Tips For Getting A Fair Price On A Home

Whether it's a buyer's market or a seller's market, all homebuyers have one thing in common: they don't want to get ripped off. But how do you know if you're getting a fair deal on the home you're prepared to place an offer on? Read on to find out how to evaluate the price of any home so you can make a sound investment decision.

• Research Recently Sold, Comparable Properties
  
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• A comparable property is one that is similar in size, condition, neighborhood and amenities. One 1,200-square-foot, recently remodeled, one-story home with an attached garage should be listed at roughly the same price as a similar 1,200-square-foot home in the same neighborhood. That said, you can also gain valuable information by looking at how the property you're interested in compares in price to different properties. Is it considerably less expensive than larger or nicer properties? Is it more expensive than smaller or less attractive properties? Your real estate agent is the best source of accurate, up-to-date information on comparable properties (also known as "comps"). You can also look at comps that are currently in escrow, meaning that the property has a buyer but the sale is not yet complete.
• Check Out Comparable Properties That Are Currently on the Market
  
• 
• In this case, you can actually visit other homes and get a true sense of how their size, condition and amenities compare to the property you're considering buying. Then you can compare prices and see what seems fair. Reasonable sellers know that they must price their properties similarly to market comparables if they want to be competitive.
• Look at Comparables That Were on the Market Recently but Didn't Sell
  If the house you're considering buying is priced similarly to homes that were taken off the market because they didn't sell, the property you're considering may be overpriced. Also, if there are a lot of similar properties on the market, prices should be lower, especially if those properties are vacant. Check out the unsold inventory index for information about current supply and demand in the housing market. This index attempts to measure how long it will take for all the homes currently on the market to be sold given the rate at which homes are currently selling. (For further reading, see Selling Your Home In A Down Market.)
  
• Consider Market Conditions and Appreciation Rates in the Area
  
• 
  Have prices been going up recently or going down? In a seller's market, properties will probably be somewhat overpriced, and in a buyer's market, properties are apt to be underpriced. It all depends on where the market currently sits on the real estate boom-and-bust curve. Even in a seller's market, properties may not be overpriced if the market is on the upswing and not near its peak. Conversely, properties can be overpriced even in a buyer's market if prices have only recently begun to decline. Of course, it can be difficult to see the peaks and valleys until they're history. Also consider the impact of mortgage interest rates and the job market on the economy. (Knowing your mortgage choices is important. For more information, read Shopping For A Mortgage .)
• Are You Buying a For-Sale-by-Owner Property?
  A for-sale-by-owner (FSBO) property should be discounted to reflect the fact that there is no 6% (on average) seller's agent commission, something that many sellers don't take into consideration when setting their prices. Another potential problem with FSBOs is that the seller may not have had an agent's guidance in setting a reasonable price in the first place, or may have been so unhappy with an agent's suggestion as to decide to go it alone. In any of these situations, the property may be overpriced.
  
• What Is the Expected Appreciation for the Area?
  The future prospects for your chosen neighborhood can have an impact on price. If positive development is planned, such as a major mall being built, the extension of light rail to the neighborhood, or a large new company moving to the area, the prospects of future home appreciation look good. Even small developments like plans to add more roads or build a new school can be a good sign. On the other hand, if grocery stores and gas stations are closing down, the home price should be lower to reflect that, and you should probably reconsider moving to the area. The development of new housing can go either way - it can mean that the area is hot and is likely to be in high demand in the future, increasing your home's value, or it can result in a surplus of housing, which will lower the value of all the homes in the area.
• What Is Your Real Estate Agent's Opinion? 
• 
  
• 
  Without even analyzing the data, your real estate agent is likely to have a good gut sense (thanks to experience) of whether the property is priced appropriately or not and what a fair offering price might be.
• Does the Price Feel Fair to You?
  If you're not happy with the property, the price will never seem fair, even if you get a bargain. Even if you pay a little over market value for a home you love, in the end, you won't really care.
  
• Test the WatersEven in a seller's market, you can always offer below list price just to see how the seller reacts. Some sellers list properties for the lowest price they're willing to take because they don't want to negotiate, while others list their homes for higher than they expect to earn because they expect to negotiate downward or they want to see if someone will make an offer at the higher price. If the seller accepts your price or counteroffer, you'll get an indication that the property probably wasn't worth what it was listed for and you have a good chance at getting a fair deal. On the other hand, some sellers may underprice their properties in the hope of generating lots of interest and sparking a bidding war. Unlike on eBay, however, the seller doesn't have to simply sell to the highest bidder: sellers can reject any and all offers that don't meet their expectations. If you have your heart set on the property, be warned that some sellers may be offended by lowball offers and refuse to work with you if you chose to employ such a tactic. Also, when you offer less than the list price, you may increase your risk of being outbid by another buyer. (For strategies that will help you to come out on top in any negotiation, read Getting What You Want.)
• Get an Appraised Value and a Home Inspection
  Once you're under contract, the lender will have an appraisal of the property done (usually at your expense) to protect its financial interests. The lender wants to make sure that if you stop making your mortgage payments, it'll be able to get a reasonable amount of its money back when it forecloses on your home. If the appraisal comes in at considerably less than your offering price, you may not be getting a fair deal. In fact, the lender may not even let you purchase the home unless the seller is willing to bring the price down. A home inspection, which is completed after you're under contract, will also give you a way to gauge your offering price. If the home needs many expensive repairs, you'll want to ask the seller to make the repairs for you or discount the purchase price so you can make them yourself.
• 

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Conclusion :When you're shopping for a home, it's important to understand how homes are priced so you can make a sound investment and reach a fair agreement with the seller. Using these tips, you'll be able to make a confident and well-informed offer on any home in any market.

Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international


Contact Us  
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com

Pros and Cons of Investing in Commercial Real Estate

Any type of property, whether it’s commercial or residential, can be a good investment opportunity. For your money, commercial properties typically offer more financial reward than residential properties, such as rental apartments or single-family homes, but there also can be more risks. Understand the full pros and cons of investing in commercial properties is important so that you make the investment decision that’s right for you.

What Is a “Commercial Property?”

Commercial properties may refer to:

• retail buildings
• office buildings
• warehouses
• industrial buildings
• apartment buildings
• “mixed use” buildings, where the property may have a mix, such as retail, office and apartments.

There are nuances to managing each of these types of properties. To paint a general picture of what it’s like investing in commercial property, let’s examine the pros and cons of investing in a single-story commercial retail building, such as a community “strip mall”.

Positive Reasons to Invest in Commercial Property

Here are some of the pros of buying commercial real estate over residential property.
Income potential. The best reason to invest in commercial over residential rentals is the earning potential. Commercial properties generally have an annual return off the purchase price between 6% and 12%, depending on the area, which is a much higher range than typically exists for single family home properties (1% to 4% at best).
Professional relationships. Small business owners generally take pride in their businesses and want to protect their livelihood. Owners of commercial properties are usually not individuals, but LLCs, and operate the property as a business. As such, the landlord and tenant have more of a business-to-business customer relationship, which helps keep interactions professional and courteous.
Public eye. Retail tenants have a vested interest in maintaining their store and storefront, because if they don’t, it will affect their business. As a result, commercial tenants and property owner interests are aligned, which helps the owner maintain and improve the quality of the property, and ultimately, the value of their investment.
Limited hours of operation. Businesses usually go home at night. In other words, you work when they work. Barring emergency calls at night for break-ins or fire alarms, you should be able to rest at night without having to worry about receiving a midnight call because a tenant wants repairs or has lost a key. For commercial properties it is also more likely you will have an alarm monitoring service so that if anything does happen at night, your alarm company will notify the proper authorities.
More objective price evaluations. It's often easier to evaluate the property prices of commercial property because you can request the current owner’s income statement and determine what the price should be based on that. If the seller is using a knowledgeable broker, the asking price should be set at a price where an investor can earn the area’s prevailing cap rate for the commercial property type they are looking at (retail, office, industrial, etc.). Residential properties are often subject to more emotional pricing. See the Nolo article Is that Residential Real Estate Investment Property Worth It? for more on the subject, including an explanation of cap rates.
Triple net leases. There are variations to triple net leases, but the general concept is that you as the property owner do not have to pay any expenses on the property (as would be the case with residential real estate). The lessee handles all property expenses directly, including real estate taxes. The only expense you’ll have to pay is your mortgage. Companies like Walgreens, CVS, and Starbucks typically sign these types of leases, as they want to maintain a look and feel in keeping with their brand, so they manage those costs, and you as an investor get to have one of the lowest maintenance income producers for your money. Strip malls have a variety of net leases and triple nets are not usually done with smaller businesses, but these lease types are optimal and you can’t get them with residential properties. For more on common lease terms, such as net leases, see the Nolo article Commercial Leases: Negotiate the Best Term and related articles in the Business Space and Commercial Leases section of this site.
More flexibility in lease terms. Fewer consumer protection laws govern commercial leases, unlike the dozens of state laws, such as security deposit limits and termination rules, that cover residential real estate. For more on commercial leases, see the Nolo book Negotiate the Best Lease for Your Business, by Janet Portman and Fred Steingold.

The Downside of Investing in Commercial Property

While there are many positive reasons to invest in commercial real estate over residential, there are also negative issues to consider.
Time commitment. If you own a commercial retail building with five tenants, or even just a few, you have more to manage than you do with a residential investment. You can’t be an absentee landlord and maximize the return on your investment. With commercial, you are likely dealing with multiple leases, annual CAM adjustments (Common Area Maintenance costs that tenants are responsible for), more maintenance issues, and public safety concerns. In a nutshell, you have more to manage; and just as your tenants have to worry about the public eye, you do as well.

Professional help required. If you are a do-it-yourselfer, you better be licensed if you are going to handle the maintenance issues at a commercial property. The likelihood is you will not be prepared to handle maintenance issues yourself and you will need to hire someone to help with emergencies and repairs. While this added cost isn’t ideal, you’ll need to add it on to your set of expenses in order to properly care for the property. Remember to factor in property management expenses when evaluating the price to pay for a commercial investment property. Property management companies can charge between 5-10% of rent revenues for their services, which include lease administration. Evaluate beforehand if you want to manage leasing and the relationships yourself, or if you want to outsource those responsibilities.

Bigger initial investment. Acquiring a commercial property typically requires more capital up front than acquiring a residential rental in the same area, so it’s often more difficult to get your foot in the door. Once you’ve acquired a commercial property, you can expect some large capital expenditures to follow. Your property might be humming along for a few months and wham, here comes a $10,000 bill to address roofing repairs or a new furnace. With more customers there are more facilities to maintain and therefore more costs. What you hope is that the gains in revenue outweigh the gains in costs, to support purchasing a commercial property over a residential one.


More risks. Properties intended for commercial use have more public visitors and therefore have more people on the property each day that can get hurt or do something to damage your property. Cars can hit patrons in parking lots, people can slip on ice during the winter, and vandals can spray paint the sides of the building. Incidents like these can occur anywhere, but chances of experiencing something like these events go up when investing in commercial properties. If you're risk adverse, you may want to look more closely at putting your money in residential properties.

Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international


Contact Us  
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com

Tips For Buying A Safe Commercial Property

Investing in Indian property today is a challenging task. On one hand, with the rupee touching all time lows against the dollar, it appears to be a great time to remit funds to India for investment. However, on the other hand, with India’s growth story looking bleak, the prospect for high returns seems an uphill task. Vidhan Properties here understands the needs and requirements of all our investors and customers of buying commercial property in India.
If you are keenly looking at investing in property in India, considering commercial spaces. Here are the best 5 tips which you need to keep in mind while buying any commercial property in India,
1. Location

Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets which have or will have high vacancies. Today Delhi, Bangalore and Mumbai offer the best investment opportunities for commercial.
2. Type of property
In fact, if you are looking at buying retail space, It is advisable to look at high street rather than a mall as a strata sold mall is a recipe for disaster. In a strata sale model, shops in a mall are pre-sold to individual investors. The developer thus restricts himself to selling a store as a unit and investor can hunt for a tenant.
The problem arises because the model has no control over trade and tenant mix and there is no cohesiveness to the mall to attract customers as much as they can in a high street place.
3. Out Lay

The Real Estate deals with the land by buying, selling and giving the land on rents. The real estate business provides complete facilitation about the dealing of land. The land can be it farm, house, building, factory, Institutional or commercial building.
Vidhan properties always suggest that the minimum budget you should have in mind for a commercial investment is Rs 3-4 crore. It is noted that many times buyers tend to ignore rental yield and instead focus only on capital appreciation.
When you buy a commercial property, make sure that you can get a rental yield of at least 11-12%. A yield of less than that means the property is overvalued
4. Expected returns
You can expect returns of 10-11% per annum from commercial investment. Remember, you do not only make a profit on the sale of appreciated commercial property.
The rental cash flows of a well-located office or shop space are considerable. Unlike with a residential property, the income that can be generated from commercial property is what determines its value. In other words, the capitalization rate is actually the measure of the demand for the property.
5. Due diligence

If you are an investor looking at an income producing office asset, look at the break-up of cash flows, the vacancy factor, expenses such as maintenance, property tax and building insurance, lease term, lock-in period and expiry dates, long-term capital appreciation potential, and refurbishment, refinancing and repositioning potential.

Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international


Contact Us  
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com

Tips For a Hot Commercial Real Estate Deal

There's an old joke in commercial real estate: If you think nobody cares you're alive, just miss a few mortgage payments.

Unfortunately, there was a lot of that going on during the credit crisis that started in 2008, as commercial real estate values went into a freefall. According to the Massachusetts Institute of Technology Center for Real Estate, commercial property values fell by 10.6% in the fourth quarter of 2008, alone – the biggest price drop since 1984.
But to savvy real estate investors, times of lower prices typically reveal genuine investment opportunities. For instance, according to a survey by Marcus & Millichap Real Estate Investment Services, of 1,129 commercial property investors, 51% planned to increase commercial real estate allocations during the 2008 credit crisis.
So, despite the significant drop-off in acquisition plans from the peak in 2005, more than half of investors still planned to increase their commercial real estate holdings. A mere 11% planned to reduce their real estate portfolios in 2009.

Finding a Good Commercial Real Estate DealAsk any real estate professional about the benefits of investing in commercial property and you'll likely trigger a monologue on how such properties are a better deal than residential real estate. Commercial property owners love the additional cash flow, the beneficial economies of scale, the relatively open playing field, the abundant market for good, affordable property managers and the bigger payoff from commercial real estate.
But how do you evaluate the best properties. And what separates the great deals from the duds?
Like most real estate properties, success starts with a good blueprint. Here's one to help you evaluate a good commercial property deal.

1. Learn What the Insiders Know
   To be a player in commercial real estate, learn to think like a professional. For example, know that commercial property is valued differently than residential property. Income on commercial real estate is directly related to its usable square footage. That's not the case with individual homes. You'll also see a bigger cash flow with commercial property. The math is simple: you'll earn more income on multifamily dwellings, for instance, than on a single-family home. Know also that commercial property leases are longer than on single-family residences. That paves the way for greater cash flow. Lastly, if you're in a tighter credit environment, make sure to come knocking with cash in hand. Commercial property lenders like to see at least 30% down before they'll give a loan the green light.
   
2. Map Out a Plan of Action
   Setting parameters is a top priority in a commercial real estate deal. How much can you afford to pay? How much do you expect to make on the deal? Who are the key players? How many tenants are already on board and paying rent? How much rental space do you need to fill?
   
3. Learn to Recognize a Good Deal
   The top real estate pros know a good deal when they see one. What's their secret? First, they have an exit strategy – the best deals are the ones where you know you can walk away from. It helps to have a sharp, landowner's eye – always be looking for damage that requires repairs, know how to assess risk and make sure to break out the calculator to ensure that the property meets your financial goals.
4. Get Familiar With Key Commercial Real Estate MetricsThe common key metrics to use for when assessing real estate include:
   • • Net Operating Income (NOI)
       The NOI of a commercial real estate property is calculated by valuating the property's first year gross operating income and then subtracting the operating expenses for the first year. You want to have positive NOI.
       
     • Cap Rate
       A real estate property's "cap" – or capitalization – rate, is used to calculate the value of income producing properties. For example, an apartment complex of five units or more, commercial office buildings, and smaller strip malls are all good candidates for a cap rate determination. Cap rates are used to estimate the net present value of future profits or cash flow; the process is also called capitalization of earnings.
       
     • Cash on Cash
       Commercial real estate investors who rely on financing to purchase their properties often adhere to the cash-on-cash formula to compare first-year performance of competing properties. Cash-on-cash takes the fact that the investor in question doesn't require 100% cash to buy the property into account, but also accounts for the fact that the investor will not keep all of the NOI because he or she must use some of it to make mortgage payments. To uncover cash on cash, real estate investors must determine the amount required to invest to purchase the property, or their initial investment.
5. Look for Motivated Sellers
   Like any business, customers drive real estate. Your job is to find them - specifically those who are ready and eager to sell below market value. The fact is that nothing happens - or even matters - in real estate until you find a deal, which is usually accompanied by a motivated seller. This is someone with a pressing reason to sell below market value. If your seller isn't motivated, he or she won't be as willing to negotiate.
6. Discover the Fine Art of Neighborhood "Farming"
   A great way to evaluate a commercial property is to study the neighborhood it's located in by going to open houses, talking to other neighborhood owners, and looking for vacancies.
   
7. Use a "Three-Pronged" Approach to Evaluate Properties
   Be adaptable when searching for great deals. Use the internet, read the classified ads and hire bird dogs to find you the best properties. Real estate bird dogs can help you find valuable investment leads in exchange for a referral fee.

The Bottom LineBy and large, finding and evaluating commercial properties is not just about farming neighborhoods, getting a great price, or sending out smoke signals to bring sellers to you. At the heart of taking action is basic human communication. It's about building relationships and rapport with property owners so they feel comfortable talking about the good deals - and doing business with you.

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Aurum Estates offers every solution that comes within the ambit of real estate business: sale& purchase, relocation, real estate investments, real estate consultancy and management.We believe in offering a solution that works and an investment decision that changes the lives of our customer.We are the most trusted & ethical Residential and Commercial real estate consultants in Gurgaon NCR. It’s our highest client customers satisfaction standards & transparency that has resulted in increasing our investor base both national as well as international


Contact Us  
Vijay Chawla
Aurum Estates
Shop No 1 Main Sohna Road
Opposite Uniworld Garden,
Adjoining indian oil petrol pump,
Sohna Road Gurgaon
(Haryana) 122018 India
Tel : +91 1243295123
Mob : +91 9811210388, 9999597969
Fax : +91 1242217833
Email : aurumestates@gmail.com
Website : http://www.aurumestates.com