While it is quite common for everyone to seek some form of financial security through real estate, making wise investment decisions can often prove more difficult than they may realize. One of the first mistakes that people often make is not realizing that buying real estate is not the same as buying a retail product. One must have a systematic approach and recognize that much more is involved than finding the property you want and writing out a check.
Once you understand that purchasing real estate is more about the process than it is about the sale itself you’re well on your way to making good investment decisions. When you recognize the different stages of buying investment property the entire experience will become far more manageable than one might realize.
Step One – The Realtor
One of the biggest decisions you’ll have to make is to choose a good realtor. This should not be made casually as you will need to rely on that individual’s professional knowledge and expertise to lead you in the right direction. When you consider the weight of the choices you make in the different aspects of real estate investments you need to be absolutely sure that the guidance you get from your realtor will not lead you in a way that could cause you problems in the future. Unlike other investment options, real estate investments require a commitment that will take many years to satisfy. A good realtor could be your best ally or your worst nightmare so the choice you make will be one that you’ll have to live with for a long time.
Step Two – Prequalify for Your Loan
While some people will start their real estate search by looking at different homes before they begin the loan process there is good reason to get a prequalification from your financial institution. Even though this step is not a requirement many well-established and experienced realtors do expect it. One of the reasons for this is because it gives them the opportunity to identify you well ahead of an in person meeting and it also sets a price range that will help you to narrow down your search for your new property.
Prequalification is not the same as actually applying for a home loan; it takes only moments and can be done over the telephone if need be. If you have chosen a good realtor then they will be able to refer you to some of the more trustworthy lenders in the area. However, if you choose not to prequalify for a loan it is quite likely that you may be limiting yourself from some ideal properties that may be available.
Step Three – Decide on Your Needs and Wants
Your next step is to list your specific needs and wants in your new home. This step will be much easier if you’ve already prequalified for your loan. At this stage you can confidently determine the location you want to live in, space requirements, and any amenities you will want. You’ll know what price range you can reasonably expect to start your search in and just how much of your dream home you may realistically be able to find within your set parameters. Taking this step will certainly help you to avoid disappointments on the road to home-ownership by keeping you within the acceptable limits in the entire process.
Step Four – Start Viewing Properties
If you’ve carefully made the previous three steps then the fun will start with step four. Actually going to different homes and walking through is the point that every home shopper looks forward to. It is at this point that you get the tactical experience that most people enjoy when they start to look at properties. From this step you’ll measure each home you look at against your list of expectations.
It is at this stage that you’ll discuss with your realtor the different parameters of the market in the particular area. Make sure that you ask about the average list price for similar properties in the same area, and how many days a home will stay on the market before it is sold. Your realtor should be able to provide you with all of the information you’ll need so that you can choose the right property to pursue.
There are many different steps that a future homeowner must make in order to find the ideal property for their investment. In addition to these four steps a potential owner will have to pursue financing, have inspections made and even more. Still, with the right professionals at your side to walk you through the entire process there is no reason why making a successful real estate purchase can’t be accomplished successfully.