Frequently Asked Questions

Many first-time Home property buyers believe the physical characteristics of a home property will lead to increased property value. But in reality, a property’s physical structure tends to depreciate over time, while the land it sits on typically appreciates in value. Although this distinction may seem trivial, understanding how prospective land values influence property returns lets buyer/investors make better choices. 

Quite simply, lands appreciates because it’s in limited supply. After all, no one is producing any more earth. Consequently, as the population increases, so does the demand for land, driving its price up over time. Therefore, investors should consider how land appreciation can offset the depreciation of a home, which requires capital infusion for maintenance, as it ages. The Internal Revenue Service (IRS) even acknowledges this inevitability by allowing the depreciation of a physical structure to reduce tax obligations for a business or investment

The degree of depreciation and/or physical obsolescence varies from one property to another, but if left alone, properties continue to depreciate until they no longer add any value to the land. Some owners even raze physical structures to maximize the value of their parcels.

KEY Points

Ø  Many first-time home buyers believe the physical characteristics of a house will lead to increased property value. But in reality, a property’s physical structure tends to depreciate over time, while the land it sits on typically appreciates in value.

Ø  Understanding how prospective land values influence property returns allows investors to make better choices. 

Ø  Land appreciates because it is limited in supply; consequently, as the population increases, so does the demand for land, driving its price up over time.

When the time comes to buy a home, you’ll be faced with a number of critical decisions. Chief among these is the choice between buying a newly built home or purchasing an existing property.

 On the face of it, it may seem like a simple decision. Newly built homes are – well – new, and that delivers some definite advantages to the home owner. You can choose the floor plan you prefer, and start out life in your new home with up to date amenities and state of the art appliances. On the other hand, you may be limited as to where and when you can build your new home, and you may find that the costs of new construction outweigh some of the obvious lifestyle advantages.

 Existing properties offer a bit more flexibility for the buyer, both in cost and location, but they too have their own disadvantages to consider. Financing can sometimes be difficult to secure, and there is frankly more competition for the choicest real estate.

 All in all, there’s much to consider when choosing between a newly built home and a resale property, and it is important to look at all of the variables before making any final decisions. If you’re in the market for a new home, the following key points of comparison should help you decide which option best suits your situation, and will hopefully help guide you to the home of your dreams

A real estate brokers, real estate agents or realtors is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients, Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a experience real estate professional for a written definition of an individual state’s laws of agency. Many states require written disclosures to be signed by both parties outlining the duties and obligations.

Generally, real estate brokers/ agents fall into four categories of representation:

• Seller’s Agents, commonly called “Seller brokers” or “Seller agents”, are contracted by owners to assist with marketing property for sale or lease.
• Buyer’s Agentsare brokers or salespersons who assist buyers by helping them purchase Residential / Commercial property.
• Dual (single Agents) help both the buyer and the seller in the same transaction. To protect their license to practice, a real estate broker owes both parties fair and honest dealing and must request that both parties (seller and buyer) sign a dual agency agreement. Special laws/rules often apply to dual agents, especially in negotiating price. In dual agency situations, a conflict of interest is more likely to occur, typically resulting in the loss of advocacy for both parties. Individual state laws vary and interpret dual agency rather differently, with some no longer allowing it. In some states, Dual Agency can be practiced in situations where the same brokerage (but not agent) represent both the buyer and the seller. If one agent from the brokerage has a home listed and another agent from that brokerage has a buyer-brokerage agreement with a buyer who wishes to buy the listed property, dual agency occurs by allowing each agent to be designated as an “intra-company” agent. Only the broker himself is the Dual Agent.
• Transaction Agents/Brokers provide the buyer and seller with a limited form of representation but without any fiduciary obligations. Having no more than a facilitator relationship, transaction brokers assist buyers, sellers, or both during the transaction without representing the interests of either party who may then be regarded as customers. The assistance provided are the legal documents for an agreement between the buyer and seller on how a particular transfer of property will happen.

A real estate broker typically receives a real estate commission for successfully completing a sale. Across the India this commission can generally range between 2-4 % of the property’s sale price for a full service broker but this percentage varies by state and even region. This commission can be divided up with other participating real estate brokers or agents. Flat-fee brokers and Fee-for-Service brokers can charge significantly less depending on the type of services offered.

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