Real Estate is often considered a homeowner’s greatest asset.
The majority of Americans can stake that claim as 64% of us are homeowners, CNS News reported.
Real Estate is also the 3rd largest creator of wealth among the ultra-rich, responsible for 163 billionaires, Forbes reported.
There are countless statistics to proclaim the significance of Real Estate, after all, owning a home is the American Dream.
I recently caught up with a rising star in the real estate game, Sal Ventre of Remax Realty, to discuss the professional’s opinion and much more…
Kuderna: What is the biggest mistake you see people make when buying their home?
Ventre: One big mistake people make when buying a home is not hiring a good realtor to assist them and walk them through the transaction. As a buyer, it doesn’t cost anything to hire a realtor as the entire commission is paid by the seller. That being said, you get to take advantage of all the benefits of working with an experienced realtor at no cost.
Kuderna: Investing in real estate sounds sexy, but there's always a catch. Who is it right for and when should or shouldn't you entertain the idea?
Ventre: As sexy as it sounds, investing in real estate truly isn’t for everybody. Too many people get their information from TV shows and friends or family that may be unintentionally misleading. Buying a house to flip can turn from a great idea into a terrible investment overnight. Trust me, I know first-hand. Most people underestimate the amount of money needed, don’t account for incidentals and usually overestimate the amount they can sell for, tightening the profit gap so much that in some cases, first-time flippers can lose money.
Kuderna: If you could give one piece of advice to a first-time homebuyer, what would it be?
Ventre: Listen to the advice from your Realtor, mortgage broker, real estate attorney, etc… Even though friends or family members may be giving you advice because they’ve bought homes in the past, as a full-time realtor, I deal with buying and selling homes every single day, 7 days a week. As does a full-time mortgage broker or attorney. In most cases we have seen every scenario in the transaction multiple times and should know exactly what is the best way to handle it.
Kuderna: How do realtor's get paid?
Ventre: Realtors are paid a commission based on the sale price of the home. Commission is negotiable, but 5-6% total commission is standard which then gets split between the buyer’s agent and the seller’s agent. In a standard 6% transaction, each Realtor will get 3% which is paid directly to the Broker or company the Realtor works for. From that amount, the Broker takes a percentage of the commission depending on the deal that individual agent has with their company.
Kuderna: Millennials are moving out later, getting married later, and starting families later, all the while trying to find the right career and escape overwhelming student loan debt. What effect has this had on real estate?
Ventre: Well one thing I do know is that the “American Dream” of homeownership is still alive and well. I have seen an overwhelming amount of competition in the lower price range of homes that appeals more to a first-time buyer. With interest rates slowly rising and people rushing to get into homes, the competition in the lower end price range is very fierce.
Kuderna: What's your favorite part about the job?
Ventre: I would say the answer to that is two-fold. The most rewarding part about my job is definitely helping people and families accomplish homeownership, which is one of the biggest purchases/moments in someone’s life. My favorite part about the actual job would have to be the fact that I am my own boss. I have always been an entrepreneur at heart and have never had a job that wasn’t 100% commission based, so for me it’s all I know. I couldn’t imagine waking up and sitting in the same desk doing the same job every day for the same paycheck. The fact that there is no ceiling and unlimited potential drives me more than anything.
Kuderna: There are realtors who make millions, and others who dabble part time in and out of the job. Without a prevalent designation (say CPA for accountants) how does the average consumer delineate between a good and bad realtor?
Ventre: The first thing I would do is to ask if the Realtor is full-time or part-time. I personally would not trust my home/biggest investment in my life to a part-time professional. I think the best thing for a consumer to do is to check the agents Zillow profile to find out how many recent sales they have in the last 12 months and more importantly check their customer reviews. Next, check the agent’s social media accounts and personal website for validation. Usually the agents with the most sales and great reviews are going to be a reliable choice. Experience is very valuable in the real estate business.
Kuderna: This is a financial column, so please give us your take on how real estate (home, investment, or otherwise) impacts a financial plan.
Ventre: Everyone needs to take their own personal situation into consideration. I see many buyers, especially first-time homebuyers, that are trying to make a decision solely based on the future investment potential because of a reality TV show they watched. When truthfully, sometimes the best home purchase is the one that works for your family. If you’re buying real estate as an investor then obviously that changes. But for the average homeowner, I don’t think they are truly considering how many years they will spend in the home and how much they will be spending every month in overall maintenance. If you only own one home that is strictly your family home, It’s not a financial investment in my opinion. I think buyers need to take advantage of the historically low interest rates and put as little down as they can and keep cash in hand for daily expenses and other potential investments.
Kuderna: You mention it’s free to the buyer to use a realtor. Is it as important for the seller?
Ventre: As a seller, hiring the right realtor can mean up to a 5-10% difference in sale price. Hiring an experienced listing agent that specializes in innovative marketing and knows how to showcase a home properly can be extremely valuable when it comes time to sell. All Realtors are not created equal!
Kuderna: House or Condo?
Born and raised in New Jersey, Salvatore Ventre is among the top real estate agents in Ocean and Monmouth County. Sal has been the recipient of the NJ Circle of Excellence Sale Award every year since entering the business in 2012 and in 2016 earned the Gold Level award as well as the REMAX Platinum Club award, totaling over 125+ homes sold to date.
is a Certified Financial Planner™, Life Underwriter Training Council Fellow, and Investment Adviser Representative with Kuderna Financial Team. He is also the author of the best-seller "Millennial Millionaire."
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