Real Estate Services & Real Estate Agencies
Real estate is a fast-growing occupation that includes various career paths from real estate agent to underwriter! If there is a desire to participate in real estate, it is essential to have strong knowledge of each aspect of the business and the abundant types of real estate services. Some real estate positions require degrees or certifications, while other jobs are entry-level positions. Most licensed real estate occupations require annual license renewals and exams. Like any other industry, it’s incredibly beneficial to have experience with multiple elements of real estate to achieve the utmost success! It is also critical to have a diverse investment portfolio, most experienced investors participate in many forms of real estate investing, including rental properties & fix and flips. Real estate is usually an intelligent long-term investment for most locations, and the property value continuously rises.
Real Estate Agents & Brokers
One of the most common roles within the real estate industry is licensed realtors and brokers. Real estate agents are individuals who sell and rent buildings and land for clients. These professionals are the staple within the real estate field. Agents participate in most transactions unless the property owner decides to sell their home directly to an investor or conduct the sale on their own by utilizing the “for sale by owner” route. There’s a standard real estate agent representation fee, typically about three percent, although that can vary depending on the brokerage. Licensed realtors must complete two courses consisting of thirty hours and ninety hours. These courses consist of a real estate code of ethics while providing agents with all the tools to accurately run real estate comps, master purchasing or selling property, and build connections to offer clients the most direct experience while “maximizing profit on a home sale.”
Real estate agents are held to high standards through a state-regulated agency. Although every agent is licensed, not every agent can produce the best results. Therefore, it’s vital to screen the agent properly and demand that the licensed realtor qualify for the experience level and obtain adequate results. Once the realtor can perform a specific amount of transactions, the realtor can open their brokerage; brokerages tend to be independently operated but subdivisions of famous companies such as Keller Williams, Coldwell Banker, & Berkshire Hathaway. Real estate agents have an advantage when selling property or discovering a potential purchase for a client simply because of an online listing service called MLS, known as “Multiple Listing Services.” The application MLS places the listing on a multiple-state platform that exposes the property to every licensed realtor. Usually, listing your property on the market with an agent allows the most significant profit but may require months to conclude the process.
Investors & Developers
Real estate investing has many additional aspects; some options deliver massive potential but can be extremely risky. It’s instructed that new investors start their journey conducting fix and flip properties close to turn-key or require a basic rehab process to produce a sustainable income. The first step to becoming an investor is to build a strong credit score. Most investors complete transactions utilizing a bank or lender’s assets with a percentage down roughly in-between ten and twenty-five percent. Therefore, it’s paramount to establish a lengthy credit of multiple years while achieving a credit score above seven hundred. Once a credit history is prevalent, and a down payment is attained, it’ll be time to get pre-approved by a lender or a bank. After getting approved, contact a reputable licensed realtor to locate the right investment property, typically a cap rate over ten percent. Location is critical when purchasing an investment property, and the area should have a considerable amount of transactions within the last six months and a consistent growth rate. The most desired areas have top-notch schools, employment opportunities, safe neighborhoods, & committees such as restaurants and stores.
Real Estate Lending
Real estate lending refers to a bank or private money lender funding a real estate transaction. The investor will approach a lender to request funding towards a fix and flip opportunity; typically, lenders will require twenty percent to purchase a home to lower the lending risk, although this amount will vary depending on the borrower or bank. When considering the approval of the money loan, the lender will assess the loan’s collateral, credit history, assets, three to six years’ worth of financial statements, income tax returns, & overall loan-to-value ratio!
Most investors have hectic schedules with multiple investment projects occurring at once, so it’s essential to prioritize the to-do list. Property managers can play a critical role in overseeing rental properties and other aspects of the real estate industry. The property management duties consist of overseeing property operations and maintenance, with complete control over deciding and qualifying potential tenants. Property managers conduct showings, screen tenants, collect rent and conclude any traditional maintenance or necessary house repairs. Property managers cover residential, commercial, and land real estate.
In most cases, there’s a standard fee to utilize property management services, and the cost consists of the first month’s rent and a monthly fee of roughly six to ten percent of the total monthly rent. Property managers are advised for out-of-state landlords; the property management company has a familiar understanding of the local rental market and a strong network of contractors, plumbers, electricians, etc. The manager can also oversee operational tasks and issues! There’s an enormous upside to utilizing a property manager, and it’s always something to consider. However, it may not be the best option for an individual who prefers being more hands-on with their rental properties!
At times, it’s challenging to encounter a trustworthy contractor with incredible prices. The average individual doesn’t know where to start when finding and qualifying a carpenter or tradesperson. Different internet services such as Angie’s list (also known as Angi.com) or home-advisor can bridge the gap between the homeowner/investor & licensed contractors. Hiring a general contractor to oversee the project is suggested if you’re new to real estate investing. The general contractor would sub-divide the jobs to reputable plumbers, contractors, and electricians while completing each task. General contractors typically charge ten to twenty percent of your total construction project costs. Our company recommends using a general contractor for your first couple rehab projects to reduce potential risk and stress!
Property assessors and appraisers provide a detailed estimate of the real estate value for residential and business properties! The home’s overall condition and comparable sold comps within a quarter-mile are the main focus points when conducting an appraisal. The different aspects to consider when running real estate comps are the total square footage, number of bedrooms & bathrooms, and similar conditions. Appraisers can be employed privately for local agencies, banks, or insurance companies, while assessors tend to be used by the government to access property taxes.
When closing on an off-the-market property, the buyer and seller typically utilize a title company to act as a middle party in the transaction while clearing the title on the home. Title companies provide title insurance and verify all state/city required documents with a local underwriter. These agencies are similar to notary and licensed and state-regulated title companies. The purpose of title companies is to protect both the seller and buyer during a real estate sale, and the title company acts in a similar role as a licensed realtor or a real estate attorney. The process when using a title agency is simple. Once a contract is signed between the homeowner and potential buyer, the buyer will forward the documents to a title company to begin the process of a title search. After settling existing mortgages, tax liens, and possible violations, the title company will obtain state documents to transfer the property deed. Clearing a title usually takes up to three weeks, depending on what necessary paperwork would need to be attained. Closing day is straightforward; the seller and buyer will sign a couple of documents & the funds will be issued by paper check or wire transfer! On average, title companies will charge between one hundred twenty-five dollars to two hundred dollars to conduct the title search and complete the real estate transaction. Most lawyers will demand at least five hundred dollars, while real estate agents require three to six percent of the sales price. The capability of for sale by owner and selling property directly to an investor has allowed for growing popularity involving utilizing a title company! The entire process is easier and cheaper than any other aspect of closing a real estate transaction.
Cash Home Buyer
Over the last decade, selling property directly to a real estate investor has gained massive popularity. Homeowners are approaching the investor route due to a quick house sale, no closing costs, or real estate agent commissions that consist of three to six percent of the sale price. It’s appealing to homeowners to sell property in its current condition without making any house repairs or home upgrades. Most of the time, homeowners can’t afford the costly repairs to reach standards to list the property on the market. Selling a home using a real estate agent tends to be complicated. After the renovations and repairs are concluded, the homeowner would be required to prepare the house for showings to potential buyers. These showings can be inconvenient, especially for individuals with children or animals; the showings occur on evenings and weekends. Once a potential buyer is in place, the buyer will need to get approved for the loan, which requires inspections and financial contingencies, which can take months. If you’re a homeowner desiring a simple real estate sale that can be concluded within twenty-one days with no repairs or fees, consider reaching out to reputable local investors to receive an all-cash offer!
The real estate industry consists of many different fields. One or more real estate agencies will be involved in completing a real estate transaction, so it’s essential to understand each real estate occupation and its functions! Real estate investing seems complicated, but taking advantage of professional services can minimize risk and maximize profit potential. Knowledge, connections, and credit are the keys to success in being an accomplished real estate investor!