Listing your property with a Realtor

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Our Fix and Flip Academy will go through how to source a good Realtor, this will be an important point. But once you have found one, how does the process work?

First step will be a Listing Agreement. A realtor listing agreement is a written, binding legal document between you as the seller of your property and a real estate agent who will help handle the sale of your home and earn a commission from it once the sale is made.

It is up to you to decide how long you would like to list your home with that particular realtor. You can negotiate with the realtor in terms of duration and payment of commissions. I have no issue paying Realtors commission for sales, if they are good! I never sign a listing agreement for more than 90 days. Often they will attempt to lock you in for 6-9 months! I believe it often can takes some time, particularly in the mid-west US to build interest, the market is nothing like Australia or NZ where you may get 100 people show up to an open house. But 90 days gives you enough time to feel comfortable that the agent is doing what they can, but gives you a chance to change agents if needed without struggling for 6 months or more and yet gives the agent time to build some momentum on the property.

Commission
The realtor earns their commission through marketing your home in a range of ways and handling a lot of the important paperwork involved.
The average commission on a home is 6% of the final closing price of the property. However, you might be able to go lower if the house is in good repair and in high demand due to its location and desirability as a property. Again, I have no issues paying for service, but you may be able to get a discount.

Protection Clauses
It is important to note that in some cases you might still have to pay commission even if the listing has already expired. If the person who eventually buys is someone that the realtor brought to the table, the clause will usually state that the commission is payable for up to 90 days after the contract has expired. This helps protect realtors from having all their hard work taken advantage of by unscrupulous sellers and buyers trying to cut them out of the deal and save money.

Exclusion Clauses
If you have been in discussions with other interested parties prior to the contract with the realtor, such as family members, colleagues or other investors you know who might want to buy your house, you can include the names of these people in order to show you are bringing in the sale and therefore there is no commission due to the realtor. Sometimes if you can contact the neighbours, it’s surprising how many homes are sold to people who already live in the street!

Early Cancellation of Contracts
Your contract with the realtor can be cancelled early for a number of reasons. If you don’t feel the realtor is doing enough to market your property effectively, you are legally entitled to ask for an early cancellation. Be clear about the responsibilities and obligations of each party, and see if you can get them to be more proactive on your behalf. If they are not meeting the terms of the agreement, ask to cancel.

It might be difficult to cancel prior to the end of a 90-day contract as the Realtor might claim (legitimately) that he has not been given sufficient time to sell. But if you need to get out of a 6 or 9 month contract, if careful, it can be done.

If they make a fuss, remind them that word-of-mouth referrals are important, and they certainly would not want to hold you to a contract when you are so unhappy with their services.

Linz’s Friday Musings – July 19th 2019

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G’day all

And it’s a Happy Friday from me again this week! Been a massive week so far, hope you all have had a great week too! Started for me in a conference, one of my favourite, on mindset and personal growth, all hinged around growth and success.

Strategy and skills are all important but the third leg of that stool (so you don’t keel over!) is mindset. It’s as important or possibly more important to work on that as the other.

Changing tack slightly, today I want to discuss strategy in a way. I was reading recently about the widening gap in Australia between the wealthy and the poor – the “have’s” and the “have not’s” essentially. Now we see this in a large way in the US, it’s one of the driving forces we need to be careful of when investing in the US, but we haven’t, until relatively recently, seen such a gap in Australia per se. This is not just a problem for Australia or the US, it’s happening all over the world now unfortunately.

Some stats, from the Australia Bureau of Statistics (ABS):

  • Australia’s richest 10% now hold more than 50% of the nation’s wealth (a share that is also increasing quickly)
  • The top 1% hold 16.2% of the nation’s wealth
  • The lowest 40% own just 3% of the wealth while the lowest 20%, less than 1%

To give you an idea of where we sit, the median (read, typical) net worth of all Aussie households was $558,900. The average net worth of the top 20% of households is $3.2 million. Bear in mind this is also 2018 statistics, so could be more now.

Hmm…note to self, need to get this stat for the US too..

Now, I guess to some degree, although we may not have known the actual figures, this data belongs in the “thank you Captain Obvious” bucket. But then again, we also want to be extremely careful of creating “poverty traps”. We certainly don’t want that. I have committed myself to helping Aussies invest in real estate to help avoid this, but it’s probably me throwing a glass of water into the ocean to stop receding water levels…

Looking at this we may ask, why is this happening. When I ask this at the events I run, the resounding response is that the rich buy/have real estate. While this is true to a degree, I am not sure they the rich got wealthy through simply owning real estate. I think it’s more just a great vehicle to park wealth and allow that wealth to grow more.

Property certainly is a brilliant way to get wealthy too, don’t get me wrong… but my point though, is that a lot of people look at the “wealthy” and see them buying real estate and thinking, that is what you must do to get wealthy. Reality is, that to “get” wealthy you cannot just park money in real estate, you have to be IN it, creating deals, making stuff happen, be ACTIVE in the real estate game.

This is how anyone can make money in real estate, but unlike the already wealthy, we cannot sit back idly sipping our cognac and watching the money grow… we need to be in the trenches, be active and make deals work. There is no room for free-riders here on the way to wealth, you need to make things happen!

Happy Investing all! And have a great weekend!!

Cheers

Lindsay

Linz’s Friday Musings – July 12th 2019

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G’day all

Today I am writing this in a break from a Real Estate Conference I am attending in Brisbane (shout out to all the Brisbane-ites! What weather you have here!)

I say “Real Estate” loosely because really this is all about mindset, and one of my all-time favourite and most important events of the year (not my first rodeo I will admit – attended this event a few times). This is the Real Estate Millionaire Within event that I would highly recommend to anyone, and
I say important, because without mindset, growth and belief, all the strategy in the world is useless to you. Without the belief you can achieve, the mindset to be able to overcome the difficulty (and oh my, there will be difficulties!) and the growth learn and grow and be flexible in adversity, you will not be able to achieve success, whether it be in business, investments, wealth, or happiness.

It’s the growth and belief that you develop that allows you to firstly recognise opportunities and strategies that you can use. It’s that growth and belief that will allow you to take the strategies you KNOW you can apply and run with them. And then again, when things get tough, it is that growth, belief and mindset that allows you to push through the barriers, get up after the setbacks, and keep moving towards your goals.

If you have read any of my blogs or musings before, one of my favourite sayings – It not knowledge that is power, but the application of that knowledge. Yes, I agree, we all need knowledge. Hell, I’m pretty certain that none of us (myself included) put enough of our time each day aside to learn, read and grow (well, maybe my business coach who reads a minimum of 2 hours every day) but you get the idea. Knowledge is needed, learning is critical, but if you do not have the personal growth to apply that knowledge, if you don’t have the mindset to succeed in the adversity, then it becomes moot. Just another course we bought and placed on the bookshelf; just another book that looks great, but we never open the cover; just another strategy we have been taught that we never implement.

It is growth, mindset and belief that will allow us to take and use the tools we learn and to achieve. And its not something that will necessarily occur overnight, Growth takes time. But sometimes, Mindset and belief can be like a switch! Something will resonate with you, a key that will trigger that inner lock deep in your psyche that suddenly unlocks and all becomes clear…

Find yourself that key, however long your journey takes and suddenly the knowledge becomes vast and available…it was always there, you just couldn’t see it

Happy Investing all! And have a great weekend!!

Cheers

Lindsay

Linz’ Musings – July 5th, 2019

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G’day all

While we are all waking up to a gorgeous Friday morning (at least here in Melbourne ☺ ) The US is coming to a close on their July 4th Celebrations!  Happy July 4th to all our American mates! And Happy Friday to the Aussies!

As the sun rises here, and the US celebrate their Independence Day, the one word that comes to mind is Freedom.  We are blessed to live in this lucky country, and to quote John Williamson in one of my favourite songs of his “Australia is another word for free”

One of the definitions of freedom (apart from the one that says “not being imprisoned LOL) is the ability or right to act, think or speak as we want.  Now, all quips around political correctness aside, we are lucky to have this freedom, and there are certainly many places in the world even in this advanced 21st century, where this is not a given.

To me though, Freedom really means Choices.  The ability to choose what we what to do, where we want to go.  Real freedom is having the option to choose.  People talk about freedom being “not having a job” or use the term “financial freedom” as this holistic, airy fairy term that apparently we are all striving for…but in reality what is the definition of “financial freedom”?  Until we cement this down, we will never achieve it.

If freedom in your life is having the ability to choose; choose if and where you want to work; choose how long you want to work for; choose where you want to go, what you want to do, then is not financial freedom, the ability to choose what you do with your money?

I feel financial freedom really is this – the ability to choose where you spend or what you do with your money; because at the end of the day, really, that is all money is good for – to exchange for goods or services or to gift to others.  It is not some magic pill that makes everything better; not some new age cure for all that ails us; simply the ability to exchange for goods or services we want or use it to help others do the same…

So then financial freedom would, simply put, be the ability to choose the goods and services we want, when we want or to gift to others to do the same…right?  So, what choices do you want to be able to make? What freedoms do you want?  Travel, healthcare, ability to spend time with the family?  Give to charities or create your own? 

My wife and I are about to book a farm stay on Airbnb in the Blue Mountains to get the grandkids and family all together for Christmas in a large 5-bedroom home.  This will cost in excess of $5000 for 4 nights, but this is the choices we want to be able to make, the reason we work hard and ensure our investments are working hard for us – what’s your reasons, your choices?

Anyway, have a great Friday everyone, I’m going back to choosing to film the gorgeous sunrise here in Melbourne this morning ☺

Happy Investing all! And have a great weekend!!

Linz’ Musings – June 28th, 2019

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G’day all

Happy Friday! The only way is up right!? With winter solstice behind us, days start getting longer now… although it is going to take some time to recognise this. The US are now in their summer break, schools are on holidays and people are enjoying the warmer weather there. Be a nice time to visit if anyone is thinking of planning a trip! Oh, and if so, please let us know, we can help give you a checklist to get a bank account open in your LLC name (if you don’t yet have your US company set up – give us a call to chat!).

Tax time is upon us here in Oz… can be an exciting time or a depressing time, depending on your view point. How have your investments performed this financial year? Are you happy with their effort? One thing I always believe we must ensure that our money works HARD for us. We work hard for it, and it is only right that we expect the same in return. Think of your money or investments as employees – they need to give you good outcomes, good return or you need to change something.

This is a good time to sit back and take stock of where your investments are going and ensure they are moving you forward. This give then the next few months before the end of the year, to make some changes and put steps in place if needed to change direction

One thing a mentor of mine went through recently is when reviewing parts of your life to your goals and how they are performing, whether it be investments, business, job, or life, knowing when to change (Innovate), tweak (Optimize) or grow (Scale)…

For instance: If your investments are performing less that 20% of your goal, you should innovate – essentially look to change tack complete and start again.

If on the other hand, the performance is within that 20% range, then optimize – tweak a few areas just trying to increase returns.

And lastly of course, if the performance is exceeding goals, then scale – grow the investments!

This can give good clarity on how to ensure your investments are working has hard for you as you do for them! Tax time can be very exciting 🙂

Have a great weekend all and Happy Investing!!

Cheers,

Lindsay