The Essential Guide On How To Buy Like A Pro
Leverage the Power of the Internet
By using a combination of MLS searches, 3rd party property search sites, classified ad sites like Craigslist, and investing in Google and Facebook ads, we can help you hunt for real estate bargains from day one.
These property searches will also help you get your finances in order, and get a better idea of the size of the mortgage you’ll need to live in the neighborhood or area of your choice.
Find The Right Lender and Mortgage For You
Just like you would always get a second opinion from a doctor, you should always get a second (or third, or fourth) offer for a mortgage loan.
Though interest rates from top lenders (major banks being some of the most popular ones) tend to be pretty similar, even a tenth of a percent in a fixed-rate loan makes a huge difference in the long run.
At the same time, the right lender will help you see if you qualify for a number of government-sponsored programs geared for first-time buyers.
As always, our team of real estate professionals can help you find the right lender and loan.
Be the first (or last) to make an offer
The phrase “You snooze, you lose” is especially relevant for real estate buyers.
That’s because the buyer that makes the highest offer doesn't always get the home. In many cases, it’s the one that makes the first offer.
If the seller is in a rush to sell, and the first offer is a good one, it’s quite possible the seller may simply accept the offer on the spot.
So when looking for a great deal, you must be ready to make the FIRST offer.
To make sure that happens, you MUST get your finances in order. Before you start making offers, make sure (only one sure) to have your pre-approval letter for the maximum amount your budget allows and ask your lender to fully underwrite your loan up front, which takes about 1-2 weeks. Why? In a hot sellers’ market, sellers can receive multiple low-risk offers that waive the financing contingency. Cash offers don’t require an appraisal. With a fully underwritten loan, you can choose to waive the financing contingency and waive the appraisal contingency to make your offer stronger. Please consult your lender prior to making a decision on how to proceed with your offer.
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And once you’re pre-approved, don’t delay in making offers. Work with our team to establish the parameters for a good deal. And as soon as a deal that meets those requirements hits the market, make an offer in the same day.
Also, as you wait for a great deal to hit the market, we can keep an eye out for properties that have been stuck on the market for a long time. The owners of these homes could be more willing to sell at a discount, because they’ve been stuck paying a mortgage for the entire time it’s been listed.
Ask the Seller to pay closing costs
Though the buyer is typically expected to pay for a number of closing fees, (especially those related to the origination of the loan), it’s not a law written in stone. Like pretty much everything in real estate, closing costs are negotiable.
Of course, sellers don’t like to sell homes for less than their bottom line. Not just because they don’t want to lose more of their earnings, but also because there’s always an ego element attached to any home sale.
Home sellers are keenly aware of how much their neighbor's homes sold for, and would hate to sell their home for less.
If the sellers are adamant against bringing down their asking price, we can negotiate for the seller to cover the closing costs.
Not only does this allow the seller to save face and keep a larger final price, but it could also save you thousands of dollars.
In a hot sellers’ market, sellers may select your offer if you choose to pay their closing costs, along with other favorable terms.
Shop during the slow season
Even if you don’t live in a place with a harsh winter, most home buying and selling activities take place during late spring and summer.
As a result of that seasonal increase of activity, home prices go up.
So if you’re willing to brave the cold and wait until winter, you may be able to capitalize on some amazing deals. People who are willing to list their homes in the middle of the holidays are typically very motivated to sell. This, of course, could lead to amazing deals for you.
On the other hand, there’s a downside to shopping for homes during winter: you’ll have fewer homes to choose from. And when making offers, you’ll have fewer recently sold comparable properties to help you calibrate your offers.
Look into bank-foreclosed properties
Banks are not in the business of homeownership. They are in the lending business. Homeownership comes with a lot of maintenance requirements, expenses, and taxes.
Which is why any time a bank ends up taking possession of a home by means of a foreclosure, the bank would want to sell it as quickly as possible. This usually translates into banks selling homes at a substantial discount.
On the other hand, not every foreclosed property is an amazing deal.
The foreclosure process is a lengthy one which could drag on for years. Many foreclosed homes are in serious disrepair. If you’re not careful, your bank-foreclosed property “deal” could turn into a nightmare scenario.
It’s extremely important to work with a professional real estate team that has plenty of knowledge and experience dealing with foreclosed properties.
But if you’re willing to spend the time and resources needed to sift through the foreclosed home inventory, you’re sure to find some valuable gems.
Drive for dollars
A tactic commonly used by real estate investors is driving around neighborhoods they’re interested in to find good deals.
Yes... It really is that simple.
These investors would get in a car, drive around the area they are interested in, and look for homes that give signs of a potentially motivated seller. This includes homes with a “for sale by owner” sign, homes in disrepair or showing signs of neglect.
Next, these investors would knock on the door, and introduce themselves to the owners. They let the homeowners know they’re interested in buying a home in the area, and would ask the homeowners if they could point you to someone looking to sell, or if they themselves are interested in selling their home.
If no one answers the door, even after several attempts, not all is lost. These investors could do a property search in the city’s public records or a reverse phone number search to find the owner’s contact information.
LOOK INTO NEW CONSTRUCTION DEVELOPMENTS
Many buyers love new construction, especially if they can join the builder early in the process to choose the lot and yard they want and then make the material selections in their home.
Many builders have a waiting list for their upcoming lot releases. Work with your broker to get your name added to these lists.
Your broker is experienced with working with dozens of local builders, so contact her to learn the approach and strategies to help you be successful with the build process.
Look into tax-delinquent homes
As you know, every homeowner in the US must pay his/her yearly property taxes. But if they fail to pay these taxes, their name is added to the county’s treasurer’s “Tax Delinquent List.”
If enough time goes by (1-5 years, depending on the state) and the homeowner doesn’t pay those delinquent taxes, the county takes possession of the home via a tax foreclosure. Then, the house is auctioned off to recuperate those missing taxes (from which the homeowners would get $0 in return).
Believe it or not, tax delinquent lists are part of the public record. You can have access to your local list by asking for it in your county treasurer’s office, and paying a fee to obtain it.
This list is filled with homeowners that have a HUGE motivation to sell their property, especially if they haven’t paid their property taxes in years. If they’re only a year or two away from losing their home to a tax foreclosure, and they could be willing to sell their home or property for pennies on the dollar.
Of course, as you may expect, many of these homes fall squarely into fixer-upper territory, and would require you to have plenty of capital to get them into shape.
Get in touch with real estate wholesalers
Real estate wholesalers make a living in finding amazing deals, marking them up a bit, and reselling them to real estate investors.
Some of the homes they resell could still be fantastic deals. Meaning that with the right wholesaler, you could still find amazing deals without the need of doing all the work of finding the deal yourself.
Real Estate wholesalers can be found in local real estate clubs, google searches, and industry networking events. Once you get in touch with a real estate wholesaler or two, make sure you give them your contact information and tell them to add you to their buyers’ list.
Again, just like with tax-delinquent homes, many of these properties fall into fixer-upper territory. Make sure you keep that in mind.
Hire an Amazing Real Estate Broker!
As a home buyer, you have absolutely NO reason why you shouldn’t hire the best possible real estate broker in your hyperlocal area.
First of all, hiring a buyer’s broker won’t cost you a dime. That’s because the home seller is the one that pays commissions to both the buyer and seller’s brokers.
Second, we bring a wealth of expertise, street smarts and knowledge to find you the right home at the right price. We can use those skills to help negotiate a far better price than you could get on your own.
Finally, our services offer a buffer of protection. Thanks to our experience and expertise, we can see challenging deals a mile away and can discuss them with you. We can also help you avoid common legal pitfalls in real estate which you could stumble into on your own.
Can you please delete the red background and use a white background with black font? In the last sentence, change ‘agent’ to broker. Thank you!
In Conclusion
Don’t believe the naysayers. It’s not just rich real estate investors and brokers that find the best real estate deals.
Though it may take effort and patience, if you work together with a knowledgeable and experienced real estate agent, and know where to look, you’ll also be able to find some of the best possible deals in the area.