Drowning in Student Loan Debt? Who Is to Blame?

What do you do when your child tries to make up her mind among different colleges she’s been accepted to? Would your conscience allow you to give up the best possible college for a cheaper college that wasn’t as good? Could you ever live with yourself in the knowledge that you didn’t give your child the best education you could? Isn’t an education an investment that will pay for itself many times over anyway? Perhaps that was how it used to be. Seeing education in this way is no longer something that can hold water though. There are many families today that find themselves in debt for close to $100,000 from having considered a child’s education an investment that can pay for itself. Many graduates who find themselves in a merciless job market that doesn’t pay a fraction of what they hoped it would, find themselves enrolling in night school three years just on the hope that they can keep creditors for their student loan debt at bay.

Does putting off paying your child’s student loan debt off really make sense? The longer you put it off, the more the interest accrues. Does all of this sound like déjà vu? This does sound like the mortgage crisis that brought on the recession two years ago. Just as homebuyers five years ago thought that they could just swing it buying a home that would appreciate in value and make it worth their investment, students and parents today are trying to buy an education that they really cannot afford. They just hope that the investment they make will appreciate in value and somehow bring them great returns. They’re finding out just as homeowners did a couple of years ago, that reality can be very different.

It’s all panning out exactly as it did with the housing loan crisis. Colleges are enrolling students no questions asked, for courses that cost $200,000 over the duration of four years. They bring on banks that will underwrite those loans, and they all hope just like that, that those students will graduate and go on to make fat paychecks. If the jobs market happens to be disappointing, they can’t just declare bankruptcy with student loan debt either the way they can with a home loan. Federal bankruptcy law makes sure of that. Far from opening doors, an education for these young people pushes them into years of debt they can’t possibly get out of.

Typically, families that get themselves into this kind of situation start off applying for a federal loan from Sallie Mae. But after a while, Sallie Mae by the time the child gets to the final year, rejects any further advances and directs parents to apply for a private student loan with a private bank. Typically, when an application for a loan s rejected on account of maxing out credit, that person should set red lights flashing. But it usually doesn’t, because parents naively see an education as something that is worth any kind of sacrifice. Perhaps more balance is called for.

Real Estate Analysis – Definition of Real Estate

Before getting further in the topic of Real Estate Analysis, the general definitions and specifics of the market has to be understood.

Real Estate is an English legal term which defines Land and anything fixed or permanently attached to it. This usually includes buildings, but also fences, roads, sewers etc. The title to Real Estate usually includes also air and mineral rights, which can be then sold together with the original property or separately.

From an etymological point of view, “Real” refers to “Royal” (Royal in Spanish means “Real” in English). Royal family always owned the land in Spain and peasants only paid rent or taxes to use the Royal land.

Even though Real Property has many specifics, it is still a form of goods, which is traded on the market. In the following paragraphs are described some of the specifics involved.

Real Estate is a complex type of goods. Each property (i.e. residential investment property ) is different from the others. The main characteristics are usually: size (square footage), number and sizes of rooms, year when built, etc. Then there are many characteristics which are connected with the area of the property such as quality of the neighborhood, criminality rates, schools, etc. Even two pieces of “identical” investment apartment in one building will have at least different views from the windows making their prices differentiated.

Most of the market is usually represented by houses, flats or condominiums, which are always fixed to a specific location. This is the second specific of Real Estate investment. It cannot usually be moved and therefore location is dominantly the most important factor affecting the price of the property. It is obvious that the value of land differs according to the distance of the center of employment. Land further away from this center, has to accommodate future costs of daily commuting to work, and therefore the price of this land and property standing on it will be lower. Example of this can be suburbs of the cities in contrast with locations near the centers.

R.E. is a form of goods of a long term use. Ordinary people buying a property are counting on the possible resale in many years to come. Even an investor does not buy and sell a property within a couple of hours, which can be easily done with stocks for example.

R.E. is not only a type of goods for a long term use, but also a specific type of investment. In comparison with other goods, i.e. a car, its value usually grows in time.

Purchase or building of a new property is accompanied with high transaction costs. These costs include fees to agents (realtors), moving costs, Real Estate taxes or fees paid to banks on mortgage.

Another specific of the Real Estate market is the influence of local community and government. Local neighborhood and its quality can change the value of each property in it rapidly.

These all specifics and the complexity of R.E. make it very difficult to estimate a market value of a property. Luckily even in this specific market there exist the laws of supply and demand which make it possible to estimate the value of a property and also there is a big quantity of Real Estate Investment Software, which can help radically with the Real Estate Analysis.

Common Misconceptions About Buying and Selling Real Estate

One of the tasks associated with my business is educating clients who have various misconceptions about real estate.

Most believe information a friend has provided them is accurate without investigating themselves.

Here then are some of the most common misconceptions about buying and selling real estate my customers have presented me…

Foreclosures are the best deal

Many who purchase real estate either for investment or as their primary home are under the impression that foreclosures are the best deals.

While there are certainly some very good deals when purchasing foreclosures, often times making an offer on a property not in foreclosure is a better deal.

If a home or property has been foreclosed on, there is a high probability that the owner neglected maintenance due in part to financial implications. When this is the case, the property may require a significant financial investment to return the property to a “livable” condition.

When purchasing a foreclosure it is highly recommended that a full and thorough inspection be made of the property to ensure everything works and all significant features of the property are in good condition.

Look first get a loan second

First time home buyers as well as those who have not purchased a home recently are often misled into believing they should look at homes before obtaining proper financing.

While this may have been somewhat true during the boom years, many sellers no longer entertain offers on their property that are not accompanied by a letter of approval from a lender.

In addition, when searching for a home it is imperative that your real estate agent know not only your wants and needs, but also the price range of which you can afford.

Think for a moment about looking at several homes before obtaining pre-approval. An agent shows you several and you fall in love with one that costs $250,000. You make a full purchase offer with an earnest money deposit of $2,500 which is accepted, the sellers agent takes the property off the market so no other offers can be received.

You contact your lender for approval, who responds that you are qualified for a loan up to $200,000.

Not only have you found out you’re not qualified to purchase this home, but it may also be difficult to get your earnest money deposit returned to you. This can be a significant disappointment to you during your search for a new home. In addition, you’ve wasted the time of all parties concerned including yourself.

Therefore, it is highly recommended before you start looking at homes, you get a pre-approval letter from your lender. At least then you know how much house you can actually afford to purchase.

I must see all properties in my price range before deciding

Many buyers believe looking at every available property for sale will give them more options before making an offer.

Unfortunately the truth is actually the reverse – Looking at many properties tends to blur one into the next. When buyers view too many properties, they tend to forget or blend one properties prominent feature with another.

Also, it takes quite a bit of time to view every single property on the market and may cause you to miss that special property that meets your needs by not making an offer before someone else.

A preferred method of deciding which properties to view is to make a list of your wants and needs, discuss them with your real estate agent and together prioritize them.

Your real estate agent will be able to print out the properties that best match your criteria and show these to you so you can make a quick, informed purchase offer.

Real estate agents make too much money

This misconception is quite interesting – It is often expressed mostly by sellers wanting to haggle over a commission amount.

Did you know that the real estate agent actually only receives a small amount of the total commission?

Here’s why…

First off there is the split with the office broker so now the real estate agent only gets half. But wait; there are two sides to every transaction so there is another split with the selling agent and their broker.

So actually, the listing real estate agent only gets ¼ of the total of commission out of which their bills must be paid such as advertising, signs, MLS fees etc.

While some agents do make a very good living, it is not because of the amount of commission but instead because they treat their clients well, are well educated and have good business sense and ethics.

Buyers have to pay a real estate agent

This misconception is quite common in today’s market. Many buyers believe when they work with a real estate agent, it will cost them money.

Actually, in many areas real estate agents work with buyers for free. The agents fee is paid by the seller when the property is sold and closed.

So buyers go ahead and call a real estate agent and ask them – it’s the best decision you will make prior to purchasing your next property.

Going directly to the listing agent will save money

Often, a buyer will want to go directly to the listing agent in the hopes of saving money by negotiating or asking them to lower their commission.

Lowering a commission however, helps the seller and hurts the agent and most agents are understandably unwilling to do so.

Many buyers are not experienced negotiators, and may not be aware of what items may be negotiable besides the price of the property.

Having your own buyer’s agent represent you helps when purchasing a property by having an experienced negotiator guide you on what items are negotiable, price and other ways to save you money.

Working with more than 1 agent is ok

This extremely common misconception is one of the most wasteful of all.

When working with an agent as your representative, it is vital that you work with just that one agent.

Most real estate agents such as me work very hard for their clients. Their expenses tend to be quite high just getting clients: website fees, administrative fees etc are just a few of the costs real estate agents incur in their business.

There are many acceptable reasons a real estate agent may be unavailable to show you a property: personal illness, prior engagement with another customer, family matter etc.

These are not reasons to contact another agent and ask them to show you properties.

However, there are also many unacceptable reasons agents may be unavailable: they went on vacation without letting their clients know or they failed to provide another agent as backup to assist their clients, perhaps the agent does not work the hours clients are available to view homes or perhaps the agent doesn’t work weekends or holidays and many others.

The latter two are unacceptable for the mere fact that most potential buyers work during the day and are only available to view homes after work hours and on weekends.

If your agent is unavailable for any unacceptable reason, rather than contact another agent to show you a few homes, perhaps instead you should be contacting an agent who will work for you when you need them.

Listing with a friend/relative will save me money

This misconception can be quite damaging to a relationship. First off, if the agent is a friend and have agreed to reduce their commission, are you certain they are still able to market your property correctly?

Also, an interesting issue that often arises when working with friends or relatives – if your property does not sell and you believe you are not being represented appropriately, will you be able to fire them and hire an agent who will?

Working with a friend or relative may place a strain on this relationship and I highly recommend you hire a competent 3rd party to represent you.

You can always ask your licensed friend to help you find an agent so they can receive a referral fee.


As you can see there are many misconceptions about buying and selling real estate, working with an agent as well as the procedures involved.

When you’re looking to purchase or sell a property, get as many facts and information from licensed sources. This will ensure you not only have accurate information, but also can make an educated decision on your next property purchase.

Copyright © 2001-110 Jennifer Mackay and http://www.JennferMackay.com All rights Reserved.

Why Real Estate Attorneys Are the Important Members of the Real Estate Team?

In order to complete, the real-estate deals you need to do a lot of paper work. Paper work is quite essential for all real estate jobs. Do you know how this paper work is being completed? Well, the real-estate agent who shows the property to the buyer is taking the first initiative. You will be surprised to know that the real estate agents are doing about 90% of the real-estate deal. You will hardly find any estate deal, which does not contain the real-estate agent. However, there are many other players as well who participate in the real estate. Realtors are one of the team members who can replace the estate-agents. However, the estate agents are still the favorites. Similarly, the real-estate attorneys also play an important role. One cannot really imagine how tense these estate deals are.

Most of the people do the real estate deals once in their lifetime. They hardly go for any another real-estate deals after that. Hence, most of them do not have the right knowledge about the real estate. That is why they need the estate-agents and the attorneys. It is true that the busiest member of the team is the real estate agent. However, you cannot really discard the real estate attorney. In fact, you are looking at the deadly combination of the estate agent and the estate attorneys.

They both are very active throughout the process and you cannot hope for the deal without them. Some of the estate agents and the attorneys are so experienced that they can solve the deal and complete it within one day and this is really the case. The attorney is preparing all the paper works. However, the credit of controlling the paper work should go to the estate agents who are responsible for finalizing all the requirements of the buyers and the sellers. They note down all the requirements while they have the meeting with the buyers and the sellers. They provide the appropriate details to the attorneys who are experts at preparing the agreements and they dare to finish these agreements within few days.

In some of the countries, you can still see the typewriters being used in the court campus. Those typewriters are quite great and type the whole agreements within few minutes as the real estate agents and the attorneys ask them to do. These are some of the rare sites seeing such a great typewriters working on the old typing machines.

If you feel of viewing such machines then you should go to the court. They are just awesome and you can hope for some of the best scenes. However, the attorneys guide them and it is the attorney who go through the detail of the papers and find out that they are according to the law or not. They try to make sure that no point goes against the seller or the buyer in the future. Most of the attorneys take the responsibility of such condition. They in fact play a major role in finalizing the real estate deals.

How To Become Your Local Real Estate Investing Guru

To better understand the psychological nature of real estate investing, you first need to understand the nuances of the real estate market, and how the opinion of the market differs between investors and the rest of the universe. Consumers might use the following terms or phrases to describe the current real estate market: bleak, dismal, sluggish, and catastrophic.

Investors, on the other hand, might use a slightly different set of descriptions for the exact same real estate market, because we will always view market conditions different from the majority. Examples include: opportunistic, a rare gem of possibility, a millionaire maker, ripe for the picking and a never-ending opportunity.

The truth, for investors, is that there has rarely ever been a market condition that is better than the one you are experiencing right now. Like the hundred year flood, you may never see the likes of this again in your business lifetime and it represents a rare and exciting opportunity for people like you and me. The public, influenced as you know by the popular media, sees things differently and in a much more pessimistic light. As real estate investors, you have an amazing opportunity in front of you, and in the spirit of building a multi-million dollar business, you also have to bear in mind that your view of the market is dramatically different than the one your clients will have. This is a gap that needs to be bridged if you are to have optimum success.

In part because of the difference in perception about the market and in part for reasons I’m about to describe, it is the unfortunate truth that investors, as a group, often get a bit of a bad rap and have a questionable reputation in the world of real estate. Why is that? I can think of several reasons that are worth discussing:

Lack of Credibility

First, you have the greed factor. Basically, in a nutshell, what I’m referring to here is the small percentage of real estate investors who let their pursuit of power, money, and glory get in the way of running an ethical business. Ultimately, the emphasis should be on creating outcomes that benefit all parties. We’ve all come across examples of greed in this business, and if you haven’t, you will. It could appear as the slumlord that maintains slovenly apartment units to better line his or her pockets with revenue from rents. It could appear as the scam artist who dupes others into sinking funds into phantom projects that never actually materialize. It could appear as the heartless person who promises the world to a client in pre-foreclosure and then leaves them stranded at the eleventh hour. I could go on and on.

These select few make a bad name for the rest of us and it is an unfortunate reality for those of us who wish to run our business the right way. There’s not much you or I can do about it. Real estate is a commodity from which tremendous profits can be realized, and as a result, some greedy people are going to get into the mix. What you can do is recognize how these people affect the reputation of real estate investing as a business and place extra emphasis on building a reputable business that will show the true colors of your craft.

Second, you have the issue of jealousy. I might be going out on a limb or sparking a little controversy here but some of the current reputation for real estate investing as a profession comes from that which is explained by real estate agents and brokers. It is unfortunate, but some (not all) of your real estate brethren are often working against you either consciously or subconsciously. If these select few would simply take the time to learn something new, and open their eyes to the many unconventional and creative opportunities that real estate offers then they would truly understand why you choose to be a real estate investor, rather than a real estate agent. There are hundreds of differences between selling houses for a commission, and buying and selling houses for equity and profit. Personally, I’ll take the equity and profit any day of the week.

Should real estate investors to be alarmed? Not necessarily. Rather, it is important to be aware of the preconception that exists in this business. Credibility must be built in spite of this obstacle, rather than simply expecting that things you can’t control will somehow change.

Third, you have the issue of ignorance, not as much on the part of your colleagues but on the part of the general public. I’m not suggesting the public is ignorant in a general educational sense. What I am suggesting is that the general public is very unlikely to be up to speed with the kinds of concepts and techniques that you will be utilizing as a real estate investor. For example, the majorities of homeowners only buy and sell a few homes in their lifetime and in doing so utilize realtors who are pretty much driving the transactions based on conventional wisdom. We as investors on the other hand are trained to buy and sell properties as a business and perhaps have completed dozens if not hundreds of deals or more. That said, while this type of ignorance may impact the reputation of investing as a profession, it also opens a key door of opportunity for you to really establish a local name for yourself and your business that will literally make believers out of your clients.

Next, is the unfortunate issue of a few dishonest investors out there who threaten what you do on a daily basis. Whether it’s an unscrupulous developer who cuts corners or abandons a project, or foreclosure investors who skim equity or take funds up front from clients and then disappear, the bottom line is the same. Like any industry, real estate investing has its share of “bad apples” and unfortunately, these people get more attention than the good ones. The media loves a story where some evil investor scams an innocent consumer because; (a) it’s negative, and (b) people pay attention to that kind of stuff. My commentary on the media aside, it’s important that you recognize what your clients are likely hearing or reading and how it relates to what you do for a living. You do not want to let yourself become defensive about it but understand that your reputation will in part be built upon showing clients that you do not fall into the “bad apple” category.

Last on my list of things that give investors a poor reputation is a simple lack of true knowledge & professionalism. In short, some of your investor colleagues just don’t know what they are doing and this can impact the overall perception of what you do as a business. While I can’t oversee proper education for all investors, I think (in fact I know) that this can work to your advantage. Where other investors fall short, you will finish. Where other investors are weak, you will be strong. Business is about survival of the fittest and, even though some investors may damage the reputation of the business as a whole by not being very good at what they do, that can and should be seen as a great opportunity to establish your own reputable foundation and build from it.

I will continue this topic next week. Until then, check out my set of tools that when used correctly will easily make you stand out as the educated, smart, and confidant investor. Using the same techniques with the integrity and honesty with which we should all do business, I have created a very successful and highly profitable investment company.

Check it out: http://www.freemakemoneygift.com/Invitation.html