4 Things That Will Help Fetch the Right Resale Value for Your Property

So, you have decided to part with your home. Wondering how to get the best deal that will justify holding it is an investment property until now. Before you put up a notice for sale, or start passing the news to your near and dear, consider the fact that the reality market is some parts of the country has been sluggish.

Hence, it is worthwhile to put in a little bit of effort that will make your property look a lot more attractive to potential buyers. Here are some expert tips that will help enhance the resale value of your home by tens of thousands if not few lakhs.

Pep up the exteriors

As soon as a home is bought, homeowners spend time, money and energy in designing the interiors to their whims and fancy. What they miss to see is that, the exteriors play a major role in creating an impression in the minds of a potential buyer than the interior. It is the exterior that is first seen before they take a walkthrough of the interiors. Hence, pay attention to pepping up your exteriors in equal measure to the interiors to get a better resale value.

Creating additional space

An extra room is fine, but what if it serves no purpose? Moreover, what if that extra room does not fit into the ergonomic layout of the home properly? Instead, think of ways to increase the space inside the home. There are plenty of architect firms with interior designers and vasthu consultants who help altering the physical dimensions of any home to make it appear spacious and airy. A spacious home will fetch a higher resale price than one which boasts about a tiny and ill-fitting extra room.

Setting right minor repairs

Like drops of water that collect together to form a messy puddle, a number of unattended minor repairs can wash away a significant portion of your property’s resale value. A prospective buyer will be more interested in knowing the present physical condition and the expected longevity of the house before making a final decision.

The scene of leaking walls, falling patches and plumbing problems can definitely take a hit on the property’s sale worthiness. Hence, make sure all minor repairs are attended to on a regular basis.

Keep a cushion for price negotiation

Indians are ruthless negotiators. We love to bargain for the best deal in every transaction. Especially when it is about buying a new home expect the negotiation process to be fiercer than what you can imagine. Hence, make sure you price your property with some cushion for reduction during the negotiation process.

You might want to take into consideration the existing market rate of similar properties and how the deals have ended before fixing the price or agreeing to the price offered by the buyer.

The resale value for a property is highly dependent on various factors. Location, floor space, number of rooms and furnishings all play a major role in determining the resale price. However, other factors like well-maintained exteriors, perfectly functioning plumbing and sanitation, additional space for storage, etc. can help further increase the resale value to a higher denomination.

Sparkling Future For Estate Agency

These days the growth factors have been taking a very vast and quick turn which is entirely leaps and bounds and coping with these immediate changes is something very challenging for the different industries. Every industry has its own setup and this may move according to the demands made and the changes evolving. The technology industry needs a very quick response if a business needs to be in the market for a future intent. However, the property and estate agent industry has now been on a steady position and there are bright chances for it to remain income generating in the future. On the other hand, the internet service providers which used to offer the card system have become extinct.

When it comes to focusing on the real estate business specifically one may expect the brightness of future for a number of reasons a few of these reasons may include the following:

Boom of Residential Spaces

These days at every point what we see is the construction of a new residential space which may be a bungalow or a huge building. The population is increasing day by day and with this the demand of residential properties is also increasing with the same pace. Therefore the future of estate agencies here may prove being a very outstanding one because when it comes to the sales and purchases of these residential spaces there is a major chance of the business of real estate to take a boom. The relation between the real estate and the residential properties is a direct one because people need a home for shelter and real estate may give a perfect deal.

Trend of Shopping Malls

Another very commonly increased concept all over the world is the prevailing concept of shopping malls. Previously people accustomed to run after the differed shops in different corners but with the passage of time these malls are taking very significant place in the lives of every individual. In this regard, the development of malls may leave out numerous shops and stores on individual basis which may need a selling agent and here the role of the real estate is something essential. Many builders may approach different agents for the purpose of either purchasing the individual shops left out or the builders working over the mall projects may move towards real estate agents for huge lands. In every case, the future of the real estate agency is a brighter one.

These two factors add a lot to the future of real estate agency and with this the reliability possessed by the agents makes people prefer professionals who are also a plus point for the business of real estate and this is why estate agent jobs are growing.

Rent or Buy? Which Option Makes Sense for You?

If you are the individual who is weighing the option of buying or renting a house, you need to consider a few factors. Your financial situation has to be assessed for your long-term planning and that it is not that simple as well.

Understanding your house budget and expenses

It is wise to review your household budget in comparison to the expenses before you begin looking for a new house. You have to find out how much can you afford to pay for accommodation without putting a burden on the budget.

You simply cannot go for rent or mortgage payments if you are unable to pay them on time. Several factors are involved both for renting or buying that should be considered prior to making a decision.

What are the requirements while renting or buying a house?

Your credit history and credit score are crucial and that they will be looked upon by the rental agency or the landlords for the mortgage or rent. You will be checked whether you are can pay the bills on time and are not overdue with the loans or the credit card balances. You have to check your score and credit history before applying for the apartment or the mortgage.

Other factors that are important include your strong employment history, W-2 forms and current bank statements that have to depict a good picture. A few rental agencies require professional or personal references as well as background check and contact information from the previous landlord respectively.

When is renting a viable option?

If you have uncertain employment: According to Evelyn Zohlen (financial planner), if you are unsure about your living paycheck and job situation, it is best to save money for the future living expenses. This will help you to build an emergency fund for you as well.

Limited funds: Renting is the better alternative when you do not have enough money for making the down payment or for managing the additional costs of owning the house.

Short time frame: If you have an assignment that lasts two years or you plan to move abroad in a couple of years, then renting a house is a better option.

When is purchasing a house a feasible option?

Buying a house only makes sense when you have the ability to cover the additional costs for owning a house. It is vital that you pay the closing costs and the down payment before you buy a house. It is seen that many banks receive a 20 percent down payment. This means for a house that costs 250,000 dollars, at 20 percent the down payment will be 50,000 dollars. So, the total amount includes percent in commission and another one percent in closing cost as well.

But if you have much debt, you should not put your savings for the down payment at all. It will be better to pay off the entire debt first until you get a better financial position for yourself. If there is no debt, then you need to work out the buying or renting options in detail.

Why Are UK Property Funds a Good Investment?

Investors seek profits on the exceptional housing demand. Fortunately, public and private programmes synergistically encourage home building.

“Everyone needs a home over their head at the end of the day.”

This is what a UK residential property fund manager said in January 2015 to Professional Pensions, a website dedicated to institutional investors who are tasked with achieving the highest returns for their clients.

The fund manager (from M&G UK Residential Property funds) described being involved in the property market with built-to-let properties as well as participating as an investor in the development of new-build homes. The 25-34 age group is a focus of this funder, which means they target properties that are near public transport.

That particular age cohort is indeed important, not because of where they stand in wages but more because they represent pent-up demand. With tight lending in the UK – particularly after the 2008 financial crisis – homebuilders were reluctant to construct new homes at the entry level for first time buyers. In the past decade, this has slowed housing formation altogether or put people into the rental class who would likely be owners under other circumstances (working people who rent now comprise about 19 per cent of the market, up from 11 per cent a decade ago).

Homebuilders and developers are fully aware of this demand, but were waiting on the sidelines because of the difficult financing matter. Today, there are several factors addressing this blockage to building – which have spawned creativity in the private sector as well as from the government:

Help to Buy programme – First time buyers and home movers are provided equity loans on properties with purchase prices up to £600,000. Buyers need to contribute at least 5 per cent of the property price for a deposit while the Government provides a loan up to 20 per cent of the price. The buyer then needs to qualify for a 75 per cent mortgage loan. No loan fees are charged for the 20 per cent Government loan for the first five years of home ownership.

Starter Homes programme – Available at a 20 per cent discount to under-40 buyers, this housing bill is targeted at increasing the UK housing stock by 200,000 residences. All homes will be built on brownfield (previous use) land. It is favourable to self-builders and smaller home construction companies with reduced bureaucracy and a streamlined neighbourhood planning process.

Property fund management of strategic land – From an investor’s perspective, this is a way to help increase the country’s housing stock while achieving asset growth. their skills are in designing homes, building and then selling them. With increasing frequency, they are able to buy lots on streets that have utilities installed and planning approvals already cleared, thanks to the work of developer-investors. The investors, typically working in joint venture partnerships, identify where homes are needed most and find land that can increase in value if allowed a use designation change by the local council. Once that is accomplished, they sell lots to builders.

Crowdfunding – Start-up investment companies are launching a global stock exchange for residential properties in the UK and possibly abroad. Launched in early 2015, Property Partner has properties in London and the South East where more than 1,000 investors have invested as little as £50 on up to £50,000 in homes, hoping to receive rental income and possibly capital growth. The shares are highly liquid and can be traded via a one-off transaction fee of 2 per cent. An additional 12.5 per cent fee is charged for advertising, letting and managing the property.

It took an improving economy to convince investors that the homebuyers and home renters were ready to jump out of their parents’ flats and into their own homes. Government programmes have had a measurable impact, but entrepreneurial thinking on the part of strategic land partnerships and others has made the private sector a good partner. With a shortage of one million homes, it will take a decade or longer to bring supply up to demand.

Investors should always be versed in the risks of their positions. Consulting with an independent financial advisor can help identify tolerable risk, particularly in relation to other wealth development goals.

Six Characteristics of a Good Note

The six critical factors to be aware of when buying or creating a real estate-backed note include the buyer/borrower, the collateral, the down payment, the terms of the note itself, seasoning and the associated paperwork. We’ll go through these one at a time.

The most important of these is the person buying the property and getting a loan from the seller. Most seller-financed loans are created for people with a credit score of 600 or greater, although most banks have a 620 minimum. Just like with banks, the better your score, the better the interest rate you can get.

If you are creating a note you can protect yourself from an applicant with poor credit by getting a larger down payment and charging a higher interest rate. These are things a note buyer will look for when considering the purchase of a loan.

The second thing to analyze is the property being offered as collateral. A pretty 3-bedroom home in a nice suburb would be worth more than a single-wide on 35 acres, 20 miles from the nearest grocery store. A well-built apartment building would be worth more than 50 acres of dirt.

When buying a note you must affirm that the property is correctly valued. If you get that number wrong, the whole deal starts off on shaky ground. While you may want to check a home’s value on Zillow, or Trulia, or eppraisal.com, your most accurate number will come in a BPO (Broker’s Price Opinion) created by a local realtor who has actually driven out to see the property. Sold comps and listing comps will be more accurate than anything produced by a software package like Zillow.

The third factor to consider is the down payment. Consider two people who each by a house worth $50,000. One puts down $800 and the other puts down $5,000 (10%). The note that has the great down payment will be worth more than the other if everything else is equivalent. If a buyer has enough “skin in the game” they will be more likely to make paying their mortgage a top priority since they have more to lose if they default.

The fourth thing to look at are the terms of the loan. What is the interest rate? Currently, a rate between 8 and 10% is pretty common in the seller-financed world. Much above that will make it difficult to pay. A note with a rate of 5 or 6% may pay too little to make it attractive to an investor who will be forced to deeply discount their offer to get their required yield.

The payback period can also affect the perceived value of a note. Generally, a short amortization period is more attractive because an investor will get her money back quicker.

If a note has a provision to collect escrows for taxes and insurance, that should bring a better price when sold than one that doesn’t. In the latter case the lender is counting on the buyer to set aside funds to take care of these payments, but that’s asking for a lot of self-discipline from someone who has shown via their credit score that they may not have much.

If the buyer can’t make the insurance payments, you as the investor may have to attach forced-place insurance, an expensive option to keep yourself covered.

Property taxes will be collected eventually and generally have a lien position ahead of the first mortgage. Non-payment over a period of years can lead to the loss of the property at a tax sale.

The last thing to look at on the note itself is the overall payment. An investor making an offer to buy a loan will want to feel comfortable that the buyer can afford to make the payments and still have enough left over for all their remaining living expenses. Also, if local rental rates are higher than their mortgage payment, that’s another incentive for the buyer to keep up their obligation to pay on time.

The fifth factor is called seasoning. That’s simply the amount of time the borrower has been making payments. A note buyer will offer more for a note with three years of seasoning than one where the new owner has only made three payments. A good track record gives an investor confidence that payments will continue being made on time and can even offset the negative affect of a low credit score.

Sixth and last, all the ancillary paperwork contributes to the overall value of a note. Here’s a list of documents to ask for from the note seller: title policy, tax certificate, mortgage or deed of trust, the allonge (showing the transfers of the loan), the mortgage transfers, credit report, payment history and original application including the social security number of the borrower. If you are creating a seller-financed note, having all these documents will keep the value of your note as high as possible.

So whether you’re buying a note or creating one, the same six pieces of the puzzle will be responsible for the size of the discount offered when a note is sold.

The Current State of Foreign Buyers of UK Homes

What happens abroad affects regular Brits at home – more specifically, the price of the homes they wish to buy. Blame it on the stability of the UK economy.

For a number of years it has been well documented that rich Russians, Chinese, Saudis and others from outside the UK have been buying up pricy real estate in London. That has actually expanded to cities elsewhere in England. And with the outcome of the May 2015 elections, combined with continued instability abroad, that trend may not reverse itself for some time.

And it does affect ordinary citizens in the UK. Part of what drives up the cost of real estate throughout London has been the extreme degree to which the most expensive homes in Central London are sold to foreigners, almost all for cash seeking a safe, stable haven. In September 2014, The Telegraph reported that 20% of buyers in Westminster, Kensington and the City of London were sold to people from Russia, Italy, France and the Middle East. Among the top boroughs favoured by foreign buyers were Camden, Islington and Hammersmith and Fulham.

Most maddening to native residents of Great Britain is the report that 60,000 of these homes in London sit empty. Few of those buyers actually live here as they hold those properties as financial assets. One estate agent told The Telegraph that some developers are specifically building at very high luxury levels specifically to attract these buyers; the average price for prime property in Central London reached £4.7 million as of the middle of 2014.

At mid-price levels at city’s edge and elsewhere in England and Wales, developers are building homes that are affordable to the middle class. This helps fill the yawning gap of the UK’s housing shortage, particularly where homes are needed to house families near emerging companies outside London. That said, The Daily Mail reported in October 2014, “some Chinese buyers who can pay in cash are touring northern towns to find investment opportunities. Experts fear this trend will force up prices for ordinary families.”

In the run-up to the May election, the Labour party spoke of a mansion tax that might diminish foreign interest in buying in the UK. But with that party’s loss, the idea of this type of tax was trounced as well. Estate agents who work with overseas buyers reported an immediate surge of interest on the very night the election results were reported.

Global events play a role in this. Sanctions against the Russians for their aggressive tactics in Crimea and the Ukraine have had an effect. International sanctions against the country in 2014 have challenged the rouble, making those purchasers more expensive to the oligarchs and “medium rich,” who, on the margins, might retract their buying.

However, many argue it should be in commercial property or residential development instead of finished residences that go unoccupied. The Cameron government will undoubtedly wrestle with this question in the years to come.

Investors need to consider what asset classes fit their overall wealth strategies and objectives. The most objective advice can be found with independent financial advisors.