Challenges of a Home Based Business

Contrary to popular belief, those who work from home, or to be more specific, have their own Home Based Business, are successful. In 2004, the Bureau of Labor Statistics released a report that there are 7 million people that are working from home in the US alone. That was five years ago, imagine how many more successful people are there in the US alone now, those who are successfully working from home.There must be something good about having your own Home Based Business for such a large number of people doing it and successfully at that. How do you make yourself one of them though? Being disciplined would be a good start.The honest truth is, having your own Home Based Business doesn’t come without its challenges. The term ‘motivation’ takes on a whole new level of meaning. You are now no more an employee on the monthly payroll. Instead, you are now an employer and employee, all rolled into one. You no longer have a boss who tells you what to do and who has the power to fire you. You also no longer have a subordinate whom you can delegate mundane tasks to.You will now play the role of management in your Home Based Business. You’ll be in control as its now your Home Based Business that you’ll be running and well, everything that happen or doesn’t happen will be your problem. It’s from this control where you’ll get your motivation. Motivation will tell you what work needs to get done and self discipline will make sure you get that work done.In your Home Based Business, all you ‘office equipment’ is right there; your computer, phone and fax. You don’t ever have to leave you home now, because well, your home has also become your office. This is where the tricky part comes in. You have to find the right balance for yourself, as to when do you actually do the office work, that is work on your Home Based Business, and when do you do your household duties. To overcome this tightrope, its best to actually set yourself ‘working hours’.These working hours are entirely up to you. It can be early in the morning or even late into the night, depending on what else you have going on in your life. Whatever you decide, it’s important that you stick with those hours and actually work on your Home Based Business at that time. This discipline is important as it not only sets the momentum going, it also give you and you clients guidelines as to when you are available to talk business.The common sense here is, to be truly successful in your Home Based Business, you musty truly work.On the other hand, when everyone else is physically away in an office and your office is actually your home, family and friends tend to jump to the conclusion that just because you are at home everyday, you have tons of free time in your hands. They will then start thinking that you’re free to help then do stuff that they can only get accomplished during the weekends, etc. Family commitments like children and duties around the house will easily lure you away from your Home Based Business.This is where more discipline comes into play and you have to put your foot down and say ‘NO’ to these distractions. This is where your set working hours will help you decide what you can and cannot do. With a little bit of persistence, your family and friends will start to understand your Home Based Business better. As long as you keep giving in to these distractions, your cash flow will be affected. Hence, discipline plays a vital key in making your Home Internet Business a successful one.

Purchase of Real Estate in Germany

The actual and legal conditions for a real estate purchase in Germany differ considerably from those in other countries. The transfer of title is carried out in two steps: The conclusion of the purchase contract and the entry of the transfer of title into the land register.

The Land Register

The land register (Grundbuch) is administrated by the Land Registry at the particular Local Court. The function of the Land Register is to inform the public about the legal relationships in regard to a specific parcel of land. Albeit being a public register only such individuals gain access to it who can demonstrate a justified interest, e.g. banks and other creditors, public notaries, estate agents and potential purchasers.

In order to review the legal situation, each potential buyer is well advised to demand an actual extract of the land register. It is a basic feature of the German real estate law that transfers of ownership is effected by the transcription of title in the land register. Any individual who is nominated in the register is always and automatically the lawful owner of the property. Due to its publicity, the contents of the sheets are ascribed public faith and credit. As a consequence, everyone can rely on their accuracy and further research regarding the title held by the seller need not to be carried out. I

Each property has to be registered on a separate sheet. Past entries in the sheets are deleted by the officers of the Land Registry by underlining them in red. The files attributed to each sheet contain all relevant deeds regarding present or future entries in the register.

Every sheet is divided into an inventory listing (Bestandsverzeichnis) and three sub-sections (Abteilung). The inventory listing identifies the cadastral district (Flur) and unit (Flurstueck) of the real estate and its size. The first section nominates the owner of the estate and the legal ground of his acquisition (purchase/ inheritance etc.). The second section shows all encumbrances in regard to the estate such as easements on the real estate or personal easements, heritable building rights, pledges or claims for recurrent payments or services, usufruct, priority notices, the owners limitations regarding the right to dispose of his title. The entries in the third section document if the real estate has been used before as a collateral security. These informations are important for any potential purchaser because irrespective of the individual who owns the property, each bailee of a lien on the real property is entitled to put the real estate onto auction in order to enforce his money claim.

The Purchase Contract and its notarisation

A purchase contract should provide stipulations at least about the following issues at least:

Name of the parties

Description of the purchase object

Conveyance of property/ Priority notice of conveyance (important because it blocks further entries in the land register)

Purchase price

Change of possession

Warranty

Costs of the purchase and their distribution

The purchase of real estate is subject to a mandatory notarial recording. Conversely to the legal situation in most other countries, unless the contract is notarized any agreement is invalid. Therefore, any purchaser should take care that the complete agreement he has made with the seller is presented to the notary (Notar) and included in the official deed. As the costs for the notary are usually born by the purchaser it is custom that the purchaser decides who shall effect the recording. It is the notary`s duty to convert the parties mutual agreement into an efficient and legally binding set of rules. As a specialised and impartial lawyer, he advises the parties from an independent point of view about rights and obligations arising of the purchase contract. Consequently, it is his main task to identify contractual loopholes and to prepare the draft. Moreover, notaries offer to take and keep the purchase price in a notary trust account until all conditions for a vested transcription are met (approval by the municipality, payment of the estate purchase taxes, entry of a priority notice in favour of the purchaser in the land register). As the costs for the notary are usually born by the purchaser it is custom that the purchaser decides who shall effect the recording. As the deed is established in German the notary would be obliged to call a sworn translator unless the parties waive this requirement and call someone who can translate for them.

During the notarization ceremony the notary reads the document out loudly to the parties before they sign the deed. Notaries have to explain the contract details to the parties if questions arise but they are prohibited to give advice in favour of one party. The notarization may take place in English or any other language if the notary is fluent. As purchase contracts may be complicated any purchaser should study the draft and join the notarization personally. However, each party may also can be represented by an authorised representative. After the notarization the notary manages the necessary entries in the land register. The transcription of title is accomplished after app. six months. However, the basic contractual obligations (payment, entry of priority notice, transfer of possession, benefits and the liability for public charges) are performed within one month since the notarial recording.

The notary fees and the fees of the Land Registry are accounted according a schedule as provided in the Fee Act (Kostenordnung). They usually add up to 1,5 % of the purchase price. The commission for estate agents usually amounts to 3 % plus VAT for both parties. The tax rate on the purchase of real estate is 3,5 %. In Berlin it is 4,5 %.

The purchase from a building developer

According to this contractual scheme, the purchaser obligates himself to buy a house or an apartment and effects payment ready at a time when the construction of the building has not been completed. Such contracts (Bautraegervertrag) usually stipulate a purchase of undeveloped real estate plus the obligation of the developer to construct a building on it. The predominant conflict of interest between the building developer and the purchaser concerns the time and mode of payment.

3 of the Agents-And-Building-Developers-Decree (Makler und Bautraeger Verordnung) defines the progress payment as the statutory mode of payment. Furthermore, the building developer is bound to several preconditions before he can claim any payments from the purchaser. Finally, 3 Sec. 2 of the Agents-And-Building-Developers-Act provides maximum percentage installments of the purchase price which the developer can claim upon the accomplishment of particular steps of the construction.
Thereby, the developer has not the right to receive any payments unless…

- a valid building agreement has been concluded,
- a priority notice of conveyance has been entered in the land registry (as a second step the transfer requires the entry of the purchaser in the land registry),
- the release of the property from previous encumbrances created by the contractor to obtain financing for the project has been assured. This is usually performed by obtaining a note of promise issued from the developer`s bank. As a condition for grating that note the bank demands that the purchase price is paid onto a particular account. Only upon receipt of the funds the bank has to clear the register. The law stipulates the particular requirements for such promise note. It shall also apply in case the building is not accomplished; instead of this the bank can reserve the right to pay the funds back, not more than the current value of the property)
- a building permission for the house has been granted and
- finally any right of the contractor to withdraw from the contract have ceased.

In spite of the granted promise note, there are substantial not covered risks in the event of the insolvency of the building developer because in that event the still outstanding purchase price is regularly not enough to complete the building. Furthermore, the purchaser can be liable to his bank for a prepayment penalty if the money is paid back by the bank that issued the promise note.

Instead of granting the fore mentioned measures for securing the purchaser claims the developer can also furnish a directly enforceable guarantee issued by a bank. The guarantee covers the total amount of claims for repayment of the purchaser funds.

The MaBV stipulates that the purchase price is paid in up to seven installments as stipulated in the contract which compound these elements:

- 30 % after the earth moving
- 28 % after completion of the structural including the carpenter work
- 5,6 % for the tiling of the roof and the fixing of the rainwater gutter
- 2,1 % for the preliminary installation of the heating system
- 2,1 % for the preliminary installation of the electric system
- 2,1 % for the preliminary installation of the sanitary facilities
- 7 % for the windows
- 4,2 % for the interior plaster
- 2,1 % for the floor pavement
- 2,8 % for the tiling in the sanitary rooms
- 8,4 % after the building is ready to move in and the possession is handed over to the purchaser
- 2,1 % for the work at the face of the building
- 3,5 after full completion

The finance of the purchase should be clear at the time when the contract is concluded. An insolvency of the purchaser at a later date has no effect on the performance of the contract because the mortgage has already been paid out..

Development of land under ones own responsibility – the Baugruppe as an alternative to the commercial building development

The Baugruppe is a partnership of convenience which targets at circumventing the commercial building developer. The partners are free to choose and plan their building concept. The savings which can be gained in comparison to the use of a professional building developer can amount to 20 % of the building costs.

A Baugruppe relies on harmony and communication among the partners and their willingness to compromise in problematic situations. At least one partner besides the architect should be able to account the costs arising in the building process. Since everything is subject to mutual consent of the group and has to be organized by the partners a lot of spare time has to be spent on the project. The partners should both have a common vision but also an estimation of what can be achieved realistically. The architect should be able to temper the building phantasy of the partners.

The Baugruppe is usually organized as a private partnership. The agreement provides the joint and several liabilities of the partners even in the event that one of them dies.

Conversely to the contract with a developer there are no fixed prices. The architect contract should therefor consider unforeseen costs for rising raw materials so a buffer of 10 % of the costs in the individual financial planning. A legal protection insurance is also advisable if rising costs have their origin in sloppy craftsmanship. For negotiations with the crafts enterprises, construction companies and so on a lawyer should be engaged right from the start. Insurance should be taken out in order to get protection against insolvencies of crafts and construction enterprises to which money has already been paid for the raw materials and against thefts and damages which may occur during the construction process.

Banks are generally skeptical to finance projects initiated by a Baugruppe. Mortgages and maybe even the pledging of salaries may serve as collaterals. In regard to obtain proper financing the adherence to ecological standards may make governmental subsidies available.

Acquiring Your Own Home Based Business Leads

Home based business leads are of utmost importance when it comes to successfully running and growing your own business, and there are a variety of ways that one can go about in getting these leads, ranging from purchasing the leads themselves to the actual self marketing and acquisition thereof.So many of us dream of the possibility of starting and running our own home based business, and although it may well be somewhat of a challenge, it is far from being impossible or unachievable. The level of desire and commitment that one has to achieve this goal or objective will in all likelihood determine the success or failure of such a venture. Within this process of growing the home business is one of the most important aspects of home based business leads, or otherwise referred to as prospects. These are the individuals or companies that one would normally target in terms of presenting your product or service to and aiming to close a sale with these folks to ensure that you are meeting your sales and revenue targets. Without customers and sales where applicable, a business whether it be home based or not is literally dead in the water.Going about getting the home based business leads for someone operating from home may at first prove to be a little more challenging, largely due to the fact that there is less interaction with others when working from the isolation of one’s home. But this can be changed, and is totally within the home based entrepreneur’s control, as he or she can choose to get out into the market place via networking opportunities and build up from there. Often times the fledgling business may fail because of the lack of such social and professional interaction and therefore the importance thereof is vital. This interaction can take the form of social get-togethers, local business member meetings such as Chambers of Commerce, associations and societies, as well as through local sports clubs. These places are normally teaming with prospects, especially like minded business people and owners that are also looking to expand their businesses.Alternatively the telephone book has often been used as a source for all types of leads, so why not give the local book a try to acquire some of your own home based business leads, it is at the very least a starting point and may lead onto bigger customers and contracts too. By establishing a solid base or foundation within your business, albeit from a cold calling perspective you will place yourself in a position to succeed, whilst growing your confidence during this phase. The most important point here is that you cannot let yourself get down and continue to seek out those valid and qualified leads on a daily basis.Making it a daily habit will make it easier, and you will soon come to realize that it is a numbers game in terms of getting the leads, and then closing the sale. Home based business leads will ensure your ultimate success and you can literally never have enough of these valuable ‘commodities’ in your own business.