Here's How your ERA First Agent Works for You

This week's topic was inspired by some recent discussions and questions that have been brought to us by our clients, and we thought it would be a fantastic educational opportunity for everyone. Those of you who have moved in the past probably worked with the same agent when you were both selling and buying, but did you know they wear very different "hats" when they are working for you on each side of the transaction? The responsibilities and methods used by your ERA First Advantage agent differ a bit when he or she is working for you as your buyer's agent or seller's agent.

We get a lot of questions about what an agent does throughout the transaction, and first-time home buyers especially are interested in learning more, specifically how each agent gets paid and what they can expect from their agent when they make the decision to buy or sell a home. There are some major differences between working as a Buyer's Agent versus a Seller's Agent, and it takes a great deal of skill to be successful in both these areas of real estate.

To highlight these differences as easily as possible, we are going to take a look at each side of the transaction.

First, let's talk about what your agent does when he or she is working as your Buyer's Agent:

• Represent the buyer, obviously, and only the buyer's best interests.
• Coordinate home showings with the listing agents of houses buyers want to see.
• Negotiate price of home, sales conditions, inspection details & repairs on behalf of the buyer.
• Work with buyers to determine their wants and needs (within budget!) and then search, or even preview, available inventory for homes that meet buyer's criteria.
• Paid by commission, which is settled by the sellers and their agent. Buyers do not pay for their representation unless their agent charges an up-front fee.  
• Buyer's Agent only gets paid when buyers find their new house.
• Agent may ask buyers to sign an agreement that states buyers will not switch to another agent when they find a home. This is simply a way to protect the agent so he or she does not put in many hours of work without payment.
• Once the buyers find a home they love, their Buyer's Agent works with and educates them each step of the way through closing. 

Next, let's outline some ways the Seller's Agent differs:

• Also called a Listing Agent
• Represent the sellers (homeowners)
• Complete a Comparative Market Analysis to determine market value of the home and work with sellers to settle on a competitive list price.
• Once listed, the agent will create a marketing plan to get the house noticed by as many agents and potential buyers as possible.
• Coordinate showings with buyer's agents who have clients who want to see the home.
• Host open houses to showcase the home to potential buyers.
• Negotiate sale price, inspection details and repairs for the sellers.
• Advocate for the homeowners and represent their best interests.
• Negotiate the commission with the sellers for the listing.
• Split the commission with the Buyer's Agent.
• Only get paid if they sell the listing.
•  Inform and educate sellers throughout each step of the transaction to get to the closing.

 Like we stated before, it takes a tremendous amount of skill to do all of these things well for clients. Some agents specialize if they only want to work with buyers or sellers, but most in our market do not specialize. At ERA First Advantage, we want to be specialists in all real estate matters, so our agents are happy to work with clients who want to buy or sell.

 We hope this post has cleared up any confusion you may have about what your Realtor does when he or she works with you. What are some other real estate topics you'd like to learn more about? Share with us because we are here to help you!

Chat with an Expert: Flips and Investment Properties

Welcome back! As noted last week, we have a special blog for you all this week. Since the Tri-State is such a strong investment market, we wanted to share some practical, real-world knowledge from an agent who helps clients build their investment business every day. Becky Demastus is an agent in our Newburgh office who works primarily with investors, and your resident blogger got the opportunity to sit down with her to get some outstanding insight. Becky is a high-producing, award-winning agent who has become our resident expert for transactions involving flips, foreclosures, short sales, and all other situations that fall into the category of “motivated sellers”.  She is a busy agent, so it took a little time to coordinate our schedules, but our meeting was well worth the wait. I am thrilled to share her advice and knowledge with you all, because this world of real estate investing can be competitive, overwhelming, and frustrating. Have no fear though, I am ready to share some wisdom from one of the experts.

I began our conversation by asking how people get started in real estate investing. She answered by stating that if someone has 20 percent to put down on that initial property, plus a great agent who knows the process, anyone can navigate the investment business. The first thing Becky asks her investor clients is “What is your goal?” You need to determine whether you are looking for a property to flip or an income-producing rental. That goal will influence which properties stand out as smart buys. The next consideration is how you are going to pay for the property(ies). Since investors typically buy homes wholesale, through foreclosure and short sales, estates, and sheriff sales, conventional loans are not an option. They are not primary residences for the buyers, and they typically don’t meet safety criteria like homes that have been well-maintained by owners. The most common ways investors finance their properties are through cash and commercial loans. Becky recommended talking to a trusted loan officer who is experienced in handling this particular type of transaction.

My next question started a great discussion. I asked Becky what types of markets are strongest for investing. I have always assumed big cities are the best places to invest in real estate, but she assured me that is not the case. Cities of all sizes have houses ideal for flips and renters, and the Tri-State is no different. Evansville, Jasper, and Newburgh are all especially strong rental markets, and since we have affordable housing in our region, it doesn't take as long to start making a profit on your investment. You just have to take your time to and start slowly so you find the right one that will provide a return on investment. 

In our market, for example, Becky told me that there are a lot of renters and a strong investment market. One thing to remember is that we do not experience the major swings in real estate values like other areas in the country, so we see more real estate investors who buy income-producing properties to rent to tenants rather than property flips. She said it can be a slower return on your investment, but it’s secure, especially if you work with a property management company that handles all paperwork and tenant issues like rent payments, proof of insurance, screening, evictions, etc.

Our conversation naturally led into flipping because so many people are interested in how it works. Do flippers really make huge profits like the shows we see on TV? In some cases, yes, flippers enjoy a profit of 10-20% , but that comes with a great deal of work. Properties that are great options for a flip are not always in good shape. Becky made a great point that when investors are looking at a house they want to flip, they need to use a formula for pricing. Start with the value the home will be worth upon completion and subtract the cost of repairs, taxes, realtor fees, your desired profit, and a cushion for unexpected costs. The number you have after those deductions is the price you can pay for the property. She said it does not matter what the listing price is. This is a business decision, and if the numbers don’t work, it’s not a wise buy.

With a flip, the repairs are probably the biggest variable. Becky recommended having a team in place for rehabbing properties before you ever make an offer. It is also a bonus if you can do some of the work yourself to save on labor costs. Ideally, your contractor should walk the property with you to estimate costs for all necessary and check the condition of the major components of the house like the plumbing, electrical, roof, and foundation. It is critical to do your due diligence on these investments so they do not become money pits. In addition to the home itself, do some market research to ensure the other homes in the area are similar in market value. That will be important when it’s time to sell. Don’t “over invest” to the point that you price yourself out of that particular neighborhood.

Another great topic we covered was negotiating investment deals. I asked Becky if she handles those negotiations differently than primary residence buyers or sellers.  Her short answer was “no”, as she is aggressive and prepared in all her negotiations, but she shared a few tips that have helped her clients get the homes they want when it is a competitive property with multiple offers. The best way to get an offer accepted, especially when the purchase price is lower than asking, is to pay with cash, waive inspections, more earnest money, and a quick close. Those are a buyer’s most aggressive means for getting that property. Just remember that the investment is a business transaction, so if you miss out on some properties, don’t fret. Becky noted that she has clients who make 15-20 offers per week once they’re established because they know other investors are doing the same thing and they will “lose out” on most of the deals (all part of the process).

As our conversation came to a close, Becky reiterated the important of working with an experienced, knowledgeable agent when you’re buying and selling investment properties. You really need someone who is well-versed in the process and can help you make wise, profitable business decisions. I hope you have learned a lot from this series. It has been quite educational for me to write, and I look forward to continuing my research and expanding my knowledge on real estate investing. As always, if you have follow-up questions or want to know more, don’t hesitate to reach out! If you have interest in becoming a real estate investor and would like to talk to Becky directly, please giver her a call at (812) 858-2400.

The Scoop on Real Estate Investing

Real estate investing has become a hot topic among industry circles, so we thought it would be a great topic to chat about this week. It's a realistic way to build wealth, own a business, and diversify investments. Another major "plus" for investing in real estate is that it can be done in any market. There is a demand for rental properties in cities and towns of all sizes, and the Tri-State is no different. With 2 universities, an upcoming medical school, and several growing industries, there are always people moving in and out of the area that need short-term housing. Let's first take a look from the perspective of a potential investor. This investor wants to know the benefits and potential drawbacks of owning investment property before making this major decision.

What are the benefits of investing in real estate? There are many, but these typically are most important to potential buyers.

Cash Flow: This is extra money "in your pocket" after all bills have been paid. This money is what is leftover from your tenant's rent payment after the mortgage, insurance, taxes, and maintenance costs are taken care of. In a strong market, many property owners enjoy an extra several hundred dollars each month that allows them to build savings, expand their business, travel, or invest in additional properties. Generally speaking, this cash flow is stable and predictable when you have tenants who pay rent on time and have a low vacancy rate at the property. 

Tax benefits: The federal government offers some nice benefits for rental property owners. Included are considerations that account for depreciation of a property and lower tax rates for long-term rental profits. There are also quite a few tax write-offs that property owners should look in to such as maintenance, insurance, and legal fees. Talk to your accountant for a more conclusive idea of what you can write-off as an investor.

Building Equity: This might be the most convincing benefit associated with real estate investing. Just as we try to pay down the mortgage on our primary residence, as an investor, you want to pay down your loan on our investment property and build equity as quickly as possible. The great thing about renting to tenants is that they actually pay your mortgage for you through their monthly rent. This increases your net worth and equity stake as owner of the property. Even better? You are essentially building another form of savings with this asset, and boosting your financial credit by paying off a significant debt. Keep this in mind as you determine what to charge tenants. The amount should stay within your market value, but it also needs to cover your mortgage, taxes, insurance, and include a cushion for maintenance and your monthly cash flow.

Rising Property Values: We all know real estate can be fickle and market values fluctuate to a degree, but generally over the span of five, ten, or even thirty years, property values will go up. They will appreciate, especially in strong markets. Eventually the property you own will be worth substantially more than what you paid for it, providing an opportunity to make a nice profit if you choose to sell. The best case scenario would be selling at a high point in the market after you've paid the mortgage in full; that entire value of the property would be your profit for retirement, a college fund, or a nice vacation to celebrate your hard work and prudent financial decisions.

Ability to Control Investment: Unlike stocks or many other business ventures that investors have no control of, you can make decisions to affect your situation as a real estate investor. As the buyer you choose the property you want to buy, and you can negotiate the price and terms of sale for the property when you make an offer. You can make improvements and updates as you see fit before renting the space, and as the owner, you will "call the shots" on how to market the property to find a quality tenant. To a degree, you also get to decide to whom you decide to rent, as long as you comply with Fair Housing Laws, and you determine what to charge for monthly tenant payments. This control puts real estate investors in a unique position because in many businesses, the owner cannot control many of outcomes associated with his or her business. As a real estate investor, you have the choice to be as involved or hands-off as you wish.

Ready to invest? Call your local ERA First Advantage agent anytime with questions. We are all happy to help you through this process!  

Safety Precautions During Severe Weather Season

Many communities across the country have already experienced severe thunderstorms and tornadoes this spring. It is actually quite common for the Tri-State to face severe weather during March, and especially April, so we have been thinking about writing a blog article that outlines how to keep your home as safe as possible during inclement weather. Of course, during a storm the safety of your family is most important, but we also want to discuss some ways to protect the actual home itself. 

Keep in mind that there are some storms that are just too powerful for any type of structure to withstand. In those cases, forget all your earthly possessions and get your family to a basement or storm shelter as our fantastic local meteorologists advise. However, for the majority of thunderstorms during the spring weather season, there are measures we all can take to prepare ahead of the forecast and equip our biggest investments with everything they need to survive severe weather situations.

Let's go over the top five actions we've found to help protect a home during a storm. If possible, try to implement this advice at your primary residence and any rental/flip properties you own. 

1. Look over your home insurance policies to make sure you're covered for damage caused by a major storm. Most policies cover wind and tornado losses, but flood insurance is typically separate. If you're in a flood zone, you are already required to have flood insurance, but even if you're not, it might be wise to look into it because water damage has proven to be expensive to repair and utterly destructive to a home. Additionally, document your valuable belongings and keep that paperwork in a safe place away from your home.

2. Keep tabs on cracks and settling around your home that could allow rain and wind to enter. If strong winds funnel into your house at just the right angle, they could life off your roof and allow rain to do significant damage to the entire interior of your home. Straight-line winds and micro blasts are unpredictable, so it's in our best interest as homeowners to do everything we can to keep them from doing damage to our homes. Seal all doors and windows as tightly as possible, and invest in storm shutters if you're in a locale that is particularly vulnerable.

3. Clear your gutters and down spouts of all debris. Check on this regularly throughout the spring as leaves and flower buds often fly around during this time. If heavy rains bog down already "flooded" gutters, water will spill over the sides and land in areas surrounding the the house where it could seep into the foundation and cause a great deal of damage. 

4. Do a bit of yard maintenance when severe weather is forecast. Make sure tree limbs, lawn furniture, toys, tools, flower pots and other accessories are picked up and moved indoors or to the garage. If heavy winds or a tornado develop, these items could easily be picked up and thrown into your home or your neighbor's home. I've actually seen our neighbors' patio sets and trampolines picked up by the wind during a storm and tossed across yards and fences. It's quite frightening and really does cause damage, so I take this particular advice to heart.

5. Have a back-up power plan ready to go. Major power outages are fairly common due to lightning strikes or wind damage. Install a surge protector for the whole house and consider purchasing a generator to keep your power on in the even of a long-term outage in your community. We hear a lot about generators during the winter in case an ice or snow storm occurs, but they are also a wise item to keep throughout the spring storm season.

We think these are all realistic, effective actions we can take to protect our homes. If you own rental properties, share this advice with your tenants and help them with whatever you deem appropriate, since ultimately you own the home. What other precautions do you take in the event of severe weather? Stay safe! 

Home Improvement Season is Here!

If you're like many of us, the approaching spring season is a time to refresh and renew your home and yard in new ways. The warmer weather and fresh air give us a great burst of energy and creativity -- the perfect combination to tackle some "projects" around the house! Not to mention, this final season of Fixer Upper has had inspiration like crazy for all of us who want to spruce up our nests.

Since we all have different tastes, budgets, varied home styles, and a range of DIY skills, today we just want to share a few of our favorite go-to sites when we want home inspiration and project ideas. There are so many options and ideas we can implement in our homes, and we are fortunate to have stores throughout the Tri-State that supply us with materials and accessories of all kinds when we're ready to get started.

These resources are meant to feed your creativity and help you achieve what you want in your home. Do not get overwhelmed or feel like you have to do everything at once. No matter the price point or scope of your dream project, home improvements are always a process! Give yourself plenty of time to really think about what you want and how you want create it.

So, without further delay, here are a few of the home sites we are frequenting this spring:

This Old House -- DIY information, how-to guides, budget-friendly projects, inspiration for many home styles. Very practical for homeowners and investors interested in tackling some exciting renovations and updates.

Real Simple -- Organizing & decluttering tips, decorating ideas, kid-friendly projects, landscaping advice, seasonal changes. Find great inspiration and shopping ideas. Realistic whiles till inspiring us to create an efficient, beautiful space for our busy lifestyles.

My Home Ideas  -- House plans, storage solutions, remodeling ideas, outdoor space planning, budget-friendly updates, entertaining guides. Awesome resource! This has become a go-to for so many clients. The site even has some quizzes to help you determine your style and prioritize what you'd like to accomplish in your home.

Southern Living -- While we don't technically live in the South, there is no better guide for cultivating a warm, inviting home for you & your family. Room inspiration, recipes, garden tips, house plans, & more. Talk about house goals!

Bob Vila -- Maintenance guides, tool information, how-to guides, a lot of outdoor project information, troubleshooting for home issues. We know this site is a trusted resource, and we can rely on the information in its articles to be current, accurate, and helpful. It's a great one to peruse just to know what's out there in case you run into an issue at home that you want to fix yourself.

Porch -- Information and assistance with all larger-scale home improvement projects. Great resource for remodeling or building. There's almost too much information on home renovations, and it's easy to get lost in it all. This site really helps narrow down priorities while inspiring with beautiful finished projects that make all of us feel like our projects are within reach.

What websites would you recommend for all things "home"? We would love to know what you're reading and where you get the best information. Share with us on any of our social media pages!

What's On Your Mind? Here's Your Chance to Tell Us!

Hello and welcome back! We hope you're enjoying your week and maybe even tackling some of the March home maintenance tasks we discussed last week. Did anyone else think we might get through this winter without wintry weather? It's chilly today! Oh well. Let's just hope it doesn't last long and we get right back on track with sunshine and warmer temperatures -- perfect for scouting your new home.

This week's post is just a little different. We have been publishing this weekly blog for over three years now, and we want to make sure it's reaching our friends and clients in the way we intend. The purpose of the ERA First Advantage blog is to inform, educate, inspire, and even entertain our readers. We want this weekly post to be a way for all of you to connect with us and stay current on all things real estate, home, and community, even if you're not in the market to buy or sell a home.

As your resident blogger, I pretty much have creative freedom and can write about what inspires or concerns me as a Realtor and homeowner at any particular time. However, what is currently on my radar might not align with what all of you want to read about. That thought is the inspiration for this week's blog -- time to check in.

What topics do you want to know more about? What are you interested in at the moment? We really do want to know so we can serve you better as a company and as individual agents. Below are categories relating to all things real estate, home, and community that are great "starting points" for blog content. This is where our topics begin. This is where we find inspiration to bring real estate information to you and hopefully make the entirety of home ownership easier for you. If you would be so kind as to choose 2 or 3 that interest you most and share them in the comment section on this Facebook post or this blog post, we would appreciate it so much! Even better, if there is a specific topic you'd like us to write about that is not listed here, feel free to share that as well! Our goal is to serve our clients, so if there are things you'd like to learn more about or cover, we're here to help with that.

Listing Your Home
Finding an Agent
Home Staging
Inspections
Appraisals
The Closing Process
Preparing your home for sale
Negotiating an offer
Mortgage Options
Community Profiles
Affordable Cosmetic Updates
Curb Appeal
Landscaping
Seasonal Maintenance
Contracts
ERA Agent Profiles
ERA Staff Profiles
Local Business Spotlight
Decorating Tips
Home Improvement Resources
DIY ideas
Builder Profiles
New Construction
Home Technology

What else is on your mind? Please choose two or three of these categories and type them in the comment section on this Facebook post! Thank you, thank you for your help as we continually make improvements in serving the real estate needs of the Tri-State!

Happy March! Time to Get to Work!

Welcome back on this first day of March! We hope everyone affected by the recent flooding and heavy rain is recovering and drying out by now. This month certainly has certainly in like a lion! March is typically a fickle month in the Tri-State. It could snow, especially early in the month, we could get some nasty storms like we experienced last week, or we could have a stretch of beautiful, warm days that give everyone spring fever (fingers crossed we have more of those). Our vote, of course, is for a dose of early spring weather! After a long winter, we are ready to get out and get some work done on our homes' exteriors or in the yard.

Does anyone else feel this way? We like to call this time the early spring itch. This time of year begins to bring all of us out of our houses and into our yards or neighborhoods. We also find that specifically in our business, it brings out more buyers and sellers who have been waiting to make a move and maybe looking at homes online throughout winter, and that is great. Your ERA First Advantage agent can certainly help you find your new home and sell your current one.

So whether you're in the market to make a move in the coming months or simply want to spiff up your own home sweet home, we have put together a maintenance guide for the month of March. Give yourself the whole month to work on these items, and by the beginning of April, you'll be ready to move on to other projects or just enjoy your beautiful space and all you've accomplished.

• Change out the HVAC filter. It will run more efficiently and safely, especially as the weather warms up.
• Test all your smoke detectors. Replace batteries where needed. If you have carbon monoxide detectors in the home (which you should), check them as well.
• Clean out your gutters and downspouts. We want water to flow freely throughout the upcoming rainy season.
• Clear any debris off your roof and take a look for any missing shingles or other necessary roof repairs. We don't want to welcome spring with a leaky roof!

• Begin trimming trees, bushes, or other plants that are near the house. This will not only help aesthetically with your curb appeal, but will also prevent these plants from growing up the side of your house and doing any damage by rubbing against brick or siding.
• Little by little, remove any dead limbs and plants from your yard and landscaping. As the weather warms, these areas can become a hot bed for insects to live.

• Uncover your crawl space and look inside to make sure it's dry and clear. Test and clean the sump pump if you have one. 
• Clean and inspect your deck and/or porch. Look for necessary repairs like cracks or rot. This is also a great time to re-stain your deck so you can enjoy it when the weather is beautiful!

• Check handrails around decks and porches, and secure if needed for safety. This is especially important if you're thinking of selling your home because buyers will be concerned if the house seems unsafe in any way.
• Look closely at caulking and weather stripping after the harsh winter weather. Repair as needed so moisture doesn't get inside. This project also helps tremendously with energy efficiency.

What else do you work in your home throughout this month? Do you focus more on indoor or outdoor tasks? Do you take on a few projects at a time and split them among the spring months? We would love to hear from you!

Have a fantastic weekend and check back next week!