Part 1: FAQ’s From Media Interviews With Real Estate Author

Do you feel there is going to be a real estate bubble?

Nash: No. Are some coastal and resort markets over-heated, yes. I don’t feel that markets will collapse. But investors and property owners should be ready for longer market times, diminishing over-full-price and multiple offers in over-heated markets. Prices could plateau and appreciation levels will hover at more historical levels. If you live out-of-town from where you purchased property on appreciation speculation, I would keep in very close contact with a un-biased professional in the market, daily.

Have real estate appraisers contributed to the rapid increase in home prices?

Nash: Not necessarily. You have to understand their role in a real estate transaction. They are hired by the mortgage lender to appraise the property. The homebuyer pays for the appraisers services. The lender is in business to lend money and the real estate brokerages want to close the transaction and receive their fees. In most markets there are solid closed comparable properties that justify underwriting the loan. In rapidly appreciating markets, where there are no closed comparables to support the new value, all the participants in the transaction should be aware that there is risk involved in the new value assigned to a property in a real estate contract.

What should homeowners and investors do to protect themselves from a potential bubble?

Nash: Look for incentives by builders on completed new construction buildings or homes; this indicates an over-supply of new units. Research days on market or the length of time of property has been on market. If the typical time recently has been 30 days for sold properties and current market times for the majority of sold properties are 60 or more days, the market is softening. Home prices and mortgage rates effect each other, as interest rates drop, the more buyers can afford to pay for a home, but as rates rise buyers can afford less of a purchase price. Watch interest rates as an indictor of deflating prices.

What is your position on interest only loans?

Nash: Consumers need to look at the long-range implications of interest-only loans. They should keep in mind that if their home value declines, they still owe the loan amount, which could be higher than their homes market value when they sell. If appreciation remains low, in the two to five percent range and the cost to use a full-service real estate company to sell their home is five to seven percent, their appreciation will actually go to pay selling and marketing costs, ouch!

What do you think about two new books:” Irrational Exuberance” and “Freakonomics” that touch on residential real estate?

Nash: Both make solid contributions for real estate consumers and investors in today’s environment. Everyone is looking for information to make real estate decisions. While there are many inflammatory headlines, I’ve found the majority of the accompanying dialogue; offer good market and real estate practices advice.

The term Realtor® is generic to most consumers but are all real estate agents Realtors®?

Nash: No and the National Association of Realtors® (NAR) is diligent on protecting it’s status as an registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. NAR has approximately 1.1 million members, while industry sources state there are about an additional 1.4 million real estate agents not members of NAR.

What housing style will be hot in five years?

Nash: The ranch. As the boomers age they’ll go from the two-story “I’ve arrived” colonial to the “I’ve retired” ranch. Five years ago ranch homes were not that popular and languished on the market in some areas. This last year several clients looking towards retirement and downsizing have asked to see only ranch homes.

Why did you write your fourth real estate book “1001 Tips for Buying and Selling a Home”?

Nash: I wanted to focus on informing the consumer to understand the questions to ask the other participants in their next real estate transaction. I ask questions like, “What is dual agency?” and “Are you being served if your agent is a dual agent?” I explain the back end of the real estate business, which is important if you as the consumer want to manage the front end of it, i.e. your transaction.

Why is 1001 Tips different from other “how-to” real estate books?

Nash: Early on my publisher wanted the book real simple. Its style is numbered tips with an explanation in bullet-points. Editorially light, but not real estate light. The reader can pick it up and put it down and grasp each tip without having to read four additional paragraphs. Plus I’ve been through many transactions as a real estate broker and understand what the buyer or seller needs to know in their transaction before they walk out of closing or escrow. With home prices today, consumers should demand to know.

Is location, location, location a cliché in real estate today?

Nash: Location, price, risk.

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Is Buying Real Estate Today A Good Investment Opportunity?

Being that you are reading this you are wanting to find out if buying real estate is still a good investment opportunity.

Well, lets be honest…

Real estate will always be a good investment opportunity, its all in how you approach it and how strategic you get when times get hard in the economy.

First, a little word of advice…

Just because advertisements, newspapers or media people say the economy is terrible and you shouldn’t buy real estate because we are in a recession, doesn’t mean you should listen to them.

Those newspapers and media sell bad news because it gets readers and viewers, the more they have the more they can charge for advertisements.

Besides most of the experts you see make less than you do at your job, so why listen to them?

Here are a couple solid idea’s to get your mind going on why buying real estate is still a good investment opportunity.

First, as more and more people lose and move out of their main homes, this is in large part because they can no longer afford that big mortgage because of a hardship of some sort…

Laid off, downsized or just plain can’t find work.

This is where the opportunity lies…

People will always need a place to live and if you can provide one they will pay you forever!

At a alarming rate rentals have gone up.

Families are realizing that they need a home and usually a apartment is not the best option for them so they find normal homes that fit their budget and loyally pay their monthly dues.

Imagine not having to worry about how the economy is doing, or if a company makes a mistake or gets boughtout and your investments tank.

This is the power of having rentals.

That as long as they are occupied, you will have a check every month!

Another great way to buy real estate and create a investment opportunity is by flipping homes strategically…

Flipping homes was very popular between 2000 and 2005, and that’s largely in part because it was easy to do it.

Homes were appreciating every 30 days and anybody could make money as long as they were willing to go through the motions and invest a little…

This is no longer the case, its takes a strategic plan today. But the chances for making more money exist.

If you are going to peruse this route I would contact and interview a handful of very successful realtors. And once you find one who is good at finding distressed properties, negotiating and selling, get them on board and use them as a long term asset.

Buying real estate for investment opportunities is not complicated but it does require risk and being able to adjust to the ever changing environment.

In doing so you can to build yourself a fortune over time and laugh at all the media that told you not to go into real estate investing.