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1. You need a real estate agent to sell your house.
Actually, every year, millions of individuals sell their home on their own without hiring a real estate agent or paying any commissions. The reason they succeed when many others fail is because they understand the market value of their home and do not try to make a killing when they sell. Without or without a real estate agent, nothing turns buyers away faster than an overpriced home.
2. The time of year is not important when you are trying to sell your house.
The time of year you put your house on the market is very important and second only to understanding the market value of your home. Except for very warm climate states, spring and early summer are by far the best time to put your home on the market. The federal government even uses a seasonal adjustment factor to smooth out homes sales figures throughout the year because the amount of homes sold in spring and early summer is greater than any other time of the year.
3. Besides owning your own home, the only way to make money in real estate is to become a landlord.
Unbeknownst to most individuals, there are many ways to make money in real estate without becoming a landlord. Tax lien certificates, probate sales and mortgage notes represent a few of the methods real estate investors use to make money in real estate without becoming a landlord.
4. You cannot buy and sell real estate through your self directed IRA.
Although it is not well publicized, the regulations governing IRAs do allow individuals to purchase real estate. However, most IRA plans do not offer this option. Fortunately this trend is changing and a number of companies are now offering IRA plans that are setup to purchase and sell real estate.
5. You cannot buy and sell real estate like stocks.
Real estate investments trusts, or REITs as they are commonly called are offered on all the major stock exchanges and can be bought and sold in the same manner as any other publicly traded company. REITs come in all shapes and sizes and their holdings can include just about any type of real estate including residential homes, apartments, self-storage units, hotels, industrial parks, medical buildings and mortgages. REITs also offer another way individuals can buy real estate through their IRA.
6. Purchasing real estate for 50% to 90% below market value is not possible.
Ask someone to describe a tax deed sale and you are likely to get a blank stare. However, many states in the United States have tax deed sales and in highly populated counties, tax deed sales can occur year round. At a tax deed sale, the county auctions off properties where the property owner has failed to pay their property taxes. In most states, the bidding for the property starts at only the taxes owed and properties at these sales can sometimes be purchased for 50% to 90% below market value.
7. Unlike bond investors, real estate investors cannot earn a fixed interest rate on their investment.
The second way states have devised to handle property owners that do not pay their property taxes is to sell the tax debt due on the property at a public auction to investors. This sale is called a tax lien sale and the winner bidder is issued a tax lien certificate. This tax lien certificate bears an interest rate that can range from as low as 8% per year in Oklahoma to 36% per year in Illinois. To remove the tax lien against the property, the delinquent property owner must pay the investor all money due plus interest, based on the state mandated interest rate. If the owner fails to pay back the tax lien plus interest, the investor can foreclose and keep the property.
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