1. Loopnet.com – Loopnet is probably the largest and most well-known commercial real estate listing site. They claim to have over 630,000 active commercial real estate listings on their website. It costs $24.95 a month for visitors to have access to all of the property listings. The free membership for visitors allows full search capability, however, only a limited number of results are shown.
2. Realup.com – Realup is brand new to the market and officially launched on May 17, 2009. It appears that all of the memberships for both buyers and sellers are free. The website says that “our property listings are charged based on a pay-per-results pricing model, setting us apart from our competitors and providing the greatest value to our partners and clients.” So, they are basically charging for the traffic or leads that your listing generates. This sounds good in principle but from my experience the technology for these “pay for the lead” type of systems is usually too weak to determine what a valuable lead is.
3. Costar.com – Costar offers the ability to search for all commercial property types. Basic listings are free for real estate professionals and property owners. It costs $24.95 a month for visitors to have access to all of the property listings. The free membership for visitors allows full search capability, however, only a limited number of results are shown. They offer information on “space available for lease, comparable sales information, tenant information, properties for sale, property information for clients’ web sites, industry professional directory, analytic information, data integration, property advertising and industry news–throughout the United States as well as in the United Kingdom and France.”
4. Lead-Trac.com – Lead Trac is designed to give investors and commercial real estate professionals access to following data about commercial real estate: property data, owner data, phone numbers. They also offer direct mailing and marketing tools within the website. Pricing starts at $69/user/county/month.  In addition to the monthly plans, they have an unlimited access plan that they sell on a per county basis.  This plan ranges from $1500 to $3000 per county per year.
5. CIMLS.com – What makes CIMLS different than many other similar sites is the fact that visitors can search listings for free while realtors and property owners can also post their listings for free. Realtors and property owners have the option to upgrade to a Gold account for added exposure. The Gold account costs $14.00 a month for the first month and $20.00 a month for every month thereafter.

Photo Credit: quinet

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Where to Search for Commercial Real Estate Online

Do great rates and great service fail to impress you? Well you are not alone. We are in a time where you need to find out who can create value with their services and ideas. And what I mean by value is, attracting customers. A good number of investors plan to sell their property at some point and awareness of loan programs can help your potential sell.

Here are a few loans of value over the last few years:

• 100% purchase, non-owner, stated income, interest only
• 1% pay option ARM
• 100% cash out refinance
• 100% Jumbo Loans

There is great debate on whether these loans are good loans, but few can argue these loan did attract customers for Realtors, Builders, and Mortgage Companies.

What are the next generation of loans to attract customers?

• 3-2-1 buy-down
• PITI Abatement
• FHA/VA
• My Community
• Credit Repair

One might say that 2008 is the year of government backed mortgages. All the loans high lighted above are directly tied to the government through Fannie Mae, Freddie Mac or FHA/VA. Unfortunately the line is drawn right at $417,000 and some high cost areas have limits as high as $729,750.

3-2-1 Buydown
Sellers and Builders can use a temporary 3-2-1 and 2-1 interest-rate buy-downs as a sales incentive. In a 3-2-1 buy-down, the interest rate is reduced by 3 percent the first year, 2 percent the second year, and 1 percent the third year. A 2-1 buy-down lasts for two years, with a 2 percent reduction the first year and a 1 percent the second.

The 3-2-1 Mortgage Buydown

• This is a 30-year fully amortized mortgage.
• The interest rate increases 1% every year for the first three years.
• Then the interest rate is fixed for the remaining term.

Here is how it works. Your loan balance is $375,000 and the interest rate is fixed at 6.5% for 30 years. The seller incentive could buy down the interest rate by paying a lump sum of $16,764.

1. First-year interest rate is 3.5%, payable $1,684 per month.
2. Second-year interest rate is 4.5%, payable $1,900 per month.
3. Third-year interest rate is 5.5%, payable $2,129 per month.
4. Years four through 30, interest rate is 6.5%, payable $2,370 per month.

• First-year savings (as compared to $2,370 per month) is $686 per month or $8236.
• Second-year savings (as compared to $2,370 per month) is $470 per month or $5642.
• Third-year savings (as compared to $2,370 per month) is $241 per month or $2,892.

Add up the annual savings: $8,236 + $5,642 + $2,892 = $16,770. Therefore, it costs $16,764 to buy down the interest rate and payments for three full years. It costs approximately 4.5% of the loan amount to buydown.

Benefits of 3-2-1 Mortgage Buydown

• The borrower qualifies for this loan at the 3.5% interest rate and payment amount of $1,684 versus the real rate of 6.5% and the payment of $2,370.
• Instead of the payment jumping all at once, it goes up in smaller increments, about $200 each year, for the first three years.
• It keeps payments low for 36 months for borrowers whose income is expected to later increase. Perhaps a spouse is returning to work after a hiatus or a person expects to graduate and land a higher paying job with that newly earned degree.

The 2-1 Buydown Mortgage

• This is a 30-year fully amortized mortgage.
• The interest rate increases 1% every year for the first two years.
• Then the interest rate is fixed for the remaining term.

Here is how it works. Say your loan balance is $350,000 and the interest rate is fixed at 6.5% for 30 years. The seller’s incentive could buy down the interest rate by paying a lump sum of $8,063.

1. First-year interest rate is 4.5%, payable $1,773 per month.
2. Second-year interest rate is 5.5%, payable $1,987 per month.
3. Years three through 30, interest rate is 6.5%, payable $2,212 per month.

• First-year savings (as compared to $2,212 per month) is $439 per month or $5,268.
• Second-year savings (as compared to $2,212 per month) is $225 per month or $2,700.

Add up the annual savings: $5,268 + $2,700 = $7,968. Therefore, it costs $7,968 to buy down the interest rate and payments for two full years.

This loan program can help more individuals qualify from and income documentation stand point.

PITI Abatement
What is PITI Abatement?

• An incentive to the buyer to have the first 6 months of the mortgage paid by the seller.
• PITI Abatement program is a product designed specifically for home-buyers. You can give a 6% Seller Contribution that can be used for Principle, Interest , Taxes and Insurance payments.

What are the General Guidelines?

• Loan amounts up to $417,000
• Up to 100% of the purchase price (5% reduction for declining markets)
• Minimum score of 575
• Fixed Rates and ARMs
• Interest Only is available
• Income limitations may apply
• Closing costs can be paid by seller too
• No prepay penalty

What is the Realtor marketing element?

• 6 MONTHS PAID!
• BUY THIS HOME AND I WILL PAY YOUR FIRST 6 PAYMENTS
• 6 MONTH PAID MORTGAGE INCENTIVE
• BUY MY HOME AND I PAY CLOSING COST AND 6 PAYMENTS

FHA Loans

FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.

• Low down payments
• Low closing costs
• Easy credit qualifying

Benefits for your buyer·
Your down payment can be as low as 3% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.

FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan. Sellers and investors should be aware that FHA requires 90 days of season ownership of a seller in orders for a buyer to use a FHA loan.

What is the Realtor marketing element?

• FHA can provide 100% Financing when combined with gift, grant or down payment assistance program
• One loan with low fixed rate

  My Community Mortgage

  What is My Community Mortgage?

  • A conforming affordable housing program offering high loan-to-value/combined loan-to-value financing for income-eligible borrowers
  • Government backed mortgage program

  What are the General Guidelines?

  • Loan amounts up to $417,000
  • Up to 100% of the purchase price (5% reduction for declining markets)
  • Minimum score of 575
  • Fixed Rates and ARMs
  • Interest Only is available
  • Income limitations may apply
  • Closing costs can be paid by seller too
  • No prepay penalty
  • Allows “roommate rent” for income qualification

  What is the Realtor marketing element?

  • Automated underwriting = more approvals
  • Government backed loans available
  • Let us pay your closing costs

  Having all the tools to properly sell your property can be critical.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Mortgages That Attract Homebuyers

Good news, bad news time for real estate and the general economy this week.

The bad is, I am afraid, very bad, indeed.

Prices for single-family homes took a nose dive in the first quarter of 2008…down an enormous 14.1 percent from the year before.

Standard & Poor’s/Case Shiller report, according to Reuters, says this is at “a pace five times faster than the last housing recession.”

The chairman of S&P’s index committee tells the wire service, “There are very few silver linings that one can see in the data.”

You think?

And now, says the New York Times, the housing mortgage mess has spilled over into the auto industry in a very big way. Mostly because many people can’t borrow against their mortgage now.

Want proof?

Shares of General Motors Tuesday slid to a 27 year low!

Okay, now some good news…for consumers but maybe not so good for bricks-and-mortar brokers.

The U.S. Justice Department has just reached a deal with the National Association of Realtors in an anti-trust case.

Says the New York Times on its website, “government officials said (the deal) should spur competition among brokers and ultimately bring down hefty sales commissions.”

Told you this may not be such good news for brokers…though it is for consumers and, in particular, for Internet real estate brokers.

Under the terms of this settlement–the case goes back to 2005–Internet brokers will be able to use the multiple listing services that are used by other brokers and which were sometimes denied them.

A judge still must approve all this, of course.

Here comes the good news, bad news thing again—one expert predicts this deal will eventually result in a reduction of sales commissions of as much as 50 percent! Good for consumers, bad for some brokers.

The Times quotes one business professor as saying, “It’s pretty clear that there was an enormous amount of discrimination against brokers who were trying to use innovative business models. There are lots of entrepreneurs who have been looking for a green light in the form of this order to begin offering discounted rates. It has the potential to be a big step forward for consumers.”

Could this be the spark needed to breathe new life into the real estate market? (yes, I know there are really several markets depending upon where you live, but, in general, the real estate market nationwide is not doing all that well!)

I doubt it. Too many other things need fixing, too.

Having said that, anything that means lower rates for home buyers is bound to, over time, help improve the dismal picture we now have, and that has to be good news no matter how you look at it!

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Good News, Bad News: Home Prices Fall Off A Cliff; Big AntiTrust Case May Help Home Buyers

Need an incentive to help move a home?

The answer is PITI Abatment. Do not let the financial jargon scare you. For years production builders have used this incentive to move inventory. Now every seller/investor has the opportunity to participate.

What is PITI Abatement?

• An incentive to the buyer to have the first 6 months of the mortgage paid by the seller/investor.
• PITI Abatement program is a product designed specifically for home-buyers. You can give a 6% Seller Contribution that can be used for Principle, Interest, Taxes and Insurance payments.

What are the General Guidelines?

• Loan amounts up to $417,000
• Up to 100% of the purchase price in some markets
• Minimum score of 575
• Fixed Rates and ARMs
• Interest Only is available
• Income limitations may apply
• Closing costs can be paid by seller too
• No prepay penalty

What is the Realtor or Investor marketing element?

• 6 MONTHS PAID!
• BUY THIS HOME AND I WILL PAY YOUR FIRST 6 PAYMENTS
• 6 MONTH PAID MORTGAGE INCENTIVE
• BUY MY HOME AND I PAY CLOSING COST AND 6 PAYMENTS

In today’s real estate market investors need all the help they can get. With increased inventory in just about every market place, realtors and investors need to use unconventional tools to create benefits for their potential buyers. I have seen cars, furniture, pools, and televisions given away. But those items can be difficult to include in the average investor transaction. Giving away 6 months of payments can create separation from the other sellers in your market place.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Selling a Home???? Make your buyers first 6 months payments!

I recently came across an article that put something so well and so clearly that I really don’t think I could improve upon it. Everyone interested in real estate investing would do well to check it out.

In “Why Do You Still Need an Agent to Sell Your Home?” author Douglas Gantenbein makes an excellent case for the thing I am most passionate about: homeowners getting the power back in their real estate transactions (i.e., selling their own homes).

Written all the way back in 2004, this article cited the then-statistic that “Americans will spend about $1.14 trillion buying 6 million homes this year-both [setting] records.” And of that $1.14 trillion, Gantenbein writes, an enormous chunk would go to realtors. Is this fair?

Here are some highlights from the article:

1. Realtor work doesn’t equate with realtor commission.

   “And what do Americans receive in exchange for that commission, which can total up to $24,000 on a $400,000 home? In many cases, not much. A realtor’s license can be had after as little as 50 or 60 hours of training (the person who cuts your hair probably has 1,000 hours or more).”

2. Realtors seldom work in your best interest.

I was flipping through Freakonomics recently and remembered this little anecdote from one of the authors’ real experience:

“K. wanted to buy a house that was listed at $469,000. He was prepared to offer $450,000 but he first called the seller’s agent and asked her to name the lowest price that she thought the homeowner might accept. The agent promptly scolded K. ‘You ought to be ashamed of yourself,’ she said. ‘That is clearly a violation of real-estate ethics.’

K. apologized. The conversation turned to other, more mundane things. After ten minutes, as the conversation was ending, the agent told K., ‘Let me say one last thing. My client is willing to sell the house for a lot less than you think.’

Based on this conversation, K. then offered $425,000 for the house instead of the $450,000 he had planned to offer. In the end, the seller accepted $430,000. Thanks to his own agent’s intervention, the seller lost at least $20,000. The agent, meanwhile, only lost $300-a small price to pay to ensure that she would quickly and easily lock up the sale, which netted her a commission of $6,450.

So a big part of the real-estate agent’s job, it would seem, is to persuade the homeowner to sell for less than he would like while at the same time letting the homeowner know that a house can be bought for less than its listing price.”

3. The NAR is an exclusive group that doesn’t want to give up dominance.

“Overall, the NAR has ensured that nearly all residential real-estate transactions still are conducted between two agents in cahoots. And they’re largely responsible for keeping commissions close to that 6 percent level when any normal law of competition would suggest they’d be lower.”

4. Therefore, FSBO has a lot to offer, in my opinion.

Using a quality FSBO company like Buy Owner puts the power back in the hands of the investor. It’s definitely a smart decision for savvy investors.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Why You Don’t Need a Realtor

If you’re selling your home by owner, you’re probably very familiar with all the reasons for doing so: no commissions, more control, less stress. Obviously the real bottom line is simple: more money for you.

So let’s just assume that when you’re selling by owner, it means that you want to make/save as much money as possible. Following that line of thought, you might not see any reason for using a FSBO company, one of those help-you-sell types that you can purchase marketing through. You might be perfectly content to stick a sign in the front yard and wait.

Well, in today’s buyers’ market, wait you will.

Here’s my solution: use a FSBO company.

You may be thinking, doesn’t this contradict the whole point of selling on your own? If I use a company, shouldn’t I just use a realtor? Well, no. FSBO companies counteract the primary problem of selling by yourself: they bring you buyers and create professional advertising.

If you decide tomorrow to sell your house and you buy a red and white sign at the hardware store and put it in the yard, only the people who drive by your home will know it’s for sale. This is a start, and it’s good, but you want to cast your net a little wider. You want to reach as many people as possible so you can find THE buyer—the one who’s going to pay you what your home is worth, in the shortest amount of time.

FSBO companies usually offer advertisements with their websites, magazines or other marketing tools. They build their business around reaching consumers and bringing them to your property. This is very, very important.

Plus, you’re still saving thousands of dollars: compared to a 6% commission, a one-time fee for advertising/buyer-gathering is always a better deal! Personally, I’ve been very satisfied with Buy Owner, after using several other companies. BO is the only company that left me with no complaints. Do some research and determine which company’s best for you. (Ask me about any one of them! Odds are, I know about it, if I haven’t used it myself!)

Selling a property is important—so important, in fact, that you want to do it right. Consider a FSBO company. You’ll be glad you did.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Using a Homes For Sale By Owner (FSBO) Company

Your favorite farmer’s market. The blanket you bought at the craft show. The discount you found by going through the company directly. What do these things have in common? No middle men.

Today, middle men are everywhere. Some are good: the grocery store, the post office, the restaurant. But some are purely optional; in fact, I’d say they’re largely unnecessary. Consider these two examples of industries that make their money on connecting:

Middle Man #1: Travel Agent
I don’t know about you, but I have the ability to research online, call hotels, ask around for discounts, etc. Last month, I visited a friend on the East Coast and booked my plane ticket and accommodations through an online provider—I think it was Travelocity or Expedia. This allowed me to save the most money, at the most benefit to myself. Imagine if I’d used a travel agent: less control, more money lost.

Middle Man #2: Staffing Agency
How did you find your current job? Did you go through a head-hunting firm? You might’ve, and that’s fine. But you also might’ve been like thousands of other job-hunters who didn’t want to get paid less than the company could afford by inserting a middle man. You might’ve looked online at places like Careerbuilder and Monster and Craigslist and applied, interviewed and landed your position.

What each of these agencies has in common with a real estate agent is this: they are middle men. They find hotels, and they find travelers; they find jobs, and they find job-seekers. Or, in real estate, they find sellers, and they find buyers (imagine if the travel agency or the staffing firm similarly took a solid 6% of the sale, too!!). In return, they take a BIG chunk of the deal home with them. No tangible product provided—just their “connections.”

For a long time, real estate companies have been telling us that we need them, that we have to have a real estate agent in order to find the home or to sell the home. In reality though, all you need is a buyer and a seller. An agent is ONE way to find a buyer, not the only way and, in my opinion, certainly not the best. Using an agent means less money for you, and that’s never a good alternative.

If I take the analogy one step further, it’s a perfect illustration of why companies like Buy Owner are so helpful. They’re the Travelocity or the Careerbuilder of real estate. Much less cost and much more control for you.

Before hiring a realtor to list your home, consider trying your hand at finding buyers on your own, eliminating the middle man. You are fully qualified.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Real Estate Agent = Middle Man