careful comparison should be made with others of a similar kind, which are obtainable. Conclusions are best drawn by comparing the amount of cash to be invested and the unit price and income of the other structures in a similar district or in other districts of the community. In this way the sharp differences in community values and the factors which lead to the creation and maintaining of values within different districts will suggest themselves and a final selection of the property to be purchased is more easily made. The principle of comparative values obtains, likewise, in the acquisition of leaseholds or leases. Taxpayers. Here it should be noted that there are many improved properties which it may be wise to purchase even though the improvements are not adequate, yet, where the owner, content with a small income or even with no net income, may place himself in a position of receiving large returns from an increase in the value of the land. Making an Offer.-After the complete survey of the property has been made and the purchaser is decided in his own mind as to the value of the property, and the terms and conditions under which it would be a desirable purchase, he should set about obtaining the property in a way suited to get the price and terms wanted from the person or persons with whom the deal is being made. Act with firmness and determination. Ingenuity may bring rewards. Negotiations for the purchase of a valuable plot on Fifth Avenue, New York, had reached a deadlock; finally, the difference between the two prices was reconciled by the buyer agreeing to pay the owner's price on condition that the owner take back a mortgage, the interest on which was at 234 per cent for 10 years. The difference in the interest as against the prevailing rate was equivalent to the difference between the offer and the asking price, and what the owner would not do one way he did in another. The purchaser, in giving his final instructions to acquire the property, will find it wise to give them in the form of a letter or a written memorandum. They should cover the length of time which the contract of purchase has to run before the purchaser takes title; the amount of the mortgages which he is willing to assume; their dates; the amount of annual payments; the amount of cash, and such other items as are of importance to the transaction in hand. There is much talk of technique today in all business, but always watch for the moment to close. A musician must finish his piece and get his climax at a certain point, but in buying, the climax-the moment to close-may come at the very opening of negotiations, or it may be delayed until after many successive attempts. It is usual to apportion such charges as taxes, interest, insurance, and rents as dating from the day upon which the new owner takes possession. Of course, any other items which are known should be fully stated, so that when the broker reports upon the offer submitted, the person making it is sure that nothing has been overlooked. In the purchase of most properties, by the time negotiations have reached the final stage, the brokers know fairly well what will be accepted by the owner, often times owners are unwilling to disclose this, or to make up their minds definitely until they have before them formal written offer which covers all, or most of the points involved. Closing the Deal. It is usually possible to work quickly when the negotiations reach this stage and it is often wise for principals to meet. If this is not the case, then the broker should be fully authorized to act and should do so with positiveness and decision. It is a well-recognized fact that in purchases an agent can generally represent a principal more effectively than the principal himself. Many real estate men are expert in closing these transactions, and there is scarcely any part where the ethics of the profession are better maintained than in the relation of a broker or agent acting for his customer. After Acceptance.-As soon as the bid is accepted, a written acceptance should be obtained, even if it is only in the form of a letter which can stand as evidence of agreement until the permanent contract is drawn.. In the modern apartment house or business building where there are a large number of leases, it usually takes a considerable time to prepare a contract and an intermediate binder is necessary. The chief requirement of such a binder is that the terms of the sale shall be accurately set forth and some consideration be given by the purchaser for it. Between the time of the purchase of a property and the actual taking of title the questions which come up usually relate to leases and modifications of any other operating contracts which are to be assumed when the new owner takes possession. According to the contract of purchase the property is ordinarily taken subject to certain leases and the present owner has no right to modify those leases without the consent of the purchaser. Such modifications as tend to the smooth operating of the property, however, are always approved, by proper written consents. Taking Possession.-When the actual closing of the transaction has taken place, the former owner directly, or through his agent, should notify every occupant of the building of the change in ownership, and if there are any occupants who are holding the premises under oral lease, or otherwise, it is well for the new owner to take legal advice so that he may not assent or give his consent to some agreement on the part of any former owner which may be embarrassing at a later date. Conclusion. The person who has acquired the ownership of a piece of property, or the agent, or the manager, will do well to remember a statement which was recently given by Loton H. Slawson of New York City in Forbes Magazine: There is practically no improvement which is not capable of marked improvement, if rightly handled. Quite often an owner "pulls his chestnuts out of the fire" by so improving his property in a run-down neighborhood that it immediately begins to show marked financial returns. In spite of the fact that it generally returns such excellent results, real estate is probably the most abused of investments. A man will buy a piece of improved real estate and expect it to yield an income, with little or no attention and, more often than not, when a wrong policy as to his budget for operation, amortization and depreciation. Yet, in spite of all this, it continues to increase in value, for, even if the buildings go to pieces, the ground value continues to rise. The investing public is gradually beginning to realize that good business property offers enormous returns as a permanent investment. Professional men, or those engaged in some occupation which has a periodic limit, secure an income for later life by investing during their producing years. Nor need they always look far into the future for their returns, for property rightly selected, managed, and financed, has been known to yield sufficient income to pay back the entire investment with interest in the fifth year of ownership. Real estate properly handled must yield returns, if it has been bought with a view of future growth. CHAPTER XI QUESTIONS ARISING WHEN BUYING These questions arise in practically every purchaser's mind, and are given here in simple form with answers. Q.-Suppose I see a piece of property which is marked for sale, if I go direct to the owner, instead of to the agent whose name is posted am I likely to get a better price? What are the advantages of dealing direct with the owner? the advantages to me of dealing through an agent? What are A. You will probably not get a better price. The owner usually feels flattered at the inquiry you make and quotes the price he told the agent. Sometimes he deducts the commission, or he says he does, but usually he is only quoting his inside price in such cases. Some purchasers are temperamentally good buyers and can deal with owners. Inasmuch as it is impossible to tell in advance what may come up during the negotiations, an agent is a great help in such transactions, as he supplies, by his knowledge, ability, and resourcefulness, what the purchaser or seller may lack. Q. Is it better for me to travel about the city or locality to find the right kind of property, or is there danger that by so doing I may not get a wide viewpoint? A.-Most people seek education whenever they buy anything. They like to study the type of thing they intend to buy. In certain classes of real estate the purchaser can "shop" to advantage. Take the homeseeker, either renting or purchasing. The daily papers in their display and their classified columns contain advertisements of houses and apartments, and, since lots, houses and apartments usually carry signs, it is easy to get a good idea of the offerings by a visit to the particular district in which you want to live. Many of the best offerings, on the other hand, are not plac |