How to buy a house 101
So you want to buy a house like an expert real estate investor? Buying a property at that ‘deal’ may not be the same house that you have in mind for your 2.2 kids with a pool in the backyard to live in. The typical criteria a first time homebuyer looks at are how many bedrooms and bathrooms the property has, what is the character of the neighborhood. and how much a mortgage will cost per month. On the other hand, top real estate investors and developers divorce themselves from the emotional impulses and buy based on the potential capital gains of the investment. Obviously if you are buying a house for your family there are many concerns other than just the ‘profit’ and with the right research, there is a middle ground.
Buying a House: Locating that Potential Property
There is a myriad of ways to go about finding the perfect property. If you have a neighborhood in mind, you can call a realtor that works that area. You could choose to begin your search on the Internet until you find a property you like and call the listing agent. Note that agents will have access to the MLS (Multiple Listing Service) and may know of properties that are not yet on the market. If you do not have an agent, look at sites such as these to see listings:
Some important considerations that affect both buying a house for the new homebuyer and the real estate investor are:
- School districts: Whether or not a property is located in a good school district affects not only the family that is looking to buy in the district, but the investor that is looking at the property either as a rental or for resale as well. If a home is large enough for a family, the school district is a major concern to both. An out of the box consideration is whether the district may cause a previously private schooled child to attend public school, or vice-versa, and the potential costs or savings of that change.
- Location, location: Are the prices already high in a notable area or is there an up and coming area where the prices are lower but there is lots of potential for increases? What are the factors that would make the area more or less desirable and how likely are those factors to come into play?
- Proximity to work: The length of your commute as well as the potential commute of any future buyer is something to consider when looking at expenses in gas, time, wear and tear on the vehicle and lost family time.
- Property Values: The value of a property has many different components. A property with many bedrooms may have more value in a neighborhood with a good school district, where a home far from schools but on the water may not need all the bedrooms and be a perfect fit to a retired couple that does not commute. An expert buyer takes these items into consideration when deciding to move forward and look at the history of the property.
Buying a House: Understand the Underlying Issues of that Property
A real estate expert would first find out everything they could about a potential property investment. There are services available that give potential homebuyers information about the value of a property aside from the number of rooms and curbside appeal. Some of these important services are a Natural Hazard Disclosure Report such as a Property I.D. Report, which tells a buyer about potential needs for flood and fire insurance and taxes that could be imposed, among other details. Another is a CLUE report that gives a potential first time homebuyer the background for insurance claims place on the property. These are two ways to understand that history of the property that can affect its ultimate resale value.
How to Buy a House: Understand the Financial Options
Coming next time!