There are good and bad ways to purchase a house. You will waste a lot more money and experience frustration if you choose the wrong path. If you follow the advice of real estate experts, you will walk away with a big smile and money in your account.
1. Before choosing an agent, research the agents.
The right agent can make a huge difference in finding the perfect home and negotiating a fair price. Carlos Miramontez is the vice president of mortgage loans at a Californian credit union. He offers some tips on how to narrow down your agent pool.
He writes in the company’s blog that “doing your research can help you to make a good decision and select a qualified real estate agent that is right for your needs.” Remember that you are creating a professional relationship. You need to work well with each other, because it may take several months for the whole buying or selling process to be completed. Have a cup of coffee with several agents before you decide which partner is best for you.
You should also ask your agent specific questions, including:
- How often will I receive listings?
- Can you show me houses when I am available, e.g. after work or at the weekend?
- How long have worked you in the real estate industry?
- What kind of properties do you specialize (e.g. condos, townhomes, single family homes)?
- Do you have experience working with clients in the same price range and area as mine?
2. Find local real estate groups on social media
Brady Hanna of Mill Creek Home Buyers, Kansas City, has been renting, buying and flipping homes for more than a decade.
He says to search on Facebook for local real estate groups. You will be surprised that there are probably 10 or more. Join them all, including wholesaler and investor groups. Post across all these groups, stating that you’re looking to purchase a home in the ABC area. Include your email and your criteria. This technique will get you off-market listings from many people. “I have purchased six properties just by joining local Facebook groups.”
3. Add a personal touch to multiple offers
How can you make yourself stand out from a crowd of buyers? Send the seller a note with creative details about you, your plans to transform the home, and why you are the ideal buyer.
Hanna says that if you mention your family, it will make the seller feel more at ease and you’ll have a better chance to be selected than a buyer with a similar offer. “I’ve seen this first-hand when selling homes. I always chose the buyer who wrote the personal note, even when there were multiple offers. “
4. You don’t have to settle for city living
Many people find city life attractive and convenient, especially if they like to be able to walk to their daily necessities. Even though the necessities of life are readily available, your financial situation may eventually rob you a certain level of quality of life.
Shane Lee is a data analyst at RealtyHop. He suggests that you should consider the commute time and cost when looking for properties in the suburbs. While the city is great, you may find a better deal out in the suburbs. With the money you saved on the purchase, you can find a fixer-upper and turn it into your dream home.
5. Before you buy a home, make sure to check all the costs.
The down payment is the biggest expense for first-time buyers, but there are many other costs that must be considered before you begin the purchase process.
Lee recommends that you budget for the down payment, closing cost, and any other costs as soon as possible. Origination fees can be between 2-5 percent of the loan amount. This is in addition to the 20% down payment that some lenders may require. It’s important to start saving as soon as possible to ensure you have the cash you need to pay for all mortgage payments, legal costs, and broker commissions.
Do not forget the hidden costs, which are often overlooked, such as property taxes, homeowner’s association (HOA), and insurance premiums. Ask for specifics on taxes and HOA fees. Ask your agent for an estimate of the insurance premium.
You should consider all of this before you commit to a particular property. This will ensure that you are able to afford the fees and costs associated with it.
6. Check the HOA to see if you are compatible
Homeowners associations can be great in many communities, because they set standards that ensure all residents live in an area that values beauty and resale. Some people find HOAs to be overly involved and that the board’s decisions are not always the best.
Robert Nordlund explains.
He says that “location” is one of the biggest factors in determining the value of real estate transactions. However, when buying a house in one of 350,000 AGCs (association-governed communities) in the United States there are two other circumstances. First, the AGC’s unique financial factors will influence the value of a home on a first-time basis. The fate of the investment over the long term will be determined by the decisions and whims made by a board of volunteers. It is not a complicated process, but it takes time to complete and should be done before any offer comes on the table.
Consider these tips to help you choose the right HOA:
- Attend a meeting of the board.
- Meet the manager if the association is professionally run.
- Verify that the budget is accurate and balanced.
- Take the time to read and understand the Reserve Study.
- In the daylight and at night, check the curb appeal.
- Note any obvious neglected maintenance.
- Inquire about the history and development of special assessments.
- Assess the transparency of your board and management.
- You should read the rules and standards of your association.
7. Purchase a house below your budget
Julie Gurner, a real estate expert, argues that you should spend as little money as possible to buy a house that suits your needs and makes it easy for you to live in, even if you can afford more.
She says that while your friends may struggle to afford a house at the top end of their budget range, you should aim for a home priced at 75 percent of your approved budget or less. This will allow you to save for your retirement, for emergency repairs, for travel and to enjoy life more, without having to worry about the financial burden.
How do you do it? Find the oldest home in the most desirable area.
Gurner says, “Look for homes that are outdated in style — they may need a newer kitchen or have old carpets and wallpaper — but the home is well-maintained with solid bones.” With a little time and effort, even the most ugly house on the block could become your dream home. Many people expect move-in ready homes. The outdated homes can be overlooked gems. They can save you money and allow you to start building sweat equity right away.
8. Invest in real estate markets with high yields remotely
Home-buyers from New York City and other coastal markets can build long-term wealth by purchasing single-family rental homes.
Zach Evanish, the sales director at Roofstock Investment Property, says that buyers in coastal areas will find better yields and lower home prices. Memphis, Cleveland and Indianapolis are prime examples. Also, Atlanta, Dallas and Phoenix. SFRs can be used as a stepping-stone to a real estate investment empire that generates a steady stream of rental income.
9. Ask for reductions after inspection
A home inspection that uncovers interior or exterior problems is one of the ways I save money when buying homes. You can make a deal after an inspection if the seller has a low-demand market or is under pressure to sell.
Home sellers tend to describe the condition of their property as better than it really is. Lucas Machado explains that a good inspection can reveal unanticipated flaws. Don’t be scared to ask for a discount. Some buyers are afraid of losing their home and hesitate to ask for a reduction. Sellers are willing to reduce the price if asked, even by tens or thousands of dollars. Asking is not a bad thing. You can still go ahead if the seller says no.
