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11. What You Need to Know About Buying Your First Real Estate Property
Buying real estate is more like a marathon than a sprint. It’s going to take a while – from the search process to the escrow process, it may be months before you get the keys to your first property.
In this episode, I want to share a few things with you to make the process a bit easier and less stressful.
1. Assemble your team before you start making offers: Agent, Lawyer, Lender. A great agent usually has a great team already, so ask them for recommendations.
a. Get pre-approved before you start looking. That will help you narrow down your search.
b. Choose a real estate attorney with experience in the area you are targeting. Knowing which lawyer you will use before making offers allows you to start attorney review as quickly as possible once your offer has been accepted.
2. Start with the right mindset. In a competitive market, with historically low mortgage rates coupled with extremely low home inventory, expect to make lots of offers before you get a deal under contract. Expect to lose out on homes you really liked. Remain grounded and try not to let emotions cloud your judgement. Buying real estate, especially if you’re a first-time buyer, is an inherently emotional journey. You’ll probably ride the rollercoaster of human emotions – frustration, fear, doubt, anger, anxiety, and hopefully, joy.
3. Set your expectations. If you’re in a seller’s market, where the number of buyers is greater than the number of sellers, don’t expect to find a “great deal”, because everyone else is looking for one too. On the flip side, don’t get so sucked into the bidding process that you bid more than you can afford or are comfortable with. Know your “max” and stay within your limits, even if that means losing out on some homes. It’s better to lose out on homes than to get under contract on a home you can’t really afford.
a. “Max, I want to find a deal where I can get a property 20% below market value.” Not happening when everyone and their grandma is looking to buy real estate AND any sensible seller can just pull up their property on Zillow and at least get a ballpark idea of what it’s worth by looking at the Zillow estimate and expected price range.
Now for some transactional nitty-gritty:
1. Don’t get too excited about an accepted offer. Your offer was accepted! That is exciting. But curb your enthusiasm, because a lot can happen between your offer being accepted and you closing on your first property. In fact, a lot can happen between your offer being accepted and you getting under contract.
a. For example, in NJ, a seller can accept a better offer while you’re in attorney review, since the buyer and seller are not legally bound to each other until attorney review is concluded. I’ve seen this happen many times, working with buyers. It happened to al client of mine a couple weeks ago in Hoboken. We saw a nicely renovated one-bedroom condo in Hoboken that he really liked, which was listed at 449k. He initially offered $438,000, with 15% down. The seller’s agent countered 447k a couple of days later.....(check out the episode to learn more)
Theme music excerpted from:
Feelin Good by Kevin MacLeod
Link: https://incompetech.filmmusic.io/song/3744-feelin-good
License: http://creativecommons.org/licenses/by/4.0/
View all episodes
By Max VishnevBuying real estate is more like a marathon than a sprint. It’s going to take a while – from the search process to the escrow process, it may be months before you get the keys to your first property.
In this episode, I want to share a few things with you to make the process a bit easier and less stressful.
1. Assemble your team before you start making offers: Agent, Lawyer, Lender. A great agent usually has a great team already, so ask them for recommendations.
a. Get pre-approved before you start looking. That will help you narrow down your search.
b. Choose a real estate attorney with experience in the area you are targeting. Knowing which lawyer you will use before making offers allows you to start attorney review as quickly as possible once your offer has been accepted.
2. Start with the right mindset. In a competitive market, with historically low mortgage rates coupled with extremely low home inventory, expect to make lots of offers before you get a deal under contract. Expect to lose out on homes you really liked. Remain grounded and try not to let emotions cloud your judgement. Buying real estate, especially if you’re a first-time buyer, is an inherently emotional journey. You’ll probably ride the rollercoaster of human emotions – frustration, fear, doubt, anger, anxiety, and hopefully, joy.
3. Set your expectations. If you’re in a seller’s market, where the number of buyers is greater than the number of sellers, don’t expect to find a “great deal”, because everyone else is looking for one too. On the flip side, don’t get so sucked into the bidding process that you bid more than you can afford or are comfortable with. Know your “max” and stay within your limits, even if that means losing out on some homes. It’s better to lose out on homes than to get under contract on a home you can’t really afford.
a. “Max, I want to find a deal where I can get a property 20% below market value.” Not happening when everyone and their grandma is looking to buy real estate AND any sensible seller can just pull up their property on Zillow and at least get a ballpark idea of what it’s worth by looking at the Zillow estimate and expected price range.
Now for some transactional nitty-gritty:
1. Don’t get too excited about an accepted offer. Your offer was accepted! That is exciting. But curb your enthusiasm, because a lot can happen between your offer being accepted and you closing on your first property. In fact, a lot can happen between your offer being accepted and you getting under contract.
a. For example, in NJ, a seller can accept a better offer while you’re in attorney review, since the buyer and seller are not legally bound to each other until attorney review is concluded. I’ve seen this happen many times, working with buyers. It happened to al client of mine a couple weeks ago in Hoboken. We saw a nicely renovated one-bedroom condo in Hoboken that he really liked, which was listed at 449k. He initially offered $438,000, with 15% down. The seller’s agent countered 447k a couple of days later.....(check out the episode to learn more)
Theme music excerpted from:
Feelin Good by Kevin MacLeod
Link: https://incompetech.filmmusic.io/song/3744-feelin-good
License: http://creativecommons.org/licenses/by/4.0/