Sunil Tulsiani: 10 Secrets From a Real Estate Agent

Buy and sell your house successfully with 10 tips from a real estate professional.

With the economy on a slow rise back to normalcy, many are still unsure of whether they should be buying or selling a home. Despite the uneasiness you may feel, you don’t necessarily have to stay put, explains Linda Turner, a real estate agent with Royal LePage Meadowtowne Realty in Mississauga, Ont.

For people looking to buy, now is a very good time, she says. "With the all-time low mortgage interest rates, it is the perfect time for first-time buyers, investors and existing homeowners who are looking to upgrade to purchase a property." Interest rates are predicted to rise in the coming months, and with the new HST looming, you'll want to move fast.

We got Linda's best advice for weathering the still unsteady economy. Whether you're a buyer, seller or both, check out these 10 tips for navigating the real estate market successfully.

Tips for buyers

It's all about location - Whether you're a first-time buyer, investor or existing homeowner, you need to understand the best locations for your investment, Linda says.  "Buying the smallest house on the best street versus the largest house on a less preferred street will reap big rewards when it comes time to sell." As an investor, a condominium that is near public transit or a university is a good move.

Think about a condo - There's a surplus of inventory in the condominium market, so your realtor should be able to negotiate a good deal for you when it comes to buying a condo, Linda says. If you're buying as an investor, rather than a first-time homebuyer,  you will want to consider leasing out your suite for the next four to five years before selling, she explains. "It's been suggested that the condo market should be in an upswing by 2013."

Know your credit rating - It's best not to just assume your credit rating is in order. To avoid getting any surprises before you meet with a lender, check your rating first so you have time to resolve any issues that might stand in your way of buying. You can call either Trans Union of Canada at 1-800-663-9980 or Equifax Credit Information Services Canada at 1-800-465-7166. 

Know your price range and stick to it - Meet with one or more mortgage lenders to obtain a pre-approved mortgage before you start house hunting, Linda says. Once you know how much you can spend you can narrow down your choices. It's safer to buy within your budget, no matter the economic situation.

Head out of the city - It's booming in Milton, Ont., for example, Linda says. Young families are heading there to buy affordable and newer resale homes. Sometimes it pays to go further afield depending on what you're looking for. If you want more space and more property, but have a budget to stick to, a downtown location won't do. You have to widen your circle of prospective locations. 

Tips for sellers

Refresh and beautify - Getting your home ready for sale is crucial. Linda suggests considering a consultation from a professional stager so your home's potential is maximized when potential buyers see it. Think about getting rid of clutter, adding stylish accents to tired furniture and tidying the yard for curb appeal.

Upgrade and update - You don't have to completely renovate your home, but consider updating areas that are tired, such as replacing a kitchen counter and sink or replacing worn carpeting. Adding hardwood to a room or two is also helpful as this upgrade is becoming very popular to buyers, Linda says.

Make sure the price is right - Price your property right the first time, according to the current market conditions in your area. Some sellers believe that if they overprice their property, they have more room to negotiate or they can always reduce it later, Linda says. "This strategy can really hurt the seller." Prospective buyers will search for homes within their price range. If your home is listed too high, buyers may skip over it. 

Don’t worry about a closing date conflict - If you receive a great offer on your home but the closing date is up to 30 days later than the closing date of the property you already purchased, don't sweat it, Linda says. Most mortgage lenders will approve bridge financing for approximately 30 days, if all conditions have been removed and you have a firm sale. For peace of mind, speak to your current lender prior to listing your property to confirm this, she suggests.

Get the best representation - Your home is most likely your largest investment so you'll want to feel comfortable when you go to sell it. Start off right by selecting a real estate agent who you feel you can trust, Linda says. Find someone who has a solid marketing plan plus a proven track record of successful negotiated sales. 

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Investing in Hot Markets

Frequently, I am approached by investors throughout the country who think they cannot invest where they live because it’s a hot market. Currently, I live in an area ranked as the third hottest market in the country and am still finding great deals. And not only do great deals exist, but they keep getting better! 

So what am I doing differently? I’m focusing on doing fewer deals and selecting projects that will result in higher profit margins. Opportunities that will net in excess of $100,000 for rehabbing and at least $20,000 for wholesaling are most desirable. In the past, the average retail value of homes I purchased was about $75,000. Now I purchase homes in the $250,000 range or higher in order to achieve my desired margins.

To achieve these types of margins, I’ve begun pursuing the following types of deals:

Commercial Deals: Although buying, rehabbing and reselling commercial is not my top interest, high margins can be made by buying, improving and holding, or just wholesaling commercial deals. In hot markets there are always people looking for profitable commercial deals. If you don’t have the money to buy the commercial property yourself, consider wholesaling it to someone who has the money.

Land Deals: In hot markets, land is always a wise investment and is usually easier to sell than a home. This is primarily because there are many cash buyers waiting for land to build their dream home. In purchasing land, I look for properties that either have the potential for subdivision or have large parcels of land where a lot or two for new homes can be built or sold to a builder.

Obsolete Homes: In the 50’s, there were many homes built and a significant number were small, one bathroom ranchers. It was the American dream! Unfortunately, many people now believe ranchers are insufficient and worthless. This is a good thing for investors. In areas that are hot and have a number of these homes, investors are usually able to buy these ranchers for less than the value of the lot itself. In purchasing this type of home, I will either tear down the rancher and build a new one or build modern additions to make it more attractive to buyers. The key thing most buyers want is a minimum of two bathrooms. When I buy one of these homes slightly under or at market value, I can usually get about $2 back for every $1 in renovation and additions. If I buy a home for $200,000 and put $70,000 into it, getting $350,000 or more for the home isn’t uncommon. Another obsolete and hot item is a house on the water. Recently, I’ve been seeking small cottages on Baltimore’s waterfront (a.k.a. Chesapeake Bay) with the intent of tearing them down and putting up new homes. I’m able to occasionally buy an outdated cottage for $250,000, put a new home up for $200,000 and retail it for $600,000 or more. 

Condos: Builders and buyers can’t build enough of them. Taking old apartment buildings and doing condo conversions is hotter than ever. Do a nice job and make them luxury condos, buyers will be lining up for them. Of course, give consideration to location because condos are more desirable in some areas than others. For example, the Manhattan market demands condos. Everyone wants one. However, many are outdated with old kitchens, antiquated bathrooms and horrendous decorations, especially the wallpaper. Although condos in this area frequently sell for over $1 million, they are small and renovations are only needed to the inside of the units. That’s the bonus for investors – no exterior renovations. An AWESOME renovation will cost about $30,000-$40,000 and sell for $150,000 more in many cases. 

Pay Full Price and Still Make Quick Cash: There are always hot spots within hot markets. These are areas where people are lining up and waiting for homes to come available. There are more buyers than available inventory. People will make full price or higher offers the day listings come out, regardless of what the home looks like inside. They just want to get into the neighborhood. In pursuing these deals, I would do mailings in these hot neighborhoods and let people know that I’m looking to buy a home, am willing to pay them full price and can save them the realtor’s commission. I would sit back and patiently wait for the sellers to call. Because it’s a private sale, I would tie the homes up with very small deposits and then look to assign my contract to a retail buyer who is willing to pay more than I am to get into the neighborhood. Since no realtor is involved, I would negotiate a fair price with the sellers and get the benefit of the savings plus whatever the buyers are willing to bid over list price. When dealing in markets where homes sell for $400,000 or more, a $20,000 markup or more isn’t that big of a deal. When getting upwards of a million dollar home, $50,000-$100,000 is almost irrelevant to a motivated buyer.

The good news is this - there are opportunities everywhere, everyday. Think outside of the box and approach deals a little differently. With my focus on higher profit margins and the type of deals listed above, four deals now can net me $1 million or more. Before, I had to do about 100 deals to make that amount of money. For those of you who are ready, there is a ton of money to be made in high-end and hot markets. Don’t let a hot market stop you from doing deals – they’re actually easier to make money in than anywhere else. 

This article was originally published on REIClub. See it here

8 Surprising Real Estate Tips

Looking to buy a home? It’s better to be on a “Way” than a “Street,” pick a female real-estate agent and try to be close to a Starbucks.

That’s the advice of Spencer Rascoff, CEO of Zillow.com, who collected statistics from his site’s database of 110 million homes to find trends in real-estate pricing. Along with Zillow economist Stan Humphries, he has written “The New Rules of Real Estate” (Grand Central), out Tuesday. Some of his findings:

• The Starbucks effect. Take two identical homes sold in 1997. One near Starbucks would have sold for an average of $137,000, while the same home without a Starbucks would have sold for $102,000. Fast-forward 15 years: the average US home appreciated 65 percent to $168,000, but the property next to Starbucks skyrockets 96 percent to $269,000.
• All renovations are not created equal. The greatest return for your investment is a mid-range bathroom remodel, a $3,000 job that returns $1.71 for every dollar spent. The worst home improvements for value are kitchen remodeling and finishing a basement. A top-of-the-line kitchen reno will cost you $22,000, and you’ll only get about $0.51 back for every $1 you spend.
• Use the right words in a listing. Avoid “unique,” “TLC,” “investment” and “potential” — these could lower sale prices by as much as 7 percent. But words like “luxurious” for bottom-tier homes and “captivating” for top-tier homes could add 8.2 percent to your home’s value. Longer, more-detailed listings often sell for more.
• “When” is as important as “how much.” In New York, the worst time to sell is the second week of December (listings sold for 2.8 percent less than average). The best time is March, when homes sold faster and for 2 percent more.
• Seven is an unlucky number. Homes with “777” as their address sell for 2.1 percent less than their estimated value; house numbers that just include 777 (such as 17779 Main St.), sell for 1.8 percent less. Oddly, houses with just 7 as their number sell for 1.8 percent more than the estimated sale price.
• Psychological pricing works. Listings with a nine in the thousand digit ($450,000 vs. $449,000) sell anywhere from four days to a full week faster.
• Female agents tend to sell homes faster and for higher prices.
• What’s in a name? A lot of cash, according to Zillow’s data. Homes on named streets tend to be 2 percent more valuable ­nationwide than numbered ones (unless you’re talking about New York City, where it’s a wash). But Main Street homes garner 4 percent less than America’s median home value. Street names with Lake or Sunset will sell upwards of 16 percent higher. Suffixes also matter. Avoid “Street,” which has the lowest home values of $183,120 nationally, and find a “Way,” which has the highest home values averaging around $312,000.

This story was originally published on NYPost. See it here