Do You Know Why Your Rent Agreements Are Generally For 11 Months?

Every one of us is aware that the rental agreements are made for 11 months only. Have you wondered why these 11 months’ time frame required? Have you even asked yourself what is the actual need for the agreement? The foremost requisite for the rental agreement is to keep the track of the interest of both parties: the tenant and landlord.

Coming to the comprehensive understanding of the rental agreement, it is a legal document framed in between the property owner and tenant which also guarantees the interest of the both these parties. The contract evidently lays down the privileges of the landlord and tenant. It also prevents the needless removal without previous notice of minimum one month.

Rent Agreement

The rent agreement also known as a lease agreement is the written contract between the landlord (property owner) and the tenant who takes it on rent. The contract defines the terms and conditions based on which the property is let-out such as the property description (like address, size and type), monthly rent, security deposit, purpose for which the property is to be used (whether commercial or residential) and finally the duration of the contract. The terms and conditions are negotiable prior to signing as it binds on both, the tenant and property owner. It also describes the situations under which the agreement can be dismissed.

Why 11 Months?

As per the understanding, most rent contracts are signed for 11 months which acts as an evidence, so that they can avoid stamp duty and other charges. As per the Registration Act 1908, the registration of a lease agreement is obligatory, if the leasing period is more than 12 months.

 A rental agreement comprises the obligations and accountabilities of all the parties concerned. A good rental agreement should exclusively indicate the names of the parties residing in the premises and evidently mention the date of the rental time that contains the tenure of occupancy. Precise dates from which date to which the lease of the agreement would be effective have to be mentioned here. Some agreements also go an extra step and mention the mutual duties of all the occupants towards each other and the landlord too. The more comprehensive a rental agreement is the better probabilities of decreasing liability of the parties and also having a rock-solid legal support.

Objective for Making 11-Month Agreement

In case the rental agreement is commenced for a time-frame of a year (12 months) or more, it needs to be registered. Therefore to avoid the lengthy process of registering the contract, many people enter into 11 months agreements which are the cusp between having the agreement documented and having a manuscript that is recognized by the law.

Thus in order to evade any issues such as denial to evacuate the house when asked or violating the signed rules and regulation, rent agreement is a very vital deed. All you need to do is to stopover the property registrar office, pay the stamp duty on the term of the lease and register the lease.

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The Most Interesting Investment with the Best Interest

One of the most globally recognized sectors, the Real Estate in India is the second largest employer after agriculture. The real estate sector involves around four major sub-sectors – Housing, Retail, Hospitality and Commercial. The growth of this sector is well integrated by several factors, geographical conditions, weather, transportation and connection with other cities and places. The growth of real estate also enhances employment, educational facilities, hospital, shopping malls, accommodations and self-employment.

It is also expected that this sector attracts more non-resident Indians (NRIs) investments in both short term and long term. Bengaluru I is the most desirable property investment destination for NRIs. As the investors are not only observant to the real estate’s hubs like Delhi, Gurgaon, Faridabad, Noida, Mumbai, Pune, Goa, Ahmedabad, Chennai, Kolkata and Hyderabad, other cities and places are also evolving with the new plans and trending smart cities. The constant growth of real estate sector is focusing on places like Surat, Jaipur, Raipur, Lucknow, Indore and other developing cities into high demands to be residential or commercial, considering the surrounding factors of the place.

In few years, India has witnessed new developing trends in various sectors and industries. The growth of sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. Bengaluru has recorded the highest new office-space absorption for the past few years. This commercial sector can highly influence the residential and retail demand in that particular place. Housing contributes averaging 15-18 per cent in GDP which is inclusive of residential and consumption spending.

Tech Meets Real Estate Industry

The recent tech-enabled real estate which is speedily viable to make India one of the fastest originating realty tech harbours in the world. The compelling realty tech is all set to revolutionize the sector with their innovative approach. Be it in consultancy, sale-purchase, investment, after sale services or any other plot related assistance, tech start-ups have agitated the primary real estate market and reformed the business. The simple property search, legal aid, safe possessions and purchase accessible made it possible to expand in the market. Registering on the website, the buyers can get a virtual property viewing sitting at home. It’s difficult to visit ten projects prior to making a final call to invest into one. But the virtual display can show a number of various projects in no time and you can shortlist them by viewing as many times as possible. Introducing rent or lease activities online has also proved to be beneficial for the migrants to settle in the new city. This way they can search for any homestead or apartment in different cities.

Reaction on the New Taxation

The Goods and Services Tax (GST) is a great booster for the industry. GST will seek to restore buyer and investor interest by bringing more transparency in the taxation. The sector is ready to improve the prices that are likely to drop around 1-3 per cent. Previously, the taxation was too convoluted for the buyers who were liable to pay taxes depending on the construction status of the property and the state where it is located. The total tax amount was divided into value added tax, service tax, stamp duty and registration charges on investing an under-construction property and for the completed property, the tax applicable were stamp duty and registration charge. Moreover VAT, stamp duty and registration charges were state levies so each state stated its figures on their own. Service tax was charged on the stage of construction by the central government.  So the calculation of taxes was very tedious in the earlier regime, GST charges all under-construction properties at 12 per cent of the property value excluding stamp duty and registration charges. No indirect tax is applicable on sale of ‘ready-to-move-in’ properties hence the tax will not apply to those. The biggest outcome of GST is the simple tax that applies to the overall purchase price.

Earlier, VAT and Service Tax are used to account for nearly 9 per cent of the property value. Since that will be lower by the GST applied to the sector, the price reduction benefit is enjoyable by the buyer and the builder.  The developers were also charged for the Central Excise Duty, VAT and entry taxes collected by the state on construction material costs. Further, They had to pay a 15 per cent  tax on services like labour, architect fees, approval charges, legal charges, etc. which was eventually transferred to the buyer.  However, under the new simpler tax system, reduced cost of logistics will result in reducing expenses hence increasing the profit margins.

The Bright Future of the Industry             

The simple taxation is not only a perk for the low price but also the delay in construction has been wiped out. The entry taxes collected by the state during the transportation are excluded, consequently, the crossing with the construction materials inner the states are accelerated.  The decreased rates of interest on housing and business loans give a positive desire for the industry. Mumbai is considered to be the best city in India for commercial real estate investment, expected with returns of 12-19 per cent likely in the next five years, followed by Bengaluru and Delhi-National Capital Region (NCR). The real estate sector in India is expected to attract investments worth US $ 7 billion in 2017, which would rise further to US $ 180 billion by 2020. The growing percentage in India and the greater domestic consumption is driving India’s improvement, implying the middle class to come and demand their suitable housing. As the foreign investors are supplementing for the last three years, it has topped the popularity for yield, something to find in high-priced “gateway cities” leading them to explore more speculative plays and also to enhance.

To culminate as the Real Estate Expert Sahil Kapoor - Executive Director on throws light on GST – “Since the real estate sector shares direct relationship with more than 250 other sectors like steel, cement, transport, financial services, etc. the advantages or disadvantages of GST on all these sectors will have an indirect impact on the real state sector. In my view, GST for the real industry would have both pros and cons depending on the nature of transactions.”

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Understanding - Carpet Area, Built-Up Area & Super Built-Up Area

        

First time home buyers often hear the property agents or realtors repeating the terms and jargons which are very common in the real estate industry, leaving us absolutely clueless.  Nevertheless terms like carpet area, built up area or super built up area normally elude our dominion of anticipation or at least cause some false impression.  

In every residential complex, there are these three different ways of calculating the square foot of the flat area. They may not all seem much distinct but there is in fact a “BIG” difference between them, especially the carpet area and the built up area which as a buyer it is mandate to understand.

Ignorance or half knowledge in this matter can place you in resentful state. Here the brokers or developers can take you on ride. Don’t worry, it is not rocket science, just a little exploration and you will be well-thorough with these terms. So let’s explore these terms in details and understand them well before any visit to home buying.

Carpet Area        

The very basic concept is the Carpet Area. It is nothing but an area that can be in fact covered by a carpet or the floor area of the apartment excluding the thickness of inner walls. Generally, the carpet area is the actual area you get for usage in a housing unit. Hence in case of home search, it is very vital to scrutinize the actual space while taking the decision as that figure will give a clear picture.

Weightage on the carpet area will help you know the usable area in your kitchen, bedroom ad living room, etc. Recently, many developers and builders don’t even speak about the carpet area primarily, and generally charge on the basis of the built-up area or the super built-up area. Carpet area is usually about 70 per cent of the built-up area.

Built-Up Area

To understand the term ‘Built-Up Area’ is simply a combination of “Carpet Area + Wall Area”. By the wall are doesn’t mean the surface area but the thickness of the inner walls of the apartment. This area comprising the walls is about the 20 per cent of the built-up area and entirely changes the viewpoint.

The built-up area also contains other areas sanctioned by the authorities, such as a dry balcony, flower beds, etc. adding up to the 10 per cent of the built-up area. In simple words you are able to use the 70 per cent of the built-up area. To understand more clearly let’s say for e.g. if the built up area is 1000 square feet, it means around 30 per cent  (300 square feet) is really not usable and the actual area you will get to use is only the left 700 square feet.

Super Built-Up Area                                                                   

It is said that Super Built-Up area is the builder’s Best Friend Forever (BFF). It is calculated as ‘Built-Up Area + Common Area”. The common area includes the lift lobby, corridor, etc. and in some cases the builders even take account of amenities such as garden, club houses, pool and so on. The builder or a developer charges you on the basis of the super built-up area which is why it is also known as the ‘Saleable Area’.

Bearing in mind the fact that the developers and the builders customarily price their apartments based on this super built-up area or saleable area, being unaware of this important difference between built-up area and carpet area including other terms leaves one run blind. It is often the tangible usable area much lower than the super built-up area. Some developers/builders take into account the carpet area while charging you, but that can be just in the rarest of the rare cases. About 90 per cent of the builders compute the base cost on the basis of the super built-up area, more the amenities – higher the super built-up area

For the beginners, real estate can be complex to understand but you can amend the practices and rules. You can definitely make a knowledgeable decision when you are aware of the diverse kinds of calculations for the square feet – apparently major but very simple task.

Hope this article clears the confusion that always has been to permeate floor areas and how is it calculated, making it easier for you to decide. Still any questions, feel free to ask us!

Great Tips to Get Good Deal as a Buyer

Great Tips to Get Good Deal as a Buyer

As a buyer when you short list the property of your dreams and are about to seal the transaction, it is very crucial for you to know certain tricks of the trade.  During negotiation the “ask” price tabled by the seller, it is important to know these tips that might be handy.

Be aware: 

As a buyer it is essential to know the market situation well whether it is a seller’s or buyer’s market.  Preferably in a buyer’s market, the supply outnumbers the demand, thus, catering more possibilities to pick from. This requires a higher negotiating power for the buyer. In a seller’s market, nevertheless, the supply of residential units is lower than its demand, keeping seller at a greater position. Comprehending the market undercurrents go a long way in cracking the precise deal. You must be conscious of the city you are planning to invest in. Factors such as inventory level, present-day price trends, and sales volume, midst others, would assist you to negotiate well with the seller.

Take assistance: 

Buyers generally avoid confirming a property purchase via broker in order to save on the brokerage fee. On the other hand, comprising an expert from the realty industry might support you acquire better probabilities as brokers possess comprehensive understanding about the native market and may help you fetch the perfect home within the required budget.

Cash rebates: 

Offerings such as free gifts have become pretty common in real estate market. Developers employ all genera of marketing strategies to sell their product and complimentary gifts are just one of them. As a buyer you can negotiate for cash concessions instead of supplementary tangible gifts accessible by the builder.

Show interest: 

On Contrary to the accustomed belief that being too keen might constrain your probabilities of getting worthwhile discounts, an inquisitive buyer stands a greater opportunity of finalizing a deal. Developers generally try and give the best promising option in case they feel that the buyer is in fact interested in purchasing and not just exploring options.

Gauge the seller’s requisite: 

It always aids if you know the purpose behind the sale. Is it a case of distress selling, where the seller is in an urgent need of money or does he have plentiful time in hand? In case you sense emergency, then you can negotiate much better and crack a worthy deal.

Be equipped with funds: 

Update the seller if you have instant cash accessible or a pre-approved home loan. A seller would be more motivated in confirming the deal with a buyer who is not combating financial restraints.

Every property deal is bargainable: 

There is nothing about real estate dealings that cannot be negotiated. While this does not imply that you would win all bargains, you can anticipate a reduction of 5 to 10 percent on the ‘ask’ price if you make an informed endeavor and reason it out well with the seller.

Aim a win-win situation: 

Establishing a good rapport with the seller is vital for a healthy real estate agreement. Such a position can be accomplished when both parties feel that they have acceptably met their objectives. The necessity to ensure a successful negotiation is the understanding each other’s needs and obliging the goals of both the parties.

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RE/MAX Rises to Top Five of Franchise 500

RE/MAX Rises to Top Five of Franchise 500

Global Franchisor Once Again Named #1 Real Estate Franchise

January 15, 2018

DENVER – RE/MAX, LLC, one of the world’s leading franchisors of real estate brokerage services, is ranked fifth among the 500 franchise companies included in this year’s Entrepreneur Franchise 500® survey. More than 1,000 franchisors applied for the 39th annual ranking.
 
The franchises in the top spots reveal the newest trends as well as the industries that keep going strong decade after decade, according to Entrepreneur. RE/MAX rose five spots to finish fifth, the highest ranking it has ever achieved in the survey. Only McDonald’s, 7-11 Inc., Dunkin’ Donuts and The UPS Store ranked higher. The 2018 Franchise 500 marks the 15th time in 19 years that RE/MAX is the top real estate franchisor.
 
“Nobody in the world sells more real estate than RE/MAX as measured by residential transaction sides,” said Adam Contos, Co-CEO of RE/MAX. “Broker/owners and agents want to be affiliated with the number one name in real estate because of our brand awareness, continued education, on-demand training, competitive advantages and technology. Entrepreneur continues to rank us higher than our competitors, and that’s because of the unmatched quality of the real estate professionals in the RE/MAX network.”
 
Highlights of the 2018 Franchise 500 survey include:
• RE/MAX ranked #5 overall, up from #10 in 2017, #21 in 2016 and #75 in 2015
• RE/MAX ranked #1 among real estate franchises
• Other real estate competitors were Keller Williams Realty at #22, HomeVestors of America at #37, Weichert Real Estate Affiliates at #139, Realty One Group at #230, Realty Executives at #424 and United Real Estate at #471.
• The top 10 overall standings include #1 McDonald’s, #2 7-11, #3 Dunkin’ Donuts,
#4 The UPS Store, #5 RE/MAX, #6 Sonic, #7 Great Clips, #8 Taco Bell, #9 Hardee’s and #10 Sport Clips.
 
The Franchise 500 is considered the oldest and most comprehensive franchise ranking in the world. Companies judged by the same criteria including costs and fees, size and growth, support, brand strength and financial strength and stability. To be eligible, franchisors must be seeking new franchises in the United States or Canada and have a minimum of 10 units open and operating as of July 31, 2017, with at least one franchise located in North America.
 
From a single office that opened in 1973 in Denver, Colo., RE/MAX has grown into a global real estate network with more than 115,000 sales associates in more than 100 countries and territories. RE/MAX was ranked the leading real estate franchise for the ninth consecutive year in the 2017 Franchise Times Top 200+® survey and was named the top real estate franchise in Entrepreneur’s 2017 Top Global Franchises list.
 
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About the RE/MAX Network
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 115,000 agents provide RE/MAX a global reach of more than 100 countries and territories. Nobody sells more real estate than RE/MAX when measured by residential transaction sides. RE/MAX, LLC, one of the world’s leading franchisors of real estate brokerage services, is a wholly-owned subsidiary of RMCO, LLC, which is controlled and managed by RE/MAX Holdings, Inc. (NYSE:RMAX). With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised more than $157 million for Children’s Miracle Network Hospitals® and other charities. For more information about RE/MAX, to search home listings or find an agent in your community.

Source:  www.remax.com/newsroom.

25 Fundamental Activities for RE/MAX Broker Associate

25 Fundamental Activities for RE/MAX Broker Associate

“The most common business mistake is not doing the obvious.” Darren Hardy

1.     ..      Be an expert in your market and your industry.

• 2. Have a theme for your marketing, dedicate yourself to getting to know something; differentiate yourself from the competition. What do you do that makes clients remember you?
  3.       Be a “fanatic” investing your time efficiently. Dedicate your time to activities that produce money and don’t do what doesn’t produce income. Work at least 8 hours a day and don’t waste your time.
  4.       Maintain an updated database of clients and connections.
  5.       Contact the people in your database monthly. Ask for referrals explicitly; enthusiastically thank your connections when they send you a referral.
  6.       Dedicate two hours a day to proactively seeking new clients.
  7.       Always maintain an updated brochure explaining your services.
  8.       Always use the RE/MAX brand.  It is the best real estate brand in the world and you are a part of it.
  9.       Participate in RE/MAX events (nationally and internationally).
  10.   Each month, estimate the probability (%) of selling each property you have listed. Have the owners lower the price when necessary.
  11.   Each month, estimate the probability (%) of buying for each buyer you are working with. Focus on your serious buyers and ask them for exclusivity in working on the purchase with you
  12.   Have monthly and annual goals, and develop a plan of action to achieve them. Find a coach that demands you keep focused on said goals.
  13.   Make sure you have a minimum for how many properties and buyers you add each month.
  14.   Dedicate two hours a week to studying Global Training materials and Mainstreet
  15.   Have a personal development culture (“to be” is more important than “to do”). Develop the habit of  reading, including re-reading certain fundamental books every now and again.
  16.   Make sure each of your properties is updated on each website you use.
  17.   Contact a RE/MAX colleague outside of your office every three months (a new person each time). Develop your own RE/MAX network.
  18.   Maintain an active online marketing strategy. This should include your office/personal site, blog, Facebook, Youtube, etc.
  19.   Keep track of these performance indicators on a monthly basis: number of new listings (current as compared to those acquired over the course of the month), number of contracts (acquired during the month), number of buyers that you are working with and number of transactions (monthly and annually).
  20.   Celebrate the accomplishments, birthdays, and anniversaries of your clients
  21.   Analyze your finances monthly. Get to know your income, spending, and savings.
  22.   Save 10% of each commission you earn.
  23.   Give 10% of your earnings to your community. What goes around comes around.
  24.   Charge what your services are worth. Don’t discount your fees. Stand your ground. Learn to negotiate.
  25.   Offer top quality service, impress your clients, always go the extra mile for them.

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