Realtor Pay Exposed (Part 3 of 3): The Seller’s Agent

“So what will it cost us to secure your services?”  One of the top questions that I receive.  The answer may vary depending on the services you request.  For the purposes of this 3 part series, I will let you in on Renter’s Agent, Buyer’s Agent, and Seller’s Agent pay.  According to the 2013 National Association of Realtors Member Profile, “In 2012, the typical agent had 12 residential transaction sides – up from the previous year when the typical agent had 10 transaction sides.”  Traditionally, the real estate industry is completely commission based.  Most of the time, a Realtor works under the supervision of a broker unless they are a broker themselves.  In that case the broker may have their own company or work with a large, well-known company like Keller Williams for example.  There is also the option for a Realtor to work on a team within a larger company.  All of these folks require payment.  So realistically, on one real estate transaction, there is the potential for the commission to be split 6 different ways before it is all said and done.  Let’s take a look at the Seller’s Agent…

The Seller’s Agent.  In the very beginning, the commission percentage for the whole transaction is agreed upon between the seller and the selling agent when the listing agreement is completed.  Generally, the selling agent agrees to split that commission with the buyer’s agent, and that amount is noted in the listing agreement, as well as on the listing that is put on the Multiple Listing Service (MLS).  The listing agreement also details the length of time that the agent will represent the seller, and any other pertinent information like bonuses to the Buyer’s Agent, etc.  The listing agent is in a unique position.  The idea is to get the home in great condition and priced right from day one.  However, despite the agent’s best efforts, sometimes the house doesn’t sell right away.  If the listing agreement expires, and the seller decides not to continue listing with the same agent, that agent may never receive any form of compensation for their time and effort towards marketing the home.

But they put a sign in the yard, place the listing on the MLS and then sit back and wait to get paid, right?  Some agents do.  That’s why I am hoping that you have done your research and chosen an agent who is willing to go the extra mile… like me!  Once you crunch the numbers, it will look like a LOT of money that you are paying to be represented.  Back to the “sign in the yard” question.  Everything (almost) is negotiable in real estate, so it is important to understand what comes with that commission percentage.  The agent may provide a professionally recorded video tour, a home inspection, color flyers, your home may be featured on their website, a lockbox for easy access, coordinated showings and feedback, open houses and all different types of advertising.  Or they might not include any of those things.

So how is a Seller’s Agent paid?  Once a contract is accepted, financing is arranged, and the transaction closes, the seller’s agent gets paid.  The realtor commission agreed upon in the listing agreement is split between the Seller’s Agent and the Buyer’s Agent.  Then, as I spoke of above, this is split with the agent’s broker, and may even be split with the agent’s team if they are on one.

Here is an example:

The price of the home is $100,000.  The commission is 6%; 3% to the Seller’s Agent, and 3% to the Buyer’s Agent.  The brokerage split is 70/30.  The royalties to the company are 5%.  And then the split to the team is 40%.  The paychecks may look like this;  $900 to the brokerage, $150 to the company, and $780 to the team.  That potentially leaves $1170 to the Seller’s Agent before taxes.

Agent John Doe said that he will only charge me 4% commission, so I’m going to go with him.  I’m sure you understand saving a few bucks, don’t you?  I do understand the initial “let me save as much money as I can” feeling.  But if you step back and look at the bigger picture, taking that 4% could cost you more in the long run.  Considering that the commission is split between the Buyer’s Agent and Seller’s Agent like we talked about above, is the agent likely to split the commission equally down the middle?  Probably not!  The reason behind this is because the Buyer’s Agent may be accustomed to receiving a pretty consistent percentage on the sales that they help produce.  We’ll say 3%.  If the 4% is split down the middle, that means the Buyer’s Agent only gets 2% when on most other homes they may get 3%.  That may mean the difference in showing another home (or many other homes) over yours.  So, say the Seller’s Agent agrees to give the Buyer’s Agent the 3%, but there is only 4% to work with.  That leaves the Seller’s Agent 1%.  Let’s see what that looks like in numbers…

The price of the home is $100,000.  The commission is 4%; 1% to the Seller’s Agent, and 3% to the Buyer’s Agent.  The brokerage split is 70/30.  The royalties to the company are 5%.  And then the split to the team is 40%.  The paychecks may look like this;  $300 to the brokerage, $50 to the company, and $260 to the team.  That potentially leaves $390 to the Buyer’s Agent before taxes.

Now, do you think a listing agent is going to extensively market your home, do open houses every weekend like you want them to do, and contribute ample time and money to your home for $390?  If so, they won’t be in the business for long because they won’t be able to put food on their table.  It is more likely that this will be the agent who puts a sign in your yard, places the listing on the MLS, and sits back waiting to get paid.

What if we do a For Sale By Owner instead?  Click the chart to read over statistics provided by the National Association of Realtors, and enough said: 

Seller’s Agent Expenses. So dang, those agents make a lot of money, right?  Hold your horses!  On top of our split, we have all of these additional expenses and then some:

• Various taxes
• Office fees
• Office supplies
• Realtracs subscriber fees
• Advertising (signs, websites, business cards, etc)
• Clarksville Assocation of Realtors dues
• Tennessee Association of Realtors dues
• National Association of Realtors dues
• Dues for other professional organizations we may belong to
• Listing services (virtual tours, staging, professional pictures, home inspections, etc)
• Electronics (computers, cameras, etc)
• Phone bills
• Vehicle maintenance
• And the worst of all… GAS (sometimes multiple times per week)!

Does that break it down for you?  Questions?  Concerns?

Be sure to read, Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent and Realtor Pay Exposed (Part 2 of 3): The Buyer’s Agent.

If you have questions or need real estate assistance in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who does, call me today at (931) 436-6765 or submit your information below.

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© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2014.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

The #1 Way to Sell Your Home – For Homeowners and Home Builders Alike

Your house has been sitting vacant, or maybe you are days away from moving.  You’ve got that nagging in the back of your mind, “We need to sell! We need to sell!”  I can detail for you several ways to make sure you don’t sell your home!  Read on for a few very recent, as in the last 30 days, situations I have personally encountered:

In Tennesee, when an offer is put in on a home for sale, there is a Time Limit of Offer in the Purchase and Sale Agreement.  The time limit can be as short or as long as the buyer would like.  Usually 24 hours is a reasonable amount of time for a response.  If the contract is not accepted or countered within that time frame, the offer terminates, and the buyer is free to move on.

We all know offers are frequently made in the evenings or on the weekends.  That’s just the name of the game in the real estate world.  So, we put an offer in on a home with a 24 hour time limit.  Two hours before the offer expired, I (working as the Buyer’s Agent) touch base with the Listing Agent.  “Have you heard anything from your seller?”  No response.  Tick, tock… tick, tock… 30 minutes before the expiration, I call.  “Just trying to touch base, let me know what your seller thinks.”  Nothing.  At the exact moment the offer expires, a text message from the Listing Agent, “He’s doing a counter now.”  Well, guess what?  Too late!  The offer is technically terminated.  Now some buyers and Buyer’s Agents will understand, and continue to move forward with the counter offer.  But some will move on to the next home.  The lack of communication and timeliness potentially costing you the sale of your home.

This same home was listed on the Multiple Listing Service (at least it was listed!), though there were no updated pictures of the new carpet and paint.  And most importantly, it had been on the market for nearly two months with no “For Sale” sign in the front yard.  When I went to show it, my buyers even asked, “Are you sure it’s for sale?”  You can imagine how detrimental that can be to the sale of a home.

At another home recently, I arrived to show it to a couple of potential buyers.  There was one problem; no lockbox on the front door.  No instructions in the MLS.  I call the listing office and whoever answers the phone sounds exasperated.  “Did you look on the back door?!”  Ummmmm, this is a new construction home, no sod or grass and it rained about 8 inches in the last 24 hours.  Do you really want me to treck through 5 inches of red clay mud and then walk through your new construction home?  “The builder is about 10 minutes away, he’ll let you in.”  Click.  Tick, tock… tick, tock… 10, 9, 8, 7…  10 whole minutes (or longer) for my buyers to say, “Nevermind, it’s getting dark, let’s go look at something else.”  Potentially costing you the sale of your home.

This same home did not have a lot number displayed visibly.  Anyone who has been out looking at new constructions without a plat map will understand how frustrating this can be.  Additionally, the flyer for the home displayed the incorrect address and list price.  All of which have the potential to cost you a sale.

Another lockbox scenario:  The home for sale is occupied, and I make an appointment to show.  I show up at the home with my buyers, and I can see the lockbox on the front door through the tightly secured and LOCKED glass of the storm door!  No way possible to access it.  So I call the appointment line, who calls the Listing Agent and says they will call me back.  Tick, tock… I call the Listing Agent and leave a message.  No response.  5 minutes go by out there standing in front of the home with buyers.  “Ok, well why don’t we head to the next home on the list.”  Moving on.  Two hours go by, we are well into our home search, and the Listing Agent calls back and leaves a message that the door is now unlocked.  We are on the other side of town and they’ve already found a home that they love.  No thank you, maybe next time.  The lack of communication and timely response which ultimately may have cost you the sale.

Not a lockbox this time, but another lock situation and another new construction home:  We are out and about in the neighborhood.  There are several nice homes that my buyer likes, but we just haven’t found “the one” yet.  I think back to all of the homes I have been inside of in this particular neighborhood, and I say “You know what?  I know you don’t prefer a corner lot, but there is one more out here I think you would like.”  We head over and I access the lockbox and the key fits, but I can’t seem to get the door to unlock.  I wiggle, and jiggle it to no avail.  I go around to the backside and try the backdoor.  No luck.  I call the Listing Agent who DOES answer, but says, “Yeah, I’m aware.  It is difficult to open but keep trying.”  So I do.  Turns out, this one is nice, but not the one for her.  A little over a week later, the same scene.  I have a different buyer, and cannot get the key to turn.  Frustrating!  Why hasn’t this been fixed?!  If it were my listing, I would’ve gone out and changed the lock myself!  I was almost over it, when I inserted the key and twisted once more.  Voila!  It opened.  I am writing the contract on it today.  But how many agents would have stayed and continued to try to open the faulty lock?  Especially when there are 80 other new construction homes available within a mile radius.  There certainly was not timely follow-up, which potentially may have cost you the sale of the home several times over.

Final scenario:  The unhappy sounding, unhelpful agent.  “Good afternoon!”  I say.  “I was out at your listing with my buyer and she is interested.  Is there anything else you can tell me about the home?”  Silence.  “Ummmm, have you had any activity?  Any offers?”  I ask again.  Distractedly, she responds, “Yessss.”  Ok, I think.  This isn’t going far.  “Well, can you tell me anything else about the home?”  Silence.  Possibly even typing in the background.  Again, sounding distracted she says, “It has new carpet and paint.”  I sit there for a moment, yes we saw that on the MLS, and out at the home just now, I think to myself again.  Ok, clearly this conversation is going nowhere.  “Thanks for your time.  Have a good day.”  I explain to my buyer that I can’t offer her any other information, and we move on.  No follow-up or feedback requests that potentially cost the sellers the sale of their home.

Before I tell you the #1 way to sell your home, think about all the factors you consider when it comes time to sell.  You may have been told:  stage your home, clean it, unclutter, price it right, it might not be possible in a market that is down, list it with a popular company or team, hold frequent open houses, etc.  But really…

The #1 way to sell your home is to find a Listing Agent that you can communicate with.

Think about it… Can you get ahold of your Listing Agent at all reasonable times?  Or at least get a timely return call and regular follow-up?  If not, neither can your potential buyers!  Call the listing office and pretend to be a buyer.  Ask for information on the home.  Are they friendly and helpful?  Are you put on hold for 5 minutes?  If so, then it is likely potential buyers will be disregarded too.  Follow up.  Is the sign in the yard?  Lockbox on the door?  Are the flyers accurate?  A great agent will ensure all of these things from the start, but with communication between you and the agent, as well as between the agent and potential buyers can go a LONG way!

It will be much easier on you and everyone involved if you get it right from the start.  Make sure that in the beginning your listing agent is worthy of being HIRED instead of fired later down the road and after money spent.

If you are seeking or interested in selling real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who is, call today or submit your information below.

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© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

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Which Realtor is Right For You? 5 Tips for Military Families

In 1943, Abraham Maslow developed a psychological theory of basic human needs.  The foundation of the pyramid includes physiological requirements which among others include breathing, food, water, sleep and shelter.  The pyramid theorizes that the next level of human needs include bodily safety, health, and the security of property.  Having a place to call home is one of the most important motivators of human behavior and it is equally important to find the right person to guide you through the process.  Read on for tips to find the Realtor that is right for you!

Word of mouth (or keyboard) is the best advertisement!  Ask your friends and family first.  Sometimes that is more difficult if you are being relocated to an area that is new and unfamiliar.  As a fellow military family, we have been in that situation more than a few times.  That is when social media can be your best friend.  Utilize Facebook and different public forums.  At Fort Campbell alone there are several different active Facebook pages to include PCSing ~ Relocating to Fort Campbell, KY ~ Clarksville, TN and Fort Campbell Wives Page.  Ask around!  Then once you get names of a couple of Realtors, ask if they have a couple of clients that wouldn’t mind speaking with you about their buying experience.  According to The 2012 National Association of Realtors^® Profile of Home Buyers and Sellers, “buyers most commonly choose an agent based on a referral, with trustworthiness and reputation being the most important factors.”

Visibility in the marketplace matters!  While you are getting recommendations and speaking to clients, check the Realtor’s visibility.  One of the fastest ways to do that is to run a Google search.  For example, search “Ariel Anderson” and see what comes up.  Try “Ariel Anderson Realtor” or “Ariel Anderson real estate”.  If you don’t get any results, that is no bueno and a good sign that the Realtor is not well-established in the community.  On the opposite end of the spectrum, if the Realtor is all over every billboard, shopping cart, and magazine that you see, chances are that you will be working with more than one person, or likely even a team.  Typically when working with a larger organization or team, you may have several different hands on documents, there may be longer waits for return phone calls, and that “home town” feeling might be missing.  Be cautious if someone entices you to use their services and then sends you on to another person, who may send you on to another.  You need to know who is on your side, and that you will not be lost in the shuffle.

What exactly do you do for a living?  Another good way to tell if a Realtor is right for you is to find out if they practice real estate full-time in this area.  According to the latest update, the Clarksville Association of Realtors has 703 active Realtors registered.  Not all of them practice full-time, and some of them may not even be in the area.  You want to make sure that whoever you are working with takes your quest for a home as seriously as you do.  They need to be directly involved in local real estate, knowledgeable of the area, and familiar with homes currently on the market.  If the Realtor is spread to thin and constantly distracted by other duties, you may not get the time and diligence needed.

You may also want to be sure that you aren’t being used as a referral.  There are some Realtors who make a living off of collecting referral fees.  They may tell you they are familiar with the area and have a lot of contacts that may be able to assist you.  They will get your personal information (name, phone number, email, etc), send it to a Realtor or team who is actually based locally, and then behind the scenes they collect a percentage of the commission that the Realtor they referred you to makes when you close on a home even when they did not personally do any work on the deal.  Make sure that the Realtor represents themselves honestly from the start, that the individual you speak to is here, and that they are willing to meet with you personally versus passing you off to someone else while collecting a fee.

Communication is key.  As I speak of in Tell me how this “buying a home” thing works?  A Guide …

Make sure you feel like you can communicate with easily and that you are working with someone who will answer your phone calls, or return them at least.  Can you ask questions without being rushed?  Do they answer your questions or give you vague replies?  You want to make sure the individual is enthusiastic about their work and is confident with the process.  They need to be willing to explain things over and over again without getting frustrated, until you understand completely.

Do not drive around or search online, find a pretty home, and call the number on the sign.  The agent on the sign is the listing agent and works on behalf of the seller.  You see, with any real estate transaction, there are two sides; the selling side, and the buying side.  You want to find someone to represent you and your best interests!  There will be an Exclusive Buyer’s Representation Agreement which says that you agree to work with your realtor for a certain, mutually agreed upon, amount of time.  If you decide you do not like your realtor, once you have signed this agreement… if you go out and do the deal on your own… you may still be responsible for paying your realtor a commission, even if you did all the work on the side.  Make sure it is a good fit before you sign.  Read the fine print and remember that everything is negotiable until it is in writing!

Check your gut.  What does your instinct tell you?  Before signing a Buyer’s Representation Agreement, ask if the Realtor can show you a couple of homes.  Pay attention to the feelings that you get now so that you aren’t stuck in a binding agreement later with someone who is just isn’t a good fit.  As reported by The 2012 National Association of Realtors^® Profile of Home Buyers and Sellers, “Two out of thee buyers interviewed only one agent.  Eighty-nine percent of buyers are likely to use the same agent again or recommend to others.”  My personal recommendation is that you speak with a couple, unless you come across me first, and then look no further… You’ve found a Realtor on your side!

One more word to the wise;  Older and in the system longer does not necessarily mean better.  Sure experience is important!  They need to know the ropes, and understand the market.  But you also want someone who is eager, enthusiastic, and up to date with the market.  They need to be up to speed with the latest technology, social media, and community in general.  How cool is to find a realtor that utilizes text messaging, or Facebook?  Yeahhhhh, come on out of the stone ages!!

In conclusion, and back to Maslow’s hierarchy of needs, buying a home and the people you choose to work with can affect many of your basic needs at some point along the way.  At the upper part of the pyramid you will see a need for friendship (love/belonging), respect by others (esteem), and problem-solving (self-actualization).  A great Realtor will not only help you with the most basic of needs, finding a safe shelter, but will also be a friend, will respect your choices and desires, all while helping you to problem solve through the process with your best interests at heart.

So if you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area, pick me, pick me!  Call today or submit your information below so I can be your own personal Buyer Representative!

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© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

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Military Homeowner to Investor (Part 2)

Now we get to the meat and potatoes part of the story (with tips following)!  So we moved to Fort Richardson from Fort Hood as the accidental landlords of two rental properties.  When we first realized that we would not be able to sell our homes for enough to turn even a teeny, tiny profit, I started to consider the idea of renting them.  I was scared.  What if we couldn’t find renters?  What if they didn’t pay the rent?  And the big one… dun, dun, dunnnn… What would happen if they TRASHED our home in the process?  It all boiled down to one bottom line for us; foreclosure was not an option.  We would fight for our homes, clean out our savings, and do whatever it took even from thousand of miles away before we would foreclose.

We have rented to Majors, to Specialists, to corrections officers, and convenient store workers. We have never had a problem finding renters, and the homes have been empty for no more than 7 days in between renters.  Some have paid rent early, some on time, and some have paid late.  We have had to do minimal work in between renters due to normal wear and tear, or pet damage, but the homes have never been trashed.  We have managed the properties ourselves, and our mortgages have been paid.  There are a few simple steps you can take to ensure that you are prepared to handle those big, scary “What Ifs” that may have you afraid to buy.

1. Consider your location: Some of the top questions when people are looking for a home are… Is the neighborhood relatively safe?  Is it close to post?  How are the schools rated?  How close is it to shopping, grocery stores, and restaurants?

In a military community, we are often blessed with a fairly high demand for rental properties.  People like you and like me are afraid to buy because they are afraid of being moved by the military.  You can use this to your advantage by going from Military Homeowner to Investor (Part 1), or you can let it work against you by paying for someone else’s investment.

2. Select your home with care:  Look for an appealing, low maintenance home.  This may mean sacrificing a little bit of the things you desire for a more marketable home.  Or it may mean carefully analyzing updates (like HVAC, roofing, windows) and how recent they were made, in an older home.  You may want to forego a home with a pool or an extensive garden that a renter may not be able to maintain.  You or your partner may be perfectly capable of replacing the flooring, counter tops, and cabinets, but consider whether that is something that you want to add to your plate in order to get a renter if it comes down to PCS time.

3. Take an emotional step back:  This can be difficult to do when you are purchasing a home as your primary residence while considering that it may become an investment property in the future.  Home buying is an emotional process.  It is right on up there with having a baby, or getting married.  Breathe, take a step back, and imagine walking into the home as a renter.  Imagine turning your home over to a renter.  If you have a plan for the future, and begin to wrap your mind around the idea in advance, it will be easier to do when the time comes.

4. Research the neighborhood rental market: What are the neighborhood homes renting for?  Are there many homes for rent, or just a few?  A good rule of thumb is, if you can buy the home for 12 times what you would make annually in rent, then it is a good deal.  If you can pay your mortgage, then put the extra amount from the rent towards your principal loan amount, and can pay the home off in 10 years, it is an even better deal and I will personally jump out of this blog and shake you if you don’t go for it!

5. Have some reserves saved up: Inevitably, the dishwasher will stop working, the a/c will freeze up, or a pipe might start leaking.  This goes back to #3 and having a plan for the future.  Plan on it, and it will be easier to accept, and less of a shock.  My personal rule is to have 6 months of the mortgage saved for each rental in an account that we do not mix with our personal finances.  These reserves are an absolute necessity, and ensure that you do not become overextended.  They will also be beneficial (sometimes even required) when it comes to getting a second home loan.

I don’t care if you have to eat beans and rice every night for dinner, put your rental reserves away and do not touch them.  That way when you are broke, it is 10 days until the next payday, and your renter calls and says, “It is 90 degrees in my house and I have a newborn baby”, you will be able to handle business without an emotional breakdown.  You will be proud of your ability to handle the situation, and your renters will be more likely to hang around long term because they will see how great of a landlord you are.

6. Be involved:  Whether you enlist the services of a property management company or you become an owner-landlord, be involved!  Have the property management company send you the information of potential renters and why they were approved or denied.  Read your contract thoroughly and make sure they are following through with every single responsibility that is detailed.  Make contact with your renters so they know who you are.

I have made it a practice of sending holiday cards or hand-written thank you notes.  It is a business relationship with the potential for great reward or great cost.  If your renters know who you are and that you are a caring, capable landlord, it will be easier to respect your home as if it were theirs.  If you make periodic contact that is positive versus overbearing, it is one more reason for your renters to hang around longer.

7. Build a reliable, trustworthy team:  Do you research and begin building a sphere of support.  You will need a Realtor, lender, and possibly an accountant.  Ask for referrals, and choose people that you can communicate with easily.  Do they answer your phone calls, text messages, and emails in a timely manner?  Is conversation easy, and do you feel like you can trust them?

Begin interviewing home improvement companies, plumbers, HVAC repair companies, and electricians.  Make face to face contact.  Hopefully you will not need your repair team for years to come, but I call it “warding off the evil spirits”.  If your team is in place, and you are prepared, then you won’t need them.  The moment you are unprepared is when you will be caught off guard.

8.  Don’t wait:  If you have everything in place… If you are ready, willing, and able to buy a home… then don’t wait.  Interest rates are historically low.  Many investors, looking back, kick themselves for not investing sooner.  Interest rates will not be low forever, and don’t waste one more dime of your money paying for someone else’s investment.  If you didn’t have a little bit of fear, I would be worried!  It is totally normal to worry; that is actually the first step to building your plan and being prepared.  And who knows?  As my mom always told me, “Don’t borrow trouble!”  It may work out that you are at your current station for the next 12 years or more.  Do you really want to look back on 12 years, when interest rates are no longer low, and say, “If I had known that we would be here all this time, I would have bought back then.”

Investing is a gamble.  Life is a gamble.  Somebody can run right into that new car the moment you drive it off the lot.  Your children could take a sharpie to that nice new washer and dryer set you just bought.  The one difference is that items begin to lose value immediately and continue to lose value with age, over time.  Property will always retain its value, and may even increase considerably with time.  Sure, the home might need to be remodeled after 30 years, or you may need to replace a fence here and there, but the property will always be of value.  As I mentioned above, it can offer the potential for great gain, or high cost.  Follow the steps above, put your plan into action, and you will likely succeed!  Happy house-hunting!

If you are in or heading to the Clarksville, Tennessee or Fort Campbell area, enter your information below to explore your real estate options today!

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© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

Military Homeowner to Investor (Part 1)

Are you beginning to think about retirement? If not, DO IT! Ideally, if you take steps early in your career, you can set yourself up well for the future, but it is never too late! You don’t have to be a real estate tycoon to own investment properties. You can view frequent moves as a burden or you can use them to your advantage. Here’s how we got started:

In June of 2005, Fort Hood called our names. It was not until February of 2007 that we bought our first home. Due to deployment, and college, we rented up until that point. I did not even consider owning a home until we began dealing with inconsiderate property management and the restrictions (like no pets) that come along with renting. We sat down with a realtor who got us in contact with a lender, and to our surprise, we were pre-approved! The search began, and within about 30 days we were settling into OUR home; where we could have pets, paint the walls fuchsia, and stand on the countertops if we wanted to. All at the ripe old age of 22.

As fate would have it, I was offered an amazing job opportunity a year later. We heard that we would likely be at Ft. Hood forever, so one day out looking at houses on my lunch break, I found “the one”. We made a very rookie decision to move on up to a bigger and better home! Little did we know how it would impact our future. We rented our first home that had been purchased on a VA loan, and bought our second home on an FHA loan. We followed the advice of the lender and made sure to have three months (I encourage you to save six months!) of the expenses for the rental saved up, and we entered into the world of Landlords.

About 6 months later we got orders to Alaska! Uh oh… We were headed for the world of Landlords x 2.

Here’s a thought, if we rent our homes for $200 more than what we pay in mortgage, and make extra mortgage payments with the additional money, we can have the homes paid off in 18 years… by the time our oldest child starts college. With ONE investment home, we can pay for her college. Click the graph below (courtesy of http://www.daveramsey.com) for a great visual and stay tuned for Military Homeowner to Investor (Part 2).

If you are in or heading to the Clarksville, TN or Fort Campbell area, enter your information below to explore your real estate options today!

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© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.