You Must Know These Basics of Real Estate Transactions
October 5, 2017
Buying real estate is a process and one that you should understand before investing in property. If you are considering starting up an investing project, use these 5 basics of real estate transactions gone right…
PROPERTY INFORMATION
There’s a good chance that you will find at least one house that you fall in love with. You will want to buy it immediately, pick out drapes and claim your stake before it gets away from you. However, you are going to have to learn to know when to fold ’em. When the numbers are not adding up for you, it is time to move on and find another home that you will love just as much. Believe us, it is out there and it is all a part of buying real estate responsibly.
SELLER MOTIVATION
Most times, there is a HUGE difference in what a home owner thinks a home is worth and the worth that you will find in the same home. In the end, the home owner’s opinion is all that matters. Of course, you can negotiate and barter for a lower price, but if they aren’t biting, they don’t have to sell. You have to gauge the motivation of the seller and see if you believe that they can be swayed. If they can’t be, you have to be willing to except this when it happens. It is, however, ok to reach out now and then to touch base to reevaluate their stance.
FINANCING
How you plan on financing your purchase will greatly impact your offer. If you are someone who has access to a lot of money or can offer cash, you won’t have to wait around on a lender. Thus, your offer might be taken more quickly than someone else who has to wait around for their bank to come around.
OFFER AMOUNT
The offer that you make should be based upon 3 factors – market demand, seller motivation and comparable listings. Always know exactly who your competition is – this will keep you on your toes. Properties that have little demand, you should never bid against yourself or represent offers that are too high. On the other hand, properties that are in high demand, you should offer as close to asking price as possible.
On properties with little demand you never want to bid against yourself and offer too high. You can always come up but it is difficult to go down. Properties with high demand your offer needs to be as close to asking price as possible. Always run your own numbers and come up with a price that works for you. Keep in mind that you need to have enough room to make a profit. Make your offer and if it is not accepted move on to the next property. As said before, when your offer isn’t accepted and it’s your best offer, don’t go for broke. Move on to the next property.
CLOSING PROCESS
An accepted offer is just part of the process. Whether or not you are using a lender or hard money, you need to get an inspection done quickly. Never pass over this process just to seal the deal. Even the keen eye of a contractor can skip over something that is wrong with the foundation or structure. If you miss out on the inspection, you are opening to a huge risk. If you are working with a lender you will need to hand over all loan items ASAP. The faster that you supply the lender with these items, the quicker you can start the process. It’s important to find an attorney well versed in investing in property. Skipping this step could cost you a deal and the ball could get dropped.
As with all things in life, expect curve balls. However, if you are prepared, you will be far more likely to snag the perfect deal.