Corporate Real Estate Operation

Corporate real estate operation makes an integral contribution to a company’s value across the globe. Let us dissect the title into corporate, real estate and operation. Corporate represents a corporation, or a legal entity which is formed to undertake some business. These are limited liability entities. Now the term real estate is confused with other synonyms, but it must be known that real estate represents a certain piece of land along with any fixtures (buildings and objects that are permanently fixed to the land). The term real estate is very often used in common law (a system of law developed through tribunals and by courts). Operations refer to the activities carried out by an organization to achieve various goals.Real estate is essentially a capital asset. It can be said that at least 30% of the total capital pool of corporations is real estate. Naturally, corporations must focus on corporate real estate operation strategy in order to manage this valuable asset. Corporate real estate operation strategies must act towards assisting the overall competitive strategy of the organization. Their business objectives must give high priority towards management of such a capital asset.O’ Mara (1999) put forth a theory regarding corporate real estate operation strategy. According to this, organizations may pursue either of three distinct generic strategies for the corporate real estate operations and management. Standardization strategy, incremental strategy or value-based strategy can be applied into corporate real estate operations in order to enhance the contribution of real estate in building the business value of the corporation.A value based strategy uses the medium of real estate to express the planned direction and values of the organization. This method influences the thought process of the stakeholders, employees and customers by representing its value through the physical settings. Corporate objects are used effectively to express the corporation-community relationship. The building design and its function are used to convey what the corporation wishes to communicate to the customers. While this strategy uses design to convey value, mould behavior, and encourage future expectations, it can be an expensive scheme with an uncomfortable trade-off between aesthetics and functionality.An incremental real estate strategy defers strong commitment over matters that the corporation is as yet unsure of. The physical needs for operation are met, but there is no rigid plan regarding aesthetics. Now this is good because the corporation moves forward surely though in increments. The forecasting horizon is shortened comfortably and the organization’s flexibility is conveyed. Location remains a major commitment, and the buildings are put up somewhat at random. Financial investment remains sub-optimal.
Next is the standardization strategy relies upon confident predictions about facility requirements in future. The rational style of the corporation is exemplified through standardized corporate real estate operations. The allocation of resources is under control. The strategy employs strong use of real estate as an asset. These standard objects strengthen the dominant image of the corporation. But these standards can be perceived to be rigid, preventing the objects from adapting to fresh demands. The process of mere repetitiveness may not do much for the organization.Any corporation must ideally employ feasible corporate real estate operations that best enhance the company’s perceived value in the eyes of the market.

8 Reasons Why a Rushed Real Estate Deal Still Requires Disclosures

With the recent spike in home sales, buyers and sellers alike are feeling the pressure to quickly close on their purchase transaction before mortgage rates go up and demand for new homes slip. But before rushing to “ink the deal,” understand that real estate professionals are required to provide written disclosures to their clients on a variety of important items necessary to the transaction, as they directly affect the buying or selling decision. Here are 8 areas where written disclosure should be or are required:1. Affiliate Disclosures. These days, it’s common for a mortgage company to have a business interest in a title company or a real estate brokerage to also own a mortgage company. These are called “affiliate” relationships, and the relationship must be disclosed to the potential end users of these services. For instance, a mortgage company must disclosure in writing to its loan applicants that is also owns a title company that will close on the mortgage and purchase transaction. A loan applicant is not required to use the “affiliate” title company and can use another suitable title provider instead. Most importantly, a home seller or buyer cannot be pressured to use an affiliate service or be prevented from seeking a loan or making an offer on a home, just because one chooses to do business with an “unaffiliated” business.2. Third- party services. Similar to the above paragraph, a home seller and real estate agent cannot require someone to use a third party service in order to purchase a home. A third- party could mean a lender, a title co, an appraiser or inspector. However, one can give better pricing to a buyer who uses their services. For example, a lender can waive fees if the buyer uses one of their “affiliates,” however, they cannot prevent you from making a loan application or denying a loan for refusing to use their business affiliates.3. Real estate agent disclosure. If a real estate agent is selling a home that they own, they must disclose that they are a licensed real estate agent. Some states limit this disclosure to only an agent’s primary residence. Other states require the disclosure for any properties that the agent owns.4. Dual agency. A seller’s agent or “listing agent” represents the seller. The seller’s agent does not have any professional duty to a buyer who is not represented by their own agent. The buyer should hire their own agent. A dual agent is an agent or real estate broker that represents both parties in the transaction. Agents must provide written disclosures to both a parties when they act as dual agents. In theory this disclosure is supposed to make a dual agent in a transaction neutral. However, a real estate deal is never without some controversy and give and take, and therefore this writer suggests that a prospective purchaser hire their own “buyer’s” agent.5. Title agency. A title company’s function is to insure that the ownership to a specific property is valid according to public property records so that a lending institution can provide a mortgage on the property or a purchaser can take proper title from the rightful owner. Title agents represent the insurance companies that provides this coverage. They do not dispense legal advice to buyers or sellers. They do not represent lenders or real estate brokers. Title companies must disclose when they have an affiliate relationship with a property service provider, meaning that they are owned by the lender or real estate brokerage, or even an appraiser.6. Provide all offers. A real estate agent is required to provide its sellers with all offers. Unless a seller specifically instructs an agent not to bring certain offers, say one below a certain price or time frame, the agent must present the offer. Therefore, if a buyer feels that an offer was not presented, they should contact the agent’s broker. In some states, it’s customary for a buyer or their agent to present the offer directly to the seller. But nothing prevents an enthusiastic buyer from directly speaking with a seller, it’s just not commonplace.7. Terminating a real estate agent. It is a common misconception among sellers that they cannot fire or terminate their listing agent. They can. However, the best way to still market one’s property without bad feelings is to approach the agent’s broker and have the broker assign a new agent to the listing. Understand that the agent and broker still have a “protection period” that protects them against the seller closing a transaction with a buyer that the agent, through their business efforts, had previously procured. The period is usually for 180 days, but at time of listing a property this period can be negotiated down to 90 or even 60 days. Regardless of the time limits, it is wrong for a seller to take advantage of the agent’s efforts and is grounds for legal action.8. Attorneys. Like a property agent, an attorney cannot represent a buyer and a seller in a transaction unless the attorney discloses the conflict in writing and both parties sign the disclosure. If two parties to a transaction have completely different versions of a transaction, then it’s time that one party hires their own attorney.In a residential real estate transaction written disclosures comprise most of the real estate package. For those new to real estate, hire the right adviser to guide one through a successful transaction. But make sure to read and understand the disclosures and how they apply to one’s deal, as they are there for the buyer or seller’s benefit.