Kentucky Real Estate Business

Archive for January, 2010

4B/2B — four bedrooms and two bathrooms. “Bedroom” usually means a sleeping area with a window and a closet, but the definition varies in different places. A “full bathroom” is a room with a toilet, a sink and a bathtub. A “three-quarter bathroom” has a toilet, a sink and a shower. A “half bathroom” or powder room has only a toilet and a sink.
assum. fin. — assumable financing
Closing Costs: This has different meanings in different states, in some states a Cincinnati real estate transaction is not consider “closed” until the documents record at the local recorder which is the public official who keeps records of transactions that affect real property in the area, sometimes known as a “registrar of deeds” or “county clerk,” s office, in others, the “closing” is a meeting where all of the documents are signed and money changes hands, costs — the entire package of miscellaneous expenses paid by the buyer and the seller when the Cincinnati real estate deal closes. These costs include the brokerage commission, mortgage which is a legal document that pledges a Cincinnati property to the lender as security, that is, the property that will be pledged as collateral for a loan, for payment of a debt, instead of mortgages, some states use first trust deeds,-related fees, escrow or attorney’s settlement charges, transfer tax which is state or local tax payable when title passes from one owner to another, is, recording fees, title insurance and so on. Closing costs are generally paid through escrow.
CMA — comparative market analysis or competitive market analysis. A CMA is a report that shows prices of Cincinnati homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.
Contingency — a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. One example is a buyer’s contract which is an oral or written agreement to do or not to do a certain thing, dual right to obtain a professional home inspection before purchasing the home.
dk — Most often refers to a deck
Expansion pot’l — expansion potential mean that there’s extra space on the lot or the possibility of adding a room or even an upper level, subject to local zoning restrictions.
Fab Pentrm — fabulous pentroom, a room on top (but under the roof) that has great views
FDR — formal dining room
Fixture — anything of value that is permanently attached to or a part of real property which is land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof, . (Real estate is legally called “real property,” while movables are called “personal property.”) Examples of fixtures include installed wall-to-wall carpeting, light fixtures, window coverings, landscape, that is, adjustable rate mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount, those limitations may apply to how much the loan may adjust over a six month period, an annual period, and over the life of the loan, and are referred to as “caps,” some arms, although they may have a life cap, that is, for an adjustable-rate mortgage (arm), a limit on the amount that the interest rate can increase or decrease over the life of the mortgage, allow the interest rate to fluctuate freely, but require a certain minimum payment which can change once a year, there is a limit on how much that payment can change each year, and that limit is also referred to as a cap and so on. Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.
Frplc, fplc, FP — fireplace
Gar — garage (garden is usually abbreviated as “gard.”)
Grmet kit — gourmet kitchen
HDW, HWF, Hdwd — hardwood floors
Hi ceils — high ceilings
In-law potential — potential for a separate apartment, subject to local zoning restrictions
Large E-2 plan — this is one of several floor plans available in a specific building
Listing — an agreement between a Cincinnati real estate broker and a Cincinnati home owner that allows the broker to market and arrange for the sale of the owner’s home. The word “listing” is also used to refer to the for-sale home itself. A home being sold by the owner without a Cincinnati real estate agent, that is, a person licensed to negotiate and transact the sale of Cincinnati real estate, isn’t a “listing.”
Lo dues — low homeowner’s association dues. But find out how “low” the dues are compared to other dues in the area.
Lock box — locked key-holding device affixed to a for-sale home so Cincinnati real estate professionals can gain entry into the home after obtaining permission from the listing agent
Lsd pkg. — lease which is a written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the Cincinnati real estate for a specified period of time parking area. May come with additional cost.
MLS — Multiple Listing Service. An MLS is an organization that collects, compiles and distributes information about Cincinnati homes listed for sale by its members, who are Cincinnati real estate brokers. Membership isn’t open to the general public, although selected MLS data may be sold to Cincinnati real estate listings Web sites. MLSs are local or regional. There is no MLS covering the whole country.
Nr bst schls — near the best schools
Pot’l — potential
Pvt — private
Pwdr rm — half bathroom or powder room
Title Insurance — an insurance policy that protects a lender, that is, a term which can refer to the institution making the loan or to the individual representing the firm, for example, loan officer which is also referred to by a variety of other terms, such as lender, loan representative, loan “rep,” account executive, and others, the loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution�s are often referred to as “lenders” or owner’s interest in real property from assorted types of unexpected or fraudulent claims of ownership. It’s customary for the buyer to pay for the lender’s title insurance policy.

As apartment dwellers, we “Live for Fun.” Looking for some ideas to inject a little more fun into your lifestyle? Now you’re talking. Here’s a list of what makes apartment living fun, from A to Z…

Apartment living = freedom.

Balconies. Sublime.

Community events to socialize and spot the neighborhood hotties.

Dinner parties with neighbors and friends. No place like an apartment to find your inner Rachel Ray … or Emeril … or just nuke a Hot Pocket and kick back on the couch.

Extreme apartment makeover? Chose your own style, décor and feng shui that puppy.

Fact — you can (and should!) protect your stuff with renter’s insurance.

Gotta get some exercise? Hit they gym. It’s right downstairs.

Have a drink. Invite some friends. Hang out.

If it’s broke … not your problem! Maintenance will fix it.

Just a hop, skip and jump away from shopping centers, restaurants and of course “Targét”.

Kitchen with a fully-stocked snack cabinet? Heaven.

Laundry services? Convenient in your place or, if you share a laundry room, hide those skidmarks!

Many apartment communities are pet friendly. Bring a pooper scooper and you’re golden.

Nightly summer BBQ with fun-loving gang from upstairs and down the hall. Dogs are on!

One night stands in the privacy of your apartment? Aweeeesome.

Pool, fitness center, complimentary breakfast and tennis courts. Plenty of apartments offer these great

services. Find one!

Quality movie nights, TV show fan club groups and board games (no shame in “Taboo”). Be a kid.

Rock star parking directly in front of your building.

Sex. Fact: Apartment dwellers get it on more. Did we mention sex?

Trash pick up at your door or just down the hall ….take the smell outside!

Use your space as a fitness factory. Grab those free weights and sweat to the oldies in privacy.

Visitors welcome 24/7-or not. It’s your place, your rules.

Wireless internet signals picked up from your neighbors. They’re clueless.

Xebec is an actual word that starts with X. We could have gone with x-ray or xylophone but everyone does that.

You can walk around naked and no one will ever know. Remember, blinds closed please.

Zzzzz…in your own bedroom, complete with an attached bathroom and walk-in closet. YES!

Want to become part of this elite group of fun-loving apartment dwellers? What makes you happy is very much about you. That’s why Apartment Home Living offers an online matching service to fit your specific needs.

Live for fun. Visit ApartmentHomeLiving.com and click on our “live for fun” tab to see other ways people are living for fun in their new apartments. Then join ‘em!

Fees will range depending on the rules set by a particular community, but as a general rule you will find the following fees in place at most apartment communities. Be sure and keep yourself a handy copy of your lease agreement as that little packet of paper should contain information on all the fees that you may have to watch out for. We, at Apartment Home Living.com, have put together a list of the most commonly seen fees and fines to put you in the know of where your money may go.

1) Application fee- On some properties it’s low, some it’s higher. Some even waive this fee as a move-in special, so be sure to ask. This is a one-time fee when you apply for an apartment, but still a fee none the less.

2) Deposit- This isn’t technically a fee, but is still a cost to factor in when moving to a new place. In most cases deposits go up proportionally by the size of the apartment, but the amount determined for the deposit ranges from community to community. If you are looking to save some cash in this area be sure to shop around at different places and find out what the deposits are. If you are lucky, you might even find a $0 deposit special and not have to pay a dime here.

3) Pet Fee/Deposit- Chico may have only been $20 from the Wal-Mart parking lot when you picked him out of that litter of tiny barking black and brown muzzles, but he may set you back $200, $500, or even $750 for a pet fee/deposit. Sometimes you will even find that you may have to pay a monthly pet rent to keep little Chico at your apartment. A pet fee or pet rent is usually non-refundable, while if only a pet deposit is required you may have a chance of re-cooping that money as long as Chico doesn’t do any damage to the apartment. Usually the cost of cleaning the carpet will more than likely be taken out of the pet deposit however.

In terms of fees or rent pets are sometimes negotiable. There may be factors that help influence the cost related to your little mongrel. If Chico’s a cat, De-clawing may give you a lower rate. A lot of communities are more flexible on their rules regarding cats. Make sure and ask lots of questions and weigh the options.

4) Late Fees- Invest in some sticky notes to remind you to pay your rent on time. Unfortunately, there are generally hefty fines accessed every time your rent is late after a certain period of time as defined by your lease. It can go up to $50 a day in some cases, with usually a maximum amount at some point (right before you’re evicted). So it’s very important to get that rent in on time.

5) Garbage, Patio Fees- You should try to always keep trash from sitting by your door or on your porch. Many communities access fees for unkempt property, including trashy doorsteps and patios. Saving a little spending money and getting a little exercise is definitely worth the extra steps to the dumpster.

If your community offers a trash pick-up service, make sure to only leave trash outside of your door on the designated days. Putting it out on the wrong day may end up in a fine.

6) Feces Fine- Walking the dog around the community’s courtyard, make sure to pick up after the dog. It’s much better to bag now than beg later.

7) Parking Fee- Most apartment communities include free parking stickers, but occasionally some do have fees to obtain one.
Key/Lock Replacement Fee- It happens to all of us at some point in our lives. We lose our keys. Most apartments will access a fee to replace a lost or stolen key as well as an additional fee to change the door lock for your safety.

9) Noise Violations/ Fines- Having a bunch of parties? If the neighbors complain about the noise to the police, you may be looking at a hefty noise violation ticket. The apartments may also have a fine or other type of corrective action for noise pollution. It’s important to have a lot of fun, but try to keep the noise down a little.

10) Redecorating Fee- After you move out, if the apartment isn’t left in the exact condition it was when you moved in there will more than likely be a redecorating fee. Usually this is deducted from your initial deposit return amount and covers and repainting, carpet cleaning, general apartment cleaning, etc that needs to be done after you leave. If you extensively damage the apartment while living there, you may be looking at charges that exceed the deposit amount. The best advice is to clean like your mama would approve before you move out.

While these seem the most common fees and fines found amongst the growing number of apartment communities, there may be additional ones to be aware of. Make sure to look over the lease well and discuss any concerns with the leasing agent before you sign it. The best way to avoid fees is to know about them first.

For more info on this and many other apartment issues visit Apartment Home Living.com .

What is a real estate rebate?  Home buyers can negotiate discount savings when buying real estate with their real estate buyer broker.  Real estate commissions or fees should not be fixed and are negotiable. Since commissions are negotiable, buyers can negotiate a discount in the form of a buyer broker rebate when buying a home with a buyer broker.  Many home buyers do not understand this and miss the opportunity to save money when purchasing a resale home or from a new home builder.   

How can the rebate savings be accomplished? For example, if you are planning  to buy a home that  is worth $500,000 that is listed in the MLS (multiple listing service), the commissions offered in the MLS may vary, but in this instance, let’s assume it is 3%.  Total commissions paid to your buyer broker would be $15,000.   If you negotiated a 50% rebate, then your broker to buyer rebate would be 1.5% of the sales price or $7,500.  As you can see, this real estate rebate can provide significant savings as the buyer broker is discounting the fees that he/she receives and rebating the difference to the home buying consumer. Clearly, real estate rebates are essential to price competition amongst real estate buyer brokers. 

Why is the buyer broker discount in the form of a rebate? Buyer broker’s fees or commissions are typically paid by the seller and built-in to the sales price, cash back or rebates from your real estate broker are the principal method by which a buyer’s broker can negotiate a discount otherwise the commissions on the buyer’s side are essentially fixed.  As such, broker to buyer rebates are morally good because such rebates are the principal method by which a buyer’s broker can negotiate or discount their commissions.  Buyer broker rebates are good for the consumer because these rebates reduces the cost of housing for the consumer and promotes healthy competition and innovation amongst real estate brokers.  As such, cash back at closing from your real estate broker  is one way to reduce your home purchasing costs.

Is cash back at closing from your real estate broker legal? Yes!  The “built-in” buyer broker commissions are negotiable (not fixed) as rebates or cash back from your real estate broker are legally protected by federal anti-trust laws (U.S.A. vs Kentucky Real Estate Commission).  In fact, the Department of Justice has indicated that such broker to buyer rebates are beneficial to the home buying consumer and are “key to broker competition”. According to the Department of Justice, real estate broker rebates or cash back to buyers makes home purchases less expensive.   It should be noted that there a few lingering states which still have a “rebate ban” in place even though there is no justification for such a law. If you reside in such a state, it would be a good idea to contact your state legislature and request that they change the outdated law which impairs fair trade, price competition, and artificially inflates the home buying costs for consumers.   

Overall, buyer broker rebates on resale and new home purchases are a smart way for home buyers to save money when purchasing real estate. Cash Back Realty offers real estate rebate savings to home buyers for real estate home purchases.           

The real estate industry is very sensitive to economic changes like interest rates and the cost of materials in building houses. Interest rates in particular can easily swing the number of sales that are completed during any quarter of the year. Rising interest rates will slow down the sales and falling rates will aid the sales of real estate. This is an important fact in the real estate business as this can absolutely cause rapid changes in income from the sales that can be made.

With this in mind, the time to buy an agency that comes up for sale may be when the real estate business is in the doldrums. A hot real estate market will make an existing firm worth more, as their income will be higher during this period of time. Of course if you follow this course of action, you will have to wait out the slow down in the markets. Another factor in the purchase or start-up a real estate company is the state licensing requirements. Most states have serious requirements for real estate agents and brokers. Brokers have a much stiffer requirement in most states than an agent. The requirements include passing exams and a fixed number of educational hours for both agents and brokers. There is also a requirement for continuing education. These state mandated steps to a career in the real estate business would have to be met before an agency could be purchased or started. Since this industry is regulated and has strong legal steps to comply with, this licensing plus experience would be an initial step to being an owner in this field. This is not a business that can be stepped into by just paying out some money.

An agent can have the goal of owning their own firm, but it will take planning and meeting the state rules to make this happen. Once a potential owner has these steps out of the way, finding an existing business to buy will be in order. A quick check of real estate business listings reveals that they are usually found in larger cities and the asking price is significant. There are also resales of franchise companies. Just typing into a search engine, “Real estate businesses for sale”, came up with this quick check. A buyer could also check with business brokers and real estate brokers in their city. Another source worth checking out would be a franchise connection. An in place real estate business is advantages as the name is already known and will get clients due to this. When you start a company from the ground up you do not have this advantage. An existing business with several locations will come with a higher price tag than what you could start your own business for.

Another way to gain ownership would be buying into an existing business. This could work if you have a solid relationship with the current owner. The problem is you will not have the final say in most decisions unless you are buying controlling interest.

Specialty real estate firms

Most people think about a firm that helps with the buying and selling a home. There are several other areas of specialization. A real estate firm could become expert in buying and selling commercial property, farmland and farms, farm product processing plants, rental properties and shopping centers. Actually a broker could cut out a niche market from many that are available in the real estate business. If you have an area of expertise, this could become something that could be marketable and cut out a lot of competition in certain situations. Some real estate firms have unique departments that handle certain types of real estate marketing. The decision you must make is what kind of a firm are you going to own. You may have to start your own in order to make it happen.

You could also get into real estate management and the buying and selling of these rental properties, which is a very unique part of the industry. Shopping center related firms could be in from the start of a project. They can help with the formation of the firm to build and own the property and then handle the rentals and day-to-day management of the center.

The point of all of this is there are areas of real estate specialization that lend themselves to a business that just works in this real estate category.

Finding the money to make your dream happen

You may not have the total purchase price for an existing business. The question is how do you come up with the balance to make the deal. Finding a source to lend you the money is one way to come up with the needed funds. There are businesses that offer loans to new owners of businesses. These can be found on the Internet by just doing a search. Family and friends could be another source of money. One way to get the needed money is to take in a partner for the business. If you have a friend in the business maybe they would be interested in owning part of the existing company. All of these possible money suppliers will have different requirements for paying the money back. Make sure you can see your way clearly on how you will accomplish the pay back. This business can be adversely affected by interest rates so you would need a second way to make the payments. A person thinking about ownership in this field must remember that it can be feast or famine as far as sales and commissions go. This is not like being in the restaurant business or owning a printing company. Successful brokers can make considerable money in a good market. They can also have periods that are very tight as to sales. The brokers that succeed have a policy of putting away some of their earnings during good times to cover the less profitable times. Doing this just shows the broker has a realistic view of the business.

Conclusions

This business can be extremely profitable during low interest rate economies. The legal and state requirements make the ownership of a brokerage firm more difficult to own than is the case with other businesses. Buying and selling a real estate business is somewhat more difficult due to the restrictions that are placed on the owner of a real estate firm. You must have the appropriate licenses in place before you can begin operation. This is true whether you buy a company or start one up from scratch. Finding a firm you can afford will take some time and research on your part. Hiring a professional business broker may speed up the search.

Deciding early on if you want to be a specialist will set other decisions in place. Niche areas that you are an expert in will help cut the competition somewhat. A general real estate business will have the potential for more clients, but will need and ongoing advertising campaign to gain listings and clients looking to buy. The start-up is cheaper to open, but will have little cash flow like an existing firm. Money flow is the one huge advantage buying an existing business offers to the new owner.