After years of representing buyers of real estate I decided it was time to write a post that would give advice to anyone dipping their toe in the real estate home buying pool for the first time or for the first time in a while. The current economy has pros (low interest rates) and cons (high unemployment, shaky economy) like any others but I firmly believe that one thing holds true in any economy Ė the advantages of buying far outweigh renting for most people in most cities. So without further ado, hereís the advice that I can offer after a decade of buying, owning, investing in, managing, leasing, and selling real estate.
1. Find an experienced, honest, straight shooting, full time real estate agent. This is not a shameless plug! I firmly believe that smart, successful people surround themselves with smart, experienced, experts that can help guide them to a well thought out decision. If you donít buy and sell real estate every day all day for a living, how could you possibly understand the real estate home buying process and all of the nuances and intricacies of the available inventory, purchase contract, title insurance and mortgage process? How could you possibly know what a good deal or a great deal looks like? You canít! Get referrals from friends, use Google to search, go to open houses and keep looking until you find someone you feel has the experience, resume and personality to represent you and your interests.
2. Get Preapproved. This is synonymous with get pre-qualified. Every day soon to be buyers of real estate call and tell me what the upper limit of their property search is. I always ask "how do you know thatís your limit?" and the answer is inevitably the same Ė I used an online mortgage calculator. Getting preapproved is a 100% free, no obligation way to find out what you can really afford from someone who specializes in mortgages. If you are represented by an established agent (see above) he or she may be able to get you a better rate than the one you were quoted online or by another lender. Be honest with yourself about what you can afford every month and remember that you donít have to spend the max amount you can qualify for. Find a monthly payment amount you are comfortable with and stick with the correlating loan amount.
3. Create A Hierarchy of Priorities. I subscribe to the House MD theory of Real estate sales (i.e. everyone lies) but itís not that clients are intentionally being misleading, rather they really donít know what they ultimately want because they donít know the inventory and they may not know what features are must haves and what features would be nice to have. Buyers should consider everything before looking at homes: price, beds/baths, square footage, outdoor space, parking, location, walkability, floorplan and neighborhood. Be realistic about what you can afford and then sit down and actually write down what features are essential, and which would be nice but are not deal breakers. Try to rank the features because you will ultimately be forced compare and decide. No buyer at any price gets 100% what they want, everyone makes concessions and compromises.
4. See Everything. Obviously you shouldnít literally see everything but you should plan on seeing enough homes that you are ready, willing and able to pull the trigger when you see the right one. Somewhere in the 15-20 range is probably reasonable. Take advice from your agent on which homes you should see because he or she has likely seen many with other clients or during brokerís open houses.
5. Enjoy the Journey. There is one thing I am entirely certain of and that is that buying real estate should be a fun, enjoyable process with an equally fun and satisfying ending. There will be inevitably be stress and emotion because of the costs, time, complexities and personalities involved but at the end of the day try to enjoy the process. Work with smart, honest agents and lenders who make you feel comfortable and allow you to breath smile and just maybe even laugh occasionally.