Real Estate Fundamentals Explained

To fully understand real estate and what it is, we have to go back to the basics and define the basic principles that define real estate. Although there are a lot of basic building blocks that we can talk about – real estate investing, various types of real estate investments etc., we will tackle the very basic of all the real estate fundamentals – the definition of real estate.

Real Estate Definition

In legal terms, real property is generally defined as land and things permanently attached to the land. Things that are permanently attached to the land which includes houses, garages, and buildings are often referred to as “improvements.” Substances that are beneath the land, such as gas, oil, and minerals are also considered permanently attached. Items that can be attached to the land, but are not necessarily permanent such as mobile homes and tool sheds are not considered real property.

Real Property vs Personal Property

Property is generally divided into real property and personal property. Real property includes things like the house and the land on which it lies, while personal property includes moveable goods – your car, clothes, and most of your personal possessions are considered personal property.

Ownership of Real Property

In the United States, there are special legal requirements controlling the ownership of real property. Under the Statute of Frauds, all contracts for the sale of real property must be done in writing. This holds true for all Scottsdale real estate, too, of course. In any event that the contract for real property is not in writing, it will not be enforced in a court of law. Furthermore, real property is not covered under the Uniform Commercial Code (UCC). This means that UCC warranties and regulations do not apply to the purchases or sale of real property.

Sale and Lease of Real Estate

The sale and lease of real estate in the United States are considered major economic activities and are heavily regulated by state and federal laws. The two major types of real estate are commercial and residential real estate. Commercial real estate is the sale and lease of property for business purposes, and residential real estate involves the sale and rental of land to people for daily living.

The sale of residential property is heavily regulated, and all states require real estate agents and brokers who earn a commission for selling property to be licenses. To get a license, a person must have a high school diploma, be at least eighteen years old and pass a written test on real estate principles and law.

We have now discussed the very basic fundamental building blocks of real estate, and this can be a good start in starting your journey with real estate!


Five Oddball Tips on Real Estate

Real Estate is a tricky business and they say that only the toughest survive. There are a lot of tips about real estate from experts who have been in the business for a long time, some of them conventional and some of them are well, unconventional. Some call the advice weird, others ridiculous, only a few see the advice for what it really is – pure genius.

Tip 1: In areas with a large Chinese population, avoid ending your list prices in the number 4.
In Mandarin, the pronunciation of the word four is similar to the word death. End your list prices in the number 8 instead whose pronunciation sounds like wealth.

Tip 2: End your price with 900 when selling
This is a well-known psychological effect. As with consumer goods that are priced for $49.99 instead of $50, buyers of real estate are often searching for Scottsdale houses just less than a round number.

Research done by Zillow found out that with prices ending in a “900” for example $749,000 sold an average of 4.2 days faster and for $2175 more than houses listed for $1,000 more.

Tip 3: When selling your house, hire a female real estate agent.
This is not being sexist, but statistics show that female real estate agents sell houses faster and for higher prices. And, although the difference in terms of price is not high, it is statistically significant.

This happens because generally women agents set the starting prices high, but tend to be more flexible about lowering prices if their initial pricing doesn’t work. Men, tend to put the starting prices lower but are more stubborn in lowering prices.

Tip 4: Buy a house near a Starbucks
Apparently a Starbucks is a great indicator that a neighborhood is undergoing gentrification – which means rising housing prices. Zillow’s research looked at a decade’s worth of data and found out that properties adjacent to a Starbucks have appreciated 96%. Well, who knew that good coffee equates to rising housing prices.

Tip 5: Buy a house outside a hip new neighborhood
Another bit of unconventional advice is to scout neighborhoods that have recently been gentrified (the price of the house have appreciated) but don’t buy a house there. Buy a house in the next neighborhood instead. That neighborhood will have the halo effect of the gentrification effect of the neighborhood.


Life, Death, and Real Estate

Death is a topic that makes a lot of people uncomfortable. It’s like the proverbial elephant in the room. Everybody knows that it’s there, but nobody wants to talk about it. But death is inevitable, and sooner or later, we will all find ourselves in the Grimm Reaper’s to do list. So if death is something that we can’t escape, it is probably best to discuss the practical side of death, for instance, what happens to your Scottsdale-based properties when you die?

Well, given that you left the property without debt, and that you left a will, then, your executor will follow the will after it goes through probate court. Probate is just fancy legal term for a process in making sure that your will is real. However, if you die without leaving a will, then your property(ies) will still go through probate, and the state will decide to whom your property will go to.

The above is an ideal scenario wherein you leave your property(ies) debt free, but what if you die and your property still has a mortgage, what happens then? Let’s discuss several scenarios that can happen and what can be done in those instances. Experts recommend that the heirs should contact the lender soon after a death to discuss the options that are available. While deciding what to do, experts recommend that you keep the loan current, so that you can avoid foreclosure.

Scenario 1: Your heirs take over your mortgage

In most situations, federal law allows for the transfer of the loan to a relative or other heir when you die. Your heirs will take over your mortgage with the same interest rate as you. Though, legal formalities will have to be followed, it shouldn’t be a problem to do this.

Scenario 2: Your heirs opt to refinance the loan

Your heirs can also choose to refinance the loan. This option is best if they can get a lower interest rate or reduced monthly payments.

Scenario 3: Your heirs cannot afford to make monthly payments

If your heirs don’t have the financial capability to carry the loan, then, experts suggest that they can either sell the house through someone who is always listing Scottsdale homes for sale, or in the worst case scenario, they can walk away from their home entirely.

If the loan cannot be salvaged, walking away might be the wisest move. However, if the property has a sentimental value, then, it might be a good idea to contact the lender and discuss the options that you have.

Although nobody wants to die, death is something that we can’t escape. While we will be in eternal slumber free from the cares of this world, there will be people that we will leave behind. It would be wise to make some provision for our loved ones who still have to live in this world. Don’t you think?


5 Tips on Real Estate You Can Use Today

Whether you are selling your house or looking around to buy one, here are some few simple tips that you might want to keep in mind when it comes to real estate.

Tip 1 : For Those Who Are Selling – The Details Count

If you are going to sell your house in Scottsdale, remember that little details count. Don’t forget to wash the windows, trim the bushes ( if you have any), mow the lawn and change the welcome mats. Inside, arrange the closets, de-clutter rooms, make sure that the house is spotless. Clean the toilet and hide all the fantasy-killing labor tools (toilet scrubs and the like). Check your medicine cabinet and hide all your prescription medication, trust me, you don’t want them to know what’s in the cabinet. Yes, it takes a little bit of time and a lot of elbow grease, but trust me, it will be worth it in the end.

Tip 2: For buyers: Do Your Research

If you are looking into buying your dream house, it is best to do your homework and research the neighborhood. Try to scope the neighborhood at different times so that you can see how it is at different times of the day.

Tip 3: If you are looking into buying, buy a house outside of the hip new neighborhood.

If you are in love with a neighborhood that has a lot of cafe’s, restaurants, parks, and a shopping mall – don’t buy a house there. Buy a house in the next neighborhood over. The price will not be as expensive, and you still get the benefit of using all the facilities. This is called a halo effect and has been shown to work in a lot of cities in the US.

Tip 4: Take note of the words that you use when advertising your house

If you are advertising your house, avoid using the word “unique”, it’s a code word that means ‘this house requires a lot of work’. Save the word for describing Sarah Jessica Parker’s clothes. ;)

Also avoid using charming, quaint, and cute – they are all code words for small.

Tip 5: Honesty Is The Best Policy

Buyers appreciate if you are up front about what is going on in your house. It is best to be honest about the issues (if any) in your heating, ventilation and air conditioning. This will help to avoid disappointments, delays, and distrust in the long run.


Selling Your Home Fast

Sell Faster With  My Marketing Strategy

Marketing your home with Peter Lupus, Associate Broker/Realtor at Russ Lyon | Sotheby’s International Realty is hands-down your best choice… Here’s why: Marketing really means getting eyes on your listing.  Today that is most effectively accomplished through a proper marketing strategy.

These services are part of how Peter will market your home for a quicker sale and highest possible price:

  • Great Publicity
  • “For Sale” Sign – a Sotheby’s Realty sign that draws attention to your property will alert neighbors and people passing by that your property is on the market.
  • A global network accessing a far-reaching qualified client base
  • Time-tested appraisal, sales and marketing experience
  • An international sales force of associates with local knowledge
  • Proprietary print marketing and advertising programs
  • A compelling web sites driven by a powerful brand
  • Strong connections with the clients of Sotheby’s auction house
  • With over 11,700 sales associates in 550 offices in 44 countries worldwide, Sotheby’s International Realty provides extraordinary reach for your property.

Internet exposure is vital to the sale of your home in today’s marketplace.  The Sotheby’s web site averages 400,000 visitors and 4,000,000 page views each month,  we make certain that your home is accessible to potential buyers who are searching for homes like yours on the internet. We place your property with multiple pictures and a virtual tour (when possible) on Realtor.com and my various websites.  Your home will also be available to buyers searching for a home on all the local Realtor websites.

Realtor.com is the National Association of Realtors website compiling the nation’s inventory of real estate. It is the most widely used real estate website; home buyers and sellers spent 75% of the time they searched for a home online on REALTOR.com®. In addition, Realtor.com supplies real estate listings to popular real estate websites like Move.com, AOL.com, and MSN.com.  By working with Realtor.com and other various high traffic websites we are able to get maximum online exposure for your property quickly.

Advertising with multiple high quality pictures helps sell homes!  We take numerous professional quality pictures of your property and choose the very best ones to advertise your property in our online photo galleries, postcards, online advertisements and print marketing.

Virtual Tours
“Virtual Tours” are another exciting way to make your property stand out.  Using our photographs, we create professional “virtual tours” of our home and property. This virtual tour will be available on numerous websites and will be accessible for other agents to email to their clients.

High-quality brochures provided to prospective buyers who tour your home keep it in the forefront of their mind as they tour additional houses on the same day. Our brochures feature full-color photos and highlight your property’s special features.  This take-home brochure provides all contact information so we can answer any questions the prospective buyer might have.

Open House / Brokers Open
At your request, we will hold an open house for the public to preview your property on a day that is convenient for you.


Realtor Lock Box
Buyers are often represented by other Realtors, so a big part of Peter’s job is making sure those Realtors know about your house and have access to it.  With your permission, Peter will place a lock box on your property to increase showings.   We uses only electronic lock boxes for safety and security, and only a licensed Realtor has access to it.

Peter is a master promoter of the homes he represents.  Peter’s database of Realtors consists of thousands of  local Realtors, not only locally but globally.  In addition to email promotions, he will market your property at all of the local meetings he attends spreading the word and calling attention to your property is one of the keys to successful home marketing.

Broker’s Tour
Peter will arrange for a tour of your home with the the other top Realtors locally and follow up with them afterward to collect constructive feedback.  This will help make your home as marketable as possible.

Additional Benefits

Correct Pricing Sells Your Home Faster

Peter can determine the best listing price for your home to meet your deadlines and goals.  He does this by keeping close tabs on our local markets.  Statistics called “absorption rates” help determine how many months homes are on the market.  By calculating the absorption rate for a specific price range, we can determine whether it is a “buyers” or “sellers” market.

By doing this over a period of time, we can see market changes at their early stages. A comparative analysis, (active listings, under contract, sold, etc.) and by using these statistics helps Peter present the right list price to you for your property.

Read More About Pricing Your Home

Transaction Management Makes Your Life Easier

Peter’s tried and true systems will manage all the details of your transaction to ensure that your contract closes on time. This means you can plan ahead will not have to reschedule your moving date.

Frequent Contact Keeps You In The Loop
When you work with Peter Lupus, you will always feel well-informed.  He will regularly contact you with updates on the marketing of your home and to answer any questions that you might have.

Showing Feedback Allows Continual Improvements
Peter well keep records of Realtors and buyers who see your property and contact each of them for feedback. When available, feedback will be relayed to you keeping you in the loop at all times.


Some Off Thoughts About Real Estate and Some Not So Off

For some time we have been hearing some really goofy ideas about what is happening in the housing market, such as these old chestnuts:

  1. Banks are holding onto their foreclosed REOs and only releasing them slowly.
  2. Institutional investors are dominating the market.
  3. First time home buyers are not participating in the market.

All of these are widely reported in the media but in Greater Phoenix they are certainly fabrications and can easily be proven untrue

But now we are hearing another idea that sounds goofy but may very well be true:.

  • Builders are deliberately slowing production to capitalize on rising prices.

The housing starts released this morning from the Commerce Department came in at an annualized rate of only 914,000 versus expectations of 950,000. Most of the increase of 6.8% was attributable to multi-family starts. Even 950,000 would be a low number by historic standards. If we have such a low supply of homes for sale, why are so few homes getting started? There are lots of reasons:

  1. There is not enough skilled labor to build at a much higher rate
  2. The supply chain is not geared up to deliver at a much higher rate
  3. Some builders are short of land to build on
  4. The price of desirable land is rising to unaffordable levels relative to today’s home prices.
  5. New land deals will only pencil out if you allow for a substantial rise in home prices
  6. If you build a lot of additional homes the price of materials sky rockets and trims builders’ gross margins
  7. Builders are applying the brakes to production to sustain the low inventory and capitalize on rising prices

Some people would question the last point as merely silly; why would a developer prefer two birds in the bush to one in the hand? I think the idea deserves more than a second thought. Demand is really not a problem for builders in most of their subdivisions. Why sell out now for today’s prices when you can sell much more slowly and keep rasing prices by 1% to 2% each month. Gross margins are going to be much better in the latter case. What would you do if you were the CEO of a large developer?

This strategy would not work if we had a lot of builders competing for business. But remember it is very much a seller’s market and developers like it that way. Why would they want to see the market return to balance?

Some people have said this undermines the robustness of the recovery. On the contrary, it will tend to make prices rise faster.

Most people have not got their head around the fact that there is a chronic lack of supply. They keep thinking it must be artificial in some way. No it is real, and unless the developers start to ramp up faster the shortage is likely to last a very long time. The prospect of exceeding the pricing highs of 2006 start to become credible in this scenario. Not in the immediate future, but much sooner than we thought two years ago.