Flint Foley Real Estate Blog

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Flint had the opportunity to join Brad Roche of The Mortgage Planner and Steve Kinzler of Element Funding for their radio show The Plan. The show focuses on helping listeners realize their dream of home ownership, save for the future, and become financially independent. It aired in the Charlotte, NC area on ESPN Radio 730AM and WFNZ The Fan 610AM.

It was great to talk with people who see real estate as a true investment, starting with your personal home! LISTEN HERE:

It can be all too easy for over-eager shoppers to waste a well-intentioned agent's time. Here's what both sides should know.

Searching for a home and engaging with a real estate agent today is not the same as it was a generation ago. The space (both physical and virtual) between the buyer and the real estate agent was much larger, and coming together was slower and more methodical.

If a buyer saw a For Sale sign or an ad in the paper, they might call the real estate agency’s office, get some information, and move on. Or they could walk into an open house solo. They could be rather anonymous.

But today’s home buyers live online. They can click, text or email with agents, and seriously engage within hours. But does that mean they are active and serious buyers ready to transact? Not necessarily.

The real estate agent’s experience

Meanwhile, real estate agents, who are commission-only independent contractors, will sometimes drive around for hours showing homes. They may take these buyers around for days or weeks, thinking they have a live client they can help. They might make an offer or two on behalf of the customer, even be present at a two- to three-hour-long home inspection … all before the buyer decides to back out. They may buy a different house from the agent, or they may not.

Well-intentioned, hardworking agents can end up feeling like their time isn’t valued — particularly when they never hear from that buyer again.

Who’s responsible?

Is it incumbent on the agent to be better at time management and qualifying their potential buyer clients? Or should the buyer be clear with the agent early on if they aren’t serious just yet?

I think that the consumer comes first, and it’s up to the agent to better qualify — as best they can. But it’s also part of the business, and par for the course. Agents sign up for a sales job, and they can’t win every deal. They need to ask lots of questions of their new “client” before offering up their time and cashing a paycheck that doesn’t exist.

Some consumers relish the attention they receive from this new “friend” who will drive them places, show them around, and teach them something new about the world of real estate. If the buyer isn’t paying for the agent’s time, the reasoning often goes, why not take a few rides and see some great houses?

But soon-to-be homeowners should be mindful of their intentions, and considerate of the resources the agent is delivering.

So what’s a buyer to do?

Should everyone stop looking online or clicking the “Contact Agent” button? No way. Consumers should always feel free to click away, ask questions and gather information.

But they should be mindful of how things work once they start seriously engaging. Most buyers don’t realize that there is a process to buying a home, and that it rarely happens overnight. From the time they first click on the photo of the killer master bathroom until they get the keys, it might be one year and three dozen (or more) house tours.

And if things don’t feel right with the agent with whom you engage early on, move on. Keep researching independently, or get a referral for a good local agent. Or, better yet, just go with the flow and the right agent will come along organically.

And what about agents?

Real estate professionals need to understand that one text, click or email does not make an active buyer. A good agent has a handle on the sales process, and asks buyers lots of questions to get a read on them. A good agent fills their sales funnel with a mix of folks in all parts of the home buying process.

Early on, an agent needs to be a guiding light, resourceful and ready to answer questions. As some of their buyers get more serious, smart real estate pros know where to direct their attention.

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Many potential home buyers believe that buying a foreclosed home is easy and inexpensive. While these homes are traditionally cheaper, some specific steps should be taken when purchasing a foreclosed home.

1. Budget for the Unseen
While the house may have a low price tag, the purchase price is not necessarily the only cost; repairs will also probably be needed. Some repairs may prove to be minimal, such as replacing a doorknob or patching up holes in the drywall. Other repairs, such as plumbing and electrical reconstruction, probably require professionals and a small investment.

2. Take Your Time and Look Over the House Closely
When buying a foreclosure, see the property yourself; do not rely on pictures. While you are looking at the house, take your time and examine the house thoroughly. No matter how much the home is reduced due to its foreclosure status, a house is still a major purchase that warrants careful inspection.

3. Do Careful Research
Find out how long the house has been on the market. This information will help you budget for those necessary, unforeseen repairs. The longer the house sits on the market, the less likely it has been properly cared for.
For example, if the toilets are not in use, sewer gases could back up, or vermin may have infested the area due to untended lawns.

4. Hire a Home Inspector
More likely than not, a home inspection fee will come out of your pocket. While inspections also fall under the category of housing expenditures that are not part of the home’s purchase price, this expense is foolish to forego when buying a foreclosed home.
Careful, thorough home inspections can show you what your untrained eye cannot. For example, you may not know that you are purchasing a home with no insulation. The inspection will reveal the absence and you can then calculate home improvement costs.

5. Know the Value of the Home
Find out the appraised value of the home. Typically, the amount a foreclosed home is listed for is the amount left on the unpaid mortgage. While this initially sounds like a good deal, situations exist in which the amount remaining is higher than the value of the house.

6. Do Not Put All of Your Savings Toward a Down Payment
Know what you can comfortably afford, so that you do not end up in foreclosure as well. Rather than putting all of your money into the down payment, you can use that extra cash as part of the repair or replacement process later.

7. Bid Low on the House
The whole point of buying a foreclosed home is to save money, so when you are bidding on the house, start low. When purchasing traditional homes, low bidding can sometimes lead to offended owners. In a foreclosure, however, the other party is a bank or other financial institution.

8. Be Aware of Waiting Periods
When a home is sold as a foreclosure, significant legal paperwork needs completing. For example, the previous owners may need to relinquish all rights to the property before you sign any final sale document. It is not uncommon for parties buying the home to wait months before being able to take possession of the property.

9. Check Out the Neighborhood
The neighborhood in which the house is located is as important as its condition. Whether you are planning to live in the property yourself, rent out the property, or resell the property after you have remodeled it, location is crucial.
In some areas, neighbors are quiet and keep to themselves. Some neighborhoods have little crime and vandalism, while other locations have daily vandalism or other problems. Purchasing in such an area could leave you frustrated with continuous repairs you may have to make to the home.

10. Hold Your Ground
When a bank sells a home, it wants to recoup the mortgage amount not being collected. As long as the bank receives that dollar amount, the bank is happy. Some sellers in a foreclosure are anxious to close and would do just about anything to sell you the house.

You can be picky, and you should not have to settle for anything less than what you want.

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An article by Nathan Miller from BiggerPockets

​I used to be a strict pet-free landlord. I followed the same logic any investor might when deciding if my renters would be allowed to keep pets: Pets cause damage. They increased wear and tear, which could negatively affect my bottom line. Therefore, I simply would not allow pets at my properties.

But after 15 years of real estate investing, I’ve had a change of heart. And no, it’s not from those puppy dog eyes (pet or human!), but because I have come to see pets as a potential income source for my properties.
In this article I will break down the income-producing incentives that tipped the scale toward making my rentals pet-friendly properties.

Reduced Vacancy Time
Time is money in rental management, and the longer my property sits vacant, the less money it makes. The majority of rental properties are advertised as “no pets,” according to rental search data from Zillow.  This correlates with rental search data from my own software’s database, which found that 27 percent of rental properties in the U.S. advertise “Pets OK,” compared with 73 percent U.S. rental properties advertised as “No Pets,”—based on a sample size of 61,790 units*.

The easiest statistic to find regarding pet ownership among renters comes from a 2014 survey published by Apartments.com. It claims that 72 percent of renters own pets. More recently, Zillow released its 2017 Consumer Housing Trends Report stating that only 32 percent of renters have pets.

This research indicates that there is a shortage of pet-friendly properties compared to the number of renters seeking pet-friendly housing. By allowing pets at your rental, you open your tenant pool and increase the desirability of your rental. This leads to shorter vacancy times between tenants.

Spend Less Time Seeking Funds to Repair Damage
If your state allows it, you have the option to charge an additional pet deposit on top of a standard security deposit from your pet-owning renters. Pet deposits can be used for cleaning a property or repairing damage caused by a pet.

Pet deposits offer additional security and allow you to have available funds to cover the cost of pet damage or excessive cleaning. If you only collect a standard security deposit and a pet causes more damage than the deposit will cover, you have to invoice the tenant to cover the cost of cleaning (or repairs) beyond the security deposit. You will then be actively seeking payment from a renter who has moved, and they—or the money—might be hard to track down. If this bill goes unpaid, you can either move forward with collections or sue the tenant as your state laws allow. Or, you could eat the cost to avoid prolonging the issue.

Regardless, you will either have to spend time or funds dealing with chasing down additional payment for pet-caused damage. Having an additional security deposit limits the possibility of requiring additional money from your tenant.

Pet Rent
Another option for pet-friendly properties comes in the form of a monthly pet rent. Pet rent is collected along with your tenant’s standard monthly rent and can run anywhere from $10-$50 a month per pet. Over the course of a year, this pet rent can add an additional $120-$600 to your rental income.

In areas where vacancy rates are low and availability of pet-friendly rentals is even lower, most tenants expect to pay extra to live with their furry roommates.

Increased Renewal Rates
In general, your pet-owning tenants are more likely to become long-term renters, due to the fact that pet-friendly rentals are more difficult to find. When you build routine rent increases into your lease agreements, these long-term, pet-owning renters are the cream of the crop for an investor.

For every renewal, I also find it important to perform regular inspections. This helps determine any pet damage or problem areas that should be addressed before they become more expensive down the line.  

The Legality of Pet-Friendly Properties
Make sure to check your state and local laws about increasing deposits and the legality of non-refundable fees. Your lease should have clear language about the types of pets acceptable at the property and what additional rent, fees, or deposits are associated with a pet-friendly rental (just remember to get it checked out by a trusted attorney before anyone signs on the dotted line). I also find it valuable to require renter’s insurance for all tenants, especially for your pet-owning renters.

A Special Note About Service Animals, Emotional-Support Animals, and Therapy Animals
Your tenants that have service animals or emotional-support animals (ESA) are protected by the American Disabilities Act (ADA). As a housing provider you’re required to make reasonable accommodation for these renters and their animals.
Renters with a service animal or an emotional-support animal are exempt from paying an additional pet deposit, pet fee, or monthly pet rent. They will, however, need to provide proper documentation regarding the need for such an animal, as required by the ADA and Fair Housing Laws.

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