Determining values in the real estate market is a process. Here are a few factors that are taken into consideration:

Comparable property sales - ensure that these include properties that are located close to the subject property. If properties located miles away from the subject are included, treat them as irrelevant.

Square footage - similarity in square footage is important as is a similar bed/bath configuration.

Age of house - they should have been built at around the same time. If buyers are looking at a house built in 1998 versus one built in 2008, then, yes, there is a big difference. However, if comparing a house built in 1965 and 1975, then, in a buyer’s eyes, the two houses are almost the same.

Comparable sales - look into the type of houses sold recently and the value at which they were bought. Analyze figures for the last six months to map out a sales trend. It is important that you know whether real estate prices have moved up in the last six months or not.

Buyers - when analyzing sales figures, if no house sales have been made in the last few months, then it is time to worry. There would be no point in you trying to sell your house, if there are no buyers in the vicinity.

Market listings - take a look around, and determine what your competition is like. How do those prices compare to yours?

Day on market - take a look at how long those houses have been sitting on the market.

Modification budget - estimate roughly how much it would cost you to make your house more desirable to potential buyers.

The price - do not get too greedy. Price your house in the middle range. You do not want yours to be the most expensive house. Put out a great house with a great price.

So many newcomers fail to make it as profitable real estate investors. It is probably because they are horribly undercapitalized and are unable to subsidize their overpriced real estate investments. Putting down way too much cash for that first investment property is the mostly costly and fatal mistake you will make as a first time real estate investor. You must learn how to estimate current market values of potential investment properties accurately.

Know the value of a condemned house - some houses just cannot be cleaned up and sold, but there are some that can. Knowing the potential of such houses requires a fair amount of research. If a condemned house has potential after clean up, negotiate a below market purchase price based on the property’s neglected, run-down, non-marketable condition. After clean up, you could secure yourself a tidy profit.
Here is an eight-step approach to estimate a property’s current market value:

Step # 1: Obtain the tax assessed value of the subject property from the county’s property appraiser.

Step # 2: Analyze county’s property tax rolls for the most sales of three to five properties similar in size, amenities, features, and location.

Step # 3: Analyze these comparable properties carefully, and make sale price adjustments if there are any differences in amenities, other
features, and the subject property’s physical condition.

Step # 4: Confirm the income and expenses listed on the income and expense statement of the subject property.

Step # 5: Carefully analyze the property’s income and expenses for the past year. This will help you estimate its net operating income potential.

Step # 6: Work out the property’s capitalization rate. Divide its potential operating income by the estimated value you would obtain from analyzing recent sales of comparable properties in step #3.

Step #7: Multiply the property’s net operating income by the capitalization rate you calculated to estimate the property’s value.

Step # 8: The cost of making improvements on the property must be factored in as well.

Defining the Bona Fide Purchaser in real estate transactions is critical for the new owner of a piece of real estate. For sale by owner deals, inheritances, and seasoned investors in the frenzy of a real estate boom can get caught purchasing what is already ‘owned’ by or sold to another party.

Beware of well-meaning family members remembering earlier days when hand-shakes sold a piece of land, first time homebuyers thinking professional help is unnecessary, and large families facing tough times wheeling and dealing with multiple properties and seller carrybacks.

All of the above scenarios can find a legitimate homebuyer or heir caught trying to prove they are the Bona Fide Purchaser. The Bona Fide Purchaser is the winner and the other party is the victim. The other party can be the sole heir, with will and a deed in hand that a hospitalized uncle gave. But the Bona Fide Purchaser is the neighbor who already paid money for the home weeks before so the uncle could pay his hospital bills. That deed was taken to a title company and recorded at the county recorders, where it was verified the uncle owned the home up until that moment of recordation.

Even seasoned investors in a rush at the courthouse can stumble into a situation where their purchase was preempted by an existing seller carryback between family members who recorded in the wrong county. Tough times forced a tax auction and the undiscovered recorded transaction, leaves the seasoned investor out of luck.

These are the top ten real estate investment myths.

1. People believe they need to be rich. A person will automatically make money if he finds a good real estate deal.
2. People complain they do not have the time. Without spending hours on the computer, people will be surprised by how much extra time they have.
3. People believe shows on television are staged and investing is never going to make money. However, if you think it will never work, then it probably never will.
4. People believe there is too much competition. If there is competition, then that means there are many houses that need investing.
5. Many think flipping will not work in their own market, but real estate investing works in everywhere. Wherever there are rundown houses, there is a need for investing.
6. People think that the current economic conditions are not favorable for real estate investing, but below-market prices have made each potential real estate investment much more valuable.
7. Some think realtors will not be cooperative with investors; however, realtors are eager to help out. They make friends to bring in business.
8. Many believe good credit is mandatory. One can find a partner with good credit or borrow “hard money” to avoid this.
9. People are afraid because the real estate market is not stable. In fact, the real estate market is safer than the stock market.
10. People think they do not have the adequate skills; however, amateurs have to start somewhere. The only way to learn is to start investing.

When you are looking to get home insurance online, price might be the first thing that you look at when comparing similar quotes. However, there are several other factors that are important to consider. One of the most important is the rating of the home owner insurance provider. Companies are rated by independent agencies such as A.M. Best according to several factors, with the two most important being the company’s overall satisfaction rating and its current financial situation and solvency.

Insurance companies that are considered to be “secure” are rated anywhere from A++ (superior) or B+ (very good). These are the insurance companies with the strongest performance and solvency. At the bottom end of the equation are “vulnerable” companies that can have ratings as low as a D (under state supervision) or F (in liquidation). These are the companies you will definitely want to avoid when getting a home insurance online quote.

A more reliable second home alternative to time-shares are condo-hotel. Condo-hotels are attractive, high-rise hotels found on the beach or in other such prime locations. Their prices range from around $250,000 to over $1 million - depending on its location, size and available amenities.
The Hilton, Four Seasons, Ritz-Carlton and Clarion are some of the biggest names in the hotel industry and they all have condo-hotel buildings. Donald Trump too has a few condo-hotels across the country, including a building in Fort Lauderdale and one in Florida.

Condo-hotel properties have been successful and boasting of nearly 100% sellouts within the first few months of being up for sale. A good example is the Ritz-Carlton Key Biscayne, a beachfront property with 188 condo-hotel units. They all sold out an entire year prior to completing the building.

Condo-hotels are hugely popular because once you buy a property, you buy a condo-unit in the hotel. This entitles you to the property and is then in a rental pool when you are not in residence. Developers however, cannot guarantee that properties will be rented out - management by a respectable and experienced hospitality group could result in a few weeks of rental income. This is one of the reasons for its popularity - which is the rental income can be offset by some of the costs of owning a vacation property.

The management company is in charge of renting the unit, and thus, you do not have to worry about such details. Most rental agreements entail the splitting of the income 50/50 between the management company and the owner.

Condo-hotels are also well favored because it is considered a private home even though it is located in a hotel setting. Owners are eligible for mortgage interest deductions and any other tax advantages that are bestowed upon those owning a second home. One disadvantage is that most condo-hotels do not let you reside in the unit all year around, as the management wants to rent out the unit when you are not in residence in order to profit from rental income. The maximum time of residency on a property is however determined by the management - and must be considered before you make the purchase.

Here is a look at Escrow, prevalent in many real estate transactions.
What is Escrow? - It is a third party that takes posession of the funds and acts on the instructions of the parties to the deal, which is this case would be te buyer and seller of the real estate.

An escrow holder takes instructions from buyers, lenders, sellers and others. These instructions mete out the terms that govern the completion of the transaction. Most states only allow a licensed corporation or attorney to handle escrow, while in some areas, escrows and transaction settlements organizations are the same company that writes the title insurance. Escrow is useful to both the buyer and seller and helps to reduce the risk to both parties.

The escrow company, title company or attorney acts as:

- A guardian for funds and documents
- A clearing house for payments of all demands
- An agency to perform the clerical details between parties

A preliminary title report, issued by the title insurance company, lists out ownership details, land details, title defects and others details. The report will also show recorded limits, which are in a prior deed. It could also contain details of any covenants, conditions and restrictions (CC&Rs) contained in previous deeds. Such details could limit the use of the property.

This report issued by the title insurance company gives buyers the chance to question the seller on certain factors and request for the removal of any item disclosed in the preliminary title report that he finds objectionable prior to the purchase.

An escrow officer’s responsibilities include the following:

- Review preliminary report
- Provide copies of preliminary report to all parties
- Receive and prepare seller’s and buyer’s escrow instructions
- Receive buyer’s funds for escrow
- Arrange hazard insurance with buyer
- Comply with lender’s instructions
- Arrange new loan funding with lender
- Prepare documents and special instructions
- Record documents with county recorder
- Disburse monies and documents to appropriate parties
- Prepare final closing statements for buyers and sellers
- Issue title insurance policy.

The global stock market has been on a decline with gloomy economic forecasts looming overhead. As a result, investors shied away from investing more money in stocks and instead looked for other alternative investment vehicles. This led to boom in real estate markets across the world. If you are still interested, it is not too late. Property investment can bring about significant returns. Here are five hot tips on successfully investing in real estate.

1. Investment in property abroad - there are quite a few untapped property markets around the world. Some of them offer great returns on investment, especially in the form of rental yields or even short and medium term capital growth. You might want to look into countries like Hungary, Slovakia, Bulgaria, Croatia, Turkey, and Northern Cyprus for investing, as a number of them will become part of the European Union. This means more and more of these property markets are bound to benefit from an increase in visitors, trade, and investment into infrastructure.

2. Profitable plans - it is important to review your plans and ensure they are both profitable and sustainable. Compare the investment you plan to make with the expected rental yield. If it sounds about realistic, then go ahead.

3. Do not assume anything - never, ever assume anything is the way it seems. This goes for the structural stability of a house, to tax laws, and builders’ quotations. Make sure you do your own homework and check if the asking price for the property you are to purchase is a fair price and if your investment will promise future profit.

4. Experts are the way forward - always engage an expert in the field; this will ensure that all aspects of the purchase are covered and secure. Use them for checking the property and knowing the legal aspects of the property and the purchase to every little detail. This is important.

5. Realistic budgets - make sure you budget for everything. This will ensure you have a realistic budget set before you, which ensures that there will be no big surprises along the way. It is important that you know the estimated amount of money you would need to put in towards this investment, and no matter how lengthy, ensure that you document every possible cost and detail.

Owning your very own home is everyone’s dream. It starts off however with the question that everyone poses to themselves: should I buy one or rent it out? The answer however is never obvious. Affordability always is one of the defining factors. Here are five questions that you must ponder over before making that all important decision.

1. EXPENSES - if you rent out a house, then your expenses are limited merely to that cheque you hand over to your landlord monthly. If you do own your own place, then all the expenses must be borne by you. These include: mortgage payments, utilities, maintenance bills and a whole heap of taxes.

2. COMMITTMENT - financial commitments differ between renting and buying a house.
a. Renting calls for a lease for the time allotted at the house.
b. If you buy a house, you sign up for a 30-year mortgage. You would need to ensure that the payments are timely and are made every month to the bank or lender.

3. MONTHLY PAYMENTS - at face value, it seems that if you rent out a place, the monthly payments are not such a burden. However, this is not true. When you rent a house, the monthly rate increases a certain percentage annually. However, if you buy your own home, the loan rate stays fixed. In a nutshell, at the end of the payment period, renting a house could prove to be far more expensive that buying your own place.

4. TAX RETURNS - state and federal tax boards to mete out tax benefits to renters - this is called ‘renter’s credit’. However, homeowners are given deductions on the interest paid towards their loan.

5. WEALTH - if you consistently keep renting houses, this will eat into your savings, and building up on wealth will be a constant battle. However, once you have own home, you can rest easy, as real estate appreciates in value, and at the end of the day, it belongs to you!