Buying Real Estate

Whether you are buying a home, a farm, a ranch, rental, industrial or commercial property, or raw land, real estate is one of the best investments you can make.

There are several ways that real estate can make money for you. First of all, real estate normally appreciates in value while you pay down any liens or mortgages held against the property.

The amount a property appreciates usually depends on a number of things such as market conditions, the location of the property and what the property is being used for.

It is a good tax shelter for the average person because you can write off the interest on loan payments, claim any depreciation of the property and, if the property is used for business purposes, it can be written off as a business deduction.

Buying real estate can be a dramatic, and in some instances, a traumatic experience. But in most cases, it is well worth the time and energy you put in and you will be a proud property owner.

Some people like using a high pressure, high producing realtors to handle their purchase while others like to work with a salesperson who is more laid back and takes on one client at a time.

Regardless of who you use as a realtor, there are some basic steps you should take before getting started and during the escrow process.

(1) Have an idea of what neighborhood you want to live in or the location that is suited for your needs if the purchase is an investment opportunity.

(2) Know your financial standing and make your purchase accordingly. Remember! You are the one who is going to be responsible for making that payment when it comes due every month. Don't get pressured into buying property that you can't afford.

(3) It is a good idea to get pre-approved before you actually start looking but make sure your lender checks your credit score and crunch the numbers. Sometimes lenders will issue a pre-approval letter before looking at all the issues that will ultimately determine whether you get approved for the loan or not.

(4) Make sure you stay in contact with your Realtor throughout the process and your realtor should keep you abreast of what is going on at all times.

(5) You need to know who you want to use as an insurance carrier because escrow is going to need that information. In some cases, your insurance agent will go out and inspect the property and take pictures of it before they issue a homeowner's policy.

(6) Remember! Escrow fee's and loan fee's are not the same thing as the down payment. Ask your realtor to explain the difference so you won't be shocked at the close of escrow when you are told that you have to bring in additional money to cover those fee's.

(7) Today, most people who sell residential property are informed by their Realtor the importance of purchasing a Home Warranty Plan for the buyers of their home. If there is no Home Warranty Plan offered, you can purchase it yourself.

(8) At the beginning of the escrow, it is a good idea to have a Home Inspection Professional go out and do an inspection of the property you are going to buy. If there are negative issues regarding the property, in most cases, the inspector will find it and bring it to your attention.

(9) An appraisal is done on property to determine an estimated value. An Appraiser is not the same as a Home Inspection Professional.

(10) Before your escrow closes, it is always a good idea to go, along with your Realtor, to the property and do what is called "a final walk-through inspection." This is done three to four days prior to closing to detect any damage that may have occurred to the property during the time the offer was made until this point in the escrow process.

Good luck on your purchase!

About the author

John M. Roberts is the owner of John Roberts Realty located in Long Beach, California. You may reach him at jrobertsrealty@yahoo.com.

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