3 Common Pitfalls You Should Avoid When Buying Real Estate Investment
June 30, 2010
Want to get into real estate and achieve that financial goal that you’re shooting? Then you’re on one of the best vehicles to achieve financial freedom. Countless millionaires as have always proved Real Estate: The source of their riches or where they park they riches.
Although that its true that there are many millionaires walking that are grateful to the investment vehicle called Real Estate, but don’t think that you can get away rich without learning anything. Investing in real estate is just like any other type of investment, do your research to avoid mistakes.
Here are the 3 common pitfalls when investing in real estate.
I. Don’t jump on the first house you see.
While the saying is very true “You don’t have to get it right, you just have to get it going” but don’t be too quickly to jump on the first house you see because you just want to get started. Some of this is due to over excitement, some due to laziness (not wanting to look any more) and some due to fear – that there won’t be other deals. There are always deals to be made in the real estate market. It’s the same thing with shopping. Look around and compare until you find that what you’re looking for at a low price.
II. Don’t pay a dime more than you have to.
The best tip anyone that gave me when it comes to investing is “You make money when you buy, not when you sell”. This means that you buy real estate at lower price than the market average. Real estate investing is not like purchasing a home to live in. It is strictly a business transaction. Don’t make the mistake of offering more than the numbers say will work just because you really like the house. This also means that instead of wanting to pay more you ought to be thinking of how you can get it cheaper.
III. Not doing your homework on property inspection.
Investment schools call this “due diligence”. You might found a cheap property and you could be thinking of “Jackpot”. But mind you, few properties are cheap for a reason – they need a lot of work. You need to have a thorough inspection done on the property so there are no surprises when you start to work on it. Every day that you are having to add to your timeline to fix items is a day that you are losing money. Doing also due diligence on property inspection might uncover some unpleasant things about the property. Then you can use that information as a negotiation chip to get the property for a lower price.
Although its true that you will learn by your mistakes. But its wise that you learn from the mistake of others. Along the way of your real estate investment road there are always be mistakes. At least you learn in advance and avoid them and make mistakes in other areas.
Jed Baguio
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Do You Need A Real Estate Appraiser When Buying A Home Or Condo?
June 24, 2010
If you are considering purchasing or selling a home, condo or any other type of real estate, you will most likely need the services of a real estate appraiser. An appraiser performs an assessment of properties and other types of real estate to help establish its value. While there are several methods appraisers use to establish the value of real estate (e.g. cost method, income method, and comparison method), for residential properties, the comparison method (also known as market value) is the most common approach. The appraiser’s job is to provide an opinion about the value of a property based on its “highest and best use.” If you are financing the purchase of a property, your lender will normally require an appraisal to make sure that the property is really worth the amount loaned.
The real estate appraiser is tasked with carrying out a completely objective assessment of a property and will normally provide a written evaluation report. This is accomplished by a physical inspection of the property, as well as a comparison to other similar properties for which the value is already established. To make a determination about value, the appraiser gathers details such as the size of a property, size of the lot, location, condition, best use of the property, amenities, etc.
After this initial inspection, the appraiser may scout the neighborhood to compare the property with other similar properties in the neighborhood by age, size, price range, etc. The appraiser then gathers additional data from several sources such as the local Multiple Listing Services (MLS), which provides information on current and recent comparable sales. The appraiser also gathers information from his/her own past experience in the local market. All of these sources of information are taken into consideration while writing the appraisal report, which will provide an estimate about the value of a property.
There are many reasons to use the services of a qualified appraiser. When purchasing real estate, an appraisal provides you with a negotiating tool and helps ensure that the price you are paying is appropriate. If you are selling your property, the appraisal will help you determine an appropriate price range. Besides real estate and mortgage transactions, you may need to order an appraisal to lower the tax burden (assuming the value is really lower than the value established by taxing authorities), to establish the replacement cost of insurance, to settle an estate, etc. An appraiser only gives an estimate of the value of the property. A real estate appraiser is not to be confused with a home inspector.
If you are considering buying or selling a home, condo or any other type of real estate, you can use the services of a qualified real estate appraiser who will provide an estimate of the fair market value of your property.
Real Estate Advisor
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How to Get Money Back When Buying Real Estate
June 22, 2010
If you have the knowledge there are many ways you can get some money back from the seller when
buying real estate. One of these ways is to get the seller to pay for the closing cost. The closing cost may not be a lot of money compared to the price of the property so it is a good thing to negotiate. If a
seller is eager to sell a small thing like closing cost will not let him or her leave the bargaining table.
Another way you can get some money back from the seller when buying real estate is getting the seller to pay for the taxes for the rest of the year in witch you are buying the property. Again this will not be a lot of money compared to the property witch makes it a good thing to put on the bargaining table. One last way to get some money back from the seller when buying real estate is getting the seller to pay for the things that need to be repaired or replaced. This can be a lot or a little, it all depends on the shape the property is in. This is harder the get a seller to agree to than the first two, but it is not impossible to find a seller that will. If the property needs a lot of work it is good idea to see if you can get the seller to pay for half or more of the repair cost.
All ways make sure that if you do get the seller to agree to give you back any money for any reason that you get it in writing. It is a good way to make sure every one is on the same page. Getting money back when buying real estate is not an easy thing to ask for, but if you know what to ask for it can make the process a whole lot easer. This is a good way to help you to save a lot of your hard earn money.
A good web site where you can see more information on topics like this is Real Estate Facts which is highly recommended. Thank you and enjoy.
Kevin Cox
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