Real Estate Tips & Reports

Common Buyers Mistakes
Buyers Questions
Buying Vs Renting
Deciding Where to Buy
Ensuring a Smooth Home Purchase
First Step for First Time Buyers
Preparing to Buy A Home


Common Buyers Mistakes

Too much home, too little home, and waiting for the final word on financing can be easily avoided!

For the first time homeowner, the whole prospect of investing in a home of their very own can be very exciting, and very intimidating. Knowing some of the more common mistakes that real estate investors have made in the past can keep the new homebuyer from repeating these errors. Purchasing a home is the largest investment that over ninety percent of homeowners will ever make in their lives.

A very common mistake made by many real estate investors is actually not so very severe. It will however, cost them valuable time and many headaches which could otherwise be easily avoided. Most potential homeowners want to run right out and find their dream house before they worry about financing. While the emotional effects can be devastating to some people, the actual financial repercussions are not so severe. Still, sleeping in an apartment dreaming of a home that an investor may or may not ever be able to purchase is something many people would prefer to avoid.

When seeking out opportunities for real estate investment, whether for a primary residence or a secondary investment property, the real estate investor should always seek financing before looking for a new home. Unless the investor has a substantial financial holdings at hand and excellent credit, it is not likely that they will be pre-approved for any set amount. However, this will give the potential homeowner a better idea of how much home they can afford and let them seek out the best value for their money.

While the home that you have found may be the home of your dreams, why would you want to set yourself up for failure or disappointment? Knowing the approximate amount that you can feasibly receive financing for will allow you to narrow down your search to homes that will fit into your allotted budget and houses that you can be certain you are able to purchase.

On the other side of the aisle, what if the potential real estate investor is seeking only a modest home, believing that it will be easier to obtain good mortgage rates and financing for a smaller house. After having spent so much money on escrow, closing, appraisals and the other costs of investing in real property, they then discover that they could have purchased the home that they really wanted if only they would have known.

The wise real estate investor will find out at least an approximation of how much they can spend before they do any actual spending or investing. Knowing how much home can be afforded will set the homebuyer up to succeed more easily and be less likely to be faced with harsh, unexpected realities and difficulties in regards to home financing. Real estate investment is a great means of building up personal assets and a viable means to provide additional income. Knowing how to invest your finances properly in the real estate market is going to be a determining factor in the success or failure of your financial portfolio.


Buyers Questions

When someone is considering purchasing a new home, the idea of a real estate transaction may seem simple enough at first. In reality, an investment in real property is much more difficult than it may seem. It is always a good idea to utilize the services of a licensed real estate agent when considering an investment in a home.

Using a licensed real estate agent will allow the buyer to remain informed about exactly what must be done at every step during the home buying process. The question now becomes; how does a homebuyer qualify the real estate agent? What questions should the real estate investor ask to find out about the realtor and their qualifications?

The real estate agent is hired to do a job. Anytime someone is hired, it is necessary to ask certain questions in order to find the best person for the job. A good place to start is by getting references. While the real estate agent will only use satisfied customers as references, those people will still be able to give the real estate investor an idea of what exactly the realtor did or did not do to their complete satisfaction. Careful examination of references will usually provide both the strengths and weaknesses of a real estate agent.

The seller will pay for most of the fees, especially those incurred by the real estate agent. It is still necessary for the homebuyer to ask about any fees that may result in out of pocket expenses. Frequently, the buyer pays for a home appraisal. Asking the realtor about the fees which the buyer will be expected to pay before hand, will give insight as to how much cash on hand must be available to complete the home purchase.

It is very important that the realtor is familiar with the areas where the homes are. Knowledge of the neighborhoods is important to the homebuyer so that they will know that their specific needs can be met with the real estate transaction. This is an especially important qualifying question if the home being purchased will be used as a primary residence for the homebuyer.

Carefully qualifying the real estate agent is an important part of any real estate investment. The effects of a miscommunication or a problem will often be lifelong or a difficulty for at least the fifteen to thirty year life of the mortgage. Finding a qualified realtor can bring about a lifetime of joy and happiness from a new home purchase.

Buying Vs Renting

When it comes to real estate investments, just as in all aspects of life, there are always going to be people who are comfortable in different positions of life. Many people are very happy as renters and do not wish to have the responsibility of purchasing their own home. Many people have not only a primary residence, but also actively invest in real estate as a secure financial investment and providing much needed housing for the renters. In short, there are good aspects in regards to both renting and purchasing a home.

When renting a home, there is little responsibility to the renter as far as upkeep and maintenance of the investment property. If things go wrong or there is a problem, they are free to call the property owner and the problems will be fixed. For the homeowner, the problem is a little bit more involved. The problem must be diagnosed to discover what the problem was, what caused the problem and then they are still responsible for the repairs and costs associated with that maintenance and upkeep.

For the renter, packing up and moving may still be a difficult task. They still have all of the same possessions as most homeowners, but they do not have a thirty year mortgage keeping them in place. With proper notice being given, the renter is able to move freely wherever and whenever they would like. For the real estate investor, it is a little more difficult, as there is often a mortgage to be considered, as well as other factors which only the homeowner can truly comprehend.

The homeowner also has something else that the renter does not. Whether it is real or imagined, being able to return home to someplace that is actually your very own, is a satisfying experience. When the home is owned, there is nobody who can say what modifications to the real estate can or cannot be made. The freedom that owning your own home allows you to do as you please, within reason of course is a feeling that is very comforting to most people.

While not everyone is going to want to accept the responsibilities that come with home ownership and a real estate investment, most people would agree that the benefits are well worth the cost. Investing wisely in a home is a good idea for anybody who truly wishes to understand what that feeling is. The cash value of a good real estate investment is secondary to the rest of the home ownership experience.


Deciding Where to Buy

For whatever reasons, many people are selling their homes every day. Some people are selling because of a job promotion or a new job. Some people are selling because they have new needs for their primary residence. Many of these people are selling their primary homes so that they can purchase a new piece of real estate. Purchasing a new home can be a difficult affair. This is often made worse when the homebuyer does not know the area they are moving to. They must trust someone else’s judgment about where is a good place to live, or must they?

Certainly, they will need to find someone who knows the area where they will be moving. That should be understood, but it frequently is not. Not only is a quality realtor going to be familiar with all of the different aspects of the law in regards to real estate transactions and investments in real property, but they will also usually know all of the neighborhoods and general statistics about those areas as well.

If the potential real estate investor has done their homework and has already checked with loan officers or mortgage brokers, they already know about how much home they can afford. This will keep them from wasting either their time or the time of the realtor looking for housing that is unobtainable for them financially.

That in itself will narrow down the search considerably. Other factors such as crime, conveniences, location and the needs of the potential homebuyer individually all must be factored in. When these ideas are effectively communicate with the real estate agent, the realtor is then able to narrow the search down even further. It is important to look at all of the requirements and needs of the buyer in order to properly decide where to move.

Factors such as crime rates become even more important if there are children or families involved. How close the schools are or how far away they are will be information that has a substantial impact on the every day life of the new homeowner. How much time is going to be needed to get to the grocery store? Multiply that by two or three times a week times fifteen or more likely, thirty years over the life of the mortgage, and it becomes easy to see why these are deciding factors.

Getting the right and relevant information before purchasing the home will allow the homeowner to avoid any unpleasant surprises after the home purchase. If nothing is known until then, it is too late to do anything about it. If the real estate investor is well informed before purchasing a new property, the whole experience will be greater.

Using a qualified real estate agent, the potential real estate investor can get all of the relevant questions answered before it is too late to do anything about it. While an investment in real property is a major financial affair, it is also about lives and living. Decisions should only be made once all of the information is available for review. Finding a good realtor who can make that happen will make everything a lot better.

Ensuring a Smooth Home Purchase

Whether you are a first time homebuyer or a hardened and experienced real estate investor who knows all of the details about a purchasing real property for your investment portfolio, there are steps that should be taken in order to assure the buyer that the home buying experience would be a smooth and uneventful transaction.

For the potential homebuyer, nothing is more important for the first step than arranging proper financing. This can be done through either a regular bank or lending institution or even a mortgage broker. The reason financing is so important is the same principle as preparing your budget before you go shopping. How will you know how much money you have to spend if you do not properly calculate the amount first?

The second crucial step when purchasing real estate is going to be looking at what areas you want to live in. Whether the real estate will be purchased where the home buyer has lived all of their life or in a city entirely unknown to them, deciding which part of town they wish to live in will not only shorten their search, but make their experience as homeowners a much more pleasant one.

The third step is going to be finding affordable housing for sale in the desired neighborhood or those areas where the homebuyer has decided they would like to live. By narrowing the field down from all of the available real estate to a few select homes, costs can be cut and the whole process of buying a home will become shorter and less taxing.

When real estate for sale has been found in the areas where you wish to live, then arrangements can be made with the realtors of record for those listings to show you the homes in more detail. This fourth step is frequently attempted first by many new homebuyers. Unfortunately, if they set themselves up to look at houses that they may or may not be able to afford in areas, which they may or may not want to live in, they are going to make the whole tedious process of home sales a trying and expensive proposition for everybody involved.

By completing these steps one at a time in the order that they are listed here, the potential homebuyer will be able to be ready for each subsequent step in the real estate purchase. They will not be wasting the time of the realtor or the banks loan officer trying to buy more house than they can afford. The homebuyer will not be settling for less than what they want or need when it comes to buying their new home. In this manner, the real estate investor is more likely to get exactly what they want without all of the tribulations that they do not need when buying a home or property.

First Steps for First Time Buyers

Many people use real estate investments as a means to generate income and provide a viable tax shelter while still providing financial benefits to the investor. The first time home purchaser is more likely to be buying a new house for a primary residence rather than for a real estate investment. While the primary residence is still a major investment in real property, the start to finish method is a little different than it is for the investor.

The first time buyer should always start the search for their dream home with a recognized lending agent. Whether this means the loan officer at their personal bank or a more formal mortgage broker in a larger financial institution, this is the place where everything begins in the process of real estate investments.

A good mortgage broker will be able to explain all of the necessary details about the process of real estate investment. They will also be more fully qualified to look at the individual situations of the prospective homeowner and give them a more complete analysis of what financing options are available and which types of loans or mortgages will best suit the individual needs of the real estate investor.

Sometimes an option on a piece of real property will include the ability to lease to own or rent to own the property. This option is often a good idea for people who do not have a substantial amount of capital to invest as a down payment in a real estate venture. Rent to own, or lease to own will also be beneficial to many people who may have very good credit, but for whatever reasons, do have some discerning commentary in their recent financial credit reports.

Other options which may be viable are large down payments for someone who has the capital to invest, but does not have the credit. Some mortgage lenders offer very enticing deals to first time buyers, which include benefits that may not be available to other parties who are purchasing real property as an actual investment instead of buying a primary residence.

Still other mortgage and financing options include the use of zero down loans for real estate investors. These loans will usually cover all of the closing costs when buying a house as a primary residence.

Real estate investment is a major expense, and as such, it is important to know how much the homeowner has to spend before going out and trying to spend it. There are so many loan and mortgage options available to the real estate investor that it is imperative to start any home or property purchase with a lengthy discussion with the loan officer or mortgage broker in order to make sure that all of the proper options can be readily explored.

Preparing to Buy a Home
1. Plan to Buy a Home in an Area You Intend to Stay.

Make sure you can commit to remaining in one place for at least a few years. When looking at areas of interest take into consideration your job and commute time, school district, distance from loved ones and any other factors that are important to you.

2. Check Your Credit.

Since you are likely to need a mortgage to buy a house, make sure your credit history is as clean as possible. Ask for a copy of your credit report and correct any inaccuracies before you begin house hunting.

3. Calculate your Finances.

Aim for a house you can afford. The rule of thumb is that you can pay for a house that is two-and-one-half times your annual salary.

Getting pre-approved by a lender will ensure that you are looking at houses in the right price range.

4. Hire a Professional.

You can use the internet to find real estate agents in your area.

Also, it is best to ask for recommendations from people who have used agents when buying their home. Ask them what their experience was like and if they would use the same agent again. Interview several agents before determining the one you want to work with.

5. Do your Homework.

When making an offer on a house, your opening bid should be based on the sales trend of other homes in the neighborhood. Use a Comparable Market Analysis of homes sold in the last three months. If homes are selling five percent below the asking price, then make your offer five to ten percent below the listing price.

6. Hire an Inspector.

Even though your lender will require a home appraisal in order to determine the worth of the property, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. This will establish if there are any problems that would require costly repairs.

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Maria Pena Morales President of Team Q - DRE Lic. # 01370123 For all your Real Estate questions contact Team-Q Today!

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