The Basics of Real Estate Commissions

Real estate commissions can often be one of the most confusing aspects of selling real estate. Real estate agents are paid in a variety of ways, depending on whom they work for, where they live and what services they provide for you, but the overwhelming majority are paid as a percent of the sales price once a transaction is completed. Most real estate brokers offer both flat fee real estate agent commissions and percentage real estate commission options for clients. Before you hire an agent, it’s important to ask about their compensation agreement so that you can weigh all your options. In this article, we will go into detail about how real estate commissions work. What Are Real Estate Commissions? While many professional services, like attorneys or accountants, charge by the hour, real estate agents typically work for a commission in the form of a percentage of the money exchanged in the final transaction. Real estate agents typically receive their commission when they successfully negotiate and complete a real estate transaction for a residential property or commercial real estate. If there’s more than one realtor involved, real estate commission percentages and payment procedures may vary. An alternative real estate commission model involves paying realtors flat fees for specific services performed during a transaction without increasing their commission rates. If you decide not to pay your realtor a percentage when selling your house but instead pay them a flat fee for marketing and other services typically provided by real estate agents as part of the larger transaction – such as negotiating repairs and inspections – expect that they will still receive their commissions on any brokerage fees charged by lenders and third-party service providers, which may be passed onto you at closing. How Much Do Real Estate Agents Make From Real Estate Commissions? Real estate commission rates are typically 6% or 8%. Agents can charge different amounts because there are no federal regulations that dictate what agents should charge. Some states regulate commissions by limiting them to 6%, while others set an upper limit of 10%.  The method by which a broker splits commission between an agent or company is different, but 60-40 splits with the agent receiving 60% are common. There are also 50-50 splits and 70-30 splits. The broker may set the breakdown for all transactions or adjust it based on individual success. Who Pays Real Estate Commissions? The seller typically pays the total commission once the process is done and all closing costs are paid. Sellers will consider the loss of commission when calculating the asking price of a home and keep this in mind during negotiations. Sometimes, the listing of a property will state that 1.5% of the commission paid by the buyer agent is covered by the seller. This allows the buyer to pay more or less. This is very rare and usually occurs with bank-owned properties. It is not unusual for the buyer agent in these situations to decline additional payments from their client. Can This

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Leased Commercial Real Estate

What is Commercial Real Estate? Commercial real estate, also known as commercial real estate investment property, income property or development property, is the property intended to make a profit, usually from rental income or capital gains. It may include retail land used for businesses like restaurants and shops. It can also include raw land that is developed into apartments or condominiums. These commercial properties are usually sold by a real estate agent who has gone to real estate school or leased by a landlord or property manager. The boundaries of commercial real estate properties vary greatly depending on the property’s zoning requirements. A building can be described as commercial real estate when it is leased to a party for a specific length of time, which is called a lease agreement. The reason why a landlord leases commercial real estate to a tenant is that the tenant pays a certain amount of rent each month, with the option to buy out the contract after the current lease expires. Some contracts may require a certain percentage of the monthly rent to go toward buying out the contract but it should be set in writing and signed by both parties. It is not uncommon for some landlords to require the tenants to sign a long-term lease agreement so that the landlords can control who uses the building and decides what improvements the building will have once the lease expires. However, a different type of lease agreement may be required for a leased house or apartment. In this case, the lease will specify the amount of rent, the number of months, and other such details. Industrial buildings can be classified as commercial real estate when they are leased to specific types of tenants. Most industrial buildings are constructed in factories that need temporary indoor shelter. Industrial buildings may also be warehouses. For the latter, the main difference between commercial real estate and residential real estate is that there are usually a lot more warehouses than houses. Warehouses usually contain large amounts of merchandise that need safekeeping and protection from damage during transit. Investing in Commercial Real Estate Investing in commercial real estate is a good option for investors who have a considerable amount of capital. The capital will go a long way as these apartments or buildings can quickly be occupied by the right tenants. In addition to this, investors can also rent these structures in the future. It is also possible for them to use them as investment properties. Commercial real estate can be used for many things, such as office space, luxury apartments, retail shop leases, industrial space, and even warehouses. There are several ways of investing in leased commercial real estate. The investors can buy them in one time pieces or can look at buying several pieces of property by leasing them. Investors can make considerable profit by leasing. This means that a commercial real estate investor can earn a substantial amount of money by leasing out the property to a

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4 Little Renovations That Matter

Light Renovations: 4 Little Things That Matter   Real estate can be one of those tricky markets. Every little thing matters. Whether you want to buy, spruce, or sell a home, there are often little things that are neglected in the process. If you are buying a home for the first time, then the little things on this list often get your attention. Whereas in the process of selling a home, the little things are often neglected. Please consider this list of things to do to spruce up the property and give it a much-needed facelift. This can especially be effective from the perspective of a potential home buyer. Consider this especially true if the house is 20+ years in age and have been living at the home for a number of years. The small things are often neglected because occupants are used to looking at the home daily. So here’s to the first day of new eyes for the home:   Paint   Take a good look around. Are the colors out of date? Is there wallpaper installed? Maybe take this time to develop a short-term project to tear down the outdated wallpaper and give a fresh coat of paint with colors that pop for a modern-day feel. Also, it won’t hurt to take a look around the exterior of the home. Check for peeling and flaking,  and it may be a good time to add a fresh coat before prospects come by. The Before-and-After pictures will look exquisite.   Crown Molding and Floorboards   Crown molding and floorboard areas tend to get less attention because they’re not utilized at any point besides to give the room a little accent. Because of this, crown molding can be outdated and unnoticed or just an unneeded distraction, depending on the stylistic goal of the room. If they are out dated it may be a good time to consider uninstalling them entirely, giving them a special coat of paint, or a good detailed cleaning.   DIY Small Bathroom Remodel | Bath Renovation Project   Carpet   Especially true if you have kids, the carpet may need a good professional cleaning or may need to be replaced entirely. How long has the carpet been installed? If this question cannot be answered, it may be a good idea to haul it away and either refurbish the wood beneath or replace the carpet. Got to love that new carpet smell!   Bathroom Tile   Check out the tile in the bathroom. Particularly the grouting in between the tiles. It can get all yucky from multiple showers and start to turn colors. It may be a good idea to re-grout the tile, or if it’s not so severe then visit a local hardware store and get some tile grouting solution and give it a good scrub. It will breathe new life into the bathroom. This goes for both the shower and the floor. Any prospective buyers will assume that you’ve gotten the entire bathroom retiled when all

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House model and wooden alphabet with text house buying tips

First Time Home Buyers on a Budget – What You NEED To Know

Tips for First-time Home Buyers on a Budget Whether you are thinking about purchasing a Brownstone in Back Bay or a home in South Boston, the process of buying your first home can be overwhelming.   Young adults who have been out of college for a couple of years, recently married couples and newly formed families may want to buy their first home but have budget restrictions.  Taking some factors into consideration can help you to land your dream home without going into massive debt. Purchase a Starter Home Many beautiful homes in the outskirts of Boston MA fall into this category. While starter homes can come in many different forms, they are often on the smaller side.  Many of the starter homes can be found in Cohasset,  Hingham, Lexington, Milton, Quincy, South Boston Wellesley, and Weymouth.  Although if you work in Boston, you may have to commute, the home prices in Boston have seen dramatic increases over the last few years; making pushing first-time homebuyers to the suburbs.  Property value lines are drawn by the many neighborhoods in the Greater Boston area, so be sure to search by neighborhood.    Understand that Your First Home Won’t Have Everything You Want For example, many starter homes may have two bedrooms or one bathroom, or they may have an eat-in kitchen as opposed to both a kitchen and a dining room. Some starter-home owners decide to eventually expand their houses, and others will sell the home, make a profit and purchase a larger one in the future.  Look at your first home as a stepping stone.  After a couple of years, with some minor upgrades and a little luck, you may be able to sell that home for a profit.  This lets you invest the equity from the sale of your first home as a down payment on your next home.  The larger the down-payment, the less you pay for your monthly mortgage.  Another benefit of this “step-up” process is that you are NOT taxed on the profit from the sale of your primary residence (with certain limits).  This lets you re-invest 100% of your starter home’s equity into your next house.     Accept a Longer Commute Houses located in Boston proper with public transportation will come with a higher price tag.  While having a longer commute can certainly cut into work-life balance, it may prove worth the effort for the near future in order to have a home.  If your ultimate goal is to live in the city of Boston, search for the best deal in the suburbs, put a little “sweat equity” into the home and sell it in a couple of years.  Using the equity that was built in your first house to put a larger down payment on your next home is the best path to the home of your dreams.     Evaluate the Necessity of School Districts Many newer families insist on living in an area with a good school system.  For that reason, real estate values

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Flipping Homes

Ideas on Flipping Homes For Profit   The real estate market can be a very lucrative business to get into. Whether you buy a home or you sell a home, there is money to be made and a lot to be gained. There is no set of solid instructions on how to make money in real estate, but with a little learning curve, and hopefully not too much money lost, it can be mastered with a little time and practice. It is a very rewarding career due to the flexibility the job offers. These days, there are plenty of television programs about people flipping homes and making a living at it. It can seem overwhelming, but if you know what to look for, you will reduce the risk involved and with a lot of diligence, you have a good chance of finding a good deal.     Know All Your Costs   There are many common hidden costs when buying a home, so be sure to work with a local Realtor to get detailed cost estimates before you purchase. You will be looking at not only the purchase price of the home but also transfer fees, mortgage costs, home insurance, title insurance, and even legal costs, for example. You will want to ask your real estate agent to provide a list of all the estimated closing costs up front so that you don’t have any unexpected expenditures.   Don’t Skip the Home Inspection   No matter, what you should never forgo the home inspection. A home inspection will give you a very thorough overview of the home and will even bring to light issues that you would never have known about otherwise. It doesn’t matter if you are buying a brand new home or a fixer-upper… always opt for the home inspection. In many cases, the seller will even cover the costs of some of the repairs that you want done. Home inspections are typically performed AFTER an offer is accepted, but with a little experience and education, you can learn some of the things to look for. Consider establishing a business relationship with a good home inspector, who may offer you discounted pricing if you’re requesting that he/she inspect multiple properties.     Get a Feel For the Neighborhood   Always get familiar with the neighborhood, whether or not you plan on living in the property you are buying. You wouldn’t want to have an investment in a neighborhood that was unsafe or prone to break-ins, so steer clear of these types of areas. You could have the nicest house on the block when all the renovations are done, but a bad neighborhood can actually lower the property value of your home. A good way to learn about the neighborhood is to be observant. Walk around and even talk to some of the potential neighbors to get a good feel for the location.   Don’t Be Fooled By What You See   It’s always good to look at a

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Experience The Beach Life

Want to Experience Beach Life? Local Realtors Have The Expertise You Need Who hasn’t had dreams of spending your retirement years in a beautiful house overlooking the ocean, listening to the waves as they break onshore? Maybe you are currently looking for a vacation condo to make your family getaways easier while building great memories in one location. Home buying is not the easiest process, even in the best of circumstances. Finding a well-priced condo in a great location close to your work and schools for the children is a high priority for homebuyers. Finding a vacation or retirement condo on or near the coasts adds a whole new set of requirements to the normal home buying purchase.   PANAMA CITY BEACH   Panama City Beach is a coastal city located in the panhandle of Florida featuring beautiful emerald ocean waters that have brought a recent influx of new homebuyers to the area. Featuring eight “neighborhoods” where the median household income is $53,251.00, most of the home purchases are new construction. With all this new growth is buying a Panama City Beach retirement or vacation condo a good investment? The best place to find answers is to work with a local PCB Realtor who has the inside track to all the information needed when looking to buy a condo in a specific market, like the beach community of Panama City Beach.   SPECIAL ISSUES SURROUNDING BEACH COMMUNITY PURCHASES   An experienced local Realtor will explain that Panama City Beach is an extremely popular destination that can provide all the entertainment, dining, sun, sand and sea your family would ever need while on vacation. The agent will also explain that the population fluctuates significantly between seasons, offering opportunities for possible rental income while you are not actively occupying your residence. Agents can explain hurricane and flood insurance needs and can refer you to the codes and permits that buyers who are building or remodeling would need, in order to comply with the state and local building laws. Many locals of coastal areas have a love-hate relationship with tourists. Once you buy a home in a beach community and become a local yourself, how will you feel when “your” beach is inundated with college kids looking to party the night away on spring break? That feeling is hard to put aside, even when you consider the income generated for your local area by those tourists. That is not a question most people even think of in the excitement of buying beach property. That is why you need the wisdom of local real estate agents who will walk you through, not only the good aspects of ownership, but the possible downsides as well.   HOW REALTORS CAN CHANGE THE GAME   If you are looking to buy or sell a home in Panama City Beach, hiring a local agent brings all the tools and years of experience that Realtor has accumulated to make your transaction as smooth as possible. They not only have

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Should You Use a Realtor or Sell FSBO?

Buying and Selling Real Estate Buying or selling real estate is a complex process. Hence, having an experienced professional Realtor by your side is highly advisable. Realtors buy and sell property as a career, working with them makes it possible to find what you want quickly and easily. Even though saving the commission you pay a Realtor for their assistance sounds like a good idea, you will realize that you will end up spending much more in soliciting for a buyer or a seller, then you saved in commission.  The commission that you pay matters.    The basics of buying and selling a property   To get a buyer for a property you are selling or a seller to buy your house, you need to understand the undertakings required of you. For instance, for a seller to have their home listed and taken off the market, they need to extensively market it so that they get qualified buyers. Working with a Realtor saves you the hustle and puts you in a better position to have your property off the market sooner.   The process using a professional Realtor goes through to get you a closed deal on the property you are selling may include: Initial marketing positioning Extensive marketing Paperwork; writing up contracts Negotiations Disclosure Inspections Seeing the deal through to closing   If you are looking to buy a home, having a Realtor working with you is of great help because they understand the market and know where to look for what you want. They are aware of all house listings and can search and find faster than if you are working on your own. Using a Realtor Why exposure is good for a property seller   Right now, you may notice that many real estate markets are setting records, where the most popular homes get caught in a bidding war. People who are looking to see their houses have more groundwork to do as compared to buyers. In selling you need to consider:   Take professional photos of your property – or follow these tips for taking the photos. Virtual and video property tours Extensive property description   All these are to make sure you have a quick sale by finding a qualified buyer. Prospective buyers need to see your property for it to sell. Having advertisements on TV, emails and online websites such as Trulia or Realtor.com might seem like a good idea, but people block advertisements all the time.  Also, selling your home FSBO wont get your home in the MLS.  Working with a Realtor ensures that your property is included in all necessary listings in websites that have an optimum online presence. Real estate agents also understand how to reach potential buyers who do not search for property online. The world today is fast-paced and having someone who will quickly respond to interested buyers is necessary. It can be challenging to find time out of your busy schedule to attend to concerns a potential buyer

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4 Simple Strategies for Pricing Your Home to Sell Fast

Strategies for Pricing Your Home to Sell Fast If you were in the mall and saw one cell phone for $400 and one for $399, can you guess which one blows off the shelve in record numbers? While on the surface it might only be one dollar difference, retailers understand that psychologically, $399 feels like you’re getting a deal. The same goes for real estate, there are many tricks that real estate agents employ to move listings faster. Think about it, a house for sale at $399K just feels cheaper than a house listed for $400K, even though its a difference of a grand. There is an exact science to this, and your Realtor is going to employ strategy and psychology, to price your home to sell fast. 1. Stimulating the Herd Mentality Regardless of how much time and effort goes into researching the surrounding neighborhood to come up with a price for your home compared to others in the region, you’ll still need to reach the right buyer at the right time. Your Realtor is suggesting a lower price but you feel that your home is worth every bit of $400,000 because of the fair market analysis report and you’re hoping to find people that are willing to step up and pay your asking price so you stand firm. What can happen in this scenario is that other sellers are all targeting the same $400,000 buyers with the market flooded your listing can go stale very quickly. When you are selling your home and need to move fast, your Realtor can employ a little trick to stimulate herd mentality and create a rush of excitement about your home. Your Realtor will determine your absolute bottom dollar you’ll accept and still feel like you made money, then promote the property at that price to create interest in several potential buyers. By pricing the house at the lower end of your perceived value range, you stimulate interest in several buyers, which might result in a quick offer or best case, a bidding war. 2. Slipping in Other Realty Searches The time has come to sell your home and you have determined based on the fair market analysis report that you need to get the house listed for $410,000 so you can make a decent profit. You also want to sell fast, but you are hesitant to lower the asking price from the start. You want to leave it at $410,000 and test the waters a few months, then drop the price down after there have been no serious offers. In this scenario you are most likely missing out on a huge burst of initial traffic, and risking letting the property get stale on the market. Drop it now, and here’s why. When people are interested in buying a home, they tell their Realtor to send them listing up to $400,000 range. That automated search misses your home by $10,000, so you lose out on a ton of potential buyers who have

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Flood Insurance For New Homeowners

Flood Insurance for New and Existing Home Owners   Flood insurance is not mandatory for every homeowner. However, flood insurance is a worthwhile investment – and every homeowner should have it. Whether looking for homes for sale or an existing home owner, flood insurance is particularly important for waterfront and beachfront properties. With the damages left behind by Hurricanes Harvey, Irma and Maria – countless properties are still damaged due to mass flooding. With this in mind, you should know that flood insurance is subsidized by the U.S. Federal Government. In fact, your flood zones will determine your overall premium and deductible rates. For example: homeowners in C or X flood zones usually have cost-affordable coverage. However, properties in certain Municipal Utility Districts (M.U.D) or Levee Improvement Districts (L.I.D) may have higher insurance rates. Still, it is essential to have flooding insurance to protect your home and valuables. Whether dealing with hurricanes or tropical storms, flooding can result at any time. In fact, flooding can also stem from frozen pipes and busted water mains during those frigid and colder months. With this in mind, you also need to know that regular homeowners insurance does not cover flooding. Explanation of Flood Insurance Link to the video on YouTube Flood Insurance – Essential Information   Property flooding can occur at any time – and you must be able to protect your home or business. In fact, local districts have stepped up their efforts -due to the recent hurricanes – in monitoring flood plains and bayou/dam levels. However, this and rescue plans are simply not enough when it comes to Mother Nature. We have seen the billions of dollars in damages that these recent storms have caused across Florida, the Gulf Coast and even the North Carolina. With this in mind, flooding insurance ensures timely restitution for damages to homes and businesses. This includes optimal coverage for draining flood water out of your property, as well as complete restoration services. Here are some more benefits of taking out a flood insurance policy:   Timely financial compensation for flooding damages to floors, furniture, fixtures, Sheetrock and all interior-exterior sections of your home. Complete insurance coverage for property restoration services – draining floodwater from your home, while restoring floors and replacing any damaged materials. This includes walls, fixtures, tiles, etc. Financial compensation for pipes or water main systems that busted due to frigid or below zero temperatures. Coverage for all rooms that were flooded – living rooms, dining rooms, kitchens, basements, dens and much more. Restitution and checks for additional restoration services – contractor fees, cleanup crew fees, furniture replacements, design team fees, Sheetrock installations, lighting, and even mold remediation and treatment services.   Getting the Right Flood Insurance Plan   Getting the right flood insurance coverage does not have to be hard. In fact, local real estate agents are just a phone call away. With years of extensive industry experience, these professionals can help you find the best flood insurance coverage plans and policies.

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Buying a Condominium? Here’s what you need to know.

If you are considering purchasing a condominium, whether it’s a new one or a resale, you need to carefully review these important documents before making your decision: Buying a Condo When buying a condo, there are additional condo docs you need to review and take into consideration above what is generally looked at when purchasing a single family home for sale. Shared Ownership Condominiums, by design, have some level of shared ownership.  In most condos, the condo association will be responsible for maintenance and upkeep of those shared areas.  The shared parts of a condo can include: The parking lot The actual buildings – from the sheetrock out. Swimming Pool Gym Other Common Areas In addition, the condo association is responsible for the insurance on the shared areas.  Since the association will take in money from all condo owners, they decide where and how that money gets spent on behalf of all of the owners. This makes reviewing the condo docs extremely important – to insure the money is being spent appropriately. The Condominium Instruments. The Instruments include the Declaration, the Bylaws, the Plats and Plans, as well as the Rules and Regulations and, if your Condominium Association is incorporated, you’ll also need to obtain their Articles of Incorporation. This set of documents should clearly state the operating procedures by which the Condominium functions. The most important of these aspects deals with “use restrictions.” As an example, the use restrictions will spell out whether you can you rent or sublet your unit, and if you can for how long? Can you have pets? Are the amenities of the condominium, such as a tennis court or a shared pool, included in your condominium fee, or will they cost extra? The Bylaws will also tell you if there are architectural control requirements which have to be met, as an example, if you want to make external changes to your unit. Many community associations have architectural controls that will be outlined in the Association documents. These controls must be followed by all unit owners. Condo Buying 101 A statement of the monthly condominium fee allocated to your unit. At the end of the Condominium Declaration, there should be an Exhibit listing the percentage interest for every unit in the building. The simplest way to determine your monthly fee is to multiply your percentage interest times the total budget that should be your annual fee. Now divide that number by 12 and you’ll have your monthly payment. As an example, if the annual budget is $100,000, and you have 5% interest in your Association, your annual fee will be $5,000, and your monthly fee $416.66. You also need to know if the utility charges are included in your monthly fee. Often, buyers are caught off guard thinking that their monthly condo fee also includes heat, electricity and gas, and then feel taken advantage of when they find out otherwise. If you are purchasing from a seller, you’ll want to know if they are current

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