Wednesday, December 31, 2014

Hire the very best Real Estate agent to sell your house everytime. By Ju...

What does Buyer’s Agent, Listing Agent , & Dual Agent mean when selling homes in Oregon? By Justin Thayer

When most people think of a real estate agent, they think of someone that works with buyers and sellers of homes and other property. And for most purposes this definition is accurate. However, there are areas of specialization in the real estate field, including agents that work just for buyers and agents who work exclusively for sellers.
Understanding these distinctions is important when you are looking to buy or sell a home. You want someone working for you that can accomplish your goals. The saying jack of all trades and master of none can definitely apply to the real estate industry. If you are selling a home look for a listing specialist. If you are buying a home look for a skilled buyer’s agent.
There is a huge difference between a real estate agent who works with sellers vs buyers!

 Differences Between a Buyer’s Agent and a Listing Agent

Considering how much money may be on the line when you are buying or selling a home, you want to know that the Realtor you hire is best equipped to do what you need done. Over the years I have seen numerous consumers who do not truly understand the radical differences between the roles and skills a real estate agent should posses depending on which side of the fence they are on. This leads to mistakes choosing the right Realtor for the job. Here is a typical scenario of what I am referring to:
In this example a homeowner is going to be selling their property and decides they should interview three agents. Interviewing multiple agents by the way is something all sellers should consider. Those that make poor choices generally don’t.
  • Agent A derives 90% of their business working with sellers.
  • Agent B derives 90% of their business working with buyers.
  • Agent C does nearly an equal amount of business working with both.
Assuming all three of these agents are competent, agent A almost always will be the best choice. Agent a has a business model that is set up specifically to handle what is required to successfully market homes. Agent B does very little business working with sellers so their skill set favors understanding a buyers needs. You may be thinking what about agent C they work with a mix of both? Sounds like they could be a well rounded agent right? Most of the time the answer would be NO – they would not be a better choice that agent A.
The reason why this is the case is simple, agent C is not going to have the necessary time to do an exceptional job with their seller clients if they are out on the road every day showing homes. Keep in mind agent C works with a lot of buyers. Buyers take a tremendous amount of your time. If an agent is out all day showing homes how in the world could they possibly do what is necessary from a marketing standpoint. Most can’t as they get spread too thin.
This is why a good agent who works with sellers will often have a few buyers agents they rely on to refer business to within their office. When you are marketing homes well it goes without saying your efforts are going to draw buyer calls. A good seller’s agent is not going to drop everything they are doing and show homes every time a buyer calls. If you have ever sold a home before and had a hard time reaching your agent this is probably why! Agents that have a good sound business model will pick up the phone refer the buyer to someone else who specializes in working with buyers. This is a win-win for the agent as they get a referral fee but also are able to stay focused on working with their seller client.
Another good example of the difference between a great listing agent vs a buyer’s agent is the thought process surrounding an open house. One of the oldest and most archaic forms of marketing in real estate is the public open house. A top producing agent is not going to waste their time doing open houses. A dirty little secret in real estate is the fact that open houses rarely benefit a seller. They benefit the agent holding the open house to generate additional buyer clients that they can sell homes elsewhere. A listing agent dedicated to making sure their clients homes sell has little interest in generating buyers to work with.
A couple of years ago I interviewed with an owner who was selling their home in Milford Massachusetts. The seller ended up choosing another agent because of the fact they touted open houses. This agent did not do much business and the house failed to sell. The seller ended up hiring me a few months later and ended up admitting to me what a mistake they made. The agent could never be reached and didn’t return phone calls until the end of the day. This was because the agent was always out with buyers and not focused on working with seller clients.
As a seller it is important for you to understand the skill sets that a real estate should possess whether working with a seller or a buyer. Take a look at the outline below.
Here are some key differences in what each does:
Listing Agent Qualifications
  • Sellers Real Estate Agent Pricing skills – One of the most important skills a listing agent must posses is the ability to accurately value a property. When a seller consults with a real estate agent they expect and deserve an accurate estimate of value. There is nothing that will kill a home sale quicker than an overpriced home. Most agents that specialize in working with sellers will have a strong grasp of how to determine market value as this is what they do all week. A top notch Realtor who knows their stuff will not be swayed by an unrealistic seller. The best of the best will walk away from a listing they know is overpriced. An agent who works with a lot of buyers may not have that same rigidness, as they will use the listing to get buyer calls to sell other properties. After all working with buyers is their specialty not sellers! Homeowners that listen to the wrong real estate agent can end up with an overpriced listing that doesn’t sell. In the end the seller will sell their home for less than if priced realistically from day one.
  • Marketing skills – A listing agent has to know how to market your home. This is a complex set of skills that take years to fully develop. Not only does it take time to create an effective marketing network, it also takes a bit of innovation to stay on top of the changing marketing landscape. Gone are the days when the average listing agent could throw a sign up in the yard and put out some ads in the newspaper. Marketing houses today requires a comprehensive strategy to get positive results. This includes “enhanced” listing displays in all the online sites where buyers most often frequent. A top seller’s agent will also offer real estate marketing with creativity. Everything they do should be geared to making your home stand out!
  • A top web site – Every business today understands the need for a web presence if it really wants to excel. Real estate agents, and listing agents in particular, need to have a good website to advertise the homes they are selling. The site needs to be easy to navigate and offer comprehensive information on the homes they are marketing. Even more importantly, the site should have a decent search engine ranking if it hopes to be seen by home buyers. You can have the greatest looking website around but if nobody can find it it’s pointless.
  • Photography skills – Whether the agent takes the photos or hires someone to do it, the importance of good photography cannot be overstated. When a buyer is looking for houses, the first thing he or she sees is the pictures included in the listing. If the pictures are shoddy they will make the property look unappealing. This will naturally repel potential buyers and hurt the sale. An exceptional listing agent understand the critical nature of how well a home needs to be presented online. This can make or break a real estate transaction. Most top notch listing agents will not be taking their own photos. They will invest the money in having a professional take them. This is something that should hold a lot of weight when selecting a Realtor.
  • Honest even if it hurts – When people go to sell their home it is easy to get caught up in the emotional history of the property. You may have raised a family there or you may have made improvements to the home that you are quite proud of. Naturally, these factors will make you see your house as being the creme of the crop – even if the market may not reflect your perspective. Your listing agent needs to have the courage and insight to explain this fact to you. Overpricing a home is never a good idea and can cause real problems when you are trying to sell. The agent needs to provide honest feedback on your expectations so the house can sell and you can walk away happy. A seller’s agent should not be afraid to tell you that your favorite wallpaper needs to go and the pink bathroom you love is no longer in style.
  • Feedback system  – a skilled listing agent should have a system in place that allows you to get feedback from buyers agents after your property has been shown. Obviously when a showing takes place you are going to want to understand the buyers interest level along with what they liked and disliked. Someone who specializes in working with sellers understands that feedback is a critical element of good communication throughout the home sale process.
Buyer Agent Qualifications
  • Buyer's Agents Know Towns & NeighborhoodsUnderstand towns and neighborhoods – When you are looking to buy a house you need to have as much accurate information as you can. Agents that help buyers find homes should know their towns inside and out, down to the level of individual neighborhoods. You can’t help a person find his or her dream home if you don’t know where to look. A good buyer’s agent will understand key differences between one neighborhood to the next that can have an effect on market value.
  • Property values – A buyer agent needs to have a firm grasp on what different properties are worth. This is a calculation that varies from home to home, but will probably include factors like location, school district, square footage, number of bedrooms, number of bathrooms and all the various amenities that can be found in a home. To make things even more complicated, the agent must understand the value of all these different factors based on where the house is in the particular city.
  • Negotiating skills – Once the agent helps you find the home you actually want, it is time for negotiations to begin. If you have ever haggled at a flea market you have some idea of how bargaining can go – except with a home, you are haggling over much more valuable merchandise. You want an agent that has a good history of getting what his or her clients want at the negotiating table. You also want an agent that can help you understand what to fight for and what to concede on.
There is of course some overlap of the skills necessary for representing both buyers and sellers. For example every real estate agent needs to have the ability to understand how market value is calculated so they can adequately represent their client. If you don’t possess this skill you might as well quit and do something different. Frankly there are a lot of real estate agents who don’t belong in the business but that is an article for another day.
The best real estate agents will also have good negotiating skills as they represent their respective clients. Not only at the initial stage when an offer is made but also when home inspection items need to be negotiated. This can be one of the most stressful points in a transaction but one that needs to be managed with a solid head on your shoulders. You certainly don’t want a drama queen. An agent who can keep both sides on track and come to a meeting of the minds is vital.
Lastly and most important both a buyer’s agent and seller’s agent owes their clients undivided loyalty, disclosure, reasonable care, obedience to lawful instruction, confidentiality and accountability. Unfortunately some of the less professional agents in the industry don’t understand this concept. While they are in the minority these agents think only about one thing – their own pocket book. This is the type of agent you want to stay clear off!

Pick the Right Agent for Your Needs

Buyer's Agent vs Seller's Agent - Have a Game PlanIf you are buying a home, you are most likely to get the best experience when working with a buyer’s agent. This person will already be helping other buyers find homes and negotiate good deals. They should have a strong understanding of the towns and neighborhoods you have expressed interest in. It is important that the agent you are working with has an understanding of specialized purchases as well. For example a good buyer’s agent will know the right questions to ask when buying a lake home. The element of being located on a lake adds a whole different layer of considerations for a purchases as you will see in our guide.
Another good example would be when purchasing a condo there are different considerations a buyer should have than when buying a single family home. It is only a well rounded buyer’s agent that understands the dramatic differences that must be considered in these transactions. Educating a buyer of these things is what separates a true buyer’s agent from someone who just shows homes.
If you are selling a home, you need to work with a listing agent. Trying to get a buyer agent to sell your home is asking for unnecessary complications. If he or she is out on the road showing houses it will make it very difficult to do the necessary day to day marketing tasks or to provide you the one-on-one feedback and steady communication you need to get the house sold.
Whether you are buying or selling, pick the right agent for your needs and you are sure to be better off in the long run. Whether you are buying or selling a home it is important to ask the agent you are working with how much business they derive from each.  By now you hopefully understand it should be skewed heavily towards working with sellers if you are selling and just the opposite if you are buying.

Tuesday, December 30, 2014

Managing Your Rental Property in Eugene Oregon by Justin Thayer. #EugeneOregonInvestorRealtor

Managing Your Bottom Line

Insurance costs continue to rise, although industry experts predict rates will increase at a slower rate or remain flat in 2015. Commercial insurance saw a modest 3% increase overall in the third quarter of 2014. Compared to increases as high as 6% in previous years, that’s a welcome bit of news. The asking price for homes (market value) likely influenced the diminished growth. According to MarketWatch, although some metropolitan areas are still accelerating home prices are flattening out in many markets.
If you’re going to manage your own properties, it’s imperative that you research state and federal requirements about coverage and understand your options. Coverage varies from state-to-state and depends on the company you choose, but here are some options to consider.
  • Comprehensive: Covers property owners from sudden loss not excluded elsewhere in your policy.
  • Named Peril Coverage: Covers specific natural and accidental damage from specific events, such as fire, hail, flood, etc.
  • Liability: Covers injuries and damage to someone on your property due to negligence. Some attorneys recommend you add a liability rider that covers your property reputation. These riders protect you again slander, claims of discrimination and unlawful eviction charges.
  • Extended Loss: Covers additional expenses associated with total property loss not covered in cash-value and agreed loss settlement policies.
Whether you have one home, or a dozen homes ready to bring on the market, schedule a risk management review with a trusted insurance agent.

Protecting Your Residents and Your Workforce

Designing an insurance plan is critical to protecting yourself from the unknown, but you can reduce your risks by keeping your property in excellent condition. Minimize your exposure by vetting local contractors carefully, scheduling repairs promptly, and inspecting your property for signs of age and damage.  Your property is unique, but these tips will help you create a checklist for preventative care.
  • Check exterior lighting weekly.
  • Inspect stairs and walkways quarterly.
  • Inspect breaker boxes and fuses annually. Don’t foget to check electrical outlets, wall receptacles and exhaust fans.
  • Test smoke detectors and recharge fire extinguishers twice each year.
  • Replace filters on appliances and HVAC units quarterly.
  • Schedule routine maintenance on water heaters, heating and cooling systems, plumbing and appliances based on age and manufacture’s recommendations.

Partnering with Professional Consultants

Building a good relationship with outside contractors to maintain your property is important. Preventative maintenance extends the life of your appliances and keeps your property value high.
Unless you have extensive accounting and legal experience, you’ll probably benefit from hiring professionals. Many attorneys don’t charge for the initial consultation, so take your time finding a legal representative with an education and experience related to real estate law. It’s better to have a relationship with an attorney before a legal challenge arises than to search for one after the fact.
Our tax code is challenging. Staying informed about allowable deductions and fluid tax regulations is a full time job. Permanent tax code changes for landlords took effect in January 2014, offering some unique benefits for homeowners, but taking advantage of the changes means properly “decoding” the updates.
Engaging a CPA to guide your tax planning strategies is one step you can take to increase revenue potential.

Investing in Technology

Proactive management saves time and money. Investing in property management tools that help you manage maintenance issues and record rents and expenses accurately reduces stress and streamlines reporting.

Real Estate Capital Gains in Lane county Oregon!

Selling your home can net you a big return. But what does the taxman have to say about it? Taxes on capital gains can get you big-time in certain situations, so it is important to understand how capital gains applies to your home sale before you try to rake in the money. Luckily the rules have changed since 1997, making it easier for you to sell your home and realize a profit. This is good news for anyone wanting to sell a home right now. Understanding how capital gains work when selling a home is important.

New Real Estate Capital Gains Rules After 1997

If you sold a home pre-1997, you may be surprised to hear about the generous tax break you can get on your home sale. This is because the current laws went into effect on May 7, 1997. This law is referred to as The Tax Payer Relief Act of 1997. Before this time, you had to take the profit from your home sale and use it to buy another, more expensive house, within a period of two years. If you didn’t do this, taxation on your profits was inevitable.
The only other option you had to protect your earnings was based on age. If you were 55 or over, you could take a special exemption one time in your life, of up to $125,000. Either way, you had to fill out a special form to prove to the IRS that you were following the rules.
The current laws went into effect with the Taxpayer Relief Act of 1997. This act made it much easier to sell your residence and enjoy the profit from the sale. You can still use the money to buy a new home. But you can also use it to buy a boat, car, or vacation. It’s up to you. When you are selling a home it is important to understand how they tax laws work just like when you are purchasing property, you should know the home buying tax deductions. Understanding tax laws can save you thousands of dollars every year if you know what to look for.

Real Estate Capital Gains Explained

Real estate capital gains are, fortunately, one of the best tax breaks available to the average person. This means that in most situations, you have little to worry about unless your home is going to bring in a great deal of money. You have to realize large gains on your personal home before you pay a penny to taxes. In most instances, the rules are as follows:
  • If you are single, you can make up to $250,000 in profits on your home sale before you have to pay taxes.
  • If you are married, you can make up to $500,000 in profits before paying capital gains tax.
Here is an example of the real estate capital gains law: Lets say you were fortunate to purchase your home for $500,000 and it is now worth $800,000. Your $300,000 in profit or gain would not be taxed if you are married as the $500,000 in profit is excluded from taxation.
So what happens if you are going to make more than $500,000 in profit? Under the current tax laws you would be taxed at a 20% capital gains tax rate on the amount over the $500,000 threshold.
This is pretty exciting news for most home sellers. Granted, there are areas that have seen serious real estate booms, where you may be able to go over these numbers when you sell. But for most home sellers, there is little worry of needing to pay Uncle Sam for their home sale.
However, you do have to meet all of the requirements. Let’s explore those requirements so you can see how they apply to you:
  • Capital Gains For Real Estate44principal residence – This tax break is designed for people who are selling the home they live in, not investment property. You have to live in this residence for two out of the last five years. Practically speaking, two years is not a long time to make a home your residence. And the best part of this requirement is that it applies repeatedly. You can live in a home for two years, sell with no penalty, buy another home and live there for two years, sell again. There are no limits on how many times you can use this as long as you meet the two year requirement. As far as living in the home for two out of the last five years, there are no hard and fast rules regarding this situation. You could have lived in the home the 1st year, rented it the next three, and lived in it again in the last year and you would be fine as far as the capital gains exclusion goes. Years ago when the real estate market was a whole lot different I had a friend who lived in Southborough Massachusetts that would make a habit of of living in a home for a couple years and then selling. He would do this every few years when the real estate market was on an upswing. He would avoid pay capital gains taxes by following the code to a tee.
  • This does not apply to your vacation home – Keep in mind that selling your vacation or second home does not yield the same tax benefits. Even if you move into the second home and live there for two years, some of the profit from the sale will still be taxable, based on how long the residence was used as a secondary home.
  • Getting married can help – That doubled amount – $500,000 for married couples – is awfully appealing for some couples that have yet to marry. The tax laws are pretty forgiving here. If you get married only a short time before the sale, you can still qualify for the higher break if both of you have been living in the home for two years. So if you were living together for a year and a half, then get married and sell six months later, you should be able to qualify for the $500,000.
  • Understand your new spouse’s home sale history – Although the law is fairly lenient on residency times for marriages, it is not so lenient on previous uses of the exclusion. If your new spouse used the home sale exclusion within the past two year – like selling his own house to move in with you – this will impact your ability to use it for the current home sale. If he just sold the house, you will need to wait a full two years before you can take advantage of the full exclusion. You may be able to get a partial exclusion though, depending on your situation.

Wealthy Tax Loophole Closed

In 2009 there was a law put into effect that closed a tax loophole in the capital gains tax law. The law is known as the 2008 Housing and Economic Recovery act. The law was put into effect as a means of preventing wealthy homeowners from avoiding paying taxes. Prior to the loophole being closed, wealthy home owners who own two or more homes were able to jump from one home to another to avoid paying capital gains.
These wealthy homeowners would avoid paying the capital gains tax by selling their primary home, claiming a full tax exclusion and then moving to a second or third home that they have owned for some time. They would then make it their primary residence and then turn around and sell the home paying little or no capital gains tax.
The modification in the law says that the gain may not be excluded for periods of “non qualified use”, essentially the period of time when the home was not used as the taxpayer’s primary residence.

Special Provisions for Extenuating Circumstances

Military Tax Break44The military tax exclusion – Being in the military has it’s benefits when it comes to capital gains and selling a home. Because of being deployed, those in the military often find it hard to meet the residency rules and end up paying taxes when they sell. A law put in place in 2003  exempts military personnel from the two-year use requirement mentioned above for up to 10 years, letting a service man or woman qualify for the full exclusion whenever they must move to fulfill their service commitments. There are also additional tax benefits for being a veteran that should be understood. Here is an outstanding reference on property tax exemptions by state for veterans. If you qualify for one of the exemptions it means less money coming out of your pocket!
Your spouse passes away – Another provision in the tax law was changed in 2008. This change takes into account the special circumstance an owner faces when a home after their spouse dies. Previously in order to exclude the full profit amount excluded from taxes the surviving spouse had to sell within the same year of the death. The change allowed the widower to have up to two years to sell the property without facing the burden of paying taxes. As long as the surviving spouse sells withing the two year window they will be able to exclude the full amount of profit.

Understand The Actual Exclusion Amount

The way you figure out how much you can exclude is not just a matter of your sale price. You have to figure out exactly how much profit you made, minus what you put into the home. Profit is what is taxed, and profit is considered how much you made after your basis in the home is accounted for. The equation is not that complicated, but it does involve more than just the final sale price of your home.
To determine your basis in the house, you need to look at what you paid for the home, plus any capital improvements you made to the residence. Capital improvements can be the bathroom renovation, the garage you converted into a recreation room, etc.
One thing to make note of is the importance of distinguishing between an improvement and a repair for tax purposes. Improvements are allowed to count toward your tax basis, repairs are not. Understanding the difference between the two is paramount.
According to the internal revenue service an improvement increases the value of your home while a non-eligible repair just returns something back to it’s original condition. The IRS says that a capital improvement has to last for more than one year, add value to your home or prolong it’s life. The perfect example to distinguish between the two would be fixing a window pain vs installing replacement windows.
This is why it’s always a good idea to keep receipts from any improvements you make to your house. It all matters when you are calculating your basis. Once you know what you have invested, then you can subtract that number from the sale price of the home to get your actual profit.
Keep in mind that even if you do not meet the exact standards for the exclusion – say you lived there only a year and a half – you can still use a portion of it to protect your profits. The exact amount will be based on how closely you do fit the standards. At a year and a half, you would be at 75% of the requirement, meaning you could get a 75% exclusion.
If you are considering selling your house, talk to your Realtor and your accountant to determine exactly how these laws apply to you. If you are like most people, you can sell your home without worrying about taxes. The IRS also puts out a great real estate tax guide that can help answer questions you may have as it pertains to taxes.
The information contained in this article is believed to be accurate, however every person’s individual tax situation may be different, therefore before acting on the information contained herein, you should consult a qualified tax accountant or attorney.
Call Justin Thayer @ 541-543-7287

Does you Realtor understand the internet? By; Justin Thayer #EugeneOreg...