Houston Real Estate Market

In order to analyze the larger picture, it is important to understand that real estate refers to residential as well as commercial property. Along with the land in question, it also includes fixtures, fences, and buildings that are lawfully built up on it. Apart from this, in case a piece of a land has natural resources within it, they are a part of the real estate. Located in Texas, the city of Houston boasts of a flourishing real estate market. The Houston real estate market thrives upon trade of real estate. This refers to the purchase, sale, lease, and rentals of commercial and residential real estate.

The Houston real estate market, similar to other cities, is a volatile and unpredictable business venture. An interesting factor that sets the real estate market noticeable from other trades is its fluctuating nature. Rather than being solely influenced by global recession and inflation, real estate price points are largely dependent upon local factors. Prices of immediate neighborhood properties and local events proportionately affect real estate prices instead of variations at the stock exchange. Improvements in the economy have increased purchase power, prompting a large number of people to buy real estate. Such deals could revolve around residential, commercial or investment property. Since real estate deals can revolve around financial commitments that cannot be borne all at once by clients, the lending attitude of various financial institutions affects the Houston real estate market.

In order to be at par with real estate dealings in other places, the Houston real estate market is also dependent upon appraisal services. This helps attain precise and up to date estimates of a certain piece of property and helps facilitate quick dealings. For those who wish to make a career in the Houston real estate market, can choose to enroll at real estate schools or work under the guidance of reputed firms and brokers.

Real Estate Brokers And Fiduciary Duty

Real estate brokers and sales people are not all created equal. The glaring difference between the two is the difference in licensing. A broker is licensed to negotiate the sale of real property and represents the principal (seller or buyer). A sales person works solely for the broker, representing the respective principal under the guidance and license of the broker. But even aside form the technical licensing issues, it’s important to realize who’s representing you.

In our article titled, Real Estate Agents Must Have These Qualities, we pointed out many of the characteristics of a good real estate agent. In this article, we’re showcasing the real estate broker’s legal fiduciary duties. Many real estate investors talk about “finding a good real estate agent,” or one who is familiar with investment properties. That’s certainly recommended within real estate investing circles, as it should be.

However, there’s one thing that many real estate investors or even regular home buyers do not take into account and that is the fiduciary responsibilities of the real estate broker. Most real estate brokers generally represent sellers because that’s where the majority of the money lies. Sellers own the real property and want to sell, most buyers have many hurdles to overcome and don’t own anything.

So when we look at “finding a real estate agent” to locate properties, do “comps”, etc., where do we stand, as the investor/buyer? Unless you have a Buyers Agency with the real estate broker, no matter what they tell you or what type of information they obtain, the most important question remains, “where do their fiduciary responsibilities lie?”

Let’s take that one step further and use “comps” as an example. As a broker or sales person who represents sellers, even other agents listings, their loyalty always remains with the sellers. If you’re working with a sales person and they’re pulling comps for you, they will present information and it is up to you, the investor, to make the final judgments about what to buy and not to buy. No one is forcing you to buy a property. So, the real estate sales person you’re working with shows you comps, but unless their a buyers agent, at the end of the day, they work for the seller.

So you ask them a question like, “Can you find out how much the sellers owe on the property?” This sort of question will depend on the agents fiduciary responsibilities, or it should. As a real estate sales agent, they cannot lie to either party or misrepresent or hide information from either party in the transaction if it would be detrimental. However, a real estate agents loyalties will certainly play a part when it comes to a question like this. If they have an agency with the seller, if the seller does not wish to have this information known to buyers, then the real estate agent will not obtain this information.

Many real estate investors will work with buyers agents, meaning that a real estate broker will work directly with or will have one of his/her sales agents work with a buyer. In this case, a buyers agency means that the broker or sales agent working under the broker has a principal relationship with the buyer, rather than the seller. This situation does represent some stickiness for the broker because how can a broker represent both sellers and buyers? Many brokers avoid this exact situation for this reason. However, there are many brokers that work to represent buyers.

Communicating with the real estate agent is essential. Know where you stand and match that to the relationship you want with a real estate broker/sales agent and remember that not all real estate agents are created equal.

The Benefits of a Real Estate Auction

Many situations occur that are tailor-made for a real estate auction, but most, if not all, would fit under the category “time is of the essence.”

Property A is sold, and on the strength of this sale, your client purchases Property B. Now sale A develops problems in escrow and the sale cannot close. The client is now in a state of hysteria since his only hope of closing on Property B in 60 days is by closing on Property A. What do you do? Auction Property A and arrange a sale date well in advance of the closing date on Property B, stipulating that part of the terms and conditions of the real estate auction is a quick closing. This can only be accomplished with a real estate auction.

A type of situation which dictates the advantage of a real estate auction is the high divorce rate and the need to dispose of the real estate quickly. Often neither party can afford to hold a property that they previously owned as husband and wife.

When a partnership dissolves, the situation often demands an immediate sale of the assets, including the real estate. Private negotiated marketing cannot guarantee a sale within a set, short time period. A real estate auction can.

Heirs to an estate that involves real estate are usually highly motivated for a fast sale. Most states encourage a real estate auction as a method for generating the highest price in the shortest period of time. Illness, or the need for immediate cash, or the inability of the owner to hold and maintain the real estate is another reason you should recommend a real estate auction. Holding costs can be crippling. All too often, the carrying or holding costs during a private negotiated marketing effort won’t be recovered in a higher selling price. Instead the price is reduced. Therefore, the sooner a property sells, the greater the bottom line dollars in pocket for the seller.

An exchange being held up waiting for a buyer on one of the legs – auction it. The real estate auction can also work especially well in a “Bull Market”. The law of supply and demand, where the demand exceeds the supply, is an ideal market to expose the real estate to competitive bidding to get the maximum return. The real estate auction is highly desirable in overbuilt or stagnant markets, where no reading exists on how low prices will fall or how long the market will stay overbuilt.

The private negotiated method and auction marketing method are different. A real estate auction can most generally guarantee a sale within a short period of time, and the attention is directed to the property being auctioned. Private negotiated marketing can’t accomplish this.

Clearly, real estate auctions offer owners of all types of real estate advantages that are not available with private negotiated real estate firms.

All of us in the real estate profession are salespeople first and foremost. Let’s forget for a moment the fancy titles and diplomas we have earned during our years in the business. The bottom line of success in our profession is still determined by our ability as salespeople. We constantly look for sellers so we have more listings. Our next step is to find the buyers.

A professionally managed real estate auction is a method of marketing that will find the buyers crawling out of the woodwork, and it is this benefit that will enable you to gain additional sales by offering your clients the real estate auction marketing option.

Foreclosure Real Estate – Untapped Resources

With changes in the homeowners’ financial situation like divorce, medical emergencies or losing a job, being able to pay their monthly mortgage payments have become difficult. If their financial situations do not change for the better, a foreclosure is usually imminent. When creditors such as banks repossess a real estate property it is usually through a legal foreclosure proceeding.

Foreclosure real estate properties are often sold based on amount of the owed debt. Depending on the state, most foreclosure real estate properties are auctioned in a foreclosure sale. In foreclosure auctions, the highest bidder wins. When the foreclosure real estate property did not interest any buyer, the creditor usually receives the title to the foreclosure property. These foreclosure real estate properties are now termed as “real estate owned”.

Since foreclosure real estate properties are cheaper compared to brand new homes, they present much potential and possibilities. Aside from this, foreclosure real estate properties have been growing in number during the last couple of years mainly due to the rising cost of living, increasing interest rates and other economic factors. This means more foreclosure homes to choose from.

There are many real estate brokers engaged in selling these foreclosure real estate. Usually obtained from foreclosure auctions, these brokers still offer these foreclosure real estate properties are still sold at great deals. Some of the foreclosure real estate properties are REOs that have been entered into listings contract to attract more potential buyers. A foreclosure listing is usually compiled by these real estate brokers and contains all foreclosed properties available for sale.

Buying foreclosure real estate from either banks or brokers is a good idea. This ensures that the property is clear from any more liens, claims or other encumbrances. Foreclosure real estate attracts two kinds of buyers: investors and people looking for homes for personal use.

Real estate investors can use the foreclosure real estate as rental properties or fixer uppers that can be sold again for a considerable profit. Investing in foreclosure real estate has been known to be very profitable. The key is buying foreclosure real estate that is basically marketable.

First time home owners have also started tapping the foreclosure real estate when looking for a home. These home buyers could look for available foreclosure real estate easily and conveniently with the use of foreclosure listings. The advent of the internet has even made it easier for all buyers. Foreclosure listings can be accesses via the internet for just a small membership fee.

To take advantage of these foreclosure real estate properties, you should look for a reputable real estate broker that has reliable foreclosure listings that contains thousands of foreclosed properties including REOs.