Real estate teams vs. Individual Agents and what consumers need to know.

Real Estate Teams vs. Individual Agents

I had my first experience with a real estate team when I sold my first home about a year before I got into real estate myself. I had no idea what a team was and I the agent that was selling our house didn't explain it at all. I left feeling like I did not get what I signed up for.

There are two obvious differences between a team and an individual agent. As the name implies a team is composed of multiple agents and/or support staff. An agent is singular and therefore solo mostly without a team of support staff. The less obvious difference is that with a team you will rarely deal with the same person for any two portions of the process.

Team structure-

Teams are structured in various ways but the typical team has at least three components: a listing agent, a buyers agent and an assistant. The listing agent and buyers agent are pretty self explanatory however the assistant is the one varies. Most of the time the assistant handles all the paperwork, contracts, phone calls and all the behind the scenes stuff. This allows the listing agent and the buyers agent to focus on getting new buyer and sellers.

Single agent structure-

With a single agent there is only one agent therefore the agent has to handle everything on their own. This means that the agent will be the one showing the buyers houses as well as the one going on listing appointments. They will also be the one doing the paperwork and giving clients the update as the process goes along.

The difference to you the consumer- 

The difference between working with a team and working with an individual agent as a consumer can be pretty dramatic. When you are working with a team you will likely have very little contact with the lead agent that you initially spoke to/met with. They are the “face” of the operation and are most of the time hands off for the majority of the transaction once it gets started. This means that you agree to list the house with them and from that point on someone else takes over. Most if not all updates will come from one of the support staff and not the agent that you started working with. 

With an individual agent you have the same agent from the start to the finish, there is no one to delegate the tasks to. The individual agent is going to have much more of a personal touch and will be involved in every step of the transaction. They in a sense have more at stake than an agent with a team, because they are more personally invested in the deal. 

Conclusion- 

In concluding there is nothing wrong with either option you choose to use. Most teams provide great service but you will lose much of the personal feel that you get with an individual agent. Both should run equally smooth it just becomes a preference of what your’e comfortable with. 

Invest in tomorrow, why you should buy a duplex

If you are an aspiring investor but don't know where to start, than consider buying a duplex. 

Living rent free, being next door to your tenants and residual income as soon as you move out. These are just a few of the reasons that you should consider buying a duplex instead of a single family home for your first investment property. 

Living rent free- 

Unless your'e still living at home than your probably not getting away with living rent free. The great thing about a duplex is that you can live in one side and rent the other out. If you get it at the right price you can pay for the whole property with the rent you're making off one side. Assuming you're living in one side and renting the other out you are living rent free. 

You are next door to your tenants- 

At first this may seem like the last thing you would want. But the decided advantage with this is that you can keep a much closer eye on things than you could otherwise. Rental properties can be a great source of revenue but they can also lead to an excess of repairs if your renters trash the place. This can be prevented by screening tenants to a large degree but the knowing that you're watching is likely to help keep them in line. 

It is residual income as soon as you move out- 

All that money you were saving in rent can be turned into passive income as soon as you rent the other side out. This means that whatever you're renting the side you were formerly living in for is now profit every month. This means that as long as both sides stay rented you have residual income every month. This residual income can be used to reinvest into more real estate or for whatever you wish to do with it. 

But thats not all- 

Just because you can doesn't mean that you should. This is true of real estate as well, the natural thing to do is borrow money when buying a home since most of us can’t afford to pay cash. I would caution you to be careful when doing this for investment properties. It is by far the trend to buy and have 2,3 or 4 investment properties that are financed. This is dangerous because you are on the hook for every mortgage payment regardless of whether or not it is rented out. 

Start small and make sure you have an emergency fund in place when you own investment properties. You have liabilities such as repairs and maintenance that is going to come up inevitably. If you have repairs that need to be completed before a new renter can move in you need to account for the rent you are not getting as well as the cost of repairs. So all that to say that if you're going to invest than do so with a plan. Because failing to plan is planning to fail. 

Avoid the post holiday blues and sell your house now

Home sellers listing their home in between the months of Nov to Feb are placed in a unique situation. The holidays are around the corner and the housing market slows way down. If you find yourself in that situation consider the following three points listed below. 

Consider taking it off the market

•  Every day that your house is on the market is added to the cumulative total "days on market". Many buyers consider houses that have been on the market more than 90 days to be undesirable. 
• This naturally leads to the conclusion that there must be something wrong with it. Right or wrong this conclusion will lead most buyer to skip your house and keep looking. If you can’t afford to wait then you should price it to stand out from the crowd. If it sits through the holidays it will likely end up south of 90 days on the market. This will lead most people looking to skip right over your home in search of a newer listing. 

Be flexible with your showing times you may only get one chance 

• You typically only get one shot at most home buyers. This means that if you decline their showing request they are not likely to come back a second time. 
• During the holiday season sellers are notorious for declining showings because they have family in town or want to "enjoy the holidays". 
• While that is completely understandable, the buyer doesn't care what you have going on. They are looking to buy a house and if they cant see yours than there are plenty more out there that they can. This is not to say that you should accommodate unreasonable requests. Just make your home as available as you possible can.  Most people don't house hunt during the holidays out of enjoyment if they are searching they are probably pretty serious. Declined showings make it seem like you're not serious.

If your not going to do that then my first point is probably one you should strongly consider. 

Take it easy on the decorations

• Not everyone shares your taste in decorations so consider keeping the decorations to a minimum this year. You want to keep things as neutral as you can and holiday decorations are no exception.
•  If you are selling your home you want it to stay true to the pictures. If buyers are coming to see your home it is because they liked what they saw in the pictures so keep it true. If the buyers have to struggle to picture the house they saw in the pictures they will likely just move on. Buyers have short attention spans and judge the house on first impressions. So before you do any decorating think about what the first impression of the buyer will be when they see it. If it is going to hide any features that would be a selling point than it is probably best avoided. 

Home to one of the hottest zip codes in the country

San Antonio is home to one of the hottest zip codes in the country. San Antonio has a robust housing market, this I am sure you probably know. What you may not have know though is that 78247 was ranked by realtor.com as one of the top 10 hottest zip codes in the country. 

Why is it a hot zip code hot? 

Location has a lot to do with it I believe. People don't want to have to travel far when they want to go somewhere and this location is perfect for that. It is located very close to loop 1604 and uniquely gives you the preference of new and pre-existing homes. This is a feature that you don't often see making it appeal to a larger crowd. 

The zip code as a whole is up and coming with many changes in the works. Shopping centers have popped up all around the area with everything from Starbucks to huge gyms. Housing prices in the area have remained affordable for the time being, however that is likely to change in the near future. If you have plans to move into this area now would be the time to do so, they are still building shopping and retail centers. Once the building is complete than the demand is likely to dramatically increase. It will be somewhat of its own little urban sprawl having everything you need within a couple square miles. 

Pricing and home data

The median sold home price for Sept was 167k bringing it in well below the average for the city as a whole. San Antonio as a whole had a median sold price of 181K making 78247 significantly less expensive for the time being. The median sold price in 78247 increased by roughly $10,000 or 6% from this same time in 2014. 

Homes do not sit on the market long with the average days on the market being 43. This is also well below the average for San Antonio which has an average days on market of 72. Homes in 78247 sell almost twice as quickly compared to the city as a whole. 

What else you need to know

Based off of price range and development 78247 is likely going to appeal to the younger crowd and first time home buyers. With the option of new construction for under 200k and existing homes in well established neighborhoods the price is right. Location is hard to beat with the ease of access to the highway there you can be to most parts of the city in 20min without traffic. This has the potential to save you major tine off your commute every day. 

As always I am happy to answer any questions you may have or to show you any properties that you may wish to see. 

How to avoid the real estate dead zone

The real estate market in San Antonio (and much of the country) is very active and move in ready homes are selling extremely fast. It is critical to a successful sale that you and your realtor know what the market is doing. Failure could land you in the “dead zone”.

The dead zone

The dead zone is that area where homes sit for months and months with no serious offers. To avoid the dead zone you need to make sure that your home will appeal to one of the two most common types of buyers in today's market, Investors or those looking for a primary residence.

The buyers looking for a primary residence want move in ready, while investors don't want to pay more than 70% of market value. If your home is not move in ready or priced around 70% of the market value, than you may be in for a long wait. 

Houses are flying of the market right now

I hear this a lot, but this does not mean that your house will sell quickly irregardless of condition or price. Some people assume that because the market is so active they can overprice their home or cut corners on the listing. This is simply not the case and will cost you big if you make that mistake. 

Move in ready is not the end all be all but if your home is not move in ready you will need to take the cost of updates/repairs and then some off. Todays buyers are busy and don't want to mess with repairs or updates. To make it worth the buyers time you will have to reduce the price substantially to cover the cost of repairs and the buyers time. 

Factor in the cost of repairs and subtract it from the current market value of the home. Then subtract another 10-15% off the market value (before repairs) and you will have a list price that should get peoples attention. Anything short of that and it is just not worth peoples time. They will keep looking for something that is move in ready.  

What is move in ready?  

Move in ready means just what it sounds like, someone can move in and not have to do repairs. People not only don't want to do repairs they don't want to do updates either. People want the wood floors, granite counter tops and bathrooms that are functional and current. Neutral paint color is a key as well, you are trying to appeal to the broadest group of people so keep it neutral. 

Closing

Closing is the goal of any real estate deal. In closing this post keep in mind that investors are business people and are looking at the bottom line. The most common formula most investors use calls for them to get the house at 70% of market value. They don’t need the home and aren’t going to overpay. 

The up side is that investors can pay cash and they don’t care about condition so you won’t have to make repairs. People looking for a primary residence may be willing to do some work but your going to have to make it worth their while. Take the cost of repairs/updates subtract that plus another 10% and you may catch their attention. If that is too much than I would suggest getting your home move in ready and not risking it.

Why should I use a full time realtor?

Part vs. Full Time, Is There Really a Difference? 

As with anything you have people that take do things full time and those that don't. I don't know about you but my home is by far my biggest investment. I would not invest hundreds of thousands of dollars in the stock market with someone who does investing on the side. I also would not want a surgeon that operates on the side when he has time. That is why I would not use a part time real estate agent. I will cover some of the potential issues that could arise when working with a part time agent.

Homes are first come first serve

In most of the country homes are selling very quickly and it is not uncommon for the home to sell the first couple days on the market. To a consumer this means that you are going to have to act quickly if you are interested in a home. 

If you are working with a real estate agent that is doing it part time it is not a priority to them and therefore you are not a priority to them. How likely is an agent to show you houses you want to see after they have worked their day job all day? I would say not likely, they will probably show it to you on the weekend when they get some time. 

Agents only get paid when they help people buy or sell a home. Being that it is a side job they don’t likely need the income and therefore have no real investment in their or your success. Agents only get paid when they help people buy or sell a home. This means that if they are not dependent on the income there is truly no motivation to succeed.  

Don’t trust your investment to just anyone

If you are a home seller using a part time agent that means that they are advertising your home part time, marketing your home part time, responding to buyer inquiries part time… You get the picture, even in a hot market homes do not sell themselves and if they get overpriced or underexposed they may well sit for months. 

The initial time a home hits the market is the best shot that it has to sell. Making sure that the home is priced right and marketed correctly from the get go is going to make all the difference in the long run. Can you put your home back on the market with a different agent after it sits for a couple moths? Absolutely you can but now you have a home for sale that sat for 3,4, or 6+ month. This is a big turn off to buyer, it gives your home a stigma and makes people more likely to pass it by a second time.

What’s a person to do?

Save yourself time and money from the get go. Don’t trust yourself to an agent that does it on a part time basis. There are plenty of agents that do it full time and there is no reason to settle for a part timer.  

What is the better deal renting or buying?

The age old debate of buying vs renting is as alive as it ever was. 

Does it make more sense to rent or buy, this is a question many have asked. As with anything there are many prevailing opinions on the subject. As a real estate agent I see both sides of it and as a consumer I have been on both sides of it. There is not going to be one right answer that fits every person but I will cover a few common things that may help you decide. The key is to think of things in the long term or big picture.

To start with you want to consider your individual situation.
What are your plans long term, do you plan on staying in the city or area you are living/moving to? If the plan is to stay long term than I believe it makes sense to put down some roots and buy a house. I have many clients that move in from out of town and want to rent for a year before buying. This is a logical step in the process, you get to try before you buy in a sense. Many people also rent because they can't qualify for a mortgage due to credit score or job situation. 

Fixed mortgage rates do not go up, rent prices do.
While there is nothing wrong with renting long term, the reality is that you have very little stability or control of the situation. With a mortgage your payment is fixed every month (assuming you got a fixed rate mortgage). If you are a long term renter your payment will almost certainly go up with on an annual or semiannual basis. This could be a small increase or if you live in a booming city like San Antonio, Texas than I have seen $50-100 increases annually. Rent works off the age old supply and demand model, the shorter the supply the more money landlords can demand. Unlike renting with a mortgage you are unaffected by the supply demand model unless you are buying or selling. 

Renting has no return on investment.
Again long term renting does not build any equity while long term home ownership does. The standard mortgage is either 15 or 30 years depending. This means that at the end of that term you own the home free and clear. If you rent for 15 or 30 years you have nothing to show for it and you don't pay your rent you don't have a place to live. 

Summery

While you don't have things like repairs and maintenance costs with a rental you also don't have the ability to make the house your own. All else aside, historically speaking property has always risen in value which makes it a wise investment. It may not always rise continually but it has always bounced back which means that the only way you lose is by selling it when the market is down. So look at it like an investment that you get to live in and build equity with every payment. 

Mortgage interst rates and why you should buy or sell now.

If you own a home or are thinking of buying you may know that interest rates have remained very low. This is important for anyone that is considering buying or selling a home. You may not think that interest rates matter if you are selling a home but this is not the case. I will give you a couple reasons why you need to pay attention regardless of buying or selling. 

History Repeats itself-

Historically interest rates do not stay low forever (wouldn’t it be nice if they did though). Interest rates have been below 4% for most of 2015 and look to be holding steady through the end of the year. In 2013 and 2014 interest rates spent a majority of the year over 4%. Go back to 2011 and interest rates spent a majority of the year just below 5%. The interest rates are not likely to change dramatically unless we have another housing bubble. While they may not change dramatically the difference between 3.75% and 4.75% will make a dramatic difference on your payment. 

If you're paying 4.75% interest on a $200,000 loan for 30 years you will pay roughly $133,000 in interest over the life of the loan. If you take that same $200,000 loan and drop the interest rate to 3.75% you will pay $176,000 in interest over the life of the loan. So that 1% that doesn't seem like such a big deal will save you roughly $43,000. This is not including the principal amount that you will be paying, factor that in and your $200,000 house cost you either $333,000 or $376,000. Now I don't know about you but I don't care to pay almost as much in interest as I do for the house itself. 

Time is of the essence-

So if you are considering buying or selling now is the time to do it. I don't know what interest rates will do in the coming months or next year but I do know they are as low as they are likely to get. This means that the only place for them to go is up. This affects sellers as well as buyers. For most people selling their home they will turn around and purchase another home. That combined with the fact that you are likely to get top dollar for your home in most parts of the country make it a great time to sell. This may mean more competition when you go to purchase but it also means you get to take advantage of the lowest possible interest rates. The more interest rates go up the less enticing it is for new buyers to enter the market which means your home values may drop. 

One last thought-

To sum it up, nobody knows what the future hold but history has a way of repeating itself. So whether you are looking to upsize, downsize or just get into a different area you have to ask yourself "will their be a better time than now"? So it is up to you, roll the dice and see where the interest rates land when you're ready to move or take the sure thing and move now. 

Hope, a simple word but one which carries with it the very fabric of existence. The effects of hope are undeniable and should not be underestimated. 

I am going to tell you why I believe hope is the most important motivator that exists. There are not many things that can break a person as quickly as a lack of hope can. This is true of any situation that you want to apply it to: goals, lifestyle, freedom, marriage, finances or even a shipwrecked victim. I will tell you how to keep hope alive or reignite it if it has gone out. 

To begin with let us define hope. 

• Hope is defined as-a feeling of expectation and desire for a certain thing to happen. That is generally true but I believe hope is that unseen force that keeps us moving forward and gets us out of bed every day. Deeper than that is the fact that will power is a finite thing. We only have so much will power to go around beyond that we need something more to pull us through the hard times.

Take goals for example

• Any goal is really fine, the specific goal doesn’t really matter because the underlying concept is the same. Any goal you set has a largely psychological side to it. It is not something tangible that you can touch or feel. Despite this it is always in the back of your mind (literally) telling you you're going to succeed or fail.

•  Dave Ramsey (a well know financial coach) advocates paying your debts off from smallest to largest. This may seem counter intuitive because it would seem to make sense to pay the highest interest debt off first. Paying off your smallest debt gives you a feeling of hope in the form of progress. If you don't feel like you're making progress that will power is going to fade and you're going to lose hope. No hope means what's the point of continuing to try? 

POW and Shipwrecked victims know it well

• These are both classic example that many have probably read in a book or seen in a movie. Take a shipwrecked victim on a deserted island or a prisoner in a foreign land for example. Both are in some of the most extreme circumstances you could imagine. What keeps a person going in a situation where they are in extreme or complete solitude? If you said HOPE then gold star for you. Hope can take many different forms, for a prisoner it may take the form of hope that he will be rescued or hope that he will see his family again. Hope will look different for different people but without it most will fail.

Don't let hope die

So all this to say that you need to keep hope alive. If you are lacking hope then try re-evaluating your goals. Set smaller more achievable goals or set daily, weekly and monthly goals. You don’t need to focus on the final or end result, if you are struggling just focus on today or tomorrow. Focusing on a goal that's to big can seem unachievable and cause you to lose hope of ever reaching it. Celebrate your success, don’t wait till you reach your final goal to celebrate. You need to keep hope alive and celebrate the weekly or monthly successes.