contact a local full service real estate professional and provided them with a list of the prerequisite criteria that you require to invest in real estate. The agent will conduct research based on your criteria and will contact you with a list of potential properties.  This service is conducted without a fee attached so you have nothing to lose other than the chance of making a great investment.

Real estate professionals monitor the current real estate market and the vital signs that cause the market to fluctuate. They accumulate information on the properties that are currently on the market and on the properties that have sold or been withdrawn from the market. They also keep a close watch on the current interest rates. This information is complied, dissected, mixed with the individual’s personal experience and with the experiences of other agents and brokers in their offices and then the assembled data is disseminated to current and potential customers and clients.

There are numerous reasons that the markets fluctuate and one of the most constant factors in the housing market is the interest rate. Over the last several years many individuals have used creative forms of financing to allow them to procure properties that would not have been obtainable using conventional financing. As the interest rate moves up, these individuals begin to feel the pressure on their budgets.  To maintain some sense of security they either obtain a fixed rate on their mortgage, or sell their property and move into something more affordable.

Since interest rates are one of the causes for the fluctuations in our market, I decided to take a look back over the last couple of decades at the historical data on 30 year fixed rate mortgages. HSH Associates Financial Publishers, www.hsh.com , has been compiling data on interest rates for many years. The following calculations were obtaining by compiling a blended average of the monthly interest rates on a national average for both conforming and jumbo mortgages from 1983 through May of 2007 using historical data published by HSH Associates.

Year                                                                                     Blended monthly average

1983                                                                                                                                13.36

1984                                                                                                                                13.75

1985                                                                                                                                12.31

1986                                                                                                                                10.23

1987                                                                                                                                10.27

1988                                                                                                                                10.44

1989                                                                                                                                10.44

1990                                                                                                                                10.19

1991                                                                                                                                  9.35

1992                                                                                                                                  8.50

1993                                                                                                                                  7.40

1994                                                                                                                                  8.49

1995                                                                                                                                  8.18

1996                                                                                                                                  8.02

1997                                                                                                                                  7.76

1998                                                                                                                                  7.06

1999                                                                                                                                  7.54

2000                                                                                                                                  8.21

2001                                                                                                                                  7.16

2002                                                                                                                                  6.65

2003                                                                                                                                  5.97

2004                                                                                                                                  5.96

2005                                                                                                                                  6.00

2006                                                                                                                                  6.53

2007                                                                                                                                  6.34

Average rate for the 1983 to 1989                          11.54

Average rate for the 1990’s                                      8.24

Average rate for the 2000 to 2007                            6.60

Taxes, insurance and PMI are not included in the following calculations.

Using the 1983 to 1989 average, the monthly payment on a $200,000 thirty year fixed rate mortgage would be $1986.69.

Using the 1990-1999 average, the monthly payment on a $200,000 thirty year fixed rate mortgage would be $1501.13.

Using the 2000-May of 2007 average, the monthly payment on a $200,000 thirty year fixed rate mortgage would be $1277.32.

The difference in financing a $200,000 home in 1980’s and the 2000’s is $709.37 a month.

After reviewing this data, it can be easily deduced that we are currently at or near the best period of time in the last couple of decades to invest in real estate using affordable interest rates.  

As with most books, articles and stories, the author has a point or a moral that they are endeavoring to relay when they put their pen to paper. The moral to this story is: Do not procrastinate on buying a home, investing in property or on obtaining a fixed rate of finance by waiting on a minute reduction in the interest rate. As everyone knows, history tends to repeat itself and in this case, a repeat in history would cause you to pay a lot more for a future mortgage than the one that you can obtain today.

I enjoy participating in conversations with individuals that I consider to be the elders of our society. They often speak in envious tones of times gone by when life was enjoyed to a fuller extent and the simple things were enough to get you by. Inevitably at some point during the conversation, a statement is made regarding how the area has changed over the years. I have often heard “You see all those buildings over there, none of that used to be there” or “when I moved here, I had the chance to buy all the land I wanted for $500 an acre and now that land is over $30,000 an acre.

Many individuals watch the areas that they live and work in become developed and rezoned to a higher and better use with out becoming investors in real property. They do not take advantage of the current tax advantages of home ownership that under most circumstances allow us to sell our residence every two years and have a large portion of the profits be exempt from income tax.  They do not take advantage of using 1031 exchanges for investment properties that allow us to continually invest proceeds from the sale of real property and have those proceeds tax deferred. It is kind of ironic that the reason many of us currently live in the United States is because our ancestors desperately wanted the right to obtain and own real property. They gave up their lives in their countries of origin and made the arduous journey to the New World so that they and their families could realize all of the opportunities that accompany the ownership of real property. And yet many individuals today do not actively invest in real property.

Many individuals are like a deer caught in the headlights of an oncoming car. They know that they should be making a move of some kind but are unsure of the direction in which the move should be made. They hear on our evening news that the current real estate market in a downturn and decide to wait on the market to turn around. So while they are waiting for the opportune moment to participate in the perfect real estate deal, other individuals investing. These investors are less concerned about trying to have the perfect timing and concentrate more on researching and investing in properties with good potential returns. So when the market turns around, the investors are more aptly prepared to realize a gain on their investments than the people who procrastinated and then try to jump on the bandwagon of profiting in an upswing of the market.

Many successful investors realize significant advantage of diversifying their investments and include real property investments in their portfolios. One obvious advantage is that other than the creations of islands like the ones in the United Arab Emirates, no more land is being made. Also investors who have a lower tolerance for risk like knowing that their real property investments are somewhat insulated from tumultuous movements that can occur in the stock market.

Skillfully investing in real property is not an easy task. There is a lot of truth in the old saying “ If it was easy, everyone would be good at it”. One of the difficulties in investing in real property is determining the current value. As with any investment, a property is only worth what someone is willing to pay for it on a given day.  Some individuals will see a $10,000 price reduction on a $300,000 property and believe that the reduction in price makes that real estate a bargain. In reality that property may still be priced considerably higher than the current market and only skilled individuals that deals with properties on a daily basis can help evaluate whether that property is a bargain deal or not.

In the current market there is a lot of choice and opportunity for real property investment. Do not choose to procrastinate on learning what opportunities exist in your area. Contact a local full service real estate agent and ask for current information on today’s opportunities and avoid having conversations in the future regarding opportunity lost.