How to Make Your First Real Estate Investment
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So it is time to make your first real estate investment. Whether you are looking to buy a condo, a house, or turn one around for a profit, you are taking a big step. We asked experts for advice.
Don’t go investing in real estate alone
You may live alone, but you shouldn’t do this alone. Your people skills should be practiced for this as you speak to realtors, homeowners, bankers, and maybe even lawyers and contractors. This is not the time to be shy, not least because you need to be bold and assertive with your offers.
This is a learning curve and you should listen to people who know what they are talking about
Choose an agent you like who has experience in the field in which you want to live. Ask them about their history and how many places they have landed in the past few years. Make sure you understand what you need to have, whether it’s a garage or a grocery store within walking distance, and what you could do without. Outline which areas you are interested in, which areas you will not be approaching and which areas you are considering, whether there happens to be the right property there. If the agent gives you feedback that you don’t like or tries to lower your expectations a bit, don’t reject them entirely; This is a learning curve and you should listen to people who know what they are talking about.
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“It is important that the buyer has a strong team behind them. They should have a buyer agent they trust, guide them, highlight red flags, and advise them on valuation and the correct bid price, ”said Jessica Levine, one of Douglas Elliman’s top agents since 2011 on both transaction volume and transaction volume Gross commission income.
Build trust with your agent, and if you promise them that you won’t look at any of their competitors, don’t look at any of their competitors. Be respectful of everyone involved in the process because every person you encounter has some degree of power over whether or not you get the place.
“Don’t try to be smart or you will lose the house,” said Shawn Elliot, executive director of Nest Seekers International. “Come in with your best foot forward.”
In a sellers’ market, homes tend to go either on demand or above demand. In a seller’s market, when interest rates are at historic lows, don’t come in and praise it.
Be prepared for disappointment
It happens all the time: several people like the house. Several people make an offer for the house. Only one person can get the house. Everyone else will be disappointed.
“Bidding wars are common in this marketplace, so strategy, approach, and timing can all be critical,” said Levine.
Elliot added, “It’s a seller’s market. In a sellers’ market, homes tend to go either on demand or above demand. In a seller’s market, when interest rates are at historic lows, don’t come in and praise it. When you walk in you have to come in with your guns blazing because there are 10 other families behind you who want the same thing. You can find it in every market: New York City, The Hamptons, South Florida. “
Don’t expect to get the first place you bid on – but be glad you did. Manage your expectations, take the time to find a place, and communicate with your agent every step of the way. Ask them questions – lots of questions. At some point when you are qualified you will achieve something, but this is usually not a one-off operation.
A “financing-independent” offer corresponds in its strength almost to a pure cash offer
Increase your chances of buying the type of place you want
“When you know you are creditworthy and bankable, as a cash buyer you have to forego mortgage contingency, which actually means you look better because your terms are better than the people you are competing with,” said Elliot. “A pre-qualified letter from your bank also helps with the preparation of the offer and gives the seller discretion on the closing date.”
Levine commented: “An offer that is ‘not dependent on funding’ is almost the same in strength as a purely cash offer. The buyer should also ensure that they understand the mortgage they qualify for and the various products and options on the market. This helps to keep the budget and in the event of a bidding war the buyer can be comfortable with a price increase. This can help give a buyer a competitive advantage in what is currently a highly competitive market. “
If none of this made sense to you, take a step back. Run it from your agent. Stop by a homebuyer glossary and Forums for first time home buyers. The more information you read and ask questions, the easier it is to get a quote for your first home. Get out there now and schedule some visits to potential properties.