Real Estate Buyers – Information Shapes Motivation for Buying Property
A buyer’s motivation to purchase real estate may range from the purely aesthetic (beauty) to solely economic (value). The value of peace and happiness the right parcel of land can bring into your life may be greater than money. However, the right parcel of land can buy a lot of peace and happiness.
Regardless of your motivation, quality and timely information, along with patience goes a long way in your pursuit of peace and happiness. At Red Hawk Realty, we will provide information you need to make the move that’s right for you.
Establish Professional Relationships.
There are at least three areas involved in a real estate buyers transaction each requiring professional guidance:
- the transactional tasks and sequence,
- the financing, and
- assessing the property with respect to the buyer’s intended use.
A real estate broker, a mortgage broker, and licensed contractors are the professionals involved in this process. Consider selecting a broker who, rather than offers advice, empowers you with quality information. Your qualified real estate broker will be able to refer mortgage service and property evaluation options, if you are unable to independently contract these services.
Pre-Qualify Your Purchasing Power
It is wise to establish the limits of your purchasing power prior to looking at property. This can be done in a matter of minutes with an experienced mortgage broker. Borrowers are qualified based on the following criteria: credit scores; loan-to-value ratio; income from tax returns; liquid reserves; occupancy (owner or tenant); purpose of loan (purchase, lower rate, debt consolidation, cash out); and any extenuating circumstances (bankruptcy, etc.). The result is that you should know the price range, monthly debt service, and the cash you will need to successfully complete the transaction.
Draft A Plan
Identify all of the tasks and the timing involved in the process of your purchase. A simple place to start is by asking, “What is the outcome I see for myself?” A clear understanding of what you would like to accomplish with the purchase of real estate will make the process of identifying the tasks, the costs, and the sequence in which the tasks should be completed much clearer. Your broker can also provide a list of reputable, local service providers who can assist you with projects beyond the scope of acquiring of your property.
Understand Your Purchase In Terms As An Investment
Strangely enough, many real estate purchases are made without the forethought of what the outcome will look like in the event that something in a person’s life changes, making it necessary to sell their property. The truth is that the duration for most ownership terms is seven years or less. The average real estate cycle, from peak to valley and back to peak, has historically taken about 10 years. A wise real estate investor understands that the only thing more important than location is timing.
Where are We on the Real Estate Cycle?
Of the advice appearing on this page, the most important in terms of creating wealth through real estate is: be mindful of where you are on the real estate cycle. A competent real estate broker can provide you with the current trend in property value for your area. Factors influencing the value trend of real estate include: change in median home price; foreclosure volume; change in the number of housing permits; inventory of unsold homes and marketing time; mortgage rates; unemployment; and the percentage of people who can afford the median priced home.
An experienced real estate professional can provide and interpret information that will enable you to estimate the equity potential for your property over the period of time you plan to own it. Although there are no guarantees that history will repeat itself, it is the best tool available to predict future conditions.