Wednesday, August 23, 2017

What Is a Real Estate Agent’s Commission?

It’s your money. Why not try to keep as much of it as you can?

Where does 6% of your home sale go? A lot of different places …
Working with a real estate agent is par for the course when buying or selling a home, so it’s good to know how they get paid for their real estate commission, what specific duties they should or shouldn’t be involved in, and their role in helping you into the home and neighborhood that best suits your lifestyle.
Typically, a real estate agent is paid on commission based on a home’s sale price. (In certain cases, their commission is a flat fee.) When a commission is based on a percentage, the agents get 6%— split between the buyer’s agent and the seller’s agent—and always paid by the seller. If you’re using the same agent to trade up or downsize, they’ll receive the 3% commission twice, but on differing values.

Real estate agents work for brokers, and agents and brokers are both licensed by the state in which they work. The broker acts as an umbrella company and the agent is essentially a salesperson working for that company. Although a real estate agent can’t work independently from a broker and can’t be paid directly by a buyer or seller, a broker doesn’t need to work with an agent. However, a broker is the one who receives the agent’s commission and splits it between all agents involved in the transaction.
Real Estate Agent’s Commission

Because of the level of involvement, the 6% commission is typically split four ways: The seller’s agent, the seller’s broker, the buyer’s agent, and the buyer’s broker all get a piece of the pie. The broker and agent have separate agreements dictating what percentage of the commission each receives, and therefore your specific agent’s commission may and will most likely be less than the full 3% on the buyer or seller’s side. However, if the broker and agent helped you sell and buy, the brokerage will receive the full 6% and split it however they deem appropriate.
Because your agent can get you in or out of a house or neighborhood, they’re the source of truth when it comes to the best practices in real estate transactions and should be trusted. Make sure you’re working with an agent that has your specific needs and wants in mind before jumping into the real estate market.

Tuesday, August 22, 2017

Helpful Property Management Tips and Strategies

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Managing rental properties can be a tedious process sometimes landing you into legal issues. As a property manager or owner, you should think about preventing problems even before they occur to have an easier time maintaining order. Apart from making your tenants feel worthy, you should also find ways of making the management process easy for you especially when handling large properties or multiple properties. When you are organized in how you handle your property, it becomes easier to keep everything in check and a few tips can help you put in the best measures into the management process.

Tip 1 - Get a professional property manager

If you are a property owner with little knowledge of how to go about management, you should consider getting a professional property manager to ease out the process for you. Professional managers with some knowledge and experience in the real estate industry will know exactly how to go about the process and find organizational solutions to ease everything out. When there is a manager in place, you will feel more at peace and have fewer issues to deal with.

Tip 2 - Embrace technology

There are very effective real estate management solutions available thanks to technological advancements. Real estate management software is among the best solutions you can find to make the process easy and organized. Such a solution can improve communications and payments and data maintenance for the property. With the right system you will have an easy time collecting, returning and holding security deposits, as well as inspecting and documenting rental unit conditions before move-outs. There is just so much you can do with real estate management software to streamline processes so look for the best solution.

Property Management Tips - Rencana TTDI

Tip 3 - Handle tenants appropriately

First of all you should consider screening tenants before allowing them into your property. It is a simple way of keeping troublesome characters off your property. It is also important that you put tenant landlord agreement in writing to keep things clear and ensure that you treat all tenants equally and without any discrimination. Discriminating prospective tenants based on sex, race, origin, disability or even familial status can land you into trouble. It is also important to respect their personal privacy even if the property is yours by notifying them prior to entering their rental units. Handling tenants appropriately will save you from a lot of trouble especially legally.

Tip 4 - Keep the property in top shape

Regular inspections are very important so you can make any improvements and changes where need be. Recklessness on your part leading to safety and security issues can lead to hefty losses in terms of compensations. You should therefore make a point of making prompt repairs and consider having a security system in place to give your tenants the sense of security they deserve as well as ensure that their safety is not compromised in any way.

Tip 5 - Oversee managers

They should be competent enough to keep your property in check. It is therefore important that as a landlord you choose and supervise property managers. Background checks and clearly spelling out their duties will prevent issues cropping out later.

Thursday, August 17, 2017

Malaysia’s property sector stable in H1 2017, survey finds

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Confidence in the Malaysian property sector remained stable in the first half of 2017, with 36 per cent of respondents expressing overall satisfaction with market conditions during the period, according to PropertyGuru Malaysia’s Consumer Sentiment Survey.

The survey also found that another 24 per cent of respondents expressed neutral views, with negative perceptions declining to 39 per cent from a high of 53 per cent in the first quarter of 2015.

The sentiment was further supported by stable price perception for all property types in Malaysia, PropertyGuru said in a statement today.

“The key factor cited by consumers for overall satisfaction was the gradual but stable appreciation of property prices, particularly for landed residential properties in the key urban epicentres of Kuala Lumpur, Penang and Johor.

Malaysia’s property - Rencana TTDI
Malaysia’s property

“This is a marked contrast to the price hikes of previous years where flipping activity by speculators contributed to market over-heating and over-supply for certain property classes,” it said.

PropertyGuru Malaysia Country Manager, Sheldon Fernandez, said currently, the property market primarily consists of owner-occupiers or longer-term investors, with landed properties purchased largely by families or newly-weds using joint income affordability, providing the momentum for sales and purchase transactions.

“Houses are being bought further away from the city centre and this has emerged as a trend for 2016 and 2017. These factors are driving the development of a more stable property market where price appreciation may be smaller compared to recent years, but is also more stable and sustainable,” he said.

However, given rising living cost, a weaker ringgit, low oil prices and other factors, Sheldon said the real estate sector could still see slow growth in the second half of 2017.

On the impact of possible elections in 2017, he said Malaysians generally tended to adopt a wait and watch approach and transactions usually tapered off before the elections.

Monday, July 31, 2017

Property market to remain flat over next 6-9 months

The Malaysian property market is expected to remain flat in the next six to nine months due to the uncertain outlook in demand and slow uptake in new launches.
Prem Kumar, who is executive director of property consultant and real estate solution provider Jones Lang Wootton (JLW), said the number of property transactions was currently on the decline.
“This is given the current overbuilding in property development, which leaves them unsellable because they do not cater to Malaysians who fall under the B40 income level category,” he said on the sidelines of PropertyGuru Asia’s Property Awards (Malaysia) 2017 here today.
He added that developers were currently focusing too much on high-end properties, leading to the neglect of the B40 segment.
“These properties will then no longer generate income and will become a liability for developers because of unsold units,” he said.
The B40 segment refers to the bottom 40% of households with monthly incomes of below RM3,900.
Prem said the government should address the matter by ensuring a pricing range that catered to more buyers, particularly those below their mid-40s. This could be done with assistance from the developers, he added.

“From the developers’ perspective, so-called affordable housing is RM400,000 to RM500,000. It is very clear that this is beyond what most people can afford.
“At the moment, Malaysia has a very loose policy. Some say RM150,000 is considered affordable, some say RM350,000 is affordable while others say RM400,000.
“So we don’t know the actual figure, and this is because the government is not acknowledging the actual situation.
“That is a major issue,” he said.
When asked on the foreign buyers market in Malaysia, Prem said it would remain intact moving forward as foreigners still considered Malaysia a stable country.
“The hiccoughs are there, but when we think about it, all countries have their own political hiccoughs. From the economic perspective, we are still very stable.
“Every country has political issues. It’s just how we manage the issues.”

Sunday, July 30, 2017

Real estate booms in China’s small cities

Luxury lakeside homes and high-rise condominiums are coming up fast in China’s sleepy inland town of Bengbu, a clear sign that a home-buying frenzy sweeping across the country’s major metropolises and provincial capitals have reached even its smaller cities.
The increase in demand is welcome news for smaller cities that have a massive overhang of unsold houses left from the last real estate downturn three years ago. However, the surge in construction threatens to outpace or match the increased demand for housing, leaving housing inventories untouched.
That will be a worry for China’s policymakers, who want to keep the real estate market stable ahead of a once-every-five-years Communist Party congress in the autumn that will see a reshuffle of senior leaders.
The property market in Bengbu, once a fishing village on the banks of the Huai River and Lake Longzi, has been among the top three fastest-growing in China’s 70 main cities in recent months although the local economy is soft – the region’s main glass-making industry has been hit by the general growth slowdown.
Property analysts say property demand in such smaller cities has surged because local governments offer cheap credit and impose next to no restrictions, unlike in the bigger cities, where defenses are in place to fend off speculation and prevent the formation of property bubbles.
Real estate in tier-3 and tier-4 cities, ranked below the major metropolises and the provincial capitals, is where the growth is now, analysts say, but the frenzied construction means the stock of unsold homes has remained stubbornly high.
Nearly 50 million square meters of real estate, or about 550,000 homes, were sold in 27 tier-3 cities in January-May this year, which should have reduced inventories by 45 percent, according to Reuters calculations based on a private estimate of inventories in China’s main small cities.
In reality, inventories only dropped 7.1 percent to 102 million sq m, equivalent to 1.1 million homes, data by Shanghai-based E-house China R&D Institute showed, because of new construction.
Prices for new homes in Bengbu surged 3.4 percent on-month in May, the highest among all 70 major cities, data from the Statistics Bureau showed. Bengbu ranked second-highest in April and third-highest in June.
“We think the market will continue to be good even though we don’t expect a drastic rise in prices anymore,” said a manager surnamed Huang at Bengbu Jinhui Real Estate, a private developer that has actively bought land rights in Bengbu.
A unit of Kingyard Real Estate, the firm successfully bid 1.39 billion yuan ($205.4 million) for a nearly 12,000 sq m (3 acres) parcel of land in Bengbu in May, more than double the starting price, where it plans to build residential housing.

Bengbu’s glut

In Bengbu, housing inventories hit a high of 4.84 million sq m in January 2016, which at the time would have taken more than 40 months to clear.
But despite sales jumping almost 70 percent to about 1.47 million sq m in the first half, the excess stock only decreased about 4 percent to 4.39 million sq m as of May, House's latest estimates showed, due to new supplies entering the market.
Developers like Rencana TTDI obtained pre-sale permits to sell 1.12 million sq m of new projects in the first half, with permits in June up more than 400 percent from a year earlier, according to Reuters calculations based on Bengbu housing bureau data.
The propaganda office of the Bengbu government declined to comment, and phone calls to the city’s housing bureau went unanswered.
There are already signs demand is slowing in Bengbu.
Property prices have jumped almost 50 percent since the start of the year for some new units to around 7,500 yuan ($1,108) per sq m, according to local agents.
While that is about one-tenth of prices in big cities like Beijing and Shanghai, the price is high for a city like Bengbu.
At those prices, a two-bedroom apartment of 90 sq m would cost about 675,000 yuan ($99,956) before tax, equivalent to 12 years of average pay in the city.
Many recent buyers are locals originally from Bengbu and its neighboring counties but have gone to more affluent cities for work, said Shen Zhichao, sales manager for Amber New World, a housing project under Hefei Urban Construction.
Having seen the rapid price gains in bigger cities, they are rushing back to secure apartments before even those get too exorbitant.
“I feel too much potential demand has already been front-loaded to the first half of the year,” Shen said.
Bengbu’s government capped prices of new projects at 5,800 yuan ($859.45) per sq m on May 15, as the city became the fastest-growing market in China that month.
The new rule does not affect housing projects that have been granted a selling permit. Some developers have also sought to offer cheaper units on lower floors so the average selling price for the entire project doesn’t exceed the cap.

Data ‘myths’

The hidden danger, analysts say, is that real estate inventories are often higher than indicated by official figures.
Official inventory data only counts completed homes, while private estimates include homes that are being built but not completed yet.
Official data showed nationwide inventories stood at 646 million sq m as of end-June. Private estimates, which tend to lag official data, can be several times bigger than that.

Wednesday, July 26, 2017

Chinese, Japanese firms face off in bid for Bandar Malaysia project

The multibillion-dollar Bandar Malaysia property development project is finding no shortage of interest, with a stiff contest shaping up between a clutch of China's state-owned entities and two Japanese giants, Daiwa House Industry Group and Mitsui Fudosan.
The Malaysian government has received nine pitches on how to develop the 197ha one-time air force base on the southern fringes of the capital Kuala Lumpur, according to senior government sources.
The seven Chinese state-controlled entities that have submitted proposals to become master developer for Bandar Malaysia are China State Construction Engineering, China Communications Construction Company (CCCC), China Gezhouba Group, Greentown Overseas, China Resources, China Vanke and Australia's John Holland, which is wholly owned by CCCC.
The bids received feature development plans valued between US$7 billion (S$9.5 billion) and US$10.5 billion, according to Malaysian government officials.
They also said several of the Chinese bidders have indicated that they plan to engage renowned Spanish architect Santiago Calatrava to design the integrated township.
Bandar Malaysia Project

The Bandar Malaysia project, which is owned by state fund 1Malaysia Development Berhad (1MDB), had originally been awarded to China Railway Engineering Corp (CREC) and its Malaysian partner, Iskandar Waterfront Holdings (IWH), in December 2015 in a RM7.4 billion (S$2.4 billion) deal aimed at raising funds to tackle 1MDB's massive debt burden.
However, the joint venture's alleged failure to meet key conditions under the transaction - which, among other things, included securing the necessary approvals from the Chinese government and providing proof that the joint venture had lined up the necessary funding - prompted the Malaysian government to unilaterally cancel the contract in May.
The joint venture had disputed the termination, and called it "unacceptable".
The termination of the CREC-IWH contract was particularly controversial because it came at a time when several politically connected Malaysian business groups were privately pushing Putrajaya to revise the Bandar Malaysia project to introduce new players, such as China's privately owned entertainment and real estate giant Dalian Wanda Group.
Senior Malaysian government officials acknowledge that there were preliminary talks with Wanda, but Putrajaya later decided to widen its options by calling for international proposals on how to proceed with the development.
Bandar Malaysia's request for proposal exercise was open only to Fortune 500 companies with combined revenue of RM50 billion or more in the past three years.
The strong interest in the project is largely because it will house the terminus for the multibillion- dollar high-speed rail project that will connect Kuala Lumpur with Singapore, another huge undertaking that could cost more than RM50 billion.
The Japanese and Chinese are betting that the successful bidder in the real estate project would stand a better chance of securing a major role in the KL-Singapore high-speed rail project
Over the past year, Beijing and Tokyo have actively lobbied government officials in both Malaysia and Singapore to promote the interests of their engineering and construction concerns.
The Chinese government and its companies have been the most aggressive, said Malaysian government officials and financial consultants involved in the township and rail projects.
The Chinese have already signed a RM55 billion contract to build the East Coast Rail Line, which is a 620km electrified network that runs all the way from Tumpat, located near the north-eastern border with Thailand, down the coast to Kuantan Port, before cutting through the mountainous central region of Peninsular Malaysia to Port Klang.
China has also finalised a separate deal with neighbouring Thailand to build a high-speed rail line that will connect Bangkok with Nong Khai, on the border with Laos.
The rail project, valued at US$5.2 billion, is part of Beijing's One Belt, One Road global infrastructure development push.