Archive for December, 2007
Comedians have their minds full of lawyer jokes, such as “What’s the difference between a lawyer getting run over and a snake? A snake has skid marks in front of it!
One step down from lawyers on the ladder of shame are estate agents. They are the people who sell property. This article talks about how they privately push deals to cash buyers, and how developers get property with “no money down.” Property is a hard business, and there are millions to be made and lost!
The free market rests on the common principle that the best price is found for a product or service. Attempts to interfere with that are seen as illegal in many countries.
I have for years seen properties sold under market value by estate agents. Those sales are done via social and business contact to cash buyers that the estate agent has obtained over years.
Recently, I attempted to buy a house and the estate agent refused to provide any sales details, as I was not a cash buyer. I was so stunned by this, that I complained. Following my letter, I was banned from visiting the estate agents (a national chain) and told they would call the police and charge me with trespassing if I breached their ban. This example shows how far people will go to make money and motivated me to write this article.
I will briefly outline how financing is arranged for a property purchase.
A cash buyer is someone who does not need a mortgage. That means someone who has assets that can be sold for a cash amount, or he has a house being sold and the proceeds will be available before the new purchase.
There are plenty of mortgage products available in the current market. The principal types of mortgages are buy-to-let, let-to-buy, and a normal homebuyer’s mortgage.
A common practice by property developers is to attempt to buy under value by 15% (the mortgage deposit) or to obtain a 125% mortgage based on the first valuation. The concept is that after the developer bought 15% below market value, the developer can quickly re-mortgage or obtain a further advance and recover the deposit sum. This has meant the developer obtained the property without any deposit after the re-mortgage by using the equity. A 125% mortgage makes the assumption the property is undervalued.
A common way of finding properties undervalued is to find properties recently inherited following death (probate), properties being re-possessed, and when the owners are overseas (and hence out of touch with current pricing).
The Land Registry often provides the sale prices of houses by postcode, so you can check what is a market price within a local area. There are several commercial services offering a similar service, e.g. Nethouseprices.
Once armed with the financing and market details, you are in a strong position to find a good deal.
The estate agency business has been rife with misrepresentation. In an attempt to stop that, the Ombudsman of Estate Agents has been created and also there is a professional membership scheme of the National Association of Estate Agents.
The 1979 Estate Agents Act also offers protection. There have been several prosecutions on the basis of discrimination against purchasers. The 1979 Act states that an estate agent cannot discriminate based on additional services (e.g. mortgages) if could offer.
Finally, you cannot trust the estate agent.
By: Trevor Oakley
Acting as an agent for property in Dubai is a highly regulated affair, thanks to the efforts of the Dubai government. Real estate agents dealing property in Dubai are called brokers, and related departments of the Dubai government, including RERA, maintain a list of registered brokers. Efforts of the RERA and the Dubai government in regulating the registration of brokers and issuing licenses to them, is an important step for creating transparency, and safeguarding all parties to a property transaction.
Generally, registered brokers in Dubai fall in two broad classes:
Class A – Mostly local UAE nationals who led the growth in Dubai and are exempted from other eligibilities for registration by the power of the Chairman. Their names are entered in the Broker’s Register at the RERA along with proof of certification by the Chairman
Class B – Individuals and organizations, both local and non-local, who fulfill the eligibility requirements of a broker’s license and hold a valid license issued by competent authorities
Eligibility Requirements to Broker Property in Dubai
To deal in property in Dubai as a licensed Class B registered broker, both international and local applicants have to fulfill the following minimum eligibility criteria:
Pass the Brokerage profession test conducted by the Land Department
Graduate from any educational course on real estate accredited by the Land Department
Prove that none of the owners or directors of the applicant company had previously been declared bankrupt or convicted of a crime involving breach of honor or trust
Obtain membership of the Dubai Chamber of Commerce & Industry
Obtain valid ownership or lease for the brokerage office
Obtain a valid trade license from competent authorities
Every individual working under a brokerage firm and as a broker of property in Dubai, also require individual registration with the authorities and is issued a photo identity card with license number from RERA.
How Can a Real Estate Agent Operating Outside Dubai Deal with Property in Dubai
A point to note is that individuals who operate outside regular jurisdiction of Dubai government cannot be registered in the Broker’s Register. This restriction also applies to individuals operating from free zones and offshore entities in UAE. However, a registered developer, who is also a registered broker, can apply for a “Special Permit” to be issued to a person situated outside Dubai to market property. In such cases,
The external agent needs to supply his or her accreditation from his or her respective government certified and attested in UAE acceptable format
There needs to be a formal agreement between the Agent and the Developer and its copy submitted before competent Dubai authorities
The Dubai registered broker needs to forward an undertaking to the authorities to be fully liable for acts of the external agent
A company profile of the external agent along with attested copies of passports and proof of residency of each director of the external company needs to be submitted
All purchase-money including part-payments need to be paid into the project trust account of the relevant property in Dubai
Provided the above and other formalities are met, the Dubai land authorities may issue the special permit required by a company or person situated outside Dubai to act as agent for property in Dubai.
By: Faheen Khan
If you are interested in buying a home but you don’t want to have to pay real estate agent fees, you are not alone. You can often have the sellers of a home pay your real estate agent fees, but why mess with that? Just because you buy property doesn’t mean that you have to pay outrageous fees to a real estate agent. Many consumers get fooled into thinking that they have to have a real estate agent, but there are some great tools at every consumer’s disposal that do away with the need for the help of an agent.
First, you want to look in an area for a home that you know a little bit about. If you have to buy house in an area that you aren’t all that familiar with you have to be willing to do a bit of leg work. For instance, if you want to buy property in an area you should be willing to look up the value of the home by contacting the county that the home is located in to find out what its appraised value is. You may also want to look up the appraised values of the homes surrounding the home that you are interested in. This will enable you to know for sure if you are getting a good deal or a bad deal on the property and you can do this yourself as property values are public information.
Whether you want to buy or sell property you will want to have the house appraised as well as inspected. The inspection is more for the buyer, but the seller will know for certain after an inspection that they are selling the home in good condition and nothing can come back to haunt them later. An appraisal as well as an inspection can be done without the use of a real estate agent. As long as you ensure that both the appraiser and the inspector are certified you will be in good shape.
If you are trying to sell house you will want to ensure that it is in good condition and you know the value of the house before putting it on the market without the help of a real estate agent. A buyer also needs to figure out who their target consumer is and how best to market to that type of consumer. There are many different Internet programs out there that will do the advertising for you for much less than you would pay a realtor. You will also want to familiarize yourself with the paperwork that will need to be completed for you to sell property to someone else. Many people underestimate how much work it is to sell property, but it is hard work. Make sure that you will have time to show the home, and also make sure that you can step back from the property emotionally and show off the good attributes of the home to balance them with any drawbacks of your particular home.
Buying and selling a home without a real estate agent is possible, though it does take a bit of work. Both the buyer and the seller need to find out how much the home is worth, if it is in good condition, and each needs to become accustomed to the paperwork that needs to be written up to transfer the home from one individual to the other. If you really want to buy or sell a home on your own you can do it, and it will save you as much as 4% on the sales price of the home.
By: Caitlina Fuller
If you intend to buy any property, whether residential or commercial, you need to take a lot of things into consideration. First and foremost, you will need to make a budget of expenses that you should be willing to put to buy the property. You will also need to take care of the taxes that you are liable to pay while buying or selling a property. All of this can be handled easily by a real estate agent who can not only help you buy a good property in your preferred locality, but also help you deal with other various legal issues related to the transfer of assets in your name.
If you look anywhere in the world, you will find that real estate agents now play an important role and help shape people’s decisions for buying and selling property. If you have a house to sell, then you may approach a property agent and ask him to find a suitable buyer for your property. This is beneficial for you since you will not have to look for a buyer yourself and will be saved from the hassle of getting clearance certificates from the local city authorities. This goes the same way for buyers as well, as they will be saved from the hassle of looking for a house themselves.
Real estate agents also play a handy role in determining the price of the property in the open market. The property market is full of speculation all the time and prices of various kinds of properties are affected by different factors, such as the cost of the house, prevailing market rates, trends of property prices in the country, region, state, and many other factors. Since agents have good knowledge of these factors, they are in a good position to advice customers about the price of a property.
One must always be wary of real estate frauds. Many estate agents are also involved in them. Hence, it is a good idea to deal with agents who have established a good reputation in a certain region. This is advantageous for the customers as well since by dealing with established agents, they will be able to know about his antecedents and how his business has shaped up in the past. This information can be crucial in determining which agent is best suited for you.
Real estate is a good option for people who want to do business by buying and selling properties. In this respect too, the property agents play an important role as they help them find potential customers and also help them determine the future value of their property. If for instance, they suspect that the property market is going to experience a downturn, they may advice the sellers to hold their property to earn higher profits.
Getting the help of property agents is useful but it comes at a cost. Generally, agents will charge a nominal fee from both the parties doing a transaction. However, this fee may vary from one agent to another and from one region to another. It is, therefore, important to sort out this matter early before hiring a property agent.
By: Flora Bright
