human
Give me essay relating to housing market and house values that are prone to fluctuations but the value that is declining and the commercial or residential property tax that is related to the assessed value of the property. Start with the words '##Real Estate Management –'.
assistant
##Real Estate Management – Analysis and Valuation Report
Macroeconomic Dynamics
The effect of the recent financial crisis was felt in mid-2007 and in 2008; as a result, the financial institutions collapsed and others were acquired by other institutions causing a huge crisis in the stock market which drastically fell in large numbers (globalissues.org). The developed countries like the United States came up with bailout policies to rescue their monetary institutions. The financial bubble followed the economic boom and the bubble busted when the United States financial system failed, this led to the collapse of the mortgage market and a turnaround of the home boom in almost all developed nations which caused a wave-like effect around the globe (globalissues.org).
Securitization was the 20 th Century innovation; the bank off-loaded the risk from the mortgage owners and they received regular payment. The rating agencies were paid a price to rate the bank’s product leading to interest divergence; this led to more borrowing by the bank which caused even more securitization which eventually triggered the financial crisis (globalissues.org).
The housing crisis is over and the negligence issues that caused it have been addressed, at least according to the real estate reports which have been boosting confidence amongst the bankers. In the first quarter of the year 2010 for instance, the prices for many homes on average fell by 46% as a result of foreclosure problems that had crushed home prices (Money.cnn.com). RISMedia.com on May 21, 2011, reported that based on their closing and opening home prices contract information from its businesses and brokerage operations, it expected that the adjusted annual seasonal rate of built home auction on a nationwide basis will remain within the range of 5.0 to 5.2 million in April 2011 and May 2011 (RISMedia.com); a clear indication that the worst part of the financial crisis is now over.
Microeconomic of real estate industry
Houston Texas
Houston is an habitant to a gigantic 24 Fortune 500 head offices which surpasses even those found in New York. In the last decade, 1.23 million people were added to the population statistics of the city, making it the eighth position in terms of population increase (Money.cnn.com). It is also a resident of an “Energy corridor” which employs more than 70,000 people and is the home of Continental Airlines and Sysco (Money.cnn.com).
##Insurance
Insurance over Texas is the company that covers the whole of Texas State; the insurance offers an insurance discount of 20% when purchases of at least 2 policies have been made (Insuranceovertexas.com). These policies are designed to cover disasters that may prevail; the insurance policies include; Houston homeowners insurance, and liability insurance (Insuranceovertexas.com).
Property taxes and related fees
The housing market and house values are prone to fluctuations but the value is declining and the commercial or residential property has been examined and the likelihood is that it will cost more in property taxes than the actual amount that is supposed to be paid. However, due to lower house values the property taxes rates have been protested and the tax is then reduced every year according to the property valuation figure. The RPT (Republic Property Taxes) gives consultations services to the client at no fees and also at no upfront charges (Republicpropertytax.com).
Maintenance and repair expenses
It is very costly to maintain and repair a house but door-to-door bargain rates can be cheap. A professional house should be hired and confirmation of license and insurance to confirm if it is still effective. Any unlicensed person will not be allowed to carry out maintenance and repairs on the home, as this will increase liabilities. Deposits will be paid to the work in progress and the remaining amount when the work is complete (Homesandland.com).
The real estate agent will explain the procedure to follow when maintaining the house before I move in. This means that copies of service and warranty agreements will have to be obtained and included in the contact address in case of any problem and also set up preventive measures and records for the home useful life (Homesandland.com).
##Rentals
Globally rental properties are abundant and range in sizes and shapes from large mansions to small rooms. But even then locating a rental property in the region and size of interest can be problematic even if there is plenty of property to be rented since it might not satisfy all the conditions. This therefore calls for thorough research, if you want a house and location that fits your lifestyle it means extensive research will have to be done. In making the final decision multiple factors to consider are analyzed and the final decision is made regarding the home of choice (Buyingpropertyinusa.net).
Texas price to rental ratio is $12.16 which is obtained by dividing the price of the property by the annual rent; this means that the median monthly payment is $474 and the property median price is $69,100 (Buyingpropertyinusa.net). Rental in Texas can yield an income of 8.2% to the owner of the house when compared to other States. This is because the rent may be approximated on average when compared to other States as of September 2010 (Buyingpropertyinusa.net).
In Houston TX the comparable rental can be as indicated on the spreadsheet. This means that the rent range between $349 to a high of $2,970 in the same region. Compared to the mortgage monthly payment of $793 this means that it is approximate to the average monthly rent in the region.
Single-Family Home
The house was built in 2007 and is a 3 bedroomed house, with 2 full bathrooms and 1 partial; it has a square footage of 2040 square feet and a lot size of 4951 square feet (cnnmoney.trulia.com). It also has central air conditioning and a built-in garage, one fire place and a swimming pool at the backyard. One square foot cost $66 and the house can be bought at $134,900, with an estimated payment of $793 payable each month. The property is located in Houston, TX and the nearby school is Community Evening; this information was added on site one hundred and ten days ago and the total audiences who have visited the site total 137 as of May 22, 2011 (cnnmoney.trulia.com).
##Utilities
Houston has both hot and cold seasons that generally involve mild winters and hot summers; as such a huge proportion of the expenditure can be from utility bills (cnnmoney.trulia.com). In summer more electricity is used in air conditioning which is from May to September. This factor should be considered before buying this house in Houston. Zthe company that supplies electricity in Houston is Reliant Energy and is ranked 10 th in the US in terms of Kilowatts sales (cnnmoney.trulia.com). Southwestern Bell also provides telephone services to the Houston region (cnnmoney.trulia.com).
Other details
Comparable sales price in the region
Houston Suburban Real Estate trend
The selling price for 4114 Dogwood Hill is $134,900. Similar houses or home in Houston Suburban are worth $135,303 with a 0% above the selling price, while an average sale price for a related house or home is $121,035 with a trend of 11% below the selling price (cnnmoney.trulia.com). Finally, the average catalogue price for houses in Houston Suburban is $132,121 with a trend of 2% lower than the selling price (cnnmoney.trulia.com).
Homes sold in Houston Suburban
The already sold houses have price ranging from $109,910 to $142,246 and entire selling transactions taking place in the current year 2011 as shown by the spreadsheet (Houses sold in the past).
Similar Single-Family home or houses for sale with 3 bedrooms as shown in the excel indicates (comparable prices) that the price range is between $ 106,900 to $163,900
##Testimony
In the neighborhood (Deer park) lives Mr. and Mrs. Clean, theirs is a traditional single-Family in a replica condition; the house is wonderful with huge living room and roomy dining place which is joined to a span kitchen as well as a good sized master bedroom and Jacuzzi tub (cnnmoney.trulia.com). The house also contains a 13×13 game room, 3 bedrooms and utility room, a sized backyard and huge Lots of square footage that goes at a favorable price. In the neighborhood there are great schools and subdivisions and the area has a well kept and attractive garage (cnnmoney.trulia.com).
Property Valuation
Cost approach
Using cost method valuation of the house, the value will be the price of the land plus any development or improvement in that piece of land such as built house, swimming pools, perimeter and a flower garden. The cost of the property cannot be more than the selling price of the property which is $134,900; this amount includes the cost incurred in putting up the structures and any other improvement and also includes the profit that the seller makes. Therefore, the value of the house is less than $134,900.
Revenue approach
This method is used to value investment and commercial property, the present value of future cash flow is used to determine the property value. Since the intention is to purchase a single-Family home this approach method will not apply in this case.
Market approach
Similar homes or houses cost the homeowner on average $349 to $2,970 per month while the price of the house ranges between $106,900 to 169,900, whereas the target property monthly payment is $793 with a price of $134,900 (cnnmoney.trulia.com). This means that the value of the property is between $106,900 and $134,900 considering that there is a profit allowance to be made. From the Buyingpropertyinusa.net the rental yield from the real estate in Texas is 8.2%. Assume that the owner of the property earns 8.2% as profit therefore the property value will as shown below;
Profit =$134,900 x 8.2%= $11,061.80
Value = $134,900 – $11,061.80
= $123,838.20
Legal Forms
Before buying a piece of land one should make sure that the piece of land has a marketable title; this is the first thing to do when purchasing any property on that piece of land as this avoids the legal hassles (Propertybyte.com). The buyer should have knowledge on the following documents which are readily available as they are produced by the seller or the registered office or the lawyer.
Title deed
The title deed is usually obtained from the seller and should be produced when selling the property; the buyer confirms the name of the seller and whether he/she has the selling rights and that he is the sole owner of that land (Propertybyte.com). The original deed should be examined by the lawyer to determine its authentication and also investigate to determine whether there is another owner of the same property (Propertybyte.com).
Conveyance Deed or Sale Deed
It is a document that passes to the buyer after the ownership is transferred to the buyer; the conveyance deed help the buyer to determine whether the property he/she is buying is on piece of land owned by the builder, society or development authority in that region (Propertybyte.com).
Tax receipt and bills and Encumbrances Certificate
Property taxes and bills charged by the government on the property should be assessed to determine whether there is any liability associated with it (Propertybyte.com). The buyer should confirm that the piece of land does not have any legal charges outstanding; this can be done by obtaining Encumbrance certificate from the sub-registrar office (Propertybyte.com).