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Safe Real Estate Investing

Real Estate InvestingReal estate markets in most countries are not as organized or efficient as markets for other, more liquid investment instruments - to use a known agent or broker to invest internationally is the safe investing method as an agent or broker will know the market, the people involved and some history with regards to the real estate potential. There are ways to achieve a safe investment - individual properties are unique to themselves and not directly interchangeable, which presents a major challenge to an investor seeking to evaluate prices and investment opportunities. Resort investing is much safer for the investor as they can work with more data, be able to take advantage of pooled or solus rental schemes and be able to have their interests looked after if in a different country. For this reason, locating properties in which to invest can involve substantial work and competition among investors to purchase individual properties may be highly variable depending on knowledge of availability. Real estate investors typically use a variety of appraisal techniques to determine the value of the real estate to establish a safe purchase.

Typical sources of real estate investing include:

Market listings (through a Multiple Listing Service or Commercial Information Exchange)
Real estate agents or brokers
Wholesalers (such as bank real estate owned departments and public agencies)
Public auction (foreclosure sales, estate sales, etc.)
Private sales

The best source of information that is up to date is either direct from the developer or seller or through a reputable agent who know both the market and the product.

Once a safe real estate investment product has been located, and preliminary due diligence (investigation and verification of the condition and status of the property) completed, the investor will have to negotiate a sale price and payment terms with the seller or better still through an intermediary who will negotiate the price, making the transaction in many ways a safer purchase.

Most investors employ real estate agents and real estate attorneys to assist with the acquisition process, as it can be quite complex and improperly executed transactions can be very costly. During the acquisition of a property, an investor will typically make a formal offer to buy including payment of "earnest money" to the seller at the start of negotiation to reserve the investor's rights to complete the transaction if price and terms can be satisfactorily negotiated.

This earnest money or deposit may or may not be refundable, and is considered to be a signal of the seriousness of the investor to purchase. The terms of the offer will also usually include a number of safe contingencies which allow the investor time to complete due diligence and obtain financing among other requirements prior to final purchase. Within the contingency period, the investor usually has the right to rescind the offer with no penalty and obtain a refund of earnest money deposits. Once contingencies have expired, rescinding the offer will usually require forfeit of earnest money deposits and may involve other penalties as well.

Safe Real Estate Investing
 
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