The Real Estate Agent industry in **York Haven borough** is a type of real estate that has undergone a massive revolution in the recent years. Globalization and industrialization can be considered as two of the significant parallel factors behind the occurrence of the same. There are ample factors that have been responsible for affecting the condition and nature of the landed-property domain and have made it comparably complicated than before. On that note, it is becoming difficult for people to choose where and how to invest their money. Well, Real Estate Agent wants to invest in a property to get a higher ROI, and this article is going to talk about the tips and bits of the upcoming scenario of the landed-property industry and the tactics of investment in the same.

It is necessary for investors to understand that the business of real-estate might look transparent from a regular perspective with a robe of simplicity on. However, certain crucial aspects need to be investigated before investment in any property. The idea applies for all types of investment in the Real Estate Agency niche, fact that includes commercial, industrial and residential. There are no specific predictions that can be concluded to. However, certain benchmarks and estimations can be considered to reach to a more or less precise forecast. Investments do not always promise luck, but as a purchaser, you definitely have the liberty to choose the best place to make a residential investment. On that note, the industry of real estate in Mexico has been running at the peak satisfying most investors at the present time.

As mentioned before, the landed-property industry has ample complications attached to it if you are not planning your approach in a comparably wise way. The foremost concern that will likely present you with a satisfactory return or a punctual arrival of rent is to invest in the right place. Investors often make the mistake of not being aware of the occurring evolutions in the landed-property industry around and rushing into a decision of making an investment in a property that might not be worthy which eventually leads to a fruitless exercise. As already mentioned before, the domain of real estate in Mexico is one of the finest examples of appropriate residential investments in the present time and is also considered to maintain a similar record in the upcoming years.

Some of the core to extensive changes in the paradigms of the landed-property industry, in a nutshell, involves an increase in the mortgage rates, a possible future effect on the passing of tax laws, increasing of landed-property properties in specific locations. So, in this saturating market scenario, it is wise for investors to be hyper-aware and take each step with a certain level of precaution and estimation. One of the finest approaches to make a smart purchase would be to perform extensive research on the current market to settle for the choice. The process might be conventional, but there is nothing like self-analysis at the end of the day.

## What is a Real Estate Agent Release Agreement in York Haven borough?

Calculus has many real world uses and applications in the physical sciences, computer science, economics, business, and medicine. I will briefly touch upon some of these uses and applications in the real estate industry.

Let's start by using some examples of calculus in speculative real estate development (i.e.: new home construction). Logically, a new home builder wants to turn a profit after the completion of each home in a new home community. This builder will also need to be able to maintain (hopefully) a positive cash flow during the construction process of each home, or each phase of home development. There are many factors that go into calculating a profit. For example, we already know the formula for profit is: *P = R - C*, which is, the profit (*P*) is equal to the revenue (*R*) minus the cost (*C*). Although this primary formula is very simple, there are many variables that can factor in to this formula. For example, under cost (*C*), there are many different variables of cost, such as the cost of building materials, costs of labor, holding costs of real estate before purchase, utility costs, and insurance premium costs during the construction phase. These are a few of the many costs to factor in to the above mentioned formula. Under revenue (*R*), one could include variables such as the base selling price of the home, additional upgrades or add-ons to the home (security system, surround sound system, granite countertops, etc). Just plugging in all of these different variables in and of itself can be a daunting task. However, this becomes further complicated if the rate of change is not linear, requiring us to adjust our calculations because the rate of change of one or all of these variables is in the shape of a curve (i.e.: exponential rate of change)? This is one area where calculus comes into play.

Let's say, last month we sold 50 homes with an average selling price of $500,000. Not taking other factors into consideration, our revenue (*R*) is price ($500,000) times x (50 homes sold) which equal $25,000,000. Let's consider that the total cost to build all 50 homes was $23,500,000; therefore the profit (*P*) is 25,000,000 - $23,500,000 which equals $1,500,000. Now, knowing these figures, your boss has asked you to maximize profits for following month. How do you do this? What price can you set?

As a simple example of this, let's first calculate the marginal profit in terms of *x* of building a home in a new residential community. We know that revenue (*R*) is equal to the demand equation (*p*) times the units sold (*x*). We write the equation as

*R = px*.

Suppose we have determined that the demand equation for selling a home in this community is

*p* = $1,000,000 - *x*/10.

At $1,000,000 you know you will not sell any homes. Now, the cost equation (*C*) is

$300,000 + $18,000*x* ($175,000 in fixed materials costs and $10,000 per house sold + $125,000 in fixed labor costs and $8,000 per house).

From this we can calculate the marginal profit in terms of *x* (units sold), then use the marginal profit to calculate the price we should charge to maximize profits. So, the revenue is

*R* = *px* = ($1,000,000 - *x*/10) * (*x*) = $1,000,000*x* - *x^2*/10.

Therefore, the profit is

*P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($300,000 + $18,000*x*) = 982,000x - (*x^2*/10) - $300,000.

From this we can calculate the marginal profit by taking the derivative of the profit

*dP/dx* = 982,000 - (*x*/5)

To calculate the maximum profit, we set the marginal profit equal to zero and solve

982,000 - (*x*/5) = 0

*x* = 4910000.

We plug *x* back into the demand function and get the following:

*p* = $1,000,000 - (4910000)/10 = $509,000.

So, the price we should set to gain the maximum profit for each house we sell should be $509,000. The following month you sell 50 more homes with the new pricing structure, and net a profit increase of $450,000 from the previous month. Great job!

Now, for the next month your boss asks you, the community developer, to find a way to cut costs on home construction. From before you know that the cost equation (*C*) was:

$300,000 + $18,000*x* ($175,000 in fixed materials costs and $10,000 per house sold + $125,000 in fixed labor costs and $8,000 per house).

After, shrewd negotiations with your building suppliers, you were able to reduce the fixed materials costs down to $150,000 and $9,000 per house, and lower your labor costs to $110,000 and $7,000 per house. As a result your cost equation (*C*) has changed to

*C* = $260,000 + $16,000*x*.

Because of these changes, you will need to recalculate the base profit

*P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($260,000 + $16,000*x*) = 984,000*x* - (*x^2*/10) - $260,000.

From this we can calculate the new marginal profit by taking the derivative of the new profit calculated

*dP/dx* = 984,000 - (*x*/5).

To calculate the maximum profit, we set the marginal profit equal to zero and solve

984,000 - (*x*/5) = 0

*x* = 4920000.

We plug *x* back into the demand function and get the following:

*p* = $1,000,000 - (4920000)/10 = $508,000.

So, the price we should set to gain the new maximum profit for each house we sell should be $508,000. Now, even though we lower the selling price from $509,000 to $508,000, and we still sell 50 units like the previous two months, our profit has still increased because we cut costs to the tune of $140,000. We can find this out by calculating the difference between the first *P = R - C* and the second *P = R - C* which contains the new cost equation.

1st *P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($300,000 + $18,000*x*) = 982,000*x* - (*x^2*/10) - $300,000 = 48,799,750

2nd *P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($260,000 + $16,000*x*) = 984,000*x* - (*x^2*/10) - $260,000 = 48,939,750

Taking the second profit minus the first profit, you can see a difference (increase) of $140,000 in profit. So, by cutting costs on home construction, you are able to make the company even more profitable.

Let's recap. By simply applying the demand function, marginal profit, and maximum profit from calculus, and nothing else, you were able to help your company increase its monthly profit from the ABC Home Community project by hundreds of thousands of dollars. By a little negotiation with your building suppliers and labor leaders, you were able to lower your costs, and by a simple readjustment of the cost equation (*C*), you could quickly see that by cutting costs, you increased profits yet again, even after adjusting your maximum profit by lowering your selling price by $1,000 per unit. This is an example of the wonder of calculus when applied to real world problems.

## Realty Vs Real Estate Vs Real Property

Calculus has many real world uses and applications in the physical sciences, computer science, economics, business, and medicine. I will briefly touch upon some of these uses and applications in the real estate industry.

Let's start by using some examples of calculus in speculative real estate development (i.e.: new home construction). Logically, a new home builder wants to turn a profit after the completion of each home in a new home community. This builder will also need to be able to maintain (hopefully) a positive cash flow during the construction process of each home, or each phase of home development. There are many factors that go into calculating a profit. For example, we already know the formula for profit is: *P = R - C*, which is, the profit (*P*) is equal to the revenue (*R*) minus the cost (*C*). Although this primary formula is very simple, there are many variables that can factor in to this formula. For example, under cost (*C*), there are many different variables of cost, such as the cost of building materials, costs of labor, holding costs of real estate before purchase, utility costs, and insurance premium costs during the construction phase. These are a few of the many costs to factor in to the above mentioned formula. Under revenue (*R*), one could include variables such as the base selling price of the home, additional upgrades or add-ons to the home (security system, surround sound system, granite countertops, etc). Just plugging in all of these different variables in and of itself can be a daunting task. However, this becomes further complicated if the rate of change is not linear, requiring us to adjust our calculations because the rate of change of one or all of these variables is in the shape of a curve (i.e.: exponential rate of change)? This is one area where calculus comes into play.

Let's say, last month we sold 50 homes with an average selling price of $500,000. Not taking other factors into consideration, our revenue (*R*) is price ($500,000) times x (50 homes sold) which equal $25,000,000. Let's consider that the total cost to build all 50 homes was $23,500,000; therefore the profit (*P*) is 25,000,000 - $23,500,000 which equals $1,500,000. Now, knowing these figures, your boss has asked you to maximize profits for following month. How do you do this? What price can you set?

As a simple example of this, let's first calculate the marginal profit in terms of *x* of building a home in a new residential community. We know that revenue (*R*) is equal to the demand equation (*p*) times the units sold (*x*). We write the equation as

*R = px*.

Suppose we have determined that the demand equation for selling a home in this community is

*p* = $1,000,000 - *x*/10.

At $1,000,000 you know you will not sell any homes. Now, the cost equation (*C*) is

$300,000 + $18,000*x* ($175,000 in fixed materials costs and $10,000 per house sold + $125,000 in fixed labor costs and $8,000 per house).

From this we can calculate the marginal profit in terms of *x* (units sold), then use the marginal profit to calculate the price we should charge to maximize profits. So, the revenue is

*R* = *px* = ($1,000,000 - *x*/10) * (*x*) = $1,000,000*x* - *x^2*/10.

Therefore, the profit is

*P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($300,000 + $18,000*x*) = 982,000x - (*x^2*/10) - $300,000.

From this we can calculate the marginal profit by taking the derivative of the profit

*dP/dx* = 982,000 - (*x*/5)

To calculate the maximum profit, we set the marginal profit equal to zero and solve

982,000 - (*x*/5) = 0

*x* = 4910000.

We plug *x* back into the demand function and get the following:

*p* = $1,000,000 - (4910000)/10 = $509,000.

So, the price we should set to gain the maximum profit for each house we sell should be $509,000. The following month you sell 50 more homes with the new pricing structure, and net a profit increase of $450,000 from the previous month. Great job!

Now, for the next month your boss asks you, the community developer, to find a way to cut costs on home construction. From before you know that the cost equation (*C*) was:

$300,000 + $18,000*x* ($175,000 in fixed materials costs and $10,000 per house sold + $125,000 in fixed labor costs and $8,000 per house).

After, shrewd negotiations with your building suppliers, you were able to reduce the fixed materials costs down to $150,000 and $9,000 per house, and lower your labor costs to $110,000 and $7,000 per house. As a result your cost equation (*C*) has changed to

*C* = $260,000 + $16,000*x*.

Because of these changes, you will need to recalculate the base profit

*P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($260,000 + $16,000*x*) = 984,000*x* - (*x^2*/10) - $260,000.

From this we can calculate the new marginal profit by taking the derivative of the new profit calculated

*dP/dx* = 984,000 - (*x*/5).

To calculate the maximum profit, we set the marginal profit equal to zero and solve

984,000 - (*x*/5) = 0

*x* = 4920000.

We plug *x* back into the demand function and get the following:

*p* = $1,000,000 - (4920000)/10 = $508,000.

So, the price we should set to gain the new maximum profit for each house we sell should be $508,000. Now, even though we lower the selling price from $509,000 to $508,000, and we still sell 50 units like the previous two months, our profit has still increased because we cut costs to the tune of $140,000. We can find this out by calculating the difference between the first *P = R - C* and the second *P = R - C* which contains the new cost equation.

1st *P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($300,000 + $18,000*x*) = 982,000*x* - (*x^2*/10) - $300,000 = 48,799,750

2nd *P* = *R - C* = ($1,000,000*x* - *x^2*/10) - ($260,000 + $16,000*x*) = 984,000*x* - (*x^2*/10) - $260,000 = 48,939,750

Taking the second profit minus the first profit, you can see a difference (increase) of $140,000 in profit. So, by cutting costs on home construction, you are able to make the company even more profitable.

Let's recap. By simply applying the demand function, marginal profit, and maximum profit from calculus, and nothing else, you were able to help your company increase its monthly profit from the ABC Home Community project by hundreds of thousands of dollars. By a little negotiation with your building suppliers and labor leaders, you were able to lower your costs, and by a simple readjustment of the cost equation (*C*), you could quickly see that by cutting costs, you increased profits yet again, even after adjusting your maximum profit by lowering your selling price by $1,000 per unit. This is an example of the wonder of calculus when applied to real world problems.

A very critical concept in California Real Estate Law is the disclosure of agencies. In 1987 legislation was passed to protect home owners in regards to the agency status of their real estate professionals.

Agency is simply the relationship between the principle (the seller or buyer) and the real estate professional. In agency, the professional has a fiduciary duty to look out for the best interests of his/her principle. The fiduciary duty is defined as the 'duty of utmost care, integrity, honesty, and loyalty in dealings.'

There is a form that is used called the Agency Disclosure form (or AD for short.) This is the very first form that is used in every real estate transaction. It has 1 purpose: it discloses (makes openly known) the 3 types of agency that could happen in a real estate transaction.

1. Agent represents the seller only.

In this agency the agent for the seller represents only the seller. He has a fiduciary obligation to get the seller the best price possible for his home. He also has the fiduciary duty to make sure the seller understands all the forms he must sign. The agent serves to protect and promote the seller. In a fiduciary relationship the agent has an obligation to put the needs of the seller first above his/her own needs. He does not have a fiduciary duty to the buyer but does own the buyer the duty of fair and honest dealings.

2. Agent represents the buyer only.

This is the exact same as above except the agent represents the buyer only and has the fiduciary duty to get the home for the buyer at the best price while protecting and promoting his/her best interests. He only owes the seller the duty of fair and honest dealings.

3. Dual agency: agent represents both the seller and buyer

If a dual agency is formed it must be disclosed and agreed to by all parties of the transaction. A dual agency can never be done in secret. This dual status must be known because an agent will know confidential information about his principles. The disclosure forms states that an agent in a dual agency situation must never reveal confidential information to the other party without written permission.

The agency laws were put into practice to protect home owners and home buyers. It establishes that an agent must put the needs of the principle above his own. The law also makes the declaration of who represents who and in what capacity widely known. There are to be no secrets in a real estate transaction.

Dangers of Dual Agency

In most real estate transactions there is one agent representing a seller (aka sellers agent or listing agent) and another agent representing a buyer (aka buyers agent). However, at times, one agent might end up representing both the buyer and seller. This is called dual agency. It is perfectly legal but also can be filled with challenges. In California law, a dual agency status must be acknowledged and agreed to in writing by all parties.

To understand the potential challenge let's use this as a scenario:

• The house is informally appraised and the fair market value seems to be $270,000

• The seller begins with a listing price of $275,000

• The real estate agent represents both the buyer and seller: a dual agency

It is not unusual in the beginning of the formation of a contract to purchase that the buyer will have his initial offer price and also a back up price in mind. He might tell his agent to offer $260,000 but would not go higher than $265,000.

If this agent represents both the buyer and the seller how does he approach the seller with that offer? He must tell him there is an offer of $260,000 but cannot reveal anything else without breaking his fiduciary duty to the buyer.

Now the seller does not want to sell the house at $260,000 and asks his agent what he thinks would be a good counter offer? Does the agent knowing the house is worth an estimated $270,000 suggest to him to counter at $270,000 and possibly lose the deal? This would be in the best interest of his seller. But he could also recommend the seller to counter at $265,000 knowing the deal would most likely close. This would be in the best interest of his buyer. He could even say, I cannot tell you what to counter it as which might not make his client too happy. The agents' fiduciary duties to both of them are in conflict.

Other challenges could crop up when further in the process it comes to other concerns; for example, repairs. The buyer might want a carpet allowance. So the agent needs to represent that need. But he also has the duty to get the most money for the seller. This is just an example of another challenge in dual agency situations.

I do not write this to say that dual agency is bad, wrong, or illegal. It can be done and be done successfully. I write this so people understand that agency clarification is important; do not treat it lightly. If you are potentially in a dual agency situation you must consider all the benefits and challenges.

This is why in California (and in many other states) agency clarification is the first form to be filled out in the real estate process. You want to know exactly who is representing who so you do not reveal information to 'the other side' accidently.

Let me finish with an interesting twist; 2 different people working for the same broker also creates dual agency. For example, I am with Century 21 Award. We have 14 offices in San Diego and Orange County with 100's of agents. I work out of the Rancho San Diego office and let us say I have a listing. A person that I do not know and have never met works for our Award office in La Mesa. That agent could bring a buyer to my listing, the buyers like it, and decide to make an offer. This is a dual agency because we both work for the same broker; Century 21 Award, even though we do not know each other and work out of different offices.

As always, if you have any questions about this or any real estate matter I am as close as an e-mail.

Real Estate Agent, Real Estate Agency