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Land, Office & Industrial | Sales and Leasing

Real Estate: A Cyclical Business

Nov 24

Posted by Mike Fitzgerald in Real Estate Market Research, Real Estate Technology | 2 Comments

Any broker worth his salt will tell you that real estate runs in cycles.  It’s a well known fact that residential home sales peak in the summer months when families try to move while the kids are out of school.  The commercial cycle is a little more difficult to relate to since so many property types make up commercial sales including apartments, warehouses, shopping centers, offices, and undeveloped land.  Below is a chart for Loopnet.com’s traffic for the past 2+ years.  It shows that activity picks up in the Spring and Fall each year and declines in the summer and winter.  I have some of my own theories about why this is true, but I would like to hear what you think.  Please post your ideas in the comment section below.

Alternately, the graph below shows traffic on the largest residential real estate website, REALTOR.com. Traffic peaks at the end of the summer and bottoms out around the 1st of the year.

Home Buyer Tax Credit Extended – Not Just for 1st-Timers

Nov 23

Posted by Mike Fitzgerald in Finances and Taxes | No Comments

On November 9, President Obama signed an extension of the Home Buyer tax credit as part of a $24 billion economic stimulus bill that will also extend unemployment benefits.  The tax credit applies to new and resale homes.

There are some significant changes to the tax credit that was due to expire at the end of this month.  Namely, the new tax credit is for first time home buyers (anyone who has not owned a home in the previous 3 years) who purchase a home by April 30, 2010 or by June 30, 2010 when a binding purchase agreement was in place by April 30, 2010.

The tax credit is equal to 10% of the purchase price up to a maximum of $8,000 and is refundable meaning you can get the money back even if your tax bill is less than the amount of the tax credit.  The income limits were increased to an Modified Adjusted Gross Income (MAGI) of $125,000 for individuals or $225,000 for joint filers.  The credit phases out by 10% by every $2,000 you make over these limits.  The law allows some flexibility as to the tax year you use to calculate your MAGI.

The tax credit is only good for purchases under $800,000, but it does apply to all types of homes including detached houses, townhomes, condos, manufactured homes, and houseboats.  The home must meet the definition of a primary residence used to determine the $250,000/$500,000 capital gains exemption.  You can also apply the tax credit to a home you build on land that you already own.

Repeat Home Buyer Tax Credit

There’s also a new twist that provides a tax credit to repeat buyers defined as those who have lived in their current primary residence  during 5 of the 8 years directly before the sale.  The tax credit is equal to 10% of the Purchase Price up to $6,500.  Otherwise, the same guidelines as the $8,000 New Home Buyer tax credit apply to the Repeat Home Buyer Tax Credit.

You may be able to access your tax credit before you file your next return by reducing your federal income tax withholding.  For FHA-insured mortgages, HUD is also allowing the tax credit to be monetized at closing to pay certain down-payment and closing expenses.  Non-profits and FHA lenders may extend short term loans of up to $8,000 to monetize the tax credit at closing.  In some cases these short term loans may qualify to meet the FHA’s 3.5% down-payment requirement.

Check with your financial adviser if you believe you qualify — more information is available at http://www.federalhousingtaxcredit.com/.

Bank Failures: Where is the Opportunity?

Nov 22

Posted by Mike Fitzgerald in Bank-owned, Foreclosure, REO | 1 Comment

I know you hear a lot about the bank failures nationwide. Georgia tops the list as far as number of banks although our banks are smaller on average than the rest of the country. You can also check here to see the list of banks that have already failed: http://www.fdic.gov/bank/individual/failed/banklist.html

I expect we’re not even halfway through the purge of bad banks. So what does this mean to us as real estate agents? And how can we profit?

For resale homes, you won’t see much of a change. 99% of loans on resale homes are held by national banks like BofA and Wells Fargo – these banks appear to be in good condition. However, most new homes, vacant land and commercial property is financed by Community Banks. Many of these loans and bank REO’s will be transferred to the FDIC in the coming months as these banks fail. This can delay or jeopardize closings and generally make doing business difficult.

The silver lining is that once the FDIC gets title to the real estate and loans, they move quickly to sell them at market price – something the community banks aren’t doing now. I am actively pursuing several opportunities to obtain more FDIC business (most of what they have right now is land).

A large opportunity still exists to sell foreclosed homes for loan servicers – there are literally hundreds of them all of the country. I encourage you to go after listings with these groups. I know a couple of you took an REO class that explained this in more detail. The next class is offered on December 9 and I encourage you to attend:

Sign up at http://www.georgiarealestateschool.com/schedules/schedcourse.cfm?CourseID=269 It’s taught at the GAMLS North office in Sugar Hill. The cost is $50.

Many other courses are also offered including topics like Short Sales, Writing BPO’s and Managing REO properties.

http://www.georgiarealestateschool.com/courses/salesce.cfm

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Creating a Real Estate Blog

Nov 17

Posted by Mike Fitzgerald in Real Estate Technology | No Comments

I’ve toyed around with blogger.com and the most popular real estate blog at activerain.com.  With both sites, I was ready to post blogs in a matter of minutes and the sites claimed to bring a ready pool of readers to my posts.  Activerain’s blog highlighted my first post on their main page and over 30 comments followed mostly from members looking to get Activerain points by leaving a comment.  The blogger.com site was even easier to set up but no one ever saw it as far as I could tell.

Both blogs included advertisements and Activerain even added a feature to search for property, but the search promoted my competitor.  I discovered that I was basically creating free content for these sites which helped them sell ads and drive visitors away from my blog.

I had heard a lot about wordpress, but was afraid it would be too difficult to install and setup on my website.  I was pleasantly surprised when the setup took only 15 minutes and my web hosting company  even had an online tutorial .  Wordpress.com claims you can install in 5 minutes and provides their own instructions on how to do so.  My install took a little longer because of some extra steps my web hosting company required.

The Fitzgerald Realty blog at Activerain is still up and I guess it will remain there unless they start putting links to my competitors directly on my blog posts!

P.S. I started adding posts to localism.com but didn’t really get any response.  No ads on that site but I believe the goal is to build content for each community and then sell rights to moderate the posts to that community to a local realtor in each city.