Buying Real Estate
Real estate markets across the country are heating up due to deflated property values, low interest rates, and the needs of people who want to own their own homes.
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.
First of all, real estate normally appreciates in value while you pay down liens or mortgages held against the property. The amount a property appreciates usually depend on a number of things such as market conditions, the location of the property, and the purpose the property is being used for.
It is a good tax shelter because you can write off the interest on loan payments, claim working depreciation and, if the property is used for business purposes, write of utility bills and other items used in the line of certain everyday business expenses.
Be careful though. Keep an eye on market conditions. As we have seen in the recent past, the real estate market can become over inflated and when the bubble bursts, property can lose value rapidly leaving homeowners under water on their mortgages.
Buying real estate can be a great experience, but it can also be traumatic. In most cases, it is well worth the time and energy you put into it and if everything goes well, in the end, you will be the proud owner of a home or other real property.
Below is a list of things you can do to make your real estate purchase a positive experience.
(1) Have an idea of the neighborhood you want to buy in, whether its for a home to live in, a rental property, or if it's for a business.
(2) Contact a realtor who is familiar with the neighborhood and stay in contact throughout the process. Your realtor should keep you abreast of what is going on at all times.
(3) Contact a lender to check your credit score, income, and monthly bills. It is a good idea to get pre-approved before you actually start looking for a property. If you don't have a lender, your realtor should be able to put you in contact with one.
(4) Know your financial abilities 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 is more than you can afford.
(5) You need to know who you want to use as an insurance carrier because escrow is going to need that information. In most cases, your insurance agent or a representative of the insurance company will go out, do an inspection, and take pictures before they issue insurance on the property.
(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 sellers are informed by their realtors the importance of purchasing a Home Warranty Plan for the buyers of their homes. If they don't purchase it, the buyers can purchase it themselves.
(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. A home inspection is not the same as an appraisal.
(9) An appraisal is done on property to determine an estimated value. An appraisal is usually required by the lender to determine a fair market value for the property.
(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 Moreno Valley, California. You may reach him at firstname.lastname@example.org.
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