Expand your relationship with your broker…

For many homeowners, the selling or buying process is their only contact with a real estate broker, but some have discovered that their broker can offer much more.  A good real estate broker is aware of the wider economic, legal, and financial environment affecting their clients’ investments. 

Investment planning is one such area.  Purchasing your first home for investment purposes should be just the first stage of managing your wealth.  As well as desiring to purchase a great home in an appreciating area, first time home buyers should get advice on how to reduce tax liability by purchasing a home within the current time frame offered by The Housing and Economic Recovery Act of 2008 which authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009.

Additionally, building wealth through using that first home as a rental property as you move up is another area in which your broker can help.  Your real estate broker can help you analyze key figures such as your current financial obligations associated with the potential rental home,  appreciation percentages obtained and/or projected, and rental rate estimators to determine your possible return on investment.  Based on several attributes of your community over time, your broker will be able to advise you as to the best strategy for your property: convert to rental or sell.

Advice on how to best improve real estate with the greatest return on investment is another.  Not all features added to properties are improvements in the mind of buyers.  Ugrades of materials is a very personal matter, and to get the best return on investment, they should appeal to the broadest market.  Colors of easily changed items such as paint, which is not permanent, is the best place for personal expression.  In general, about 1/3 of the cost of upgrades is added to value.  However, there are specific items that have specific values, no matter how much may have been spent on improvements (adding features that did not previously exist, such as second bathroom) or upgrades (improving materials of existing items, such as granite countertops replacing formica). 

For example, one may add a $10,000 fence, but the appraised value for the presence of any fence is much, much less than that cost.   If a lender is involved, an appraiser is the final authority as to the real value added.

More and more, unmarried couples are purchasing homes together.  A new question is popped, “Will you buy a house with me?”  The legal and financial impacts of this decision must be considered before proceeding.  Your real estate broker is a great resource for couples considering this direction through the use of personal experience scenarios, and as a resource for an excellent real estate attorney to handle the paperwork to determine who, in fact, will really own the house, and how proceeds are divided if the relationship dissolves.

Using a real estate broker for every transaction offers the buyer/investor the expertise and experience needed to pursue one of the most expensive investments most make.  A real estate broker looks at the bigger picture and gives an independent, professional assessment of the situation and allows the buyer to keep his focus on his daily operations, not having to become a temporary real estate broker.  A homeowner or buyer who is not using his broker for more than just the transaction at hand is missing out on a great opportunity to access sound business advice.

Contact me at chrystal.safari@gmail.com

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