Know the laws concerning real estate

Real estate is a highly-regulated business where lot of fraud and unethical practices happen. You can seek assistance from a real estate attorney, but you should also strive to educate yourself.

At a minimum, you should be aware of the following:

Landlord-Tenant Rules

How much does it cost to evict someone? How long will it take? Can I serve notices myself or if there are any special rules applicable for my city? Is there a limit for the security deposits? Should I pay interest for the deposits? How long can I hold the deposit once a tenant leaves?

Legal Documents

What form of documents are used in my area? Are there any special forms for real estate agents? You should be aware of the local forms and have knowledge about how to tailor them for your needs.

Recording Rules

What are the filing fees for legal documents and what format should we follow?

Disclosure Laws

What should be disclosed to a tenant or buyer? This information can be obtained from your local real estate investor's association.

Interest Rate Limits & Other Loan Regulations

Since the limit for charging interest might differ for each state, you must find the interest rate applicable for your state.

Fair Housing

When your rent your property, you should not discriminate against people based on race, religion, sex, age.

Licensing Laws

You need to check with your state licensing agency for information about licensing laws. You should also be aware of consumer protection laws.

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How to deal with Agents in real estate

Real estate agents offer a valuable source of potential real estate deals for investors. Since real estate agents offer more information they are very important for an investor.

Most investors find it difficult to deal with real estate agents because they prefer home buyers with good credit and cash. They would like to get their interest money without any hassles. You should be ready to offer a reasonable commission to grab the attention of the agents. You should give more commission if you are presenting a solid cash.

Another important thing is to prefer a short closing date because agents will advise clients to take the offer which gets more commission and closes faster. If you want to give creative offers to the owner, you need to speak with them in person because if you present the offer to an agent it will not be presented in the same way to the owner.

Just like any other person, real estate agents would like to make more money. Unless you offer more incentives, you won't get the cooperation of an agent. Some agents are unethical and they will lie that your offer is rejected. If you come to know that a broker is not good, you can directly deal with the seller.

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Basic Legal Requirements of a Real Estate Contract

Real estate contract is one of the widely used tools in real estate business. Eventhough you are a beginner, you should know the nuts and bolts of how a real estate contract works. Contracts are usually drafted like an offer which will be signed by the buyer. Once a mutual assent arises, the contract becomes applicable.

To make a real estate contract valid, the following requirements are needed:

Mutual Assent - There must be a mutual agreement between the buyer and seller.

In Writing - The contract for purchase and sale of real estate must be written to be enforceable.

Identify the Parties - The contract must exactly identify the parties.

Identify the Property - The contract must exactly identify the property as well.

Purchase Price - The contract must exactly state the purchase price of the property.

Consideration - A contract must have consideration which is the interest that induces a promise.

Signatures - Contracts must be signed to be enforceable.

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