Prosper Newsletter: March 2008 > Real Estate

You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.

Selling Homes

Real Estate Marketing Basics

Once you receive your real estate certification, you need to hit the pavement, find properties, and practice what you've learned. For example, once you find a property, figure out how to sell it for a profit (at an acceptable price for your buyer).

One way to sell is to create a market for your property. As a general rule, the more people that know about and actively bid on a property you are selling, the more profit you should make because competition generally drives prices up. So, your job is to attract as many potential buyers to your property as possible. With the current buyer's market, you might have difficulty achieving this because of the number of homes that are in some stage of foreclosure. However, there are some basic tips that you can follow.

The first is networking. In most areas of business, networking is key. With real estate, the old adage is true: it's not what you know, it's who you know. (However, this is no excuse for ignorance about your business. You should be as much of an expert as you can in your field.)

Another tip is to advertise yourself before advertising a property. Make sure your friends and family know that you are a Realtor. Send reminders during the holidays and other special occasions that include your name and phone number. For example, a Realtor once sent refrigerator magnets with measurement conversion tables (perfect for the cook in the family) that included her name and number at the bottom. Thus, the reminder became a useful tool. Another Realtor sent atomic clocks (when the mini-version first came out) with his business card at the bottom. Both of these reminders were useful and visible for those that lived in and visited the home. It is easier to find clients among those who already know and trust you than it is to advertise heavily and hope new clients will show up at your door.

When you advertise a property, you could use the traditional approach and place a sign in front of the house, distribute high-quality flyers, and use other traditional advertising methods. However, a better and perhaps more cost-effective strategy is using the Internet. Start your own Web page (or push for your company to create one) where you can advertise yourself and your properties!

Americans tend to be highly mobile. That is, they tend to move a lot. Try to cater to those that are moving into your area from out of state. If you were in their shoes, wouldn't you rather house-hunt online and narrow your options to a few choice homes, as opposed to house-hunting the day you arrive in a new city?

By placing yourself and your business online, you are catering to the up-and-coming generation of homebuyers. These people are more interested in quick information, via the Internet. They are less likely to hunt through a newspaper or drive through a neighborhood; they are more likely to search online for homes for sale in the area.

Real Estate Rewards

There are many tax advantages to being a real estate investor, but you will still need to have supporting documentation for all deductions you take in your real estate business. Record keeping is a critical element for taking tax deductions. You must be able to prove your deductions to the IRS in the event of an audit.

Business meals are often one of the most common deductions taken by a business; however, it is also where many businesses fail to keep accurate records. If you are going to take a deduction for a business meal, you will need to keep a record of the following items:

• Date of the meal
• Amount of the meal
• Business purpose of the meal
• Location of the meal
• People present

Simply make note of each of these items on the meal receipt and keep it in your files. But BEWARE: you may see or hear (even from the IRS) that meals under a certain amount do not need supporting documentation. However, if you are audited, the IRS agent will disallow any deductions that are not supported with the above-mentioned documentation.

Keep accurate records and supporting documentation for any and all of your activities. If you do so, tax time can be a great reward to real estate investors!

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*Please see the Elective Class Catalog in your Success Center for dates, times, and class details.

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