Sellers Rejected Your Offers? Get Back on Track to Closing

Making a Strong Offer in 3 Strategic Stages

Person looking very hopeful.  Captioned: Making a strong real estate offer in 3 strategic steps.

You’re financially ready. You’re excited to be shopping for your new home. But you’re getting slammed by the competition! Now, how do you make offers with confidence and get your home purchase goal back on track?

There are three key parts of this home-buying adventure. You can break them down into:

1. Preparing your finances.

2. Choosing homes you’d like to buy, assessing their value and appropriate pricing.

3. Negotiating with sellers.

When the going gets tough, a few competitive tips might help strengthen your hand in each of these three stages. Then we offer a few lesser-known ideas. What follows is a range of possible strategies to work with, so you can choose what resonates with you.

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The 1031 Exchange and Other Real Estate Tax Staples: Will the Biden Administration Make Changes?

Image of public housing. Captioned: The 1031 Exchange and Other Real Estate Tax Staples.

In the $1.8 trillion American Families Plan, Joe Biden is looking at tightening up the tax code to move more funding into families and education. What tax provisions could be changed?

  • The 1031 exchange (like-kind exchange) tax-deferrals for business or rental properties.
  • The stepped-up cost basis for heirs after the homeowner dies.
  • The current estate tax exemption.
  • Gift tax provisions.

Congress would have to approve any changes, so none of these will be enacted immediately. If and when they are enacted, their bite may be less than their bark. Let’s take a look.

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Decentralized Finance (DeFi) and Real Estate Investments

Image of the outside of a modern multi-unit real estate building.

Real estate is known as an illiquid asset. Turning real estate assets into cash is a complex, costly process. This is so, whether the owner is selling, or seeking profit from steady rental income. Returns on an initial investment are typically slow, cumbersome, dependent on intermediaries, and reliant on other people’s reliability and performance.

Blockchain technology is being applied to lessen the administrative friction. Were real estate easier to transfer, proponents say, new investment choices could be developed.

Readers may have noted a marked rise in discussions of DeFi — decentralized finance — as a way to bringing tangible assets into digital, accessible form. Real estate, with a global market approaching $300 trillion in total value, is an impressive use case. According to Paul Tostevin, director of the Savills World Research team:

By any measure, real estate is by far the most significant store of wealth, representing more than 3.5 times the total global GDP. 

And no wonder. Territory is a good we cannot live without. And real estate is finite.

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Immigration for U.S. Real Estate Buyers

Image of a map of the United States with green pushpins marking locations of foreign real estate investing.

…And the Return of the EB-5 Investor Visa

In the United States, real estate investment opportunities abound. International real estate buyers can earn profits and bolster the U.S. economy at the same time. Some people invest from outside the borders. Some investors hope to live in the United States.

If you wish to invest in U.S. real estate from a distance, or to learn about mortgages for international buyers, check out our guide for Foreign Nationals Buying U.S. Real Estate.

If you are thinking of purchasing U.S. real estate and gaining residence as well, read on. We’ll start with a broad-brush Q&A. Then we’ll get into the investment visa and the eligibility rules as of 2021.

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Creating Affordability: Deed-Restricted Workforce Housing

Image of furniture in a house and the view out a window to a mountainous scene.

Buying a home is a major challenge for a large segment of our population, and many people can’t afford homes near the workplaces that need them. With the travel and hospitality sectors reopening for business, the problem is growing more obvious. There’s a home affordability crisis calling for remedies.

Where there’s a will, there’s a way. Or several. Some counties and towns are addressing the issue by dropping their single-family-only zoning rules. Another response is a flurry of permissions for homeowners to build accessory dwelling units (a.k.a. “in-law cottages)” on their properties. 

In this article, we’ll explore yet another partial solution: dedicated workforce housing. Counties can create deed restrictions that allocate homes to employees of local businesses. A deed restriction, recorded with the property deed, can limiting the ways a home can be held or conveyed to someone else.

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Blockchain Is Now Legal Tender In El Salvador. Real Estate Investors, Take Note.

Image representing the idea of a blockchain.

June, 2021 — As readers know, we’ve been watching the steady emergence of blockchain for real estate applications. Blockchain, which was introduced to the world through Bitcoin in 2009, is here to stay. How can we say so? It’s increasingly viewed as a change agent in the way business is done.

Case in Point: El Salvador, June 2021

Cryptocurrency has just reached a new milestone, becoming a legal tender in El Salvador. To underscore the intent to make bitcoins more like a currency than a taxable asset, President Nayib Bukele said transactions could occur without being subject to capital gains tax. On the 9th of June, 2021, the president tweeted about the country’s official recognition of Bitcoin:

The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! History! #Btc

Bukele has replied to concerns that cryptoassets can be used by criminals, observing that criminals trade in U.S. dollars and other assets as well. The president also tweeted a rebuttal to the objection that cryptocurrency relies on coal-based electricity:

I’ve just instructed the president of LaGeo (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos. This is going to evolve fast!

El Salvador will offer citizenship to those who have invested in at least three bitcoins.

Note: Bitcoin with a capital B is usually reserved to mean the platform, whereas a bitcoin with a small b is the cryptoasset itself. BTC is the abbreviation for bitcoin traded on an exchange.

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With Home Prices Soaring, Condos Are a Relative Bargain. Here’s How Their Deeds Work.

Image of a pool area surrounded by living area of a condo or house.

Home values shot up over the past year. Now, in the second half of 2021, demand remains high. But did you know that condo prices, on average, have only risen about half as much as single-family homes?

The difference is especially pronounced in some of the major East and West Coast cities, notes. For a striking example, take San Jose. The price of an average San Jose home has risen 11% year-over-year — while the rise in condo prices is a laid-back 2%.

What explains the extra high demand (and pricing) for houses over condos? When the pandemic took hold, a wave of buyers headed for suburbia, seeking extra personal and working space. The work-from-home trend freed many to leave condos and apartments near their jobs. The newly remote workers could now buy homes and cabins with space and scenery.

The upshot? Condominiums are available. In many markets, they are still surprisingly affordable. To boost buyers’ savings further, condo insurance is cheaper than home insurance. Plus, condos tend to be compact and insulated by adjacent units, so owners don’t spend so much on heating and air conditioning. Add in today’s low interest rates. First-time buyers have an opportunity here.

Selling your home this year? Many buyers continue to work remotely. New work arrangements are influencing buyer preferences.

Before jumping into condo living, potential buyers might ask: “What kind of title will I actually get?” Or even: “What will I have to do as a condo owner?” Let’s take a look.  

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The Biden Administration Confronts Racial Bias in Appraisals

Happy family gathered in a kitchen preparing food. Captioned: Administration Confronts Racial Bias in Appraisals

Black-owned homes are regularly low-balled in appraisals. It’s been happening for generations. Now, the Biden administration is confronting the issue.

On June 1, 2021, the president said a new task force will deal with race-associated disparities in home appraisals. Housing and Urban Development (HUD) Secretary Marcia Fudge will lead the team as it embarks on a thorough review of current appraisal methods and outcomes, and as potential remedies are considered.

The task force will consist of a large group of agencies and financial groups, encompassing the Federal Reserve, Freddie Mac and Fannie Mae, the Consumer Financial Protection Bureau, and a host of financial groups. It will seek information and guidance, too, from civil rights nonprofits as well as the appraisal industry and its state-based regulators.

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Selling Your Home? A Few Things to Know About Listing Agreements

Image of legal documents being offered for signature from one person to another person seated at a table. Captioned: Selling Your Home? A Few Things to Know About Listing Agreements

You start off the marketing and sale of your home with a listing agreement. This document controls all the terms of the sale. It sets the keynote for a string of important decisions and legal agreements.

In this article, we’ll discuss some recent news about listing agreements, as well as the broad-brush concepts every seller must know. First, we look at some sales tactics to look out for before you even think of selling. Then, we’ll explore how to understand the terms of the agreement you’ll sign when you’re ready.

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