Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

But if you’re still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, Title Company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

As a Realtor, I am always faced with this question: “So, how is the Real Estate Market today?”

My answer to this question is:

“Great…Great…Great.” Depending on what your financial goals are for future.

For Buyers:
No matter when you buy a home it is always a great market. When you buy in sellers’ market, you typically tend to enjoy lower interest rates on your mortgage. When you buy in buyers’ market you typically have negotiating power with sellers and sellers tend to better present their homes in the form of remodeling, upgrading or better amenities to attract the buyers.

For Sellers:
If you are selling your current home to buy a bigger home, then this is a good time to buy. Statistically, people buy their 2nd home 50% more expensive than their current home.

That means, for example, if the market has gone down by 10%, you will end up selling your current home 10% lower than originally intended price. But you are also buying your newer bigger home at 10% below market price.

Let’s take an example:

Current home price
$250,000

25,000 (market down by 10% .. your loss)
________
$ 225,000 sell price of your current home

New home Price
$ 450,000
50,000 (market down by 10% ..your profit)
_______
$ 400,000 sell price of your current home

$50,000 – $25,000 = $25,000 of profit

Reverse trend will happen in a good market meaning you sell at 10% profit but you are also buying at a 10% loss which will result in your net loss.

The reason is simple. Real Estate is one of the best LONG TERM INVESTMENTS anyone can ever make in their life. Historically, Real Estate Market on average has always moved up.

The fact is that everyone needs to have a roof over their head whether you live in your own home or you live in someone else’s (rental property).

So the question is:

Do you want to make yourself rich by owning your home and building equity over years and enjoying lowered taxes or do you want to make someone else rich by handing them your hard earned money (i.e. rent) and also giving away your hard earned money to Uncle Sam in the form of higher taxes?

Of course you know the answer to that.

Going back to the question:

1. We have lot of housing inventory right now that means it is a Buyers’ market and sellers are more desperate and may be willing to negotiate or more readily work with your terms.

2. Generally the prices of homes have comparatively come down with few exceptions like in good school areas.

3. Even though the interest rate is fluctuating currently, current interest rates are actually still pretty good. You never know which way the market will go in future. If you buy now you can always refinance if the rates go down even further.

4. With election year coming up next year, the new candidate may try and improve market conditions for buyers which means there may be more buyers increasing the housing demand…which in turn may drive home prices up (multiple offers means more money out of buyers pocket).

5. Historically, end of every decade home prices have gone up…that means that if you may get good rate of return for your investment in just few years.

6. Real Estate business is a cyclical thing which means after a downturn there is always an upturn (the number of years may vary).