Real Estate Careers Articles

Article / Updated 09-06-2023

Although the eviction process is rather straightforward in most areas, you still want to ensure you, as the landlord, don’t do anything to jeopardize the proceedings. There is no guarantee that the process will run smoothly, but if you keep the following in mind, you can alleviate many headaches: Do use an attorney. The filing and serving of eviction actions are governed by very precise and detailed rules. The smallest mistake can result in delays or even the loss of your case on technicalities, regardless of the fact that the resident hasn’t paid rent or has otherwise violated the rental contract. Don’t fail to properly respond to maintenance requests. Even if you’re in the middle of an eviction process with a resident, you’re always responsible for properly maintaining the premises. If someone gets hurt because of your failure to keep the property in good condition, you can be sued. Always fix problems immediately and worry about who is responsible later. Residents and their attorneys are very sensitive to maintenance issues. Any failure to respond to a resident’s request for maintenance can be used as a defense in the eviction action. Don’t get too emotionally involved in an eviction process and make an irrational decision that can be construed as a self-help eviction. A self-help or constructive eviction is a situation in which the owner takes illegal actions to effectively force the resident to vacate the premises. But in today’s reality, no states tolerate these aggressive tactics, regardless of how bad the resident behaves. In many states, even reducing or eliminating free services such as cable TV may be prohibited; the court may consider this move an illegal self-help measure, and the resident can sue for significant penalties. To avoid ending up on the wrong side of a lawsuit, don’t pursue vigilante justice. Follow legal eviction procedures and work through the courts and local law enforcement when you need to evict residents. The wheels of justice turn slowly, but taking matters into your own hands may result in serious (expensive) consequences.

Article / Updated 08-28-2023

The Internet is an exceptionally popular and productive medium for residential advertising, because many people begin their search for apartments online. However, posting advertisements and listings online is so easy that you need to be particularly vigilant in complying with fair housing law in all of your online advertising. Many online services, such as Craigslist, require compliance with fair housing laws and may provide guidelines similar to those listed above that identify words and phrases that may be considered discriminatory. Understanding the Communications Decency Act of 1996 The Communications Decency Act of 1996 was an attempt by Congress to regulate the use of pornographic material on the Internet. The following year, however, the anti-indecency provisions of the CDA were found to be unconstitutional. What remains of the Act is an amendment that’s been interpreted to mean that operators of Internet services aren’t considered to be publishers of the contents of their advertising and therefore aren’t legally liable for the words and phrases of the advertising that appears in their Internet postings. Any liability for using discriminatory language, therefore, applies only to the advertisement’s originator. In other words, if you post an ad online, you’re responsible for making sure it complies with all federal, state, and local laws. Applying the Communications Decency Act to apartment advertising Although website owners may be immune from prosecution regarding content posted on their sites, you may still be held accountable as an individual or a business for any discriminatory advertising content that you post or have posted anywhere online. The safest course is to strictly follow the provisions of the Fair Housing Act and make absolutely certain that your advertising — wherever you post it — doesn’t discriminate against anyone.

Article / Updated 07-10-2023

When landlords fail to maintain habitable and nuisance-free rental properties and fail to remedy serious issues raised by residents, several consequences may follow. However, for you to be held legally liable and for residents to have a right to take recourse, the following five conditions must be met: The issue makes the resident’s premise uninhabitable or a significant threat to the resident’s life, health, or safety. The resident notified you of the issue. Neither the resident nor the resident’s guest, child, or pet caused the damage. (If one of them caused the damage, then the resident is responsible for fixing it or paying for it to be fixed.) The resident gave you or your agent access to the premises to perform the repair. Residents can’t demand that you repair damages if they substantially interfere with your ability to perform the repair, such as preventing an electrician from entering the unit to fix faulty wiring. You failed to remedy the situation in a reasonable amount of time. (What’s reasonable varies according to several factors, including how the residents are affected and the state and local statutes, but two to four weeks are typical. Of course, if the heating goes out in the middle of a frigid winter day, reasonable may mean immediate attention is required.) Generally, residents have the legal right to take any of the following actions: Withhold or escrow some or all rent until the repair is made. In some areas, residents must obtain permission from the courts to withhold or escrow rent, and the amount withheld may be limited. Hire an outside contractor to make the repair and deduct the costs from future rent payment(s). Residents should only use qualified and licensed personnel plus provide copies of any bids or estimates and written proof of payment for a reasonable amount to complete the work. Personally repair and deduct the repair costs from future rent payments. Residents shouldn’t attempt to do the work themselves (or a relative or friend) unless they’re qualified and properly licensed, if required, to do the specific work needed. Sue for damages from the date of the landlord’s knowledge of the breach of the warranty of habitability. The measure of damages is generally the difference between the value of the rented premises in its uninhabitable condition and its fair market rental value. Sue to force the landlord to make repairs by obtaining a court order requiring the landlord to make the repairs. Note, however, that courts are unlikely to use this option because it involves costly court supervision. A variation of this remedy allows the landlord and resident to agree that the resident may repair the damage and subtract the cost of repairs from future rent payments. Move out and terminate the lease. If the premises are truly uninhabitable, the resident has the right to move out temporarily or permanently based on the grounds of constructive eviction — by failing to provide residents with a habitable dwelling, you evicted them, breaking the rental agreement. Furthermore, the resident may sue for money damages for the landlord’s breaking the lease and may recover for emotional and physical stress. One of the rarely mentioned costs of a landlord’s failure to provide habitable housing is a decline in occupancy. As residents move out in response to substandard living conditions, occupancy and revenue from rent payments drop. Keeping your rental units and common areas in good repair is a good business decision. Residents in properties regulated by the New York City Housing Authority (NYCHA) may make a claim for breach of the warranty of habitability even if they fail to serve a notice of claim on the NYCHA before raising the claim, as long as they seek only a rent set off and not a money judgment. Residents who want a money judgment from the NYCHA must serve the city with a notice of claim for damages. If the failure to provide habitable living conditions violates state or local building or health codes and inspectors verify the violation, they may require you to fix the problem and pay additional fines or penalties.

Article / Updated 04-25-2023

Selling a home can be very nerve-wracking, so you may be tempted to take the first offer that comes along. Be careful! Potential buyers can be problematic if you don't know what to look for. Not all offers are created equal, so if you jump at one too soon, you could end up breaking the law, tying up the sale of your home, or seeing your home sale fall through. Here are some signs of potential trouble when looking at offers on your home: The buyer requests a cash-back-at-closing deal. Here, the buyer offers you more than the home is worth if you agree to kick back the extra money at closing. This practice is fraudulent and can land you in jail. The buyer isn't pre-approved for a mortgage loan. This person can tie up your home, preventing you from considering better offers. The buyer offers no or very little earnest money deposit (EMD). The lower the EMD, the more likely the deal will fall through. The buyer makes the purchase agreement contingent on the sale of his home. For your home to sell, several other transactions must occur first. This is known as the domino effect, and you should avoid it, if possible. This type of contingency ties up the sale of your house with no guarantee that the interested parties will ever actually go through with the deal.

Article / Updated 04-25-2023

Buying and selling houses is the primary business of real estate brokers and salespeople. Here's an overview of a typical house sale involving real estate agents. A couple decides to sell their house and enlist the services of a real estate agent. You're one of several agents the couple invites to their home to hear your listing presentation and explain what services you offer. In addition, you probably advise the couple on what price they'll be able to get for their house. After meeting with several agents, the couple chooses you, signing a listing agreement and agreeing to allow you to represent them as their agent in the transaction. As the couple's real estate agent, you begin marketing the property. In communities that have a multiple listing service (MLS), you enter their house information into a computer so that all other agents in the community can see what you've listed for sale. In communities with no MLS, agents may spread the word around to other real estate agencies that they have a particular house for sale. An agent across town who's been working to find a house for another couple sees your house on the MLS and gets in touch with you, asking for more details and making sure the house still is for sale. The cross-town agent then contacts his buyers, and they agree to take a look at the house. After seeing the house, they agree to make an offer. The way a buyer's offer is presented varies in different communities. Sometimes the offer is made in person with the buyer's agent present. The offer usually is made in writing with a small check from the prospective buyer that's called a binder or earnest money. Assuming that your seller either accepts the offer immediately or engages in negotiations that result in a deal, a contract of sale then is prepared. Exactly who prepares the contract varies by state and region. In many places, however, the seller's real estate agent prepares the contract, sometimes filling in the blanks of a preprinted contract form, but in other places, only attorneys prepare the contract. After the contract is signed, the conditions within the contract are triggered. A typical real estate sales contract includes a provision for the buyer to obtain mortgage financing and may have provisions for the house to be inspected by a home inspector or engineer. The contract usually includes a provision that a marketable title must be conveyed. A marketable title means that a reasonable and proper search of the records has been conducted, showing that the title to the property has been documented from earlier owners to the current seller so that it can be conveyed (or transferred) without questions as to who the owner is. A records search that proves whether a title is marketable is called a title search. Title insurance also may be purchased (or even required) as part of the contract process to ensure that the title is legal. When all of the contract provisions are satisfactorily completed and met, the buyer and seller may proceed to closing, taking the real estate agent one step closer to getting paid. By general agreement, the commission usually is paid at the closing. When more than one broker is involved, the broker representing the seller distributes the preapproved share of the commission to the buyer's representative. Each broker then splits a portion or percentage of the commission with the salesperson who worked the deal.

Cheat Sheet / Updated 04-18-2023

Got a property to rent but worried about everything that’s involved with being a landlord? Use this Cheat Sheet for tips on marketing your property, finding the right tenant and managing the rental process from start to finish.

Cheat Sheet / Updated 09-20-2022

Being a landlord certainly sounds easy. All you have to do is line up responsible residents, maintain the property, and count your money as the rent rolls in, right? Actually, no. Owning and leasing residential real estate requires that you comply with a host of federal, state, and local laws. Certain residents may complicate your life by taking legal action against you or forcing you to take legal action against them. This snapshot explains some important landlord legalities and helps you avoid the most common legal pitfalls of owning and leasing residential rental property.

Article / Updated 08-16-2022

How you choose to structure your business as the landlord depends in part upon your willingness to share its future and yours with others. Forming a corporation is a fairly complex legal endeavor that involves the following steps: Choose and register a name for your corporation that complies with state requirements. Write and file your articles of incorporation. Write bylaws to govern corporate operations. Issue stock certificates to your corporation@’s owners and investors. Obtain any business licenses and permits required by your state and local governing bodies. You can take any of the following three approaches to form your corporation: Do it yourself. If you’re the sole owner of the business and don’t intend to add owners, seek outside capital, or do business in multiple locations, you may be able to incorporate without expert assistance. Use a third-party service. Hire a reputable, local attorney. Outsourcing to a business-formation service Numerous firms offer services to help you form a business entity. Three of the best known are Legal Zoom, Rocket Attorney, and The Company Corporation. Others include Inc Authority, and Directincorporation.com. Before using a service, check with others who’ve used it, and expand your search to include LinkedIn, Facebook, and Twitter. Find out how they’re regarded by the Better Business Bureau and local consumer protection organizations to determine whether any complaints have been filed against them. Keep in mind that these firms are ordinary retailers who tend to advertise low prices “Starting at …” for only a few of the services you need. Comparison shop. Find out what’s included and what’s not. Get a price quote from a reputable local attorney, as well, for comparison purposes. Make sure you get a price quote that covers everything you need to form your corporation. Hiring an attorney and accountant We recommend that you hire a reputable, local attorney to guide you through the process of incorporating your business and an accountant to manage the corporation’s payroll, taxes, and financial reporting for several reasons, including the following: Your attorney can help evaluate your specific needs for the area where you’re setting up shop and recommend the best business structure to meet those needs. Choosing the wrong business structure may imperil your personal assets and limit your tax benefits. Your attorney makes sure all documents are filed properly with the right government agencies and in a timely manner. Your attorney can refer you to experts in accounting, banking, financial planning, insurance, and web design. A good business attorney will have an ongoing professional interest in your success. Your accountant keeps the books and creates and files financial reports in compliance with federal, state, and local laws. Running your operation as a corporation As complicated as forming a corporation is, running it requires even more attention to detail. You must fulfill the obligations of corporate governance, which include: Paying yourself and other owners and investors salaries or distributions Holding at least one director and shareholder meeting annually Typing up and filing minutes from those meetings Updating the bylaws Practicing generally accepted accounting principles (GAAP) — standards and procedures for recording financial transactions and producing financial reports Producing and filing an annual report with your Secretary of State Preparing the corporation’s annual tax return

Article / Updated 03-30-2022

When renovating a property that you intend to flip, don't get carried away. Some home flippers hire top-of-the-scale contractors and insist on the highest-quality building materials from the nearest suppliers. To help you avoid that trap, here are 11 secrets that can slash your cash outlays and boost your bottom line. Get free advice and planning tools. You don't have to hire a professional interior designer to draw up plans for remodeling a kitchen or bathroom. Most home-improvement stores have their own designers on staff to assist you. If you purchase the materials from the store, the store frequently throws in the design consultation for free. And who can say no to free? You can often find additional planning tools and calculators online. Large home-improvement stores and manufacturers typically feature cost estimators, material lists, and installation instructions and tips on their websites. For some excellent online resources for planning your projects, check out Lowe's, Home Depot, and Bob Vila Design Tools. Hire moonlighters. Large construction companies often have large overhead costs, so they have to charge more for their work. A roofing company, for example, needs to purchase and maintain its trucks, pay rent on office space, and cover payroll expenses and insurance for its workers. To earn an extra buck on the side, the employees of many of these companies moonlight, which means they provide the same high-quality service on the side for a fraction of the cost. You can often locate prospective moonlighters by visiting worksites in your neighborhood. Ask to see the boss, and if he's not around, pitch your proposal to the workers. If the boss is around, you can ask him for an estimate without blowing your cover. Hiring moonlighters is a great idea, but make sure they have health insurance with accident coverage. If your workers don't have proper insurance and one of them gets hurt working on your house, your cost savings could quickly be sapped away by losses. If the moonlighters don't have insurance, buy an insurance policy that includes accident coverage for workers. Hire students over the summer. When school's out, college and high-school students flock to area businesses to secure summer employment, and they're often turned away because so many people are looking for jobs. That's where you come in. Post an ad in the local newspaper or contact high schools and colleges in your area to let them know you're looking for summer laborers. Students are eager and well-qualified to perform the following renovation chores: Mowing, weeding, trimming bushes and trees, and planting flowers Patching and sealing driveways and walks De-cluttering garages, basements, and attics Vacuuming, window washing, and other cleaning Demolishing old storage sheds Tearing out old carpeting Patching and painting inside and out Refinishing decks Buy overstocked or discontinued building materials. When you wander the aisles at your local hardware or building-supply store, find what you want and then ask about any overstocked or discontinued materials that are similar in appearance. Talk to the manager, who most likely wants to clear the old, overstocked items from inventory to make room for the new merchandise that's in greater demand. You can often purchase overstocked or discontinued merchandise for a fraction of the cost. Buy builder's-grade materials. When shopping for building materials, ask the salesperson to direct you to the builder's-grade materials — the more affordable options, such as prefab cabinets and low-grade carpeting. If installed and maintained properly, these materials are perfectly suitable for most markets. If you're flipping on the ritzy side of town, however, you may need to buy the good stuff. Gauge your selection of materials by the visibility and importance of the rooms. Consider using higher-quality materials for the kitchen, main bathroom, and master bedroom and a lesser quality for the other bedrooms and the second and third bathrooms. Use remnant material to trim your costs. Carpeting stores, countertop manufacturers, and other suppliers often have remnants in the back that may be sufficient for completing small jobs. Picky customers often return items that have tiny scratches or dents as well as materials that they cut a little too short. These gently used materials may be just what you need, and you can pick them up for pennies on the dollar. Buy time-saving power tools. When you hire a contractor, you indirectly pay for the tools that make the job much easier. When you rent a tool, you have to return it. When you buy your own tools, however, you have them for as long as they work, and you can spread the cost over several flips. If you're a do-it-yourselfer, buy the tools that make it easier for you to do a professional job. In addition to the standard hammers, pliers, wrenches, screwdrivers, tape measures, paint scrapers, and paintbrushes, almost every house flipper can simplify do-it-yourself jobs with the following power tools: Heat gun for stripping wallpaper and paint Power washer to clean everything from decks to siding Power roller for painting inside walls and ceilings Cordless drill with a well-stocked drill-bit case Screw gun with Phillips and flat-head screw bits Circular saw for decks and other woodworking projects Reciprocating saw for cutting anything you can't cut with a circular saw Nail gun for quick and easy single-handed nail driving Vibrating sander, or belt sander, for sanding out scratches and gouges in wood surfaces Charge purchases on a rewards-back credit card. Credit-card companies offer some pretty sweet deals to reward customers for using their cards, and as long as you pay the balance in full when you receive the bill, you're not socked with high interest charges. If your building supplier offers its own credit card, you may get a discount on all purchases. If not, shop around for other cards. Companies offer everything from cash-back deals to frequent-flyer miles, free merchandise, free groceries, 0 percent interest for a specific period of time, and other attractive benefits. Take full advantage of these perks. Schedule work off-season. During the off-season, larger companies have to keep their employees busy in order to pay them and finance their benefits. Use this as a bargaining chip when negotiating the cost of repairs and renovations. However, don't delay a project that needs to be done just to save a few bucks — holding costs (the cost of maintaining a flip) can outstrip any savings. You reap two additional benefits by scheduling work off-season. The contractor is more likely to complete the job on schedule and is generally more responsive when you need her services in season. Pool your projects. Most skilled laborers charge a minimum for just showing up. You pay for their time and travel expenses no matter how small the job. To save money, pool your projects. You can draw up a list of projects for the plumber, a list for the carpenter, and another list for the electrician. Have them complete all the projects in one trip. Better yet, if you have several houses going at one time, ask the contractor whether she'll consider giving you a discount if you guarantee that she can work on all your properties. Talk with your neighbors. If they're having the same work done on their homes, you may be able to negotiate a better price for multiple jobs. Rent a large Dumpster (a.k.a. skip) for all the tear-out and construction debris so all your contractors have one place to dump rubbish from your flip. By supplying the Dumpster, you can tell your contractors to remove the cost of waste removal from their estimates.

Cheat Sheet / Updated 03-30-2022

"Flipping houses" sounds as easy as 1-2-3: 1) Buy a house significantly below market value, 2) fix it up, and 3) sell it. However, when you actually try to flip a house, you soon realize that it's tougher than it sounds. The beginner faces several hurdles, not the least of which is tracking down properties with potential and buying them for cheap. This Cheat Sheet brings you up to speed in a hurry on house flipping basics and helps you clear the most common hurdles.