FSBO’s Versus Hiring a Real Estate Agent: Pros And Cons

When someone decides, it’s an appropriate time, to sell their home, they face many relevant decisions. One of the principal ones, is, whether to try to sell it, themselves, in a process, referred to, as For Sale, By Owner, or FSBO, or to hire a licensed, professional, real estate agent, to represent them. Obviously, having been a Real Estate Licensed Salesperson, for over a decade, I have a somewhat, biased, perspective, but, this article, will attempt to briefly examine, and consider, both the advantages and disadvantages, of proceeding, in either direction. With that in mind, this article will attempt to briefly examine, consider, and discuss, the pros and cons of both possibilities.

1. For sale, by owner (FSBO): When one decides, to try to sell his home, by himself, he often, does so, because he believes, he will net more money, because he won’t have to pay a commission. However, it’s important to understand, realize, and recognize, when one, takes this option, he must do all the work, including the marketing, advertising, showing the house, keeping appointments, overseeing and coordination Open Houses, and coordinating all of the many necessities, and functions, of the real estate transaction, process. Because, most homeowners, are somewhat inexperienced, because selling and marketing real estate, is not their personal field of expertise, and they lack the network, etc, of potential buyers, etc, there are often fewer showings, and far fewer qualified, potential buyers. In addition, this do – it – yourself, way of marketing a home, means, a homeowner must be available to dedicate the time and energy, to accompany and show the home. Especially when one works, the opportunities become somewhat more limited, under these circumstances.

2. Hiring the right, real estate agent: When a homeowner hires the right, real estate professional, for his needs, etc, the agent takes care of many of the details, associated with selling and marketing the property! It’s important, however, to recognize, what one pays in commission, often matters, much less than, what he nets, from the sale of the home. Statistically, most studies indicate, homes sold through agents, net a higher selling price (even, after paying commission), than when one sells it, himself. A qualified agent should make certain objective observations and suggestions, in order to create better curb appeal, and show the house, to its best advantage. In addition, when a house, is easier, to show, the numbers, alone, often, create a situation, where it sells, more quickly, and at a better price. However, one of the other, relevant reasons, people hire agents, is the right one, will make the process, less stressful, and considerably more, hassle – free! They will be familiar with the legal, and transaction – related aspects of getting the house, sold!

When one selects the right real estate agent, the individual is there for his client, from the onset, all the way, through, to the end of the transaction process. He will introduce ways, to make this often – stressful period, far less so!

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Real Estate Options in Barnum CO

One of the numerous neighborhoods in Denver, Barnum is situated within West Denver surrounded by 6th Avenue Freeway, Alameda Avenue, Perry Street and Federal Boulevard. The neighborhood area has been named after Barnum and Bailey Circus owner, P.T. Barnum, who in 1882 had purchased over 760 acres for winter stay and many of the streets in the area were named after popular personalities and famous people. Later it was incorporated into the Denver suburbs.

The unique architecture and buildings that were constructed in the early 19th century are still in a good condition and add to the historical heritage of the area. One of them is the community building that has a jail below it, while the firehouse was housed inside. Another attraction is the Bowman House that was constructed in 1910 and is a testimony of the bygone era.

Modern amenities and residential communities is what the town offers to all of the people staying here. The beautiful location, security of your family and easy commuting to work are the prerequisites of a good location and Barnum offers all of it.

Today it is a modern community with all of the amenities including medical facilities, school, shopping complex and entertainment options taking into consideration the local requirements. If you are moving to Denver or its suburbs, Barnum makes for the apt choice. The tree-lined and leafy streets, quaint houses standing along with new townhouses have become a sought after destination for home buyers. Whether you prefer a 100 year old mansion with its old world charm or a brand new condo with all modern amenities, Barnum offers all of the options and more for people looking to settle here.

Most of the home buyers are pensioners who wanted to retire in serene locations, families and couples looking for a place to live and work. The excellent school system and higher education opportunities are an attraction for most families. when you have to decide between your family’s safety and convenience along with an affordable rent or purchase option, it always makes sense to settle a little away from the main city.

Real estate costs and prices have started increasing in the main city and suburbs while the experts are of the opinion that the market is on a rebound with escalation in prices within the next few months. For potential home buyers, checking out the available homes and the surroundings can be an interesting opportunity.

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Real Estate and the AMT: Rental Or Investment Property

The Alternative Minimum Tax is a very important consideration for taxpayers who own real estate because just about every tax rule applying to real estate is different for the AMT than it is for the Regular Tax. This article on Real Estate and the AMT will address those situations where the individual holds the real estate as an investment, typically as rental property. The differences in tax treatment between the Regular Tax and the AMT can be significant.

Interest expense

Interest paid on the mortgage taken out to acquire the property is fully deductible, both for the Regular Tax and the Alternative Minimum Tax. Unlike itemized deductions that allow a tax benefit for what amounts to personal expenses, the tax law generally allows all deductions a taxpayer has to make in the pursuit of business income. Thus, the limitations discussed in the previous article on home mortgage interest do not apply.

If, however, the equity in the rental property is used as security for an additional loan – a second mortgage, for example – then the taxpayer must look to how the proceeds of that loan are used to determine interest deductibility. If the proceeds are used for a car loan or to finance a child’s education, for example, then the interest is nondeductible personal interest. If the proceeds are used to improve the rental property, the interest is deductible.

Suggestion – it is best that taxpayers keep personal borrowings separate from business borrowings. Mixing the two creates recordkeeping challenges and can result in disputes with the IRS.

Property taxes

Property taxes paid on rental or investment property are allowed in full both for Regular Tax purposes as well as for the Alternative Minimum Tax.

Planning idea – if you have an opportunity to pay your property tax bill either this year or next, pay it in a year when you have enough income from the property so as not to generate a rental loss. This strategy can help avoid triggering the passive activity loss limitations described below.

Example – in Florida property tax bills are mailed in October, and are payable under the following discount schedule: November – 4%, December – 3%, January – 2%, February – 1%. If you have a loss from the property in 2010 but expect to generate income in 2011, do not pay your bill in November or December – forgoing that small discount could help you avoid the loss-limitation rules.

Depreciation

Depreciation is allowed for property held for investment. The portion of the cost allocable to land is not depreciable, but for the building itself and the furniture, appliances, carpeting, etc. a depreciation deduction may be taken.

Real property (this is the legal definition of the house or other building) held for rental/investment may only be depreciated for Regular Tax purposes under the “straight-line” method, over a useful life of 27.5 years. Thus, a property with $275,000 allocated to the building would be depreciated at the rate of $10,000 per year.

Personal property (this is the legal definition of things such as furniture, appliances, carpeting and the like) may be depreciated for Regular Tax purposes under an “accelerated” method over a useful life of five years. An accelerated method allows a larger depreciation deduction in the early years, in recognition of an obsolescence or decline-in-value factor that you see in new property (cars are a good example).

For purposes of the AMT, however, personal property may be depreciated only by using a straight-line method. Thus, an AMT item will be generated in the early years if the accelerated method is used.

Planning idea – for personal property consider electing the straight-line method for Regular Tax purposes. While giving up a little tax benefit from the greater depreciation in the early years, it could mean avoiding paying the AMT.

Active/passive investment rules and the “at-risk” rules

A taxpayer who is not “active” in managing investment property may not use losses from rental property to offset other income such as salaries and wages, dividends, interest, capital gains, etc. Instead, these losses are deferred until the taxpayer either sells the property or generates passive income from this or other passive investment sources.

The at-risk rules similarly deny using these types of losses to the extent the taxpayer has acquired the investment with borrowed money and does not have personal liability on the debt.

Planning idea

If these loss limitations apply, consider the planning ideas mentioned above to minimize the losses being generated each year. They are not doing you any good anyway.

Sale of the property

Several different AMT issues can arise on the sale of rental/investment property. One is that your gain or loss may be different for the AMT than it is for Regular Tax purposes. This would be caused if different depreciation methods were used. For example, if the personal property was depreciated using an accelerated method for Regular Tax purposes, then the basis in that property when calculating gain or loss on sale would be different because the straight-line method had to be used for Alternative Minimum Tax purposes.

Gain on the sale of investment property generally is capital gain, although a portion may be treated as ordinary income depending on the accelerated depreciation method was used. Capital gains in and of themselves are not an AMT item, but nonetheless they can result in AMT being paid. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income can have the result of reducing the exemption which in turn increases taxable income for purposes of the Alternative Minimum Tax.

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5 Ways To Fund A Real Estate Purchase

Whether, one is purchasing, his first home, or has done so before, if it is for his primary residence, or investment purposes, or, for a second/ vacation – home, one reality is the common bond! In order to buy real estate, you have to come up, with the necessary funds, either through, one way, or a combination of approaches, in order, to close – the – deal. There are several options, and, some depend, on your personal credit, the type of property, etc, so, with that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 5 ways, to fund ant real estate purchase.

1. Personal funds: Some people, either, have accumulated funds, by selling another house, investments, personal business earnings, etc, and, use these, to pay cash for the property, they plan, to purchase. Some home sellers seek these times of buyers, because, they often, proceed, with fewer hassles, and other delays, which might occur, when there is a mortgage, involved.

2. Family and friends: Often, especially, for first – time homeowners, financing a house, and, thus, owning a home, of one’s own, is challenging, because most mortgages require a 20% down – payment, and, with the ever – increasing price of real estate, in many regions, is difficult! Therefore, many seek, alternative approaches. One, which is usually, the first, for many, is asking for monies, from one’s family, and/ or, friends. Often, a young couple, turns to either, one, or both sets of parents, for help. At other times, we see close friends, willing, to assist, in creating, creative financing.

3. Seller – financed: Although it happens more often, in commercial property, or in sales of professional practices (medical, dental, legal), we often witness seller – financing, used, to make a deal, work! Simply, stated, this is when, the existing owner, agrees to, hold the paper, in order to create a deal, and help it, get done!

4. Conventional mortgage: A conventional mortgage is acquired, usually, from, either, a mortgage banker, or broker. This is the most common/ typical way, people buy their personal homes. Usually, someone puts down a down – payment, and finances the balance. A conventional loan is usually, for a term, ranging from about 15, to 40 years, and the individual pays a fixed rate, for the duration.

5. Alternative mortgages, including, variable rate, and/ or, lower amount of money, down: Alternative mortgages, function, much like a conventional one, except, either, the interest rate, is variable (fixed for short period, and adjusts), or the lending institution permits a lower down – payment.

A wise home buyer explores, learns about, and knows, his financing options/ choices, and proceeds accordingly. Will you try to be a better informed consumer?

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Essentials Of Marketing, Sales, And Selling Real Estate

Some people, appear to believe, the only thing needed, to successfully, sell one’s home, is making the decision to do so, and, offering it, for sale, advertising it, etc. Statistics indicate, in the vast number of instances, when homeowners use a professional, to sell their houses, they benefit, by receiving, a higher selling price, with less stress/ hassle/ inconvenience, and doing so, in a shorter period of time. Professional real estate agents understand the market, nuances, methods/ techniques, and serve, and represent their client’s best interests. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, some of the essentials of marketing, sales, and selling real estate.

1. Marketing: The process should begin, with client, and agent, being on the same – page, and agreeing to how to proceed, to achieve the homeowner’s objectives and priorities. One should hire an agent, who perceives and conceives of, creates, develops, explains thoroughly (to client’s satisfaction, and understanding), the components of his marketing plan, and the reasoning, and rationale, which makes it make sense, and achieve the primary objectives. Marketing must include: determining the home’s niche; prioritizing approaches; determining the best options and alternatives, etc; considering media choices, and deciding, which ones, might make the most sense, for the particular property; a marketing budget; and; fully explaining the reasoning behind the listing price, and the essentials of making price adjustments, if necessary.

2. Sales: Many, falsely, believe, sales, and selling, are the same! Sales, is a process, and approach, using the tried – and – proven approaches, without thinking, outside – the – box! It means creating a plan of action, in order to maximize the results, which a client, might achieve, and receive.

3. Selling: Unlike sales, selling is a consistent, proactive, activity, which emphasizes, closing – the – deal! It is, when performed properly, and effectively, both, an art, and a science. The art is the technique, which includes: attracting buyers, and other agents; articulating an inspiring, motivating, message, which is responsive to the potential buyers needs, goals, and priorities; matching up, the right buyer, with the right house; asking for the sale; and closing the deal. Obviously, this is not, a one – step, simplistic activity, but, rather, a well – considered, effectively trained, experience – focused, tried – and – proven, method, for achieving the goal!

If you hope to sell your home, begin by hiring the right, real estate agent, for you, who will, be able to, professionally, handle the marketing, sales, and selling of your house. Take the time, to interview agents, and hire the one, who is best for you!

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New Book Teaches Real Estate Investors to Get Rich Through Mentoring Others

Barry Wilmeth’s Making Others Rich First provides a fresh take on real estate investing for both new and seasoned investors. Wilmeth, who has been investing in real estate across the United States for many years, knows that real estate investing is not solely about making yourself rich. It’s also about helping others to become wealthy by providing them with quality housing or helping them to buy their first homes, and for those who want even more, it is about helping new investors pursue their own financial dreams for success. I love Wilmeth’s attitude in this book. While some people might view real estate investing as competitive, Wilmeth believes there is plenty for everyone, and we all get more when we help each other. As he states early in the book, “We have an existential sense that our happiness depends on the happiness of others and that there is more happiness in giving than in receiving.”

Making Others Rich First is designed to help the real estate investor starting out with the basics of how to invest, but it is also designed to encourage more seasoned investors to mentor others in the real estate investment business. Each chapter has nuggets of information for both the mentor and the mentee, and while the overall structure benefits the mentee, I think mentors will find much here to give them new ideas about investing.

The book is divided into five sections, each of which has three or four chapters. Those sections are: Getting on the Road to Riches; Setting the Business Framework; Preparation, Education, and Application; Staying Motivated; and Getting a Return on Your Investment. Throughout the sections, Wilmeth shares personal stories of investments he has made, shows how to crunch the numbers to determine potential payoffs and whether an investment is worthwhile, and continually provides motivation for readers to take action.

Taking action is especially key. Wilmeth knew that no matter how many books he read or seminars he took, he would never truly learn about real estate investing until he took action by buying a property. That first action paid off in the knowledge he acquired from owning it, and today, he owns rental properties across the United States, and he also buys and sells properties on a regular basis.

Wilmeth understands that real estate investing can initially be scary, but he states:

“The fear will subside the more you do similar deals. I tell new investors over and over, ‘Don’t wait to buy real estate. Buy real estate and wait.’ Get your feet on the ground by making a real estate purchase and renting it out by using a reputable property manager. This is not a field trip. It is an internship. It is on the job training (OJT). Learning from a book or a seminar will make you think. Learning by doing will make you experienced.”

In addition, Wilmeth talks about how to find money for investing-from private investors and other sources. Once investment money is available, Wilmeth guides readers through how to do their due diligence when buying a property so they can avoid bad deals, and he also talks about how to recover if you do make a bad deal. A bad deal is not a reason to give up, but an opportunity to learn from your mistakes.

Wilmeth also takes readers through all the details of business and tax planning. He introduces them to what he calls the MBA Formula, which consists of: Monitoring Your Debits and Credits, Balancing the Books, and Analyzing the Numbers.

He also talks about the importance of following up with others. You need to respond quickly, be on the phone rather than waiting for an email response, and consistently putting yourself in front of others so they will help you find deals and you can make sales. Even if you don’t know the answers to someone’s question, just responding can lead to forming a relationship that can benefit you in the long run. All of these points are explained in detail in these pages, along with advice on networking, volunteering, marketing, and much more.

But beyond all the real estate investment details is the book’s core message-the importance of mentoring, which Wilmeth summarizes in two main points: 1) “If you are new to investing, you really should have a mentor. And if you decide not to, there will come a day when you’re going to hear me whispering, ‘I told you so,'” and 2) “If you are already a sophisticated investor, you can get more deals and expand your business by being a good mentor to others.”

Ultimately, mentoring can only be advantageous to a real estate investor. As Wilmeth states:

“Your firsthand testimony is much more powerful than a seminar, book, or attendance at an investors’ club meeting. You will come across to others as believable and as an ‘If I can do it, so can you’ role model. I believe the best way to be the real deal is to take steps to increase your wealth, share your story, and then help others get rich without charging a fee.”

Yes, you read that right-“without charging a fee.” Wilmeth describes the difference between coaches who do charge fees and true mentors, and his take on mentoring is refreshing as a result.

A lot of successful businesspeople will try to tell you how to get rich by sharing with you what they have done, but it’s rare to find someone who does it for the purpose of giving back rather than to benefit himself. Not that Wilmeth denies the personal benefits of helping others, but his sincere desire to help others get rich first is what makes this book stand out from all the other real estate books already available. Whether you’re new to real estate investing or you want to learn more through giving back, this book will open new opportunities for you.

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The Real Estate Market in Hong Kong Today

Now Hong Kong is a Special Administrative Region of China its star is rising as fast as China’s and the entire real estate sector in Hong Kong is benefiting.

The physical geographic restrictions of Hong Kong mean that there is a finite supply of residential and commercial real estate available for sale and rent; and as Hong Kong further strengthens its already robust economic, trade and investment ties with China, the demand for real estate in the region is intensifying.

Competing for space are multinational companies and their massive expatriate employee base, local businesses and local residents, tourists and students. In fact the demand for residential and commercial space in Hong Kong is at its highest today since the glory days pre-1998. Having suffered an acute recession from 1998 until 2003 real estate prices are for sale at deflated costs and are therefore seen as being undervalued which means the real estate market is in a great position right now to grow and expand.

Because demand for real estate in Hong Kong is so intense…

Because Hong Kong’s economy is going from strength to strength…

Because domestic purchasing power is so strong…

And because the real estate market is believed to be currently undervalued – the wealth of opportunity for profit in Hong Kong’s property market right now is intense.

Real estate investors from around the world are buying into the projected period of growth and are committing substantial funds to the Hong Kong market. In terms of any restrictions placed on foreign investors there are none in Hong Kong…in theory anyone is permitted to purchase property. As with all city based real estate economies property in Hong Kong – though currently considered to be undervalued – cannot be regarded as ‘cheap’. However anyone who wishes to get into the market can get mortgages locally in Hong Kong to purchase and can almost guarantee the rental income they will generate if they choose to buy residential or commercial units to let.

The medium term prospects for the real estate market in Hong Kong are good with analysis showing that the number of renovation and new development projects started in recent years is below what is required for the current level of demand. This undersupply will last for at least the next four years according to expert industry analysis. This has resulted in predictions for property price growth of up to 12% annually for at least the next four years, making the real estate market in Hong Kong today a highly attractive prospect.

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What Real Estate Investors Should Know About Local Customs

As a commercial real estate investor, there is a good chance that you will invest in a property located in another state in which local customs may be very different from where you live. Knowing some of these customs may help you avoid mistakes that may cost you money. While people say when you are in Rome, do what Romans do. However, there is often disagreement about whether the seller or buyer is in Rome. This article discusses some of the common customs that you should know. It may or may not explain why these customs are what they are which could be a very long story.

Independent Consideration

You often see this independent monetary consideration in contracts in Texas (TX), Georgia (GA), and North Carolina (NC) but not in California (CA) where love and affection are acceptable consideration. Listing brokers in these states often insist that you pay the seller $1000-$5000 as independent consideration for the right to cancel the contract during the typical 30-day due diligence period. As an out-of-state investor, you have to pay for air fare, hotel, food, and car rental to visit the property as part of your due diligence. So if you decide that the location is not as good as it appears from satellite map or whatever reasons, it does not make sense to pay another $1000-5000 to cancel the contract. While the law in these states requires an independent monetary consideration, it does say what that amount must be. So you should pick a big number between $1 to $10 to make the contract legal!

Nonrefundable Earnest Deposit

In CA, there is no such thing as nonrefundable deposit per a CA court ruling. Most if not all real estate contracts in all states have a paragraph addressing damages due to contract breaching by either party. This is often sufficient. However, some listing brokers and sellers outside of CA often insist that all the earnest deposit “going hard”, i.e. becoming non-refundable and released to the seller, after the expiration of due diligence period. While the purpose is to make sure you think twice about breaching, it could be difficult to get any of earnest deposit back if

  • You, for unforeseeable position, e.g. hit by a truck or have a heart attack and go to heaven or wherever, cannot close the transaction.
  • The property is partially damaged, or even burned down by arson.
  • The seller spends it all and your loan is not approved due to soil contamination discovered later on!

You are in a bad position to negotiate with nothing to offer when the money is in possession of the seller. It is therefore advisable to keep the deposit in escrow until closing. However, sometimes you have to make a tough choice, especially when there are multiple offers so you can buy a desirable property.

Property Taxes

In CA, the property is automatically reassessed at the purchased price. The property tax rate is about 1.25% of the purchased price. Due to the Proposition 13, property taxes can only increase by a small percentage annually unless there is change in ownership.

In TX, the property tax rate is about 3% of the assessed or taxable value. However, the taxable value may or may not be the purchased price which is often higher. If the higher purchased price is reported to the county then you will pay property taxes based on the higher purchased price. So it’s a good idea not to report this higher purchased price since it is not required. Lately in TX, the local government tries to raise revenue by aggressively reassess the property values. The new assessed value could be significantly higher than, e.g. 100% the old assessed value. Should this happen to your property, you may want to hire a professional company to protest this property taxes increase even on a property with NNN leases. The success rate appears to be fairly high. As an investor, it’s wise and prudent to keep the NNN expenses as low as possible for your tenants. You definitely want your golden goose to keep laying eggs.

In Florida, there is a monthly state sales tax for commercial properties, so make sure you know who is supposed to pay it. In Illinois, the property taxes rate is fairly steep at about 5%. The property tax rate for NC is about 1.45% of the taxable value which is not changed after the sale.

Attorney States

In CA, an escrow company can handle the closing of a real estate transaction. In GA, FL, or NC, escrow companies can only hold the deposit for you and you must hire an attorney licensed in that state to do the closing. These states are often called “attorney states”. The proponents say that a real estate transaction is very complex so it must have an attorney to assist you. For opponents, it’s all about job security for lawyers. If you invest in a property in an attorney state, you want to hire an attorney who charges a flat fee since the amount of work is very much predictable. You will receive an estimate based on what you need the attorney to do. He or she won’t start working until you authorize him or her in writing to do it. The attorney will review all the documents and give the blessing before you sign them. It is advisable to avoid an attorney who charges you by the hours. Most likely you are dealing with a lawyer looking for a big pay day.

In CA, the buyer automatically receives the Preliminary Title report which shows the owner and various information, e.g. liens and loan amount on the property. If you cancel the transaction, you normally don’t pay escrow any fees. In attorney states, the attorney will do the title search and review. The title company then issues a title commitment to insure against any title defects. Should you cancel the transaction, the attorney and Escrow Company may charge a fee for the work done.

Closing Costs

When you make an offer, you often state that buyer and seller split closing costs based on the custom in the county where the property is located. In CA or TX, the sellers customarily pay for owner’s title insurance premium based on the purchased price which guarantees the buyer of a clear title (technically you should not have to buy owner’s title insurance when you refinance the property because the title was already insured when you bought the property.) The buyer pays for the lender’s policy premium based on the loan amount. This lender’s policy is required by the lender to protect it against losses resulting from claims made by others against the property. Of course, if you pay cash for the property then there is no lender’s policy. However in GA, it’s customary for the buyer to pay for both owner’s and lender’s policy. So make sure you have sufficient fund to close the transaction.

Deeding Instrument

In CA, the sellers often transfer his interest to the buyers by a grant deed. In other states, the seller will transfer his interest to the buyer by a general or special warranty deed.

  • General warranty deed is used to convey the seller’s interest in real property to the buyer. The seller certifies that the title on property being conveyed is free and clear of defects, liens, and encumbrances. The buyer may sue the seller for the damages caused by the defective title.
  • Special warranty deed is also used to convey an interest in real estate. However, the grantor does not warrant against the defects arising from conditions that existed before he/she owned the property. So the special warranty deed is not as good as the general warrant deed. However, most sellers will use this deed for obvious reasons.
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Acquisition Of Real Estate in Cyprus

The geographical location of Cyprus between Europe, Asia, the Middle East and Africa together with the well-established legal, banking and accounting infrastructures urge local and foreign business people to invest in immovable property. A considerable advantage of the Cyprus legal system is the protection of ownership without discriminations. That is to say, according to Cyprus Law, Cypriot citizens and foreigners may enjoy all rights associated with ownership of their property without any intervention from the State or individuals. Furthermore, Cyprus is an EU member-state since 2004 and adopted the euro in 2008. As a result, the acquisition of immovable property in Cyprus became easier.

Cypriots and EU citizens:

According to the Cyprus Law, Cypriots and EU citizens Cyprus may acquire any property without restrictions.

Non-EU citizens:

For non-EU citizens there are restrictions on type and size of real estate they are allowed to buy. Precisely, non-EU citizens may purchase a house/a flat/ a building plot/land up to 4.014m2. It should be underlined that non-EU citizens may also buy a shop under the condition that the shop will be used only for business purposes. Additionally, it should be highlighted that Cyprus Companies whose shareholders are non-EU citizens may obtain business offices and residence for their foreign employees given that they maintain a fully-fledged office.

According to the provisions of the Acquisition of Immovable Property (Aliens) Law (Cap.109), non-EU citizens wishing to buy immovable property in Cyprus must submit an Application to the District Office of the District where the property is located.

The Applicant should submit together with the Application the following documents/details:

• Form Comm 145 completed and signed

• Contract of sale

• Financial standing (i.e. a bank statement)

• Particulars of the property and of the current owner

• The terms of payment and the way of acquisition

• A copy of the Applicant’s and the spouse’s passport. In case the spouse does not have the same surname as the Applicant then a marriage certificate needs to be submitted

• Copies of the governmental survey plans

The letter of approval/refusal by the District Office may take approximately up to six months. Nevertheless, the Applicant may in the meantime take procession of the immovable property he/she bought.

Transfer of Ownership:

The transfer of ownership of real estate property is conducted at the Department of Lands and Surveys. The following documents need to be submitted:

• Application Form N207;

• The registration deed of the real estate property;

• Copy of the District Office approval;

• Proofs that all property taxes have been paid;

Fees and Charges:

When a buyer registers the immovable property under his/her name at the District Land Office, he/she will have to pay the corresponding transfer fee which is calculated based on property’s market value at the time of the signing of the contracts. For more information, see Table 1.

Property’s Value in Euros / Transfer Fee (%)

Less than €85.430,10 / 3

€85.430,10- €170.860,14 / 5

More than €170.860,14 / 8

Table 1

Immovable Property Tax:

According to Section 3 of Law 24/1980 the owner of a property is obliged to pay an annual immovable property tax as illustrated below.

Value (€) / Annual Tax (%)

Less than 40.000 / 0.6

40.001-120.000 / 0.8

120.001-170.000 / 0.9

170.001-300.000 / 1.1

300.001-500.000 / 1.3

500.001-800.000 / 1.5

800.001-3.000.000 / 1.7

More than 3.000.000 / 1.9

Stamp Duty:

Usually, the buyer is obliged to pay a stamp duty of 0.15% of the value of the property up to €170.860,14 and 0.20% for more than €170.860,14. The contract should be stamped within a period of 30 days from signing. It should be taken into consideration that if you do not pay the stamp duty on time, then you will have to pay the stamp duty plus a fine.

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A SMART Approach To Real Estate

There are so many aspects, contingencies, scenarios, and differences, in real estate, it serves little sense, to seek, some, overly simplistic approach, but, rather, it makes more sense, to look at the bigger – picture, and proceed, with a SMART way/ method! Some of the considerations, should include: current economic state, as well as foreseeable future; consumer confidence; specific, personal needs; present finances; personal comfort zone; future financial possibilities; region/ area/ neighborhood, etc. With that in mind, this article will attempt to, briefly, consider, review, examine, and discuss, using the mnemonic approach, why this matters, and why, it is the wisest, possible approach.

1. Systems; sustainable; strengths; solutions; sense: When considering houses. it is wise, to avoid, simply, following, any emotional first – look, but, taking the time, and making the effort, to consider, all the specific house’s systems, and see, which might best serve your needs, etc! Consider, what you believe, the foreseeable future, may, offer, and select a sustainable place! Know, identify, and consider, every property’s strengths, as well as weaknesses, and determine, which one, makes the most sense, in the longer – run, and has the finest solutions, for your personal needs, etc.

2. Money; motivating; meaningful: Begin, by giving yourself, a check – up. from the neck – up, and in an introspective, objective manner, and knowing, if you can afford the up – front money, as well as the future financial responsibilities of home ownership! Your home must be personally, motivating, because, for most of us, the financial value of a house, represents our single – biggest, financial asset. Make the finest, most meaningful, personal, well – considered, decision!

3. Attitude; attention; aptitude; actions: Focus on why, and how, you can, instead of cannot! Proceed with a true, positive, can – do, attitude, and pay keen attention, the your options, etc. Learn as much, as possible, so you are prepared, and develop, the most relevant, skill – set, and aptitude. Proceed with taking personal charge of your life, and take the actions, needed and necessary!

4. Relevant; responsibility/ responsible/ responsive; realistic: Know your individual needs, and requires, and consider, your quest, in relevant terms! Take the personal responsibility, to take responsible measures, which are responsive to your present and future needs, in a realistic manner!

5. Trends; time – tested; timely; trust: Trust your little – voice, and know, which trends, are best fitted, to you! Learn the time – tested, industry – related, information, and avoid procrastinating, proceeding in a timely manner!

Be your best friend, and use a SMART approach to real estate. Are you prepared?

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