Top 10 Real Estate Buyer's Tips

One would think that with as many homes as are purchased every year they would make buying a home a simple process. However, for many it is the biggest investment they will ever make and there is responsibility that comes with the privilege of ownership. Financial, legal, and real estate experts have years of experience in these fields because they are trying to make things work for everyone including lending companies, sellers, brokers, etc. When it comes down to it a home is a business venture regardless if you are on the buying or selling end or whether you are somewhere in the middle. When buying a home there are many things to keep in mind.

1. Use a Real Estate Agent
   Most home buyers don't realize the huge amount of work that goes into closing and purchasing a home. Orchestrating inspections, appraisals, contracts, negotiations, etc. is best left to a professional. Interestingly enough, many very successful real estate investors use real estate agents or are real estate agents themselves. If they use them even though they may have a vast amount of knowledge about real estate transactions you probably should too. Good agents come highly recommended. Ask around. Get their contact info and then call them. Do they answer their phone in a reasonable amount of time? Interview them. Make sure they know their stuff. Pay them. A good agent is worth his weight in gold. If you hire a discount agent you will likely get a discount service. Give them a reason to make you their top priority. They will support you through a strenuous time and save you time, stress, and money down the line.

2. Get Prequalified with a Reputable Lender
   Believe it or not, two of the main reasons home buyers are not able to complete a purchase is because they are not qualified for what they are looking for or the loan officer is not able to get the job done. Just like with anyone else you will want to interview loan reps. Ask around. Trusted friends and family will let you know who can make it happen. See what they guarantee and find out how they are tied to your real estate agent. Many times in-house lenders are a plus if the agent has a strong position. Your agent can go to bat for you and have their broker tighten up on the lending broker and they will get the job done. Get prequalified with the lender to make sure you know what your price range is so you don't waste a lot of time for a lot of people by looking at the wrong price range.

3. Determine What You Need, Want, and Can Get
   Gotta wine taste and a beer budget? We all have a little dreamer inside. We also may not agree with other buying parties (i.e. spouse, parent, etc.) on what is needed. Once you have prequalified make it a priority to determine what requirements a home/area MUST have. Also determine what you WANT in the home/area. What tradeoffs can you make? Is that fourth bedroom a requirement or just nice to have? Does the house have to be one story because of mobility concerns or will it just save you a few steps? Are the schools in the area really that much different than other areas or do you have stats to prove you ought to attend in that area? The more planning you do on paper and with your agent and loan officer before getting into a car to see houses/areas the better off you will be. Know what you need and can get and will trade and then go get the house.

4. Get Educated
   You can learn a great deal from a mentor. Find someone who has done what you are trying to do no matter how simple or complex. Pay someone to educate you before you jump in. Find a good agent, stay loyal to him/her, and get the answers you need.
   
   There are many books out there in real estate. Find several that fit what you want to do. Learn the terms. Learn the processes. Learn the negotiations. Learn the market of the area you are buying or selling in.
   
   Keep in mind one thing: unless you become a real estate professional you will still need to take advice from one. Real estate professionals ask each other questions all the time. Many people become educated enough to make themselves dangerous. They know when to throw a red flag but don't know how to solve the problem and they can kill a deal. Get educated enough to know what is going on and to help but be sure to seek out the professional help that is needed.

5. Prepare Your Emotions
   Many home buyers know the typical escrow period as "hell month". Regardless of how long it is, most people will hate this period of time. There are many factors to deal with and often emotions run high. It is likely you will experience one major road block and three small bumps in your transaction -- and that's if you use a qualified real estate agent. If you don't plan on your transaction falling out of escrow because many more than half of transactions without an agent never close. Only experienced investor buyers find success in closing for themselves. However, it is interesting to note that even though an investor can do the work himself, most will use an agent to work for them.
   
   Remember you are working a complex deal. Real estate transactions tend to invite a great deal of negotiation. There is a lot of paperwork involved and organization. You will have less stress and worry if you let an agent do the work.
   
   Be prepared for the waves and roll with them. Work with your agent and try to see things objectively. You will have challenges and you will need to work through them.

6. Be Quick to Respond, Get a Fax Machine
   You will need to provide key information to a handful of people throughout the transaction. Be quick to respond. You may even consider getting a fax machine that is easy to use so you can communicate in a timely manner. When the lender needs info try and get it to them same day. When the agent needs a document signed try to get it back to him/her same day.

7. Do Most of the Work in Your Agent's Office
   Many buyers think it is "fun" and effective to drive around, find a home, call off the sign, and then begin the process. The truth is those buyers will waste a great deal of time and get burnt out. Many homes with signs in the yard are under contract, pending, or sold. The most effective way to buy is to use your agents resources. Agents have systems (including a subscription to the Multiple Listing Service (MLS)) to search and narrow down the possible homes that fit your criteria and needs. Spend time in the office narrowing down the possibilities. You may spend several hours total in the agents office instead of many hours ineffectively picking around. Make use of the resources your agent is paying for to your advantage.

8. Acquire X-ray vision
   A seller's goal is to create great curb appeal and cover/repair glaring defects in an economical manner. As a buyer you need to acquire the skill to see beyond curb appeal as much as possible. It would be great if you could see into the walls. You probably can't but you can sure keep an eye open for possible problems like water stains, bowing walls, dry wall, flaking paint, cracked walls, crumbling brick, dripping pipes, new materials in an older location (i.e. new pipes between old pipes, patched drywall), unleveled floors/ceilings, etc. Be your own private investigator. You will find things that will save you a head ache later on. If you do find something, be sure it is a real problem and not some minor fix. It would be sad to miss out on a great opportunity for something trivial.

9. Hire a Home Inspector
   Your private investigator skills will likely only go so far. Hire a professional home inspector (it is not recommended that you use your friend to do the inspection) who is impartial to the home. They will enter and flag problems and suggest fixes and suggest the extent of the problem. They can run tests to determine the status of many systems. Hire a specialist if something major is flagged like a roof or electrical. It will cost more initially but in the long run can save you a great deal.

10. Be Organized
    This is a transaction bound by contract law. Keep copies of everything and try to store them in chronological order. There may be a day when you will need to pull out your "get out of jail free" document or prove that certain items were negotiated. Pay attention to dates and signatures. Keep papers in a folder and be sure you have legible copies of everything you sign.

Buying a home is exciting but you need to stay on top of things. Work with your agent, keep your emotions at bay, and look forward to the new purchase.

NOTE: Information on this site is not guaranteed to be accurate. Some content is compiled from 3rd party sources. If you are aware of incorrect or outdated information, feel free to contact us.