So, IIt’s time to make your first real estate investment. Whether you are buying yourself an apartment or a house, or want to turn them over for profit, you are taking a big step. We asked the experts for advice.
Do not invest in real estate alone
You might a life alone, but do not approach this task alone. To do this, you need to have sharp people skills because you will be talking to realtors, homeowners, bankers, and maybe even lawyers and contractors. Now is not the time to be shy, not least because you have to be bold and assertive when you make your proposals.
To choose agent you like who has experience in the area where you want to live. Ask them about their history and how many places they have visited in recent years. Be clear that you should is, whether it is a garage or a convenience store within walking distance, and what you could live without. Indicate which areas you are interested in, which you will not go to, and which you are ready to consider if there will be a suitable property there. If the agent gives you feedback that you don’t like or tries to moderate your expectations a little, do not reject them entirely; it is a learning process and you have to listen to people who know what they are talking about.
“It’s important the buyer has a strong team behind them. They should have a buyer’s agent that they trust to give guidance, highlight any red flags, and advise them on the valuation and correct offer price,” said Jessica Levine, one of Douglas Elliman’s top agents in both transaction volume and gross commission income since 2011.
Build trust with your agent, and if you promise them you aren’t looking around with any of their competitors, don’t go looking around with any of their competitors. Be respectful to everyone involved in the process because each person you encounter has some degree of power over whether or not you get the place.
“Don’t try to be a wiseguy or you’ll lose the house,” said Shawn Elliot, Managing Director of Nest Seekers International. “Come in with your best foot forward.”
Be prepared for disappointment
It happens all the time: Multiple people like the house. Multiple people make an offer on the house. Only one person can get the house. Everyone else will be disappointed.
“Bidding wars are common in the current market, so strategy and approach and timing can be critical,” said Levine.
Elliot added, “It’s a seller’s market. In a seller’s market, homes tend to go either at ask, or over ask. In a seller’s market when interest rates are at historic lows, you don’t come in and lowball it. If you come in, you have to come in guns blazing because there are 10 other families behind you who want the same thing. That’s in every market: New York City, The Hamptons, South Florida.”
Do not expect to get the first place you put an offer on—but be glad if you do. Manage your expectations, give yourself time to find a place, and communicate with your agent every step of the way. Ask them questions—lots of questions. Eventually, if you’re qualified, you’ll get somewhere, but this is usually not a one-and-done deal.
Boost your chances of buying the type of place you want
“If you know you’re credit worthy and you’re bankable then you have to waive the mortgage contingency as a cash buyer, which actually means you look better because your terms are better than the people you’re competing with,” said Elliot. “A prequalified letter from your bank also will help with the offer, along with giving the seller discretion on the closing date.”
Levine noted, “An offer that is ‘non-contingent on financing’ is almost equivalent in strength to an all-cash offer. The buyer should also make sure they understand the mortgage they qualify for and the different products and options on the market. This helps stay within budget and in the event of a bidding war, allows the buyer to feel comfortable with increasing in price point. This can help put a buyer at a competitive advantage in a currently cutthroat market.”
If none of that made sense to you, take a step back. Run it by your agent. Have a look at a home-buyer’s glossary as well as forums for novice home buyers. The more information you read and ask questions, the better prepared you will be to propose your first home. Now go and schedule a few visits to promising properties.