What does a real estate investor need to know about hiring contractors

Copyright 2006 National Real Estate Network LLC Where do you find contractor? Ask for referrals from other investors. You can also go to Home Depot early in the morning where the contractors check out. Talk to the clerks about who are the regulars and talk to the contractors in line. Check out their work start to finish and their references. Home Depot is a great place to find a reasonable crew that works for builders. Does the contractor need insurance? You need to make sure you or your contractor has two types of insurance. The Two Types Are: A. Workman’s Compensation Insurance: If you are doing a lot of rehabs, you will want to get a minimum workman’s compensation insurance. If your contractor has workman’s compensation insurance, you will want him to give you a copy of his insurance with you shown as an additional named insured. You then have proof of coverage. Even if you have a minimum policy covering you, you will still need the proof of coverage for your insurance carrier or you will be charged for their cost on your own policy. If you hire a contractor working by himself he can choose to exempt himself from workers compensation, but he needs to sign a form that you get from your insurance company. B. Liability Insurance: Make sure again that you’re named as additional insured on your contractor’s policy or have your own policy. You should talk to insurance experts to determine the amount of coverage you need. C. Builder’s Risk Insurance: You may want to check on getting builders risk insurance for other coverage on your equipment, tools, and etc. How do you pay your contractor? If you are dealing with new contractors that you don’t have a track record on, I recommend that you buy a small amount of materials and see that they get the materials to the job. Only pay for the work that gets done. The question you need to ask yourself is if the contractor walks from the job is there enough money to hire someone to finish the job. Even experienced investors, as well as new investors make the mistake of paying out too much on the job all the time. I have had Home Depot call me and tell me that my contractor is bringing materials back for cash refund. I have had great contractors who I have had a long relationship with me walk off the job. It is a must to hold back enough dollars to hire someone to finish the job. I don’t care how long you have worked with contractors you have to inspect the job before paying. If you don’t inspect the work, don’t get in the business. Consider placing a provision in your contract that final payment is contingent on passing a city certification inspection. Should you have a contract with your rehab crew? I say yes. At the end of this article is a sample contract. See your attorney for what you need in your contract. Should you pull permits? Yes, Yes, Yes!!! The people I see who try to bypass the system and city inspectors just end up in trouble and end up doubling their cost. The short cut to getting the job done is to pay for the permits required. The comments in shared personal experiences. They are not intended to be legal or accounting advice nor solutions. You should always consult with the appropriate professional when making decisions. A Sample of Contract I Have Used: INDEPENDENT REHAB CONTRACTOR AGREEMENT This agreement is entered into this day of _________________________. 20 , in the city of ___________________, State of Michigan between ____________________, (owner) of 17177 Laurel Park N, Ste. 265, Livonia, MI 48152 and: Contractor: ________________________________________________________ Contractor is a Corp. ( ), Ltd Liab Co. ( ) Partnership ( ) Sole Proprietorship ( ) Street Address: ____________________________________________________ City, State, and Zip: ___________________________MI___________________ Phone: ( ) ___________________ Fax: ( ) _________________________ Pager: ( ) ____________________ Cell Phone: ( ) ____________________ Emp. Fed. Tax ID No (EIN):_________________ Soc. Sec. No._____________ Contactor License No (s):__________________ Type of License: ____________ Person authorized to sign and bind Contractor: ____________________________ 1. Schedule: The Contractor agrees to commence work on: __________________, 20 . The Contractor agrees to complete all work by: ______________________, 20 , subject to excusable delays such as strikes, unavailability of building supplies or acts of nature. Owner reserves the right to cancel this agreement and Contractor agrees to forfeit the balance of money due under contract if work is not completed by this date. The contract herein shall be void at the option of Owner, if contractor does not commence work within ___________________________ (____________) days from the date of the signing of this contract. 2. Scope of Work: Contractor agrees to provide the following described labor, materials and construction in accordance with plans and specifications as may be referred to herein on the following described property: (A) Address of work site: ___________________________________________________ (B) Description of work (Describe Labor, materials and Equipment to be furnished. Attach additional pages, estimates, and work sheets if necessary. ___________________________________________________________ Other Special Provisions:__________________________________________________ The Contractor’s supervisor/project coordinator of this project shall be designated agent for the Contactor. The name of the person is: ___________________________________ 3. The Contractor agrees to perform this work in a workmanlike manner and to comply with applicable building and construction codes for residential and commercial structures. The Contractor warrants that his work will conform with such codes and pass any governmental inspections. (If any plans or specifications are part of his job, they are to be attached and made part of this contract). 4. Price: Owner agrees to pay to the contractor for the satisfactory performance of the contractor’s work subject to the terms and conditions of this agreement: Total Contract amount: _________________________. Initial Payment Amount: _________________Payable on _________________. Extra work, if any, will be priced as agreed. Payments will be made only on satisfactorily completed work based on progress inspections done by Owner’s approved supervisors. Contractor has the responsibility of arranging time for inspections. All check requests must be submitted by Wednesday proceeding for Friday payments. Should work not be performed to Owner’s satisfaction and /or accordance with the codes and standards in paragraph #2, Owner will retain a sufficient amount to complete the work as a final payment until the contractor brings the job up to code and/or Owner’s satisfaction. 5. The following is prohibited unless agreed to in writing and signed by Owner and Contractor: extra services and work, deviation of the work as specified herein, or assignment or subcontracting of the work to be performed. 6. The Contractor agrees to indemnify and hold harmless the Owner of the property from any liability or claims arising directly or indirectly from the Contractor’s work under this contract whether due to Contractor, its employees, workers, and agents or any other person hired by the contractor. (This includes Construction (including mechanics and materials) liens). Contractor agrees to pay all fees and costs incurred in defense of Owner and or Owner. Contractor specifically agrees to assume and pay any liens that shall be filed by its sub-contractors. 7. The Contractor agrees to obtain and pay for: Workers Disability Compensation Insurance, Personal liability Insurance, Errors and Omissions and/or contractual Insurance, Public Liability Insurance, and any other Insurance or Bond coverage, or submit appropriate waivers which may be necessary or required by Owner, the municipality and/or State of Michigan. Copies of such documents, binders, declaration sheet, proofs, or waivers will be presented to Owner before commencing work. 8. The Contractor agrees to pay and withhold where required all federal, state and local taxes on the money earned from Owner for itself or its employees and to file all proper tax returns. Owner will not withhold any sums for any sums for any taxes due Contractor. Contractor’s relationship to the Corporation shall be that of an independent contractor and not of an officer, employee, or agent of Owner. No partnership, joint venture, or similar relationship is created by this Agreement. The Corporation shall have no liability to Contractor except to pay its compensation under this contract. 9. Building permits will be pulled by: _______________________. Costs will be paid by: __________________________. City certificates will be obtained by: ___________ _________________________________. 10. No modification of this contract will be effective unless it’s in writing and is signed by both parties hereto. This contract binds and benefits both parties, assigns, personal representatives and any successors. Time is of the essence of this Contract. This document, including any attachments, is the entire agreement between parties. The laws of the State of Michigan govern this Contract. This is a legal contract. If there is anything you do not understand about this contract or the language, DO NOT sign it. It is recommended that you consult with a legal or tax advisor of your choice. It is assumed by you signing this contract that you have either consulted with your advisors or have decided not to do so. The parties accept the terms and agree to abide by them. Owner: Dated____________________20___By:___________________________ Contractor: Dated____________________20___By: ___________________________

Sell my house without a realtor

If you’re thinking, "I should sell my house without a realtor," the current real estate market and explosion of the Internet will make your job easier. Sell My House Without A Realtor If you are looking to sell a house without a realtor, you are known as a "FSBO" seller. FSBO stands for the phrase “for sale by owner.” Although FSBO sellers have always existed, they have become much more prevalent in the last few years due to two primary factors. Hot Real Estate Market An insanely hot real estate market has made realtors somewhat irrelevant in many parts of the country. For instance, homes in San Diego, California were known to be on the market for less than two weeks on average in early 2005. Keep in mind, this was the average time it took to sell a home including the run down messes. In such a market, many homeowners started wondering why they were paying six percent commissions to a realtor who didn’t have to do much. Internet Use The creation of FSBO real estate listings sites has exploded over the last three or four years. As buyers and sellers became more familiar with these sites, they often searched online for homes instead of driving areas with a realtor. This resulted in sellers wondering why they should pay a commission of 6 percent to a realtor when a site like fsboamerica. org only charged $25 a month to list a home on the site. Many couldn’t come up with a reason. No Realtor The decision to sell you house without a realtor is one you should make carefully. If you’re comfortable with the sales process, going FSBO makes all the sense in the world. If you’re not comfortable with the negotiating process, then you may want to consider using a realtor. Ultimately, your first step should be to buy a FSBO book in your local bookstore or visit a FSBO site and read up on what is involved.

Home buying checklist windows

If you are in the market to purchase a home, it can be easy to fall in love at first sight. Do so at your own risk. While the overall appearance of a home is important, the quality is in the details. In this article, I provide a checklist of window issues you should consider when viewing a home. Windows If you are considering buying a home, you should have a checklist of things to review for the property. There is an old clichй that eyes are the window to a person’ soul. In the case of a home, they can be a clue to the quality of the home building if you check the following: 1. The first item to check is whether the windows open and close properly. Quality windows should slide easily and with little noise. Cheap windows tend to stick and make grinding noises. If any window will not open or close at all, careful attention needs to be paid to why. Is it the quality of the window or has the house started moving because of foundation problems? Make sure you know the cause. 2. The second item to check is soft or mushy sills at the base of the window. Often you can identify a soft sill by a “rotted” look, but make sure to run your hand across the sills with light pressure to see if there are any soft spots. If you find a problem, warning lights should be going off in your mind. A mushy sill means there is a water penetration problem. More importantly, it also means the problem has existed for some time. Long-term water problems can mean the existence of mold and mold can be an expensive problem to fix. If you are really interested in the home, demand an inspection paid for by the seller. If the seller refuses, walk away from the home. 3. Water stains are the final window item to check for during your viewing. Just because the sills are not soft, doesn’t mean there isn’t a leakage problem. Stains around a window frame are sure signs of water problems. If a room has been painted, try to find one that hasn’t. If the entire interior has been painted, ask the seller to state in the sales agreement there were no water stains before the house was repainted. Windows are almost always an indicator of the quality of workmanship for a home. Giving them a good “once over” should tell you a lot about the house you are considering.

Buying property in montenegro

As with purchasing a property in any country, you must make yourself aware of the formalities and "peculiarities" of the foreign market. Property prices. Without an official price index, many properties are advertised with a price that is determined by what the vender wants rather than by a market value. If you find a property in a particularly popular area (or in an area like an Old Town where they can be no more development), it is most likely that market has been determined by the price paid for a similar property. If you are looking at a renovation project in an area away from the main towns, then the price you pay will most likely be a result of your negotiation skills. Legal advice. Getting a local lawyer is imperative. Many properties have multiple owners (i. e. owned by whole families) and all parties must be in agreement of the sale. When the lawyer has this in writing, the title of the property can be yours. Paying for your property. All purchases are cash purchases. The vendor will require a cash deposit of at least 10% of the agreed price and you will need to pay the rest in 30 days. If you cannot complete the deal, you lose the deposit. If the vendor pulls out of the deal, they will have to pay back the deposit plus the same again. Therefore, if you put down Ђ5000 and the vender defaults, you will receive a total of Ђ10000. Fees. In Montenegro, it is the buyer that pays the estate agent fees. - Property tax: 2% (on the sale price, payable to the government.) - Agent fees: 4% (approx.) - Legal fees: Ђ750 (approx.) Example: Agreed sale price = Ђ45000 + Ђ900 tax + Ђ1800 agent fees + Ђ750 legal fees = Ђ48450 Transferring money. It is not necessary to carry the whole amount of money to Montenegro as cash (although you may wish to do so for the deposit). You can transfer the outstanding amount electronically to a bank in Montenegro and withdraw the money when you are there. Some banks don't have any method of direct transfer to Montenegro, so you may have to use a currency exchange to do this for you (they quite often get better exchange rates too for those in non Euro currency countries). From there the money can be transferred to a Montenegrin bank (Opportunity Bank in Kotor Old Town only charges a Ђ15 handling fee. Some banks charge a percentage). Once you have decided on your property (or properties), seek the proper legal advice and look forward to your new holiday home, capital growth or rental income. Please note: this article does not constitute legal advice and any costs incurred & potential future gains may be different in each instance.

Feng shui in real estate sales

: Literally translated "Feng" means wind and "Shui" mean water. Deeply rooted in connection to nature, Feng Shui is the 4000 year old Chinese are of placement and philosophy that supports living in awareness and harmony with our surroundings. As the awareness of Feng Shui increases, more real estate agents are being asked to show buyers homes with "good" Feng Shui. If a real estate agent has knowledge of this ancient and highly respected design philosophy will assists him/her to:

• Increase the value, marketability, and emotional appeal of a home.


• Build confidence with Feng Shui savvy buyers and sellers.


• Provide solutions to remedy a home's Feng Shui energy challenges.


• Build referrals by selling "Feng Shui friendly" homes that support the well being of your clients and their sphere of influence.

This section will explain the 5 Feng Shui tips for your references. Tip 1 : Main Entrance The main door is like the mouth for the house. It is the gateway between the world and the privacy of the home and air currents literally enter and exit at this point.

• The positioning of a main door can determine the fortune or misfortune of the occupants. Therefore you must keep the entrance clear of any clutter to allow the energies to flow freely.


• Make sure there is nothing in direct alignment with the door such as a tree or telegraph pole. To remedy this place a Bagua mirror over the door so it is reflecting the Sha Qi.


• Avoid facing a dark, pokey room, an interior staircase, mirror, stove, sink, fireplace, the door of a toilet, laundry, bathroom or bedroom. To remedy this keep the doors closed or place a screen between the doors.

Tip 2 : Bedrooms Bedrooms should be sacred spaces where an adult or child can retreat and regenerate. Most people spent roughly one third of their lives in their bedroom, so maintaining balance and serenity in this area is essential. Tip 3 : Kitchen In any case, it's better if you don't see the kitchen immediately upon entering the house, as this can portend digestive, nutritional, and eating problems. Having the kitchen at the entry point can also mean that guests will come over and eat and then leave immediately, and such a placement can also encourage the inhabitants to eat all the time. Tip 4 : Windows A house should have sufficient windows. Windows are in very important to allow sufficient light or pleasant views into the room. Tip 5 : Dining & Living Room Whenever possible the dining room should be separate from the living room. It is a social area for family members, thus it better to have as big as possible. Summary So with the above tips, you as a real estate agent when meet with a Feng Shui savvy buyer, you can use the above tips to talk with them, the chances to close the deal is high because the buyer see you as a knowledgeable in Feng Shui and the property you propose to them must be good in Feng Shui. And Feng Shui is a very good topic when come to a price negotiation with the sellers, agents with Feng Shui knowledge might be able to negotiate a better selling price for their buyers and close the sale.