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November 07 2015


Who Really Needs a Real Estate Option Contract?

new-homeowners-9194d58f9d22e410VgnVCM100000d7c1a8c0____A real estate purchase option is a contract on a specific piece of real estate that allows the buyer the exclusive right to purchase the property.

Traditionally, when sellers put their home on the market, they can consider many buyers and sell to whomever they want. But when an option contract is introduced to the mix, that all changes -- the buyer gets the exclusive right to buy the property but is not obligated to do so. Here's how real estate option contracts work.

The basics of option contracts

A real estate purchase option is a contract on a specific piece of real estate that allows the buyer the exclusive right to purchase the property.

Once a buyer has an option to buy a property, the seller cannot sell the property to anyone else. The buyer pays for the option to make this real estate purchase. The additional reading option usually includes a predetermined purchase price and is valid for a specified term, such as six months to a year. However, the buyer does not have to buy the property, whereas the seller is obligated to sell to the buyer within the terms of the contract.

Options have to be bought at an agreed-upon price. If the buyer doesn't buy within the time frame, the seller keeps the money used to buy the option.

Advantages for buyer

A real estate purchase option can be great for buyers. For example, if you want to buy a lot of land to build a new home, a purchase option can be used to keep the lot available for a certain amount of time, until you have funding.

The landowner cannot sell the plot to anybody else during the term of the option. At the end of the term, the landowner must sell the land at the price agreed upon, even if property values have risen in the interim. However, some option contracts may include terms that put a cap on the property's price, or include other factors to determine the final price.

Advantages for investor

Investors can use real estate options to secure high-profit investments at relatively low risk. Here's an example: An investor notes that a specific plot of land is in a prime location for further development, such as subdivisions or a shopping plaza. Instead of purchasing the land outright and then selling it to developers, he purchases exclusive rights to the land through an option.

With the option in place, he approaches investors and developers, offering them the land at a much higher price than his locked-in option purchase price. Once his higher offer is accepted, he either sells the option itself for the purchase price or purchases the land and then flips it to the developer, pocketing the difference.

Lease options and their risks

Tenants interested in buying a rental property can use a lease option, also known as a rent-to-own arrangement. A lease option can be tricky and technical, so it's in your best interest to get a lawyer to go over it.

A lease option allows the renter to purchase the property after a predetermined rental period, which the buyer pays to obtain. The lease option could determine a purchase price or state the property will sell at market value. A portion of the rental payments -- which will likely increase due to the addition of a new premium -- can be applied to the future purchase. All of these terms will be in the lease option contract.

You will lose money on a lease option if you don't buy the property. The owner can pocket the additional rent premium and rent option costs if you don't buy. For this reason, you should carefully review and weigh your options. In addition to a lawyer, meet with a financial planner to make sure you will be able to buy the property before the term ends.

Updated from an earlier version by Dini Harris

The post Who Really Needs a Real Estate Option Contract? appeared first on Real Estate News click to read and Advice - realtor.com.

October 16 2015


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September 24 2015


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September 20 2015


How to Sell Your House to Chinese Buyers

(Credit: Courtesy Dolly Lenz)

The Chinese make up the fastest-growing market of foreign buyers of U.S. homes, according to Juwai.com, a Chinese website for global luxury real estate.

"We're huge believers in China," says Mauricio Umansky, CEO of TheAgencyRE.com, a Los Angeles real estate company that caters to foreign buyers. "Anybody not reaching out to the Chinese is losing out on an amazing opportunity."

Umansky tells ABC News that in the Los Angeles area alone he closed 40 sales with Chinese buyers in the past year, up from 15 the year before.

See slideshow of celebrity homes.

The Chinese, he says, prefer brand new (or like-new) amenity-rich residences in a short list of U.S. cities that include New York, Los Angeles and Philadelphia. Maybe you could sell an old fixer-upper with "charm" to a European buyer - the Norma Desmond estate, for example, says Umansky, but not to a Chinese buyer.

If your home is new, located in one of these top 10 cities (see the full list below), or if it's near a high-ranked college or university, that's a plus.

Umansky says his Chinese customers also understand brands and the value of names such as Ritz Carlton, Beverly Hills and the University of Southern California. He says he's had great success selling residences in a new Ritz Carlton development right next door to USC.

But even if your home is not so favorably situated, say experts, there are still things you can do to make it attractive to a Chinese buyer.

Read about the 10 priciest streets on the planet.

Dolly Lenz, founder of Dolly Lenz Real Estate in New York, has spent 25 years traveling to Asia to build up a Chinese clientele.

"The Chinese are the most knowledgeable and intuitive buyers I have," she tells ABC News. "You can't sell to them, because they do their homework and come to you with a knowledge base that will amaze you. You have to gain their trust by adding value, meaning you have to tell them what they don't already know. The more you botanique at bartley price can tell them in terms of financial issues, tax issues, the more they will respect you."

Lenz says she has a number of properties in Manhattan that have garnered favor with Chinese clients, including a four-bedroom penthouse in what used to be the Plaza Hotel (now a condominium residence) with views of Central Park.

"The Chinese are not short-term, get-rich-quick investors," she says. "They're strategic buyers, looking for long-term plays in properties that represent a store of value for their money."

Data compiled by the National Association of Realtors shows that Chinese purchasers in recent years have bought an even mix of detached single-family and multifamily houses, with a median price of $425,000. About 69 percent of purchases have been all-cash, while 31 percent have been mortgage-financed.

Brendan DeSimone, a real estate expert with Zillow, has sold properties in New York City and the San Francisco Bay Area to Chinese buyers. He offers the following tips:

Pay attention to lucky and unlucky numbers. In Chinese culture, 4s signify death. When quoting a date or price, stay away from them, but 8s are lucky and desirable. So, don't schedule an open house for Jan. 4. Schedule it on Jan. 8.

Similarly, work 8s into your asking price. Don't list your home for $7,900,000. List it for $8,000,000.

Read how a home listing that mentioned a Rolls Royce drew super-wealthy buyers.

Consider hiring a feng shui consultant: A home whose furnishings and grounds have been arranged according feng shui principles becomes more salable.

Finally, treat the Chinese buyer with respect. If http://www.nytimes.com/pages/realestate/index.html an initial offer is laughably low, don't laugh.

"Don't be insulted, don't blow it off," says DeSimone. Respond respectfully and stick with it. Negotiations with a Chinese client, he says, may take longer than with other buyers. Be courteous, honest and patient, and you may get your asking price.

Here's Juwai.com's list of the top to U.S. cities for Chinese buyers:

1. New York

2. Los Angeles

3. Philadelphia

4. Detroit

5. Houston

6. Chicago

7. Las Vegas

8. Atlanta

9. San Diego

10. Memphis, Tenn.

September 05 2015


Important considerations for buying a condominium unit part three - Washington DC Literacy

This will be the final installment in the series titled; Important considerations for buying a condominium unit. Parts one and two discussed what a condominium is versus a town house or a detached home. Part two discussed the pitfalls of buying into a condominium community, and it introduced residential assessments. Part three will discuss the role and importance of a communitys Board of Directors, as well what happens when owners in a condominium community cant agree on the future of the complex.

Some of you may not remember this, but years ago around the time of the market crash, fist fights broke out here at our annual meetings and the police were called in, our Treasurer jokingly recalled at our most recent annual meeting when discussing the budget projections for the upcoming year. Within any condominium community, the Board of Directors is charged with maintaining the overall state of the complex. This includes managing the communitys finances, anticipating future costs, and overseeing changes and repairs in the best interests of the entire community. The current Board of Directors at my complex is an extremely hardworking group of volunteers which had a lot of adversity to overcome coming out of the bursting of the 2007-2009 housing bubble.

In the past, previous Boards hadnt steadily raised the condominium fee nor budgeted for maintenance and repairs to our older complex. This lack of foresight eventually caught up to everyone living here now (the residential assessments described in part two). Prior to my moving into my community, it was allegedly on the verge of bankruptcy, hence once again the necessity of doing your homework; hunting down the right people (the Board of Directors or current owners), and asking the right questions before closing on the property.

Why would fist fights break out at an annual meeting to discuss a condominium communitys business? A simple answer is that when money is involved, peoples emotions get involved as well. Going to back to part two of this series, in order maintain the community, part of the boards responsibility is to raise the money for common projects which may require each owner to pay out thousands of dollars at a time, something very scary and frustrating if not budgeted for. Whats even more frustrating is when owners have to pick up the slack for owners who cant or wont pay.

In life its often difficult to get a large group of people to agree on anything, especially when there are varying financial situations, backgrounds and goals. My condominium community is on the verge of a potential dispute which is going to affect everyone one way or the other.

At some point the idea was conceived to Redevelop, or in essence sell the entire property to a developer, giving all unit owners the option to buy into the new complex or leave altogether. Its a complex proposition involving several factors:

Whether or not unit owners will be able to at least break even based upon their purchase price.

Whether or not unit owners will be able to afford one of the newer units.

The logistics of owners who want to stay in the new community transition into the new units.

For those of us who want to redevelop, its a potential way out from all of the repairs that are hitting our pocket books every couple of years. As you may have expected, there is an opposition party who wants to block this effort and which is distrustful of the Board of Directors. Some dont like how the whole process has been handled, while others just dont want to move. Either way, an 80% vote by all unit owners will be necessary for the project to go forward. In the end, someone is going to be unhappy.

In closing, buying any piece of real estate is a big deal especially if its your first time buying. Each property purchase presents its own potential challenges and pitfalls, many of which can be avoided if the right questions are asked. Likewise, buying into a condominium community presents its own sets of potential challenges and its important to do ones due diligence before buying into one.

July 14 2015


Helicopter viewings, 'lifestyle films': Outlandish luxury real estate marketing may now be the norm

Rayni and Branden Williams spent months lining up a director, cast and crew for their "lifestyle film."

The plot line: A husband takes off for a business trip in his Corvette, leaving his wife to invite friends to hang out in their wine room, gym, massage space, movie theater and infinity-edge pool overlooking the city.

But the actors are only a supporting cast to the real star -- the $33-million house at 9133 Oriole Way, a modernist mansion with 12,530 square feet of sun-drenched living space nestled in the hills near neighbors such as Keanu Reeves and Leonardo DiCaprio.

And the Williamses are not movie producers; they're real estate agents. They spent more than $40,000 on the production, just one example of the outlandish lengths today's high-end agents are willing to go to in pursuit of that big commission. For the Oriole house, the Williamses' cut could exceed $1 million.

"Regular marketing doesn't work anymore. We're appealing to a more sophisticated and savvy group of buyers," Rayni Williams said. "We're taking it to a whole other level."

For some agents, that includes aerial home viewings via helicopter, elaborate parties with elite guest lists and hors d'oeuvres whipped up on demand by award-winning chefs.

The high competition among agents reflects the rapid and global rise of extreme wealth. The number of billionaires worldwide is at a record high: 1,826 total, with 290 newcomers, according to Forbes' annual list. Many are foreign; more of them than ever before are under age 40.

They're increasingly likely to buy a property based solely on what they see online, especially if they're from outside the U.S. So upscale homes are often advertised via glossy websites stocked with detailed floor plans, Hollywood-caliber videos and aerial photos taken by drones.

At the Brentwood branch of Sotheby's International Realty, potential buyers can visit luxury Southern California properties without leaving the agent's office, using headsets to view tours crafted with 3-D virtual reality technology. Users can linger in certain rooms and look around as though they're there in person, said Matthew Hood, a Sotheby's agent.

"The whole experience is only going to improve. It's good right now, but it's heading toward great," he said.

Four decades ago, when Joyce Rey started out in real estate selling homes for the likes of Sonny and Cher, the most luxurious mansions in town would go for less than a million dollars. High-end home advertising involved a two-line notice, sans photo, in the classifieds section. Documents were hand-delivered by real estate agents who usually worked alone.

Rey now has five assistants. She and Stacy Gottula, her partner at Coldwell Banker Previews International, Estates Division, regularly deal with billionaires. Together, impeccably coiffed and fashionably dressed, they represent the most expensive home listing in the nation -- the opulent, 25-acre, $195-million Palazzo di Amore in Beverly Hills.

The estate -- with its dozen bedrooms, 23 bathrooms, 27-car garage, vineyard, screening room, bowling alley and ocean views -- is separated from the rest of the city by a quarter-mile of tree-lined driveway, seemingly transplanted from some magical corner of Provence. The palatial interior, aglow under glittering crystal chandeliers, is festooned with grand tapestries and gilded artwork.

Marketing such a property -- where the 13,500 bottles of fine wine kept on site are considered a minor selling point -- requires tact, creativity and no small amount of capital, experts said.

Some agents will call in helicopters if a client wants a panoramic view. Others advise sellers to stock houses with expensive furniture, silverware and art specifically selected to lure buyers. Thousands of dollars go into intricate property renderings.

"We have to be one step ahead of the marketplace," Gottula said. "That's what our clients come to us for."

Top real estate agents move in a tiny community, and image, reputation and connections are everything.

Branden Williams, a former actor, almost exclusively wears designer suits: Prada, Dior, Yves Saint Laurent. He and Rayni own "a really nice estate" in a Beverly Hills neighborhood known as Trousdale Estates, which has been home to Elvis Presley, Frank Sinatra and Jennifer Aniston.

"It helps to have people know that we live in the area we sell in," Rayni said.

Their familiarity with extreme wealth soothes buyers, agents said. But it also allows them to screen out unwanted interest.

Rey and Gottula were given the Palazzo listing because of their previous track record, and because they had worked with its owner, real estate mogul Jeff Greene, on leasing the property to business people and prominent international families. Now, the partners open the house only to those with a private invitation or who have undergone a financial vetting process.

"You get a lot of lookie-loos," Gottula said. "A lot of these clients are very high profile and confidential."

Their fellow http://internationalliving.com/Real-Estate/ agents also use Google and contacts at banks to research potential clients and filter out all but the most moneyed prospects. Rayni Williams' rule of thumb: "If you can't buy it in cash, you can't buy it."

Qualified buyers will often mortgage their properties, although they don't need to, to take advantage of low interest rates and keep their cash liquid, she said.

"To them, it's like borrowing free money," she said. "Just like realtors, these banks will jump for you all day long."

Many clients also try to haggle.

"Most super-wealthy people are frugal and want to figure out the best way to get the best price on the property," Branden Williams said. "They'll write letters, want to talk to sellers, want to get everyone and their mothers involved."

Including their lawyers.

David Kramer of Hilton Hyland, an affiliate of Christie's International Real Estate, said he encountered distinctive hurdles when selling Aaron Spelling's 4.7-acre, $150-million Candyland property to British socialite Petra Ecclestone Stunt in 2011.

Partly to avoid future legal squabbles, Kramer said he decided to test for mold within the 56,500-square-foot main house. He hired microbiologists to set up a forensic lab on the property, and they used 99 samples to trace mold to a single laundry basket.

Kramer also researched specialists who could deal with the mansion's unique roof, generator network and commercial-grade electrical system.

Ultimately, though, the decision to buy a multimillion-dollar house is usually an emotional one, he said.

Kramer said he cinches deals by essentially letting homes speak for themselves. He's thrown poolside picnics for potential clients and their families and showcased ocean views by inviting clients over for champagne at sunset.

"When you're selling a house like this, what they're looking for is lifestyle, not specifics," Kramer said. "We're in the want business, not the need business."

Rayni and Branden Williams do whatever they can to make their properties as desirable as possible, including spending about $300,000 as the listing agents for a glossy eight-bedroom, 15-bath estate on Beverly Hill's posh Hillcrest Drive. The home -- which looks like a good place for Tony Stark to house his Iron Man lab -- includes a candy room, Roberto Cavalli place settings and multiple $5,600 toilets.

The Williamses advertised in luxury publications such as Yacht Magazine. Each month, $50,000 went toward billboards on Sunset Boulevard with the slogan "Dream Big, Live Bigger." Interested and qualified buyers received leather satchels that doubled as airplane carry-ons, which were stuffed with crocodile-bound books describing the house as well as boxes of fine Beverly Hills chocolates and bottles of Cristal.

One night, a potential client flew into Los Angeles for a few hours to see the Hillcrest house. The Williamses spent $5,000 to hire a private chef to prepare lamb chops. But when the client arrived, he said he felt like eating sushi.

The couple scrambled and soon presented platters of fresh sushi prepared by acclaimed chef Nobu Matsuhisa -- and served by models.

The client, 36-year-old Swedish video game programmer Markus Persson, paid $70 million in cash for the property in December.

"The moral of the story is: Money is not an object when we market these homes," Rayni said. "It's a gamble -- you stand to make a million-dollar commission, but there's always the possibility that you don't sell the property and end up hundreds of thousands of dollars out of pocket."


Twitter: @tiffhsulatimes

Copyright © 2015, Los Angeles Times

June 23 2015


Photos: The Historic House Steve Jobs Demolished

by Jesus Diaz, Gizmodo

This is the Jackling House -- exactly how Steve Jobs has wanted it to look since he bought it in 1984, the year of the Macintosh launch. Demolished. Destroyed. Blown to smithereens.

Even while Jobs lived in this house for a decade -- with little more than a few rugs, lamps, a bed and his Bob Dylan records -- he never liked it. In his words, the Spanish Colonial Revival building was a colossal monster, an architectural abomination. It may have been the Xanadu of copper mining magnate Daniel Cowan Jackling back in 1925, but it was never going to be Citizen Jobs' ivory tower.

It took him years of legal battling and lobbying to get permission to destroy the historic building. But finally, the defenders of the copper tycoon's manor lost, and Steve received his license to kill. His crew obliterated the house in a single day.

At last, Jobs has a dream spot to build his dream house.

Plans for the house Steve Jobs hopes to build in the location of the former Jackling mansion.Never look back

Jobs has never been nostalgic. One of the first things he did when he came back to Apple was to get rid of all the classic models that were stored -- as in a museum -- in a room on the Cupertino, California, campus. He donated them to Stanford, and freed the room from its dedication to the past. According to Jobs, you should always look forward; whoever looks back in this industry inevitably fails.

That action -- just like eliminating the Jackling House from the face of the planet -- has been a constant in his career. While the man has shown that he is proud of his life achievements in interviews or his now-famous 2005 Stanford Commencement Address, he doesn't have any doubts about deleting the past to create the future -- no matter if he is right or wrong.

Steve's Homes

1955 o Steve Jobs is adopted by Paul and Clara Jobs, who live in a humble home with room for two kids in the Sunset District of San Francisco.

1960 o The Jobs family moves to Mountain View. The house had a garage, which Paul used to tinker with cars while Steve got interested in electronics.

1969 o The Jobs family moves to Los Altos. According to Michael Moritz's Return to the Little Kingdom, they bought a house "with a gently raked roof, a large garage and three bedrooms" in Los Altos because Steve Jobs wanted to go to a better school, Homestead High School. There, he met Steve Wozniak; in 1975 the two Steves would assemble Apple I circuit boards in this same garage.

1973 o Steve Jobs goes to Reed College, where he crashes at friends' dorm rooms and apartments. After dropping out, he keeps going to class, joins Atari, disappears from time to time to a hippie communal farm, and goes on a trip to India.

1982 o Steve buys an apartment in the top two floors of the San Remo, a Neo-Renaissance apartment building in New York City. He renovated his apartment for years with the help of famed architect I.M. Pei and sold it to U2's singer Bono in 2003. He never even lived there.

1984 o Jobs buys the Jackling House, a 14,540-square-foot, 14-bedroom manor designed by George Washington Smith and located in Woodside, California. He moves in with almost no furniture.

1991 o Jobs marries Laurene Powell and moves out of the cooper manor, to a new home on Waverley Street, in Palo Alto, California. This charming, rustic brick house, with big trees and a luscious garden where Jobs cultivates his own vegetables, is his current residence.

Photographs: Tutu Lee. Camera and lens rental: borrowlenses.com. This story originally appeared on Gizmodo.

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