Building wealth trough real estate takes just a little determination, dedication and education. One very important aspect of real estate investing that you should educate yourself on is how to evaluate or appraise a property’s value. This is very important to understand since your profit is made when you buy the property and only realized when you sell it. Determining a property’s value is a tricky field and you must have sound real estate tricks up your sleeve to pull it off successfully.

Fair Market Value and market demands

Naturally, factors such as market demand tend to abide by the notion that the higher-priced recorded sales best represent true market value, while those lower-priced sales probably represent distressed sales. However, this inexact science often results in higher assessments and tax protests by homeowners.

The Supreme Court defined fair market value in the 1973 case, United States vs. Cartwright, as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” Some states have legal codes that present more refined (and longer-winded) definitions.

Subjective Interpretation

It is important to note that value opinions are based on the subjective interpretation of available information. Commercial real estate education plays important factor in subjective interpretation. This may be in contrast to imposed market values, which can set by the IRS or by legal action such as eminent domain. With the IRS, fair market value of real estate can be a very important consideration. For example, if you were to sell your home to your daughter for a sum that is considerably under local comps, the difference between that reduced price and what the IRS considers fair market value will be treated as a gift for tax purposes.

Real Estate Calculation Centre

The method of calculating fair market value should not change with a down market, at least hypothetically. But in reality, there are so many homes sold at auction and foreclosure in distressed sales that such transactions are no longer the anomalies they were a few years ago. Hence, these sales results almost have to be factored in with conventional sales to reflect a true market standard from a marketing and taxing perspective.

Fair-market values are probably lower than estimated at this bottom stage in the real estate cycle. As is true with any asset, what someone is willing to pay for it, not its list or assessed price determines its real value. A home’s condition and “location, location, location” play big roles in determining fair market value in residential real estate as well as other factors like nearby amenities, home features and crime statics.

For brokers

Most real estate agents can calculate a reasonably accurate price based on “comps,” short for a comparative (or competitive) market analysis. You can create your own “comps” based on information from your local property tax office and perusal of Internet and newspaper sale ads, but this strategy probably will not give you as accurate a picture as actual recent neighborhood sales in your price and size range.

While dealing in the real estate industry, you should always have proper real estate education. There is increasing competition in this field and good sound real estate education will help you facilitate and understand the profitable new trends and niches.

Do Your Due Diligence

Below is some information on buying properties and how to find out their values.  When you are buying tax liens, or foreclosure properties a good place to start is the town hall. There you can research and browse through the properties tax records.  Usually the county saves sales information within the tax record as well at the county assessor’s property value estimate.  In the case of a vacant lot in a new budding sub-division where nothing has been built yet, you can compare records with other properties in towns where similar sub-divisions have been developed and what they sold for at the same stage in development. 

Gather Appropriate Information

A Property’s fair market value is determined by recent sale prices of similar properties in the same area. You can go to the assessor’s office and see if they can give you the sales information on the lots that have sold in the last year or you can check the property taxes values on houses in the area to get an idea. The sales assume a fully informed willing seller and a fully informed willing buyer. There are websites that provide sales information as well as title companies that may give this information for a small fee.

Getting Fair Market Value

Let us say you are interested in 476 Evergreen Drive and want to know the current market value. First step (using your detailed map) is to define the neighborhood this property is located in and any likely impacts or amenities.

Next, you need a source for comparable sales (comps) from the last six months. Realtors can provide Multiple Listing Service (MLS) comps for a given area, title companies can provide comps from tax records and there are a few on-line real estate education companies that can do the same. Taking your list of comps, you drive by each comp noting condition, size, appeal and location. While you drive to each one, look for any other properties that are for sale by owner and take the same information on them. Keep in mind that comps might be affected by work that has been done since the property has sold; look for signs of recent work, especially on very low sale prices.

Up-To-Date Records

Assessors are interested as well in the value of property because they determine the tax in any particular town so they need to be up to date to make sure their records are correct.  Even though typically their estimations are lower then the Fair Market Value, they may be your best bet for an conservative property value.  

The bottom line is that real estate investing is a highly profitable business if done right. Spend some time to educate yourself on the tips and techniques that the pros use. Knowing them could save you a ton of money and at the very least make your real estate investing experience a more pleasant and enjoyable one. : )

Selling a property often requires skill, and to acquire this skill, you need a strong platform of real estate education. Building wealth in real estate deals is certainly tricky but not vary difficult if you solid real estate investing education.

Promoting your properties

Whether you are broker or just an individual that wants to sell your own property, you should take some time to learn some basic real estate marketing techniques. With the advent of innovative marketing tools, the task has been much easier. Nevertheless, you have to be careful while choosing the appropriate one.

You can also advertise on the Internet, there are many sites you can post on, or you can just make your own site. For a small fee, you can list properties on sites like eBay.com or Bid4Assets.com. Selling on e-bay will no get you the highest selling price, but you can use owner finance techniques to ensure profitability, or you can do a reserve auction. Make sure you have clear terms on you listings and include things like the amount of time the purchaser has to pay for the property and how closing will be handled.

Keep your documentation perfect

Just make sure all your agreements are legal.  When you have a buyer you can do the closing at a title company or you can do it easily yourself.  Either way it is a good idea to require that the buyer pays the closing costs. You can issue a deed yourself, check with an attorney on the legality in your state. Bid4assets.com is another site for selling properties and is also a good source for buying tax deed sale properties.  There are auction sites all over, just Google “land auctions” and see what comes up.  Real Estate continuing education courses will help you a lot regarding keeping these papers up-to-date.

Check your comfort levels

You should start where you are comfortable working at, don’t start out in a state which is 5 states away from where you live. At least, when first starting out, you should work locally because you will want to be able to see the properties to make sure that they show as they are described. If you can find a local auctioneer who also auctions real estate consider selling through him. A good auctioneer is worth his weight in gold.  You can just hand it to him and say sell this for me, they get a fee for this, but usually it sells.

Another option you have is to list with a realtor. This usually takes more time, between advertising, sales; closing happen anywhere from 30 up to 1080 days but it will usually sell. One thing to note is that if you do go with a realtor you will have to pay a hefty commission to the when the property sells. Still if you have the equity to do this and still may a good profit this is a great hands free and effective option.

Hi this is Jack Bosch from www.landforpennies.com ,

Let me share a success story of one of our very first deals AFTER we had figured out this system on how to buy properties for as little as $100.00 and sell them days later for $10,000, $20,000 and even more than that.

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SUCCESS STORY:

One of the very first pieces of property we bought was a small vacant lot in a nice town in NE Arizona. Our research told us that most likely the seller had let it go for taxes because it would not “perk,” meaning it would not pass a percolation test. If a lot is not connected to a city sewer, it needs to have a septic tank. In order to test the soil for suitability to a septic tank system, they dig holes into the ground, add water, and measure how quickly the water drains into the ground. If it drains fast enough it passes the test. Fairly rocky land often does not pass the test, but there is no sure way of telling by sight. One lot might pass while the lot right next to it might not, yet the one on the other side might. It’s always a risk with land, but since you’re only buying and selling it’s not of your concern as much as if you were developing the land. In this case, we contacted the owner using the techniques I am describing in my eGuide http://www.landforpennies.com/SecretsRevealed.php. We bought the property after the seller told us, “Yes, I’m giving it away. Just give me whatever you think it is worth to you, I don’t care.” Then he continued: “This lot doesn’t perk, so I would have to install instead of a standard septic system of $3000, an alternative one which costs $15,000, and I don’t want to do that.” So I am just giving up on this lot. You can have it for let’s say $400. Do you want it?” This is a perfect example of an owner who had reason to let his land go to tax lien procedures. After checking the real value of lots in that area, we called him back and said YES!!! After we purchased it, we went to place a for-sale sign on the property and, while we were there, the neighbors approached us and right there on the spot made us an offer for $4000 and were ready to pay us. They invited us for lunch, showed us their home and farm, and even gave us a basket of vegetables to take home in addition to the $4000.00. At first it was not obvious to us, why would this sweet couple want this lot so badly, but turns out they owned 40 acres nearby and our lot would allow them much easier access to their land than they had had. They wanted to use the lot basically as a driveway onto the land their farm animals used for grazing. This property was a godsend for them because it finally solved their access problem to their land.

To some of you reading this, $3600 CASH profit ($4,000 minus the $400 we paid for it) doesn’t sound like a lot, but considering that it took us $400.00 and an afternoon of driving to generate $3600.00 in Profits, I think it was a GREAT DEAL. And we still gratefully do deals in this price range, although we have expanded into much bigger deals as well, all of which you can learn from the detailed step-by-step instructions in my eGuide http://www.landforpennies.com/SecretsRevealed.php.

I’d like to explain a little about where I am coming from, if I could. 7 years ago I discovered this secret system of buying Land For Pennies and have since then personally bought and sold more than Four Thousand Properties using exactly this system. I have been able to managed an average of 600 property transactions per year.That’s right. Approx. 600 property transactions per year using the proven techniques available to you at http://www.landforpennies.com/SecretsRevealed.php

When I started out I knew Nothing, I had nothing and heck I didn’t even speak the English language properly. 7 years ago, I had absolutely Zero knowledge about Real Estate.I started out here in the U.S. with a decent education, but other than that with two suitcases, school debt, a job offer and large dreams.

The first time I read about something like “deeds” I did not even understand what that word meant. I could just refer it to the Bible, where I had read about “good deeds” and “bad deeds” but Deeds in Houses? What in the world was that about? I slowly learn over time and while I was working for a company, I had to travel a lot. I usually left Sunday afternoon to the airport, came back Friday night around midnight, slept all Saturday, and then on Sunday I started packing my stuff again and got ready to leave on the evening flight to a small town on the other side of the Country. Needless to say, I was looking for a way to get out of the drag of constant travels and take over control of my own life and time.

One of the areas I studied for many evenings during these travels turned out to be Real Estate and while learning about Tax Delinquent Properties, I realized that right there in front of me was the most overlooked secret in the world. Now that I am successfully established I have decided to make this secret system available to you. Find out more by going to http://www.landforpennies.com/SecretsRevealed.php

The more I learned, the more it became clear, that right there, in plan sight was hidden a simple, straight forward and easy system to make a Fortune in Land and improved property with virtually no risk. I was then and still am now, one of the very few out there who have discovered this extremely profitable area of investing.

Instead of risking one’s entire savings in one deal You will be able to do dozens and then Hundreds of Real Estate deals per year, where you take just a few hundred dollars per deal and turn them into many thousands of dollars. All in a matter of weeks and with virtually no risk!!!!

Well the end of the story is, that I made it work and I was able to quit my job, be at home with my lovely wife, and make a lot of money.

I truly want you to be successful to!

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