chrisalvarezrealtor

[chrisalvarezrealtor]

Single-Family Rental Investors Drawn to Click-and-Buy Strategies

After investors hire professionals in the market to assist with the transaction, “there’s no reason to physically travel to” it, Jeff Holzmann, CEO of IIRR Management Services,

The future of real estate is the web, or the “Amazonification” (I made that up… I think) of real estate. At some point, the real estate process will be automated. Let’s look at cars for a quick second. Tesla sells cars mostly online, with their retail stores acting more like show rooms than anything else. Or let’s take a look at Carvana (full disclosure, I was the Market Operations Manager for Miami before Real Estate) where the entire process is online to buy a car. You search, trade in, finance, etc.

Real Estate is going in the same direction, we’re seeing this with Zillow, RedFin, Second Avenue, Offerpad and so on. The iBuyer platform is streamlining a process that is really difficult for the average buyer and seller. What I would add though, not everyone is going to buy a house site unseen. I don’t know if I can right now. But, what are you going to do if let’s say, you don’t have the time or live out of town. Well, use a Realtor that you can trust and help steer you in the right direction.

Recently, I made a drive to Pompano Beach from Miami to take pictures for a potential investment property for a client. I took pictures and video, and if he was available would have FaceTimed as well. In short, I recommended to not move forward with property. That insight and availability to my client made me indispensable to him.

We know where the future is heading to. But in the meantime, work with a Realtor you trust.

[chrisalvarezrealtor]

Don’t bite off more than you can chew - flipping houses

The Key West Citizen on things to consider about buying a fixer - upper:

Don’t bite off more than you can chew. Make an honest assessment of your abilities and which renovations, if any, you can handle. If you are unskilled or inexperienced working with your hands, then it can be easy for an investment property to quickly become a money pit. Before purchasing a property, hire a trained home inspector to tour the home with you and point out all of the areas that will need renovation. With this list, begin getting estimates on how much money the work will entail. Determine if this fits with your budget or not. You do not want to invest so much that it exceeds what you could feasibly recoup when it comes time to sell.

When you’re considering a fixer upper don’t forget who or what is going to fund your purchase. Many lost cost properties are cash only. They may need extensive work and will not pass inspection. Consider a few options, if you don’t have the cash on hand to buy a fixer upper out right and then repair it. 1. A Hard Money Loan - This is simply a cash loan. This normally won’t require an appraisal or inspections of the property, however, interest rates will be higher than a mortgage. But, once the house is in the shape you need it to be, you can conceivable get a conventional mortgage and pay off the hard money loan. Best option for non cash buying investors. 2. FHA 203k loan - If you’re a 1st time home owner, consider this loan. It’s an FHA loan with the ability to fix your new home. If you’re an investor, this most likely will not work for you as this property will have to be your primary residence. 3. Somebody else’s cash - Yeah, I know… but if you’re looking to flip houses, try to network yourself to other like minded individuals who have the capital but don’t want to put in the work. Maybe your doctor, lawyer, etc.

[chrisalvarezrealtor]

Buying a Home, Step Five

Oh Man! You’re so close on purchasing a new Home! First, let’s recap the different steps on how we got here.

Step One  - Find a Realtor

Step Two - Get Funding (Pre-Qualification)

Step Three - Target a Home & Offer

Step Four - Post Offer Needs

Step Five - Close

You and your Realtor found a great new home. You were already Pre-Qualified and placed an offer, it was accepted. The home passed inspection and appraisal. You then followed up with your lender and gave them all necessary documentation to secure funding. The Title Company found the Title of the home to be free and clear. You found a great home owners insurance (maybe flood insurance too) that fits your lenders requirements and protects you. 

So what else is left? 

Once the first four steps are accomplished, you have a final walk through. This final walkthrough puts all parties at ease, especially you. Essentially, you are signing off that whatever work the Buyer and the Seller agreed to is complete. After the Walkthrough is complete, you’re set to close. 

You’ll most likely visit the Title Company’s office with the Lender (mortgage broker or bank rep), the Seller, the Seller’s agent and of course your Realtor. Here the signing process begins. You’ll be presented with several documents at the table but don’t be worried. Let’s cover some of those. Full disclosure, every state is a little different when it comes to these forms. Do your due diligence with a trained Attorney on all contracts and documents. This is just a quick overview. 

Title and Transfer Documents

The most likely documents you’ll receive are the ones below for transfer of title. Nearly all of these documents must be signed by the Seller and delivered to you, the Buyer.

The Deed:

This document transfers the property from the seller to the buyer. 

Seller’s Affidavit:

Sworn, notarized statement by the seller confirming ownership of the property and describing any known title defects such as leases, liens, or work on the property that could potentially create liens, boundary line disputes, or outstanding contracts for the sale of the property.

Tax Transfer Declarations:

Real property transfer taxes and require the buyer and seller to sign declarations disclosing the purchase price and calculating the tax.

Loan Documents

The documents are prepared by your Lenders representative or Mortgage Broker. Depending on your the type of home loan you have, documents may vary. 

Promissory Note:  

Essentially the promise to pay your debt. This will have initial debt, interest rates, terms, when to pay, fees, and so one. Notes can be sold to other lenders as stated before.

Mortgage:

Many different names for this here, but essentially, you are giving the right to the lender (bank) to take your home if you don’t pay your debt. Please know, in the state of Florida (and many other states), it is a Title State. Meaning you have the title of the house and you ARE a homeowner. 

Loan Applications:

Your completed loan application which includes your financial positions, debt, credit, etc.

Closing Disclosure:

The loan estimate in final form. This includes any debits or credits to the Buyers and Sellers. 

Also...

Other miscellaneous documents that may be included during your closing. Again each deal is different and each state is different.

Bill of Sale:

Any transfer of personal property from Seller to Buyer along with the home. Think washer & dryer, kitchen appliances or other furniture. 

Certificate of Occupancy:

Usually for new development, this is the sign off that the home is live able and permitted. 

Proof Of Homeowners Insurance:

Since most lenders require coverage. This is the proof that Homeowners Insurance was purchased and it covers the property.

AND... There you go! You bought a new home. Not too bad right. 

The main thing during the process is to be patient on the process. Understand, the first home you offer may not be the home you end up with. You may or may not get your top 5 needs, but depending on budget you can get close. What’s important is that you found the right house at the right time. It is the your biggest purchase ever after all. 

If you have any questions, do not hesitant to reach out to me. Always available to help.

Thanks!

[chrisalvarezrealtor]

Buying a Home, Step Four

Offer Accepted! 

Great the ball is rolling on your home purchase. Now what happens? Actually quite a lot. It depends on one thing, how are you buying the new home. Cash? Great, you can skip a lot of steps (although, you probably shouldn’t). Mortgage? Also great, but the lender wants to know what their lending the money for in order to protect their investment.

So let’s assume, you are taking out a mortgage to purchase your new home. The Lender wants to understand the value of the property you are buying. 

So first things first, your Pre-Qualified already from Step 2. That means the Lender already has a bunch of your financial data. They’re going to want more. Be prepared to give bank statements, employee verifications, tax forms, written referrals, and so on. It can get quite extensive, however, the better you’re credit history is, the easier it can be. Since many Lenders tend to sell off your loan, they may follow the Fannie Mae qualifications. To learn more, check out this great article at Fannie Mae: Loans, HomePath, and All You Should Know

While the loan process is moving forward, several conditions need to be met. 

We’ll start with a home inspection. The inspection here it to protect the Buyer and the Lender. The Inspector will look for any and all issues with the property. The Seller, MUST disclose any known and/or unseen issue with the property. If the property has severe issues, you’re pretty free to walk away with your deposit (see Step 3). However, all homes, especially re-sales, all have something. If the Seller is accommodating, they may offer to either fix all of the issues prior to closing or renegotiate the price. Even though we have a contract, everything is always negotiable. 

Now let’s say you’re comfortable with the inspection and both parties agreed to resolve any and all minor issues, you can move to an appraisal. 

The Lender requires an appraisal and you should too even if you’re paying cash. The Lender will only lend money to the property if the property has a high enough value to justify the loan amount. Let’s break it down. You’re buying a home for $300,000. The appraisal comes in at $301,000. That’s great, the Lender now knows they’ll make most of they’re money back if the Buyer defaults on the loan. 

Now if the appraisal comes in at $295,000, the Lender will not lend you money for more than $295,000. It’s not the end. The purchase contract that you offered, will have language that let’s you walk away, with your deposit, because the home is not valued high enough. Two things can happen if you don’t want to walk away. You can either negotiate the price down to $295,000 (which makes sense to me) or increase you’re downpayment to cover the difference or something in between. 

But let’s assume the appraisal came in at the value you need for the home. That’s great! Now we need to make sure we have a clear title, or Warranty Deed. The Title company, who will most likely handle your closing, will do an extensive research to make sure the title is free and clear to be transferred to you. If it’s not, it can delay the process by days, weeks, or months. The title company will offer a Title Insurance. In short, it’s an insurance policy that the title is free and clear to transfer to you. If in the future, the title has an issue, mainly someone had a claim on the property prior to you purchasing it, your mortgage can be paid off and you’re free from the debt. 

If the inspections, appraisal, and title all pass, now it’s time to get home owners insurance (and possibly flood insurance). Here you’ll work with an insurance broker to get the best insurance for your buck. However, the Lender will have a say to what insurance you’ll need to get. Again, the Lender (you should too) are looking to protect their investment. Imagine being in a position after a natural disaster where you don’t have enough funds to rebuild a home and yet you owe a mortgage. That’s why Lenders require certain amount of coverage of home owners insurance. Also, please understand, home owners insurance most likely does not cover flood insurance.

So, after covering all of that, we wait. There’s a lot of steps where the property you want falls through the cracks because something didn’t pass. That’s why, I say, don’t fall in love with a property until you’re signing at closing. Make sure you’re working with a Realtor that understands the process and can walk you through it all. It takes time and patience to get through the purchase process. Anywhere from 30 to 45 days.

So now let’s assume everything is going great. We move to final phase, Step 5 Closing.

[chrisalvarezrealtor]

Buying a Home, Step Three

Targeting a Home & Placing an Order

Alright, you’re on Step 3 of purchasing a home. In Step One, you found a Realtor you trust. In Step Two, you worked on getting funded and pre-qualified. Now the fun part, looking at houses.

When you found a Realtor, you should’ve had a good conversation, preferably in person, of what type of home you’re looking for, where, and what you’re budget should be. 

When looking for a home, regardless of it being a house, townhouse, or condo, write down your top five needs. Now realize, because of location and/or budget, you may not get all five needs. You will get close, but most likely not all of them. This is where you need to have an idea of where you’re going to live and what type of purchase you should consider. 

Higher priced homes, may come with higher property taxes. If it’s in a development or private neighborhood, expect some sort association fee. If you fancy a Condo, which may have plenty more amenities than a house, there will be HOA’s. These taxes, association fees, or HOA’s may kick you out of your monthly budget.

Now what about the Neighborhood. “Nicer” neighborhoods, will have higher taxes. However, with higher taxes, usually comes better walkability, more shops, high rated schools, etc. Up and coming neighborhoods, which may include a level of gentrification (and we’ll cover that in another post), will have lower priced homes and lower taxes. However, you may not have the same amenities as higher rated neighborhoods. Also, consider what the investment can mean 5, 10, 20 years down the line in an up and coming neighborhood, when you may want to re-sell. 

Consider a “fixer upper” over a “turnkey” home if you have time and want to fill out more of your top five needs. Turnkey means, the house is move in ready. You get the keys and move in with nothing (or minimal) to do. A fixer upper, made famous by HGTV, means the house needs work. Possibly extensive work. Again, if you have time, and maybe the foundation and roof are good, you may get a heck of deal even after the remodel costs. There are special loan programs for fixer uppers. Check the lender you found from Step 2 for more info.

When looking for a home, if the property was a “flip,” meaning a property a person bought that did a remodel to sell for a profit, check for permits. Permits protect you the buyer from bad workmanship. You may pay more for work done with permits but it will be a safer home for you and your family. Also, if you plan to do work on the property, and an inspector finds un-permitted work, you may be in a world of hurt.

After all of that your Realtor, should have sent you small list of personalized listings for you to review. The personalized web page from MLS, that the Realtor will send you, allows you to “love”  a property or to mark as “potential.” If the Realtor listened, you may like nearly all of them.

What I like to do, is schedule around 4-5 showings in one day. Knock them all out quickly. One of two things will happen. 

You, the Buyer, really like a property and you can start the offer process right away.

Or you, the Buyer, was not all there yet on the initial showings, so we schedule a 2nd day of showing. Again visiting 4-5 properties.

If you’re hitting a third day of showings, that’s okay. As long as you and your Realtor on the same. Maybe the initial neighborhood you liked wasn’t the right fit. Maybe your budget changed. That’s fine but be on the same page. It’ll be best if you keep the process within 90 days and within your initial lender pre-qualification. After 90 days, you may have to go through the pre-qualification process again, hitting your credit score again. Rates may have changed for the worse. 

So now, you found a home. YAY! Make an offer, but don’t fall in love. You’re not done yet.You’re Realtor will run a CMA, Comparative Market Analyzes, or simply Comps, on the property. That way you get a good idea what to offer. You’ll have comparisons of similar houses that recently sold and are currently on the market. The Realtor can’t and really shouldn’t tell you what to offer, that’s your decision and how bad do you want the property? Want a deal, then negotiate and go in low. Do you think the listing price is fair and it’s within your budget, then offer close to listing. It’s up to you. 

Being Pre-Qualified here makes a difference. You may submit a slightly lower offer than someone else who is not Pre-Qualified. If they’re not paying straight up cash, the Seller may choose you, because you’ll close faster. Again, your loan is already being processed. That’s an advantage. 

Another advantage is a making an Earnest Money Deposit. Earnest money deposit can be anywhere from 1–10% of the sales price, depending mostly on market interest. There will be conditions in the contract that protect both the Buyer and the Seller when a deposit is offered. If all of the conditions are met on the contract, and the Buyer walks away for really no reason, then the Seller keeps the deposit. If conditions are not met, like a bad inspection or appraisal, the Buyer get’s his deposit back. The deposit is not an extra payment, it’s part of closing costs at the end of the day.

The Seller may counteroffer, and that’s too be expected, it’s part of the game. Work with your Realtor to come back with an offer you’re comfortable with. Maybe closing costs can be negotiated. You can be creative. But stay within your means, even if that means walking away.

Now if the Seller accepts your offer, well guess what... not don’t yet. Still don’t fall in love with the house. 

Come back for Step 4 which covers, Post Offer To - Do’s.

Thanks for reading!

[chrisalvarezrealtor]

Buying a Home, Step Two

Time to Get Funded!

It’s amazing how many people who want to buy a house, start looking for a house, and then realize their finances are a mess. It’s not about just having good credit either but about having your ducks in order.

It’s important to get into the game pre-qualified. You need to understand your finances, how much debt you currently have, your expenses outside of that debt, your income (obviously), and your credit rating. There are 3 major types of home loans, Conventional, FHA, & VA. 

Conventional is your typical home loan. It usually requires a down payment of 5-20%. FHA is like a Conventional loan, that’s insured by the Department of Housing and Urban Development (HUD), with a lower down payment requirement. Downpayment is 3.5% of the total loan. VA is a loan that’s guaranteed by the government with no down payment requirement. It’s only available to military veterans.

There are more differences between Conventional, FHA, and VA such as fees, closing costs, and so on. However, some of them are dependent on first time buyer programs, access to local subsidies, etc.

When giving a downpayment lower than 20%, expect to carry a private mortgage insurance (PMI) on top of your loan payment. The amount depends on the cost of the home and how much downpayment you gave, your debt ratio, and loan length. For example, I pay $90 for my PMI on a $200k house where I put 5% down on a conventional loan. For Conventional loans fee disappears once you paid 20% of your loan back. As for FHA, the PMI is there for the life of the loan.

When you’re getting Prequalified, aside from your credit score and monthly income, lenders look at your debt to income ratio. Your debt to income ratio with a new house can be as high as 50%. However, each loan program differs, due to where you’re living and your credit score. 

So there’s a lot to consider here. What’s your purchase ceiling? How much Down Payment can you put down? Can you cover closing costs? What type of loan are you looking at, conventional, FHA, or VA (military). Are you applying by yourself or with someone? If with someone else (like a spouse), how are their finances?

In order to get prequalified, you must find a reputable lender, whether it’s a mortgage broker, commercial bank, credit union and so on. Now there are online options like Rocket Mortgage, CapitalOne, Lending Tree. Some real estate brokers already work with a mortgage broker, although that doesn’t mean you have to use theirs. Again find someone you can trust.

Big Banks are all over the place. Nearly every street corner you’ll see a Chase, Wells Fargo and so on. Visiting a big bank to get a loan limits you to just the bank you’re applying with. You’re rates are most likely not being shopped around. However, if you’ve used a specific large bank for quite some time, have good credit, and savings, then it may be an easier process as they already have most of your info. So there can be less steps and the turn around time can be quicker.

Credit Unions may be a better option than a large commercial bank. Credit Unions work a lot like a large bank, however, they are usually funded locally by a regional group of members. Because of this, you may get better rates or lower fees. 

Online Mortgages are becoming quite popular, due to their claim that their process are the easiest. Here’s the thing, you still need good credit and you still need a down payment. The house needs to pass appraisals (we’ll cover that later). You still need to be able to show that you’re able to pay the mortgage. Some like Lendingtree will shop your rates and have banks compete. Others, like CapitalOne will want to keep your mortgage for their portfolio. So rates and fees will vary between them.

Mortgage Brokers work a little different. Let’s start on how they get paid. Mortgage Brokers get paid by getting you approved and selling the mortgage. Their main job is getting the approval. Rates are shopped. There are large Brokers and mom & pop Brokers. I have a client right now working with a mom of their co-worker and it’s going great. She’s thorough and on top of it. She recommended to my clients different rates options and plans. 

My Broker works very closely with a PRMG. We don’t get a commission from them, however, they help cover the costs of marketing like the For Sale sign in front of a house (many do). Plus, as my client, again, you’re not obligated to work with them.

You may be surprised to see your mortgage sold a few times over to different banks or entities. Another example of mine, I went to a Mortgage Broker who got all of my paperwork and loan approved. Within 90 days, my mortgage was sold to Wells Fargo. A few month after that, my mortgage was sold to Fannie May, even though Wells Fargo still services it.

One thing to remember. When a mortgage lender runs your credit for a home loan, it will be a hard pull, meaning it will show up on your credit report. But here’s the cool news, credit pulls for mortgages only hit your credit report once within a 90 day period. So within 90 days, shop for every rate possible and get the best one. Sometimes you shouldn’t look at just interest rates either. Some lenders will cover closing costs, have lower fees between them, down payment assistance and more. It’s a package deal.

Like finding a Realtor, finding who will fund your home, is about trust. No option is wrong, but find the right one for you. 

The important reason to be Pre-Qualified before shopping for a home is leverage. Along with knowing what you can afford, having that pre-qualification allows the buyer to know you are serious. That can make a difference if your competing with other potential buyers for the same property.

Stay tuned for Step 3, Targeting a Home and Placing an Offer.

Cheers!

[chrisalvarezrealtor]

Buying a Home, Step one

I’m glad to report I’m working with 1st time home owners. They are a wonderful newly wed couple looking to start that family life. As I was having a conversation with my clients, the initial phone call was about educating the process of purchasing a house. That got me thinking. How many people understand the process of buying a home, particularly their first one?

It can seem easy at first. You’ll probably go on Zillow and search a few houses and say, “That one!” However, you don’t pull out a credit card or go to the Apple Store to purchase it.

When buying a home there are several steps. From finding the right Realtor, to funding, getting title, appraisals, inspections and more. Over the next few posts, we’ll cover what they are and hopefully break them down a bit.

Step One. Find a Realtor.

(Preferably me 😀)

Obviously find someone you trust. Trust here is in important. Trust that they’ll do right by you. Trust that they will be there every step of the way. Trust that they will go to bat for you. Trust is important. Trust may be more important than experience, as long as they work with a brokerage with experience.

This may be your biggest purchase ever.

If you notice, I stated Realtor and not Real Estate Agent. A Realtor follows a code of ethics. It’s quite extensive. Check it out here: The Code of Ethics | www.nar.realtor. A Realtor is here to protect your best interests. A Realtor has what’s called fiduciary duties to their client. Regardless off commission, we’re here to get the lowest price on a purchase and the highest price on sale, while doing it all within legal and moral parameters.

Now that brings me to commissions. When you use a Realtor (or Real Estate Agent) as a buyer you don’t pay them. Realtors are paid by the commission split of the sale. Meaning, the Sellers Real Estate Agent splits the commission with the Buyers Agent. Typically  commissions on a sale is 6%, split between agents. Again, as a buyer, you are not paying that.

A good Realtor won’t direct you to Zillow, or send you 100’s of listings for you to rummage through. A good Realtor will seek to understand what your budget is, what your dream home feels like, what your future plans are. A good Realtor should send you personalized listings that fit your needs. If your visiting double digit homes, the Realtor doesn’t understand what you’re looking for. You’ll be wasting time. Once you find a home, unless you’re paying cash, closings can take 45 days.

Now, did you catch what I said about “your dream home feels like?” That wasn’t a typo. If budget were limitless, we can describe our dream home to the nines. However, most of have a budget. The reality, is you may not get every single feature you want in a home, especially a first one. Visit a home, and get that Dream Home feel. If you don’t move on. I believe part of that dream home feel is where you see you’re belongings fitting in. Or what can you do to the homer to make it closer to that dream home. What future value is has.

I believe a good Realtor, is helping you to save a few bucks while finding that dream home. Understand your options. Maybe a fixer upper is the better deal than a turn key property. Sure, the fixer upper will be cheaper, and that may mean the Realtor may get a smaller commission, but they should be offering those properties regardless. Again, it’s about your best interests.

You may already know a Realtor or someone that does. Go with a referral, someone who has worked with a friend or family member. Again find a Realtor that you trust.

Come back soon to go over Step two, Get Funded. We’ll cover getting Pre-Qualified, why that’s important, while choosing the right way to get funded for you.\

Cheers!

[chrisalvarezrealtor]

Update!

So here we are.

I’ve been a secret agent for a little while. That’s a big no-no for a Realtor. When you are a Real Estate Agent, you’re not in the business of buying and selling property, in reality you’re in the business of marketing and lead generation. The real estate part comes after all of that. (I really should right a post about that)

Again, so here we are.

Brand spanking new website thanks to Squarespace (not a sponsor). Prettier blog too.

But there’s more. I low key changed my brokerage.

I started with Keller Williams. Nothing bad to say about the Miami Beach branch. Actually everyone there is pretty amazing and the training is top notch. However, it wasn’t what I was looking for. Now I worked for big time companies in the past. I wanted to go smaller. More family oriented. More start up. More hunger.

So I joined Related International Realty. It feels like family. It’s different. WE do things different.

Related is one of the few brokerages that offer healthcare and 401K. I have access to investors, both local and foreign. We have a tight partnership with a title and mortgage company. Basically a one stop shop.

Stay tuned for more updates as I have pretty amazing news coming soon.

[chrisalvarezrealtor]

Want to be a Real Estate Agent Pt.4

Start Up Costs

How much does it cost to start in Real Estate? Let’s talk money. Starting in Real Estate is probably, the least expensive business to get into. 

Let’s start with what we’re NOT going to talk about because it’s not necessary. Tuition, Inventory, Retail/office lease, Production costs, employee wages, so one and so forth. You get the idea.

The only money you’re investing is into yourself. 

Now from the start. Okay, you decided to start Real Estate. Remember you have to take the 63 Hour Pre-License course.

For BertRogders.com, the online course I chose, I spent $349 on the online package and course materials. There are is another option for $249 which does not come with a few bells and whistles. As you’re taking the classes, you should apply for the actual license through the DPBR at www.myfloridalicense.com. The license fee is $83.75.

Since fingerprints are necessary for the background check, you’ll have to visit a Live Scan Fingerprinting certified location. The cost for fingerprinting and submission is $70. After your course is complete and the DPBR received your fingerprints and approved your license, you’ll take the corresponding Real Estate Exam. The price of the exam is $36.75

After complete it these 4 steps, paid these fees, and assuming you passed the state exam, you’re an inactive Real Estate Agent. The costs for all of that was $539.50. Prices may vary depending on where you took your course, whether it was online or in a class and who took your fingerprints.

Now there’s a few more expenses to consider.

Joining the National Associations of Realtors (NAR) has it’s own fee. I’ll share the importance of joining the NAR in a future blog post. However the short reason is having access to benefits, education, and the Multiple Listing Service (MLS). Without MLS, you would not be able to list your properties and do a few more things. MLS is vital for a Real Estate Agent. The yearly fee to join a Realtor Association is $875.08 for 2019. This can be paid in installments.

Now when you join a Broker, understand, they may have additional fees. Office fees, tech fees, marketing fees, printing fees, and so on. These seem to be anywhere from $75-$150 depending no the broker. Some Brokers don’t have such fees. 

If the broker does not offer technology such as a website, CRM, email, etc. you may front the bill for that if you choose to have it. 

Of course there are other things to consider, such as business cards and other print materials. Again, sometimes your Broker may offer these materials as part of your broker fees.

So all in all, the up front fees to start in Real Estate are these:

63 Hour Class - $349

Fingerprints - $70

License Fee - $83.75

State Exam - 36.75

NAR Fee - $875.08

Total = $1414.58

Far cry of a college tuition. 

I chose not to calculation the post licensing costs, as this will vary between you and your broker. However to get started, the cost is substantially cost effective.

[chrisalvarezrealtor]

Federal Reserve Rate Cut

A Better Mortgage Rate?

As you may have heard, the Federal Reserve cut interest rates a 1/4 of a percent this week. 

This is interesting news. Some experts say that we may be heading into a recession. Others are saying the economy is strong and booming. I think we’re somewhere in the middle. 

Unemployment is still at a historic low. People are coming back into the work force. Inflation seems to be holding steady. Wages are finally starting to creep up, so people in general have a few more bucks in there pockets.

Typically, when the economy is going strong, or maybe too strong, the Fed would increase interest rates in order to slow it down a bit. An economy expanding without limits can hurt in the long run with hyper inflation, crashes, and so on.

The Fed tends to cut interest rates to stave off a recession or to get through one. Remember the Great Recession which was less than a decade ago, interest rates were at a historic low. But guess what, they still kind of are. 

The Fed states, that the labor market “remains strong, the economy is “rising at a moderate rate,” and the household spending “have been rising at a strong pace.” 

So what does a quarter percent interest point mean to you. Well, while the markets, your credit, and your location will still have a large impact on what percentage your mortgage rate will be, it can be a bit lower going forward. 

Interest rate cuts do have a direct impact on adjustable-rate mortgages and an indirect impact on fixed-rate loans. 

So saying all of that, we may see more activity in the housing market if the rates remain low and are expecting to stay low. However, I would not expect the housing market to swing to a Sellers Market anytime soon. We are deep in a Buyers Market now. Some locations will vary. 

Houses not priced right are on the market for over 6 months. There’s plenty of inventory now throughout South Florida, and families can take their time in finding a home. 

Does this mean it’s a bad time to sell a home. Absolutely not, but make sure the house is priced accordingly to the market today, not 6 months ago or longer. If the house is priced right, we can see a house get on contract in a couple of weeks, if not sooner. Be aggressive today, because you can lose more in the long run. 

Whether Buying or Selling make sure to find the right Real Estate Agent you can trust. You know... like me 😃

[chrisalvarezrealtor]

Want to be a Real Estate Agent Pt.3

Hanging your license

So to recap parts 1 & 2. I covered the why I chose to be a Real Estate Agent and how to get started in Real Estate. Check out the posts if you haven’t. 

Now the fun part. Finding a broker. Boy where do I begin. 

Well let’s begin with the Sub-Title for this post, “Hanging your License.” This is an industry term stating which Broker will activate your license and will represent you in Real Estate. Remember, once you pass the state test, you’re license is inactive. A Broker activates it with the DBPR (Department of Business & Professional Regulation).

If you switch Brokers, the new Broker will have to contact the DBPR within 10 days of you switching over. 

If you practice Real Estate with an inactive license the DBPR can fine you and/or have the license suspended/revoked. Yes, there are some caveats, like if you’re a salary employee for an Investor but I’ll cover that on another post.

“Hey Chris, which Broker should I join?” 

Okay, let’s slow down. Every Broker has it’s pros and cons. Yes, I’m with Keller Williams, and at this time I feel that they are the best fit for me. But let’s talk about some mis-conceptions and what to expect about joining a Broker. 

I imagine my readers all have gone to an interview in the hopes of working for wherever they applied. So finding a Broker, is the other way around. Once you pass your 63 Hour Pre-license, you’re email will get spammed by a slew of Brokers wanting you to join them. They are not interviewing you, you are interviewing them. 

In Real Estate, the Broker that has the most and/or most competent successful Agents, has the most marketshare. That simple. Even though you’re licensed through a Broker, you are still you’re own brand/business/start-up. 

A strong Broker will provide training, mentorship, technology, office space, legal support, etc. 

Expect Brokers to have a monthly fee of sorts. This could be a tech fee, an office fee, a training fee and so on. This is on top of whatever commission split they have. 

Commissions can be tricky. So be sure to understand what the split entails, whether there’s a cap, and so on. 

Commissions can be its own blog post, but the short and sweet is a Broker will take a cut of every deal you make. Expect anything in the range of 60/40 - 80/20. Some Brokers offer a 100% commission but use Caveat Emptor here. 

Now, understand for most Brokers everything is negotiable. Obviously the more experienced and/or the deals you can bring to the table the more leverage you’ll have. 

For a new Agent, I would advise to find a Broker that has adequate if not amazing training. The 63 hour Pre-License course teaches you the law, it does not teach you the business, how to lead generate, and definitely not how to make money. 

I hope this post answered some questions.  As always if you have questions please don’t hesitate to reach out to me. 

[chrisalvarezrealtor]

Want to be a Real Estate Agent Pt. 2

How to get started?

Let’s cover how to get started in Real Estate. The great thing is, it’s not rocket science. 

In my previous post “Want to be a Real Estate Agent Pt.1” I covered the 3 reasons why I became a Real Estate Agent. Go check it out if you haven’t.

After I decided on the career change, I began to do some research. 

I did buy a house 3 years ago and I remember the journey on looking for a house, making offers, and eventually landing the offer. So I knew the process of buying a home and luckily, my Realtor was a peer of mine that planted the seed all those years ago.

He broke down the process for me. I’m glad he did, as it answered a lot of questions. I hope this post does the same.

To begin, these steps are for the State of Florida. Other states may have their own methods and legalities on becoming an Agent. 

In Florida there are four main steps in becoming an Agent.

Apply for license at www.myfloridalicense.com

Pass 63 Hour Pre-License Course.

Pass State exam

Sign up with a Broker and activate license

  First things first. Once you decided to become an Agent go to www.myfloridalicense.com and apply for Real Estate Licence with the DPBR, Department of Business & Professional Regulation.

This is a background check so make sure to answer the questions and fill out the forms truthfully and honestly. Also fingerprints will be expected of you, you’ll be directed to any of of the Live Scan Fingerprinting locations near you.

Once you apply for a license, you will have to take a 63 Hour Pre-License Course. There are several physical and online schools available to choose from. Here are a couple.

Probably the most popular choice is Gold Coast Schools. They’re highly rated and usually the first choice for many. Check them out at www.goldcoastschools.com

They have locations all over Miami Dade and a person will have the option to take the course in one week going full time or split up into 4-5 weeks going part time. They even have an online option as well.

I decided to take my classes online through Bert Rogers Schools. Their 63 hour course is split into 19 chapters. The chapters and really the course is not timed, so in many respects a person can pass the course in less than 63 hours. 

However,there is a timed 100 question exam at the end of the course. A person must pass that course in order to proceed. If they fail, they will have to wait 30 days to take the exam again. If they fail a 3rd time, they will take the course all over again. This ensures that the person actually read through the material and absorbed it.

Okay, so the DPBR accepted your license and the 63 hour course is completed, now time to take the state exam. 

Much like the pre license exam, the state exam is also timed and 100 questions. It’s very strict. In the testing office, you are only allowed to take in a non programmable calculator. For me, scrap paper and a pen was provided. Books, notes, etc is not allowed. 

The DBPR at www.myfloridalicense.com will offer you locations to take the exam. The important thing to consider is to take the exam as soon as possible after passing the pre-license course. That way everything is fresh. 

I took my exam a week after passing my course. However, I wanted to make sure I passed on the first try. I took a practice exam everyday leading up to exam day. If you do not pass the first time, there will be a waiting period and you will have to pay the exam fee again. 

Quick tip, out of the 100 questions on the exam, 45 are on real restate principals and practices, and 45 quiz you on federal laws for real estate. There are about 10 math questions. The questions are always different for every exam, even if the template is the same.

Okay, so the DPBR approved your license, the 63 hour course is complete, the state exam is passed. You have a non-active Real Estate License. 

To activate your license, you will have to sign up with a Broker. Once you agree to work with a Broker, they will send your info to the DBPR and your license will be active. Congrats, start selling properties!

There are a few more things to consider post-license, but I’ll leave that for a post-license post. See what I did there.

I hope this clears up any questions you may have. 

[chrisalvarezrealtor]

Want to be a Real Estate Agent Pt.1

Why Real Estate Agent is for me.

I decided to become a Real Estate Agent for a few reasons like I mentioned before.

To have my own company.

Better Work/Life Balance

Wealth Creation

Let’s unpack what each one means. 

To have my own company.

Every Real Estate Agent, unless they work for an Owner/Developer, is a contract employee. Meaning that you are your own business, company, brand. There may be a misconception that a Real Estate Agent receives a weekly check. That’s not the case. At the end of the year you will received a 1099.

As a Real Estate Agent, you work for a commission on the sale, whether helping others buy or sell a property. 

Yes, you need a broker. Mine is Keller Williams (I’ll expand on why on a future post).

The right broker will support with leads, marketing, technology, training, and a few more things. A broker will get a cut of your commission and may have other fees. It’s the cost of doing business in Real Estate. 

However, at the end of the day, I am my own brand. Chris Alvarez Realtor is my brand. 

Better Work/Life Balance

I have a family, wife and 2 kids. I worked 20 plus years in Retail/Sales Management. My hours were dictated by someone else. Owning my own business means, for the most part, I dictate my hours. I can decide to work part time or 80 hours a week. However, I choose. 

Of course, there are clients that I will work with to make sure they get the support they need when they need it. However, I will not miss the most important aspects of my family. The first steps, doctors visits, first days of school, swim class... you name it. Those moments are priceless to me.

Wealth Creation

I have a plan to gain wealth and maybe, just maybe, retire before I’m sixty. Part of being a Real Estate Agent (caveat, you don’t have to be an agent to do this) is to purchase investment and rental properties. Passive income and assets (not debt) is how a person gains wealth. 

Furthermore, if this business is done right, an Agent can make considerable income on a yearly basis. The trick is understanding that some months will be better than others, so budget.

Most commission sales are in the 6% range split between buyer and seller agents. The median home value is $335,000 in Miami. Do the math, the commission can be $10K a pop. Do enough and it’ll be enough. 

So, that’s a quick run down of why I chose to become a Real Estate Agent.

Future posts will include;

How to Get Started?

Start up Costs

Difference between a Realtor and Real Estate Agent (is there one?)

How I chose my Broker (it’s not the other way around)

Stay tuned to my Youtube channel covering training videos, property walk throughs, and more.

[chrisalvarezrealtor]

Why Real Estate?

Hi Everyone, This is Chris and boy I'm excited to be a Realtor ®. I have 20 years experience in Retail/Sales Management with experience in People Development, Project Management, Operations, Sales, Leadership and more. I worked for the biggest companies and the most exciting start ups.

The question I received a few times over is, "Why be an Real Estate Agent?"

Well I'll tell you why. There are three important reasons (among many) that I chose to be a Real Estate Agent.

1. This is my company, I'm the Boss!

2. Wealth Creation. Time to make money for me, not someone else.

3. Work/Like Balance. I refuse to let the special moments with my family slip by.

Follow along on this journey here and through my Social Media Channels. Let's do this together.