MEET OUR AGENTS

TOOLS

What's Your Credit Score?
Mortgage Calculator
Area Schools
Real Estate Glossary
 

VENDORS

Victorian Finance
Welcome Home Finance
 

Avoid These 10 Real Estate Investment Mistakes

1. Understand how long the process takes

In a sizzling housing market, you could spend a month looking and a month closing, however both are considered ridiculously fast, particularly if you are financing. It is ont unusual for people to look several months before they were able to buy the home they wanted. There are a lot of things to negotiate and a lot of procedures you must go through (inspections!) before things can get settled.

2. Don't expose your hand

In any negotiation, letting the other side know how badly you want something is always a bad idea. The seller will always be cordial and friendly, whether it's because they want to sell you a house or because they're simply nice people, but don't view them as your friend. Don't let them know how badly you want the house because it will probably cost you money. They may not want to take advantage of your friendliness but their real estate agent will.

3. Don't skip the pre-approval

A pre-approval is necessary because it lets you know how much money you can afford and it lets the seller know you have access to enough funds to pay for the home. With how long the closing process takes, the last thing they want to do is start it with someone who doesn't already have pre-approval. Pre-Qualification is not enough, anyone can get one of those, pre-approval is the critical one.

4. The appraised value isn't necessarily the market value

When prices soared, many times an appraisal will be inflated so that the buyer can get the loan (if appraised after a contract is signed). If you get it appraised before you submit an offer, understand that the value listed is not gospel. You may want to get second and third opinions, if time permits, just so you gain confidence in the number.

5. Timing the market "bursts"

Market timing doesn't work with stocks and it probably doesn't work with real estate. Timing the market year by year is difficult but within a year the trends are well known. We are embarking on the slowest home sale period of the year. The combination of the holidays, schools having already started, cold weather in northern states, and a host of other factors means home sales should slow these few months. The best months are late summer and early fall when families want to get into school districts and the weather is nicer (not too hot, not too cold).

6. Don't hire the wrong agent

Don't jump to use a friend or family member, unless you've heard word of mouth reviews otherwise. Always choose an agent who is smart, empathic, experienced and dedicated to getting the job done right.

7. Remember the little things

Pick a house like you would an apartment with respect to location. Is it in a good neighborhood? How's the commute to work or school? How about your taxes, association fees, etc?

8. Read the contract and get every bit of fine print explained

With every contract you ever sign, read it careful and be sure you understand every single word. If you don't understand it, have your agent explain it. If they can't, don't sign! It's a stressful and exciting time but don't let the excitement cloud your judgement. Don't ignore parts of the contract to save a few minutes because it will affect you for many many years to come. Read and understand everything.

9. Sell before you buy

When buying a new house, sell the first one before buying the second. Having to make two mortgage payments is financially disastrous.

10. Not completing your due diligence with a criminal search

In many states, agents are not obliged to tell you if there are sex offender or other unsavory residents in a neighborhood you're considering investing in unless you ask. It's important to find out as much about the neighborhood as possible. Properties in high crime areas can be difficult to rent out or sell in the future. Fortunately, there are many online resources to help you with these concerns.

Contact us today if you need assistance!

Keller Williams Realty, Inc. is a real estate franchise company.
Each Keller Williams office is independently owned and operated.
Keller Williams Realty, Inc. is an Equal Opportunity Employer and supports the Fair Housing Act.
privacy policy | terms of use | fair housing | consumer notice | login
Copyright 2010 Keller Williams Richmond West - All rights reserved.