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1. You need a real estate agent to sell your house.
Actually,
every year, millions of individuals sell their home on their own
without hiring a real estate agent or paying any commissions. The
reason they succeed when many others fail is because they understand
the market value of their home and do not try to make a killing when
they sell. Without or without a real estate agent, nothing turns buyers
away faster than an overpriced home.
2. The time of year is not important when you are trying to sell your house.
The
time of year you put your house on the market is very important and
second only to understanding the market value of your home. Except for
very warm climate states, spring and early summer are by far the best
time to put your home on the market. The federal government even uses a
seasonal adjustment factor to smooth out homes sales figures throughout
the year because the amount of homes sold in spring and early summer is
greater than any other time of the year.
3. Besides owning your own home, the only way to make money in real estate is to become a landlord.
Unbeknownst
to most individuals, there are many ways to make money in real estate
without becoming a landlord. Tax lien certificates, probate sales and
mortgage notes represent a few of the methods real estate investors use
to make money in real estate without becoming a landlord.
4. You cannot buy and sell real estate through your self directed IRA.
Although
it is not well publicized, the regulations governing IRAs do allow
individuals to purchase real estate. However, most IRA plans do not
offer this option. Fortunately this trend is changing and a number of
companies are now offering IRA plans that are setup to purchase and
sell real estate.
5. You cannot buy and sell real estate like stocks.
Real
estate investments trusts, or REITs as they are commonly called are
offered on all the major stock exchanges and can be bought and sold in
the same manner as any other publicly traded company. REITs come in all
shapes and sizes and their holdings can include just about any type of
real estate including residential homes, apartments, self-storage
units, hotels, industrial parks, medical buildings and mortgages. REITs
also offer another way individuals can buy real estate through their
IRA.
6. Purchasing real estate for 50% to 90% below market value is not possible.
Ask
someone to describe a tax deed sale and you are likely to get a blank
stare. However, many states in the United States have tax deed sales
and in highly populated counties, tax deed sales can occur year round.
At a tax deed sale, the county auctions off properties where the
property owner has failed to pay their property taxes. In most states,
the bidding for the property starts at only the taxes owed and
properties at these sales can sometimes be purchased for 50% to 90%
below market value.
7. Unlike bond investors, real estate investors cannot earn a fixed interest rate on their investment.
The
second way states have devised to handle property owners that do not
pay their property taxes is to sell the tax debt due on the property at
a public auction to investors. This sale is called a tax lien sale and
the winner bidder is issued a tax lien certificate. This tax lien
certificate bears an interest rate that can range from as low as 8% per
year in Oklahoma to 36% per year in Illinois. To remove the tax lien
against the property, the delinquent property owner must pay the
investor all money due plus interest, based on the state mandated
interest rate. If the owner fails to pay back the tax lien plus
interest, the investor can foreclose and keep the property.
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