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As anyone who’s ever been involved in real estate knows, it’s generally one of the most stable investment vehicles available.
Of course, there can be downturns every once in a while – see the 2008 Housing Bubble – but because of the simple fact that everyone needs a place to live, it’s very reliable in the long-term.
The Housing Collapse of ’08 has been over for almost a decade now, and real estate is, once again, a hot ticket. There are reports from all over the country of homes receiving dozens of bids in a short period, and selling in record times.
Property is valuable; if you have land available for lease, for example, you can command the best prices – depending on what the developer wants with your land.
The Early Bird Gets the Worm
If you’re on the prospective tenant side of the bargain, then you’ve got to move fast in order to secure the property you want. Chances are if you desire it, many others do, too.
It begins with getting in contact with a realtor in your region of the country, once you’ve decided the basic details of the kind of home you’re searching for.
A good rule of thumb is to start looking up to half-a-year in advance. The decision to buy a home happens overnight, so leave yourself plenty of time to find your dream home.
If fact, once you start looking you have two choices: you can choose the expensive option and start looking for a dime a dozen realtor, or you can start looking at “for sale by owner” listings and cut out the middleman.
Even though the buyer traditionally doesn’t pay the real estate agent’s commission, just be aware that the fee will come out of your pocket one way or another.
Sellers listing their houses with real estate agents will factor this mammoth expense into the asking price. Plus, dealing strictly with the owner gives you direct access to them if you have questions or concerns.
Real estate agents typically shield buyers from sellers because they don’t want to slip up and tell you the truth about the property and all its problems and quirks.
On the other side of things, if you’re already a property owner, and you lease out or sublet your house, then an alert feature could be very useful for keeping tabs on your listings.
This works for AirBnB or any other listing site – and has been proven to improve revenue while also creating a safer environment for tenants and landlords.
Accounting and Finances
Given that things move quickly in a real estate bull market, you’ll want to make sure you have either the cash on hand for a purchase or a reliable source of alternative payment.
This is the entire reasoning behind getting pre-qualified first and then getting pre-approved for the necessary funds.
You’ll need to be able to show this to the seller to remain in the running – especially when she has so many offers in this current market.
Credit history is very important in this endeavor – after all, it’s an indication of the trust you’ve garnered from other lenders.
The loan you’ll be able to obtain will be based on your score, and a better score will lead to a much more manageable rate of interest.
In fact, if you’ve got poor credit and cannot secure a loan that requires a modest down payment, this could scare off some sellers; they need to be confident that you’ll be able to close the deal once that time rolls around.
Always remember – there’s competition out there, so take pains to improve your credit in the six months to a year you have after finding the property you want.
Facilitate the Transaction
In a partnership; however temporary, everyone appreciates due diligence. It makes life easier if nothing else. This entails simply following through on the deal you made. Schedule a home inspection once you and the seller come to a firm price.
Seasoned experts in the real estate game have a simple trick to guarantee you’ll close the deal on the property you’d hope to buy.
When competing with multiple bidders, offer to pay the seller’s closing costs. Although this is monetarily equivalent to raising your bid price, it has a profound psychological effect.
It’s more palatable for them to feel you’re taking care of those costs; for which they’re otherwise traditionally responsible.
Of course, if the closing costs are too high a percentage, avoid this – but that’s rarely an issue as these costs are more or less set at a regional standard.
Extend a Few Nice Gestures to the Seller
One of these gestures is accommodating of a common situation. Many times, a seller is putting her home on the market in order to recoup the cash needed to secure another property.
This often means that she and her family haven’t quite moved yet; one of the gestures you can extend is allowing them to continue renting it for a couple of weeks to a couple of months until they’re ready to move to their own new place.
This really saves them time, money and effort – at no real cost to you – in that they won’t have to move twice.
Although this next piece of advice isn’t for everyone, there’s no question that it has a huge personal effect: write the seller a letter along with your competitive bid before the house is sold. Include a picture of the family if you can.
There have actually been cases – more than you’d think, in fact – where sellers have been so positively affected by this that they lowered the bid on the house. In other cases, they accepted the first offer.
Closing Thoughts on Home-Buying
Don’t be hesitant when it comes to buying a home. The minute you decide that you’re in the market for one, start positioning yourself to acquire it – wasting time benefits no one.
Consider the type of home that meets your requirements and style and start combing through the “for sale by owner” listings until you find it.
Remember, several versions of the perfect home are out there. Since you were smart enough to cut out the middleman, you might actually nab one for hardly anything.