Purchasing Real Estate
I actually started investing in real estate almost 20 years ago. I made every mistake in the book… from overpaying contractors to overlooking structural defects. The whole time I was also working as a visiting nurse. I got to know housing and locations from a completely different standpoint. This helps me to better represent my clients.
Buyer’s Guide / F.A.Q.
- How much can I afford?
If you are buying, it’s pretty important to get prequalified first. That puts you in the best position to make an immediate offer. To begin forming your own cursory estimate of what you can afford, try the mortgage calculator at the foot of the page. It’s by no means a final word, but it’s a start.
- Why do I need a broker?
It’s my job to listen. You communicate what’s important and I will reach out to my network for an expansive search. As a Compass agent we sometimes have access to properties before they hit the public listings, so you never know. Your perfect place might already be waiting for you.
- What is the property’s current condition, and are there any known issues or repairs that need to be made?
There are certain things a property owner is required to disclose. Regardless, as a buyer you will want to have an inspection from an independent third party.
- What is the asking price, and is there room for negotiation?
Comparable sales of similar properties in the area will help you to determine if the asking price is right. A full appraisal should also be performed. Sometimes lenders don’t require one, but it protects the buyer!
- How long has the property been on the market, and why is the owner selling?
“Why are you selling?” is one of the first questions I ask. It could be a myriad of reasons, and also give you an idea as to how flexible the seller might be. A property that has been on the market for a while is assumed to be not as attractive. Learn the ins and outs.
- What are the property taxes and other ongoing expenses associated with the property?
Many times people jump into purchases without knowing what the property taxes are. Contact the local property tax assessor’s office, either in person or online. You may need to provide the property’s address or parcel number. Further, any outstanding property taxes will create a lien that takes precedent, before a sale can go through.
- What is the zoning of the property, and are there any restrictions or limitations on its use?
In the case of commercial properties this is very important. You can buy an empty building with a business idea, and find out later that it’s not zoned for that. You can check on specific zoning by contacting the local zoning department or planning office. Look up the zoning map online for your city.
- What is the current rental income or potential rental income for the property?
The “Income Approach” is another way of assessing a property’s value. Of course this matters more when it comes to investment property. If you are purchasing a residence the “comps” comparable sales will take precedent.
- What are the terms of any existing leases or rental agreements?
Just because rent is being collected, doesn’t mean you don’t have to consider this. Do the leases expire next year, or next month?
- What is the timeline for closing the transaction, and what is involved in the closing process?
It could be very important for a seller to get things done by a certain date. Try to find out why. A motivated seller might be forced to take another offer if you aren’t pre-qualified. You also need to find out if there any existing liens on the property, or if it’s tied up in court for any reason.
Let’s Begin The Process
Do you have more questions? Ready to get started? Tell me what kind of home you’re looking for.
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References
- Brown, M. (2021). 10 Tips for First-Time Home Buyers. Investopedia.
- National Association of Realtors. (2021). Home Buying Tips. Consumer Financial Protection Bureau. (n.d.). Owning a Home.
- Forbes Advisor. (2021). First-Time Homebuyer’s Guide: Tips and Tools for Success.
- U.S. Department of Housing and Urban Development. (n.d.). Buying a Home.