The Auction Experience

I experienced my first real estate auction yesterday.  I had thought about participating but left the checkbook at home and decided to be a fly on the wall and gain some experience.  WOW!  I recommend that everyone attend one of these at some point, epecially if you have any interest in obtaining some investment properties.  The auctioneers arrived late so I stood quietly as more people entered the property.  Most people seemd to know each other as if they were a part of some property managemnet fraternity.  I thought someone might slip out the secret handshake as they entered.  Soon the auction company (www.williamsauction.com) began handing out bidder numbers; I passed.  Then they announced the ground rules for the day.  Then it all began…and then it was over.  The whole BIG thing lasted about THREE minutes.  A little background on the house: assessed at 109k, spent 3 months on the market at 80k and didnt sell.  This auction was a last resort.  I was prepared to spend up to 60k (had I brought the checkbook, I guess).  The winning bid: 42 grand!  What a steal!  Of course, the bank still has to approve the winning bid for the sale to go through.  And then comes the massive amount of rehab needed to make it shine.  Oh well, I guess I should have been better prepared.  If you are out looking for the hidden gem, check out the next auction…and bring your checkbook!

Pre-Inspections

Why would I spend the money to get my house pre-inspected when the buyer usually pays for that?  Well, for one, it may get you a larger pool of buyers that want to look at your house.  Two, it will make for a smoother transaction once you get an offer if you have already repaired any issues found in the inspection.  Wouldn’t both of those things make your life easier?  Some companies even run a special for home seller’s to get their house pre-inspected.  I just heard from Ameri-Spec the other day of a special deal they are running.  It also involves a follow-up for the buyers to have any problems areas looked at after the contract has been accepted.  Spending a little bit of money ahead of time can end up saving you a lot of money and headaches in the future.

New Advertising

We were talking this morning in my networking group about the phone book.  A marketing rep mentioned that the phone book is not advertsing, it is a directory.  People open a phone book with a name or company in mind and begin to search for that particular number.  They don’t go shopping in a phone book.  I choose not to advertise in the phone book because I set my sights on making everything available online.  Ninety percent of home-buyers use the internet for their home search, why shouldn’t I?  Same thing goes with the newspaper—is that the most effective way to reach people?  Have you noticed the extreme drop in house advertisements in the paper over the past couple years?  Advertising a home in the paper gets you one picture and a few sentences of text.  However, by going online to search for houses you can search for only houses that meet your needs (price, location, ammenities) and you get to view dozens of color photos and get all the information about the property.  So, where do you spend your advertising dollars?

All-American Handyman

http://www.hgtv.com/all-american-handyman/show/index.html

Did you see the new reality show on HGTV that premiered last Sunday night called the “ALL-AMERICAN HANDYMAN?” Finally, a reality show combined with home-improvement, the perfect match for both personalities in my house! This show was a little slow to start: 20 contestants were given 2 sheets of plywood and told to create ANYTHING. Mike Holmes, the sometimes overly dramatic but extremely knowledgeable handyman, and Scott McGillivray (from the rental income show) judge the contestants. The 20 people were quickly whittled down to 10 to compete in the show. Some of the projects made from plywood were seriously embarrasing, where do these people come from to think they are qualified to compete on the show? Others showed promise and some knowledge though, so it should make for an interesting season. Once the 10 people were established the first competition was a sort of skills challenge based on woodworking and electrical/plumbing code knowledge. This show can teach you a lot but can also make you scream at the TV at the lack of knowledge of some people. The cool thing is that these people have day jobs and being a “handyman” is just a hobby of theirs. Another cool concept is that not all “handymen” are men – which gives the show an interesting dynamic. Tune in next Sunday for the next episode and tell me what you think.

A free Real Estate agent?

Did you know that as a buyer you get to use a real estate agent’s services for FREE? An agent can give you their most valuable resources; time, knowledge, and reputation to help you find the perfect home. It’s not just a sales pitch, it’s a true appreciation for wanting to help a home buyer get what they are looking for and feel satisfied in the end – and it costs them NOTHING! A REALTOR (R) can help you get started by searching for homes in the local Multiple Listing Service (MLS), a database that contains all homes for sale on the market in your city. After narrowing it down they have access to get you inside all of those homes to get a closer look. Once you find the perfect home they can help you write up the contract to purchase the home and also discuss with you a proper price to offer on the home, what items to include in the contract (appliances, etc.), and they can also get you pointed in the right direction for home financing. Once your offer is accepted they will help you navigate the results of your home inspection to ensure you know what it is you are getting yourself into. Once that clears your agent will help to answer any of those last minute questions as the closing date approaches. Once you are at the closing table you will cut your down payment check to the bank, and you still own your agent NOTHING! As a buyer, and especially as a first time buyer in today’s market, I would highly encourage you to work with a licensed REALTOR (R) to ensure you are covered with the knowledge it takes to buy that next home.

Discovery Toys

I want to take this post to do a little self-promotion within my family. My wife, Melissa, has decided to start her own business of selling Discovery Toys. Some back story-we were given a toy soon after our son was born that he absolutely loved. We later learned that Discovery Toys made it and Melissa began researching the company. We’ve come to find out they make some pretty great educational toys for kids. The great thing I love is that some of them evolve as the kids get older. It may start as a rattle, then the child can learn the shapes and colors associated with each piece of the toy as they develop. She is really excited about her business and being able to help others find the joy in their child’s development. I encourage you to take a look at some of the products offered.

She is holding an open house on August 26th from 6:00-8:00 pm in the Balcony Room at the Country Club of Lincoln. This is a very casual event to help showcase some of the summer line of Discovery Toys. If you have any other questions about the products please give her a call. You can also visit the Facebook event page below to RSVP:

http://www.facebook.com/event.php?eid=142002929164036&index=1

Melissa Person
Discovery Toys
402-202-7435
melissaperson11@gmail.com
http://www.persontoys.com

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1031 exchanges

A follow-up from the post the other day about owning rental properties. I’m hoping if you are already in the game you are familiar with 1031 exchanges. These are otherwise referred to as tax-deferred exchanges. In short, you can sell an investment property and buy another with that money, this defers the tax on your sale because you have decided to continue to purchase an investment property. The government tends to favor real estate with certain tax advantages, rather than try to spend their own money to improve our low-income housing. Investment property owners need to jump all over this tax advantage and use it to their advantage. Have you been sitting on some single family properties for a while and want to take the leap something bigger? NOW is the time with the low mortgage rates. Make sure you read up and research 1031’s before making any decisions, there are many rules to follow.

Check out some FAQs about 1031 exchanges on the IRS website: http://www.irs.gov/newsroom/article/0,,id=179801,00.html

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being a landlord

I’ve been thinking a lot about rental/investment properties lately and wanted to pass along some knowledge. Owning an investment property isn’t for everyone, I learned that after talking with a friend last weekend. A novice may look at the small picture of owning a rental property and see pure cash flow. This can be a great asset to your portfolio but be forewarned, there are definitely risks associated with owning property. Also, you set yourself up to be the landlord – unless you hire a management company which can cut into your profits. Are you set up to be a landlord? Can you fix general house problems? Leaky sinks, clogged toilets, broken windows, etc. Can you be available in the middle of the night if a pipe bursts and starts to flood the basement? Assuming you use your rentals for some side income and still have a day job – are you flexible enough with your work to handle these emergencies? It’s not for everybody. If it is for you there is a GREAT potential to add to your investment inventory these days with the low mortgage rates. Any time people are giving away money (loosely speaking) is a good time to reach out and take it. Good luck, landlord!

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Dog Days of Summer

The recent string of 90 + degree days in Nebraska has kept most of us inside. Below are some tips to get you and your home through the dog days of summer:
-Mow your lawn less often and cut it at a higher height – 3 to 3 1/2 inches.
-Excess heat on the second floor of your home? Check to see if your attic needs more insulation, turn ceiling fans on reverse to draw up cooler air, and make sure attic is venting properly.
-Check thermostat settings – If you dont already have a programmable thermostat – GET ONE! They will save you a TON of money in energy savings. If you are like me, you adjust the temp to be a little warmer during the days of summer while nobody is at home, however, if you make it too warm it can stress your A/C to try and catch up when it tries to cool down after work. Don’t use more than a 6-8 degree temp variance throughout the day.
-If your garage faces West it can get deadly hot in the afternoons and evenings; try to leave the door open a foot to create a little air flow.
-Keep your blinds/draperies closed later in the day to keep the direct sunlight and heat out of your home.

agent myths

I’ve noticed a trend of first time homebuyers being scared off of home buying and shying away from giving out any information at recent open houses. Perhaps there is a misconception of the role a Realtor(R) plays with first time home buyers. I found a great article weighing out the pros and cons of using and agent versus looking on your own. Check it out here!

The biggest fear to buyers is that it is going to cost them money – false! The commission paid on a home sale is paid by the seller’s at closing. Also, agents have access to all of the neighborhood statistics that can help buyers formulate an appropriate offer on the home. If you are out looking for your new house, give me a shot at helping you out!

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