5 Must-Know Tips When Buying Real Estate Properties
Buying real estate as an investment or your dream home can be expensive and comes with many challenges. Therefore, you need to be extremely careful when purchasing because there are also a lot of risks involved. Doing this is especially crucial if you're unfamiliar with the dynamics of the real estate market.
Navigating this whole process can be challenging. As a result, you need to first acquaint yourself with helpful tips that will help you close a real estate purchase deal without any issues. Without further ado, here are the must-know tips you should consider when purchasing a real estate property.
- Work With A Reliable Agent
It's always advisable to work with an experienced person when buying a real estate property. Agents who work with accredited agencies such as CNY Realtor and other firms near your area have the skills and experience to navigate the real estate market. With their guidance, you can make informed decisions and buy a good property.
The different services offered by real estate agents that make their services invaluable include;
- Negotiate with the seller's agent to ensure you get an excellent deal.
- Take you to properties within your preferred location that is within your budget and meet your needs.
- Issue the offer letter on your behalf.
- Take you to showings to help you better identify your priorities as a real estate buyer.
- Being present with you when closing a deal to ensure the sale goes smoothly.
It’s not advisable to rely on a seller's agent when looking to close a real estate property deal. This is because these professionals will prioritize the seller's interests and not yours. Because of this, you need to have an agent who ensures your desires are also addressed.
- Find A Suitable Location
Do extensive research before buying a real estate property, regardless of whether it's for investment or personal purposes. This is especially crucial when buying a rental property because you want your investment to provide you with a stable income. The most important thing you need to consider is the property's location. You might want it situated somewhere it's easily accessible to your desired target market. You also want a real estate property located in an area with a revitalization plan underway or a growing population to boost the marketability of your property.
Other attributes you should look for in a rental property include nearby amenities such as malls, parks, restaurants, and the presence of a suitable school district. In addition, the property should be easily accessible to a public transport system, have a growing job market, and have low crime rates. The area's property taxes should also be reasonably low to make your investment worthwhile.
- Get Pre-Approved
Getting pre-approved for a mortgage before you start hunting for real estate properties can be vital. Doing this is necessary because having a pre-approval letter clearly shows how much you can afford to pay. The figure on this letter is usually arrived at by assessing your credit score and bank statements. Having a pre-approval letter gives you an edge over other potential buyers because the seller sees you as a serious prospect.
- Secure A Down Payment
How much you should set aside as the down payment usually depends on whether you're buying an investment or personal property. When buying your home, you'll be required to deposit a down payment of at least 3%. This means for a property valued at $400,000, and you'll only need to pay $12,000.
But if the property you're buying is for investment purposes, the down payment should be a minimum of 20%. This greater percentage is usually because real estate properties to be used for investment purposes don't have mortgage insurance. Instead, you'll be expected to settle the down payment through bank financing. In addition, you also should be prepared for a more stringent approval requirement when looking to buy an investment property.
- Check Your Credit Score
Your credit score plays a significant role in determining the interest rate and if your mortgage pre-approval request will go through. And now that you're planning to buy a real estate property, the last thing on your mind should be to open a new line of credit. This is because your lender will make sure first to inspect whether you've recently taken a loan, thereby reducing the chances of your loan request going through.
Fortunately, there are several tricks you can use to boost your credit score, including;
- Keeping your current credit cards open and making sure credit card balances are low.
- Always settle your bills on time.
- Carefully monitor your credit score.
Buying real estate properties takes time and is a complicated process. As a result, it can be easy to lose track of what's the best action to take. This is why you need to know how to make an informed decision if you're planning to buy a real estate property. The tips mentioned above can help make the process of buying a real estate property less stressful.