by Brad Zackson
Arguably, a home is one of the most expensive investments you’ll ever make, and it is every homeowner’s dream that their property will increase its ROI in the long run, according to Brad Zackson, co-founder and director of development for full-service real estate firm Dynamic Star.
But buying real estate, especially when the inventory is low, can be a daunting and uphill task. Ranging from complicated paperwork to securing a mortgage and negotiating a fair price, this undertaking can be a pain for any potential homeowner.
So, what should you do when buying real estate in a tight market? Here are some of Zackson’s tips:
Work With a Budget.
Owning real estate goes beyond securing a mortgage. Even though getting the approval for the mortgage is a huge first step, setting a budget you intend to work with and sticking to it is crucial. Always remember to factor in recurring expenses such as home maintenance costs, utilities and insurance costs—just to mention a few—when creating a budget.
Don’t be the kind of person who secures a property only to find they can’t afford monthly outlays. More importantly, do not make impulse purchases. Evaluate several real estate quotes that fall within your budget in the area you wish to buy, and choose the most appropriate one, Zackson stresses.
Use the Services of a Certified Real Estate Agent.
Buying real estate is not one of those processes in which you can employ a DIY approach, especially if you don’t have industry knowledge. Hiring a realtor allows you to get the services of an experienced and skilled negotiator.
This group of professionals has the necessary market knowledge, is well-connected and will help you make an informed decision. While anybody can buy real estate, a realtor will negotiate the perfect price for you and ensure the complicated process of buying a home proceeds expeditiously, seamlessly and in accordance with the law.
Make Competitive Bids.
Making impulse decisions when buying real estate is an easy way to make a terrible financial decision, Brad Zackson warns. Always have your realtor give you several quotes from different sellers, and make competitive but fair offers. Research local real estate; this way you will know how you should bid without scaring off the sellers. And when bidding, don’t show desperation — this is the easiest way for sellers to extort money from you.
Be Prompt in Making a Decision.
Eventually, you will have identified your dream home and arrived at a price agreement with the seller. According to Zackson, don’t wait too long to make a purchase decision. Instead, be the kind of person who makes up their mind quickly. You may wait so long that another buyer swoops in and scoops up the real estate during your hesitation.
Choose a Desirable Neighborhood and Conduct a “Home Needs vs. Wants” Evaluation.
Buying a home is not easy. You may find most homes fall outside your budget. In this case, choose a neighborhood and create a “home wants vs. needs” checklist to determine what you require and what to forgo. For instance, everybody needs running water but may not require a pool. Learn to prioritize if you wish to get a good deal in your real estate buying endeavors.
With this in mind, buying real estate need not be a complicated undertaking. Follow the above tips, and you’ll stand to get value for your money.
Brad Zackson is a veteran in real estate development, finance and management in New York City. He started his career as a broker, becoming the exclusive broker and manager for one of the largest privately held multi-family portfolios, where he managed and supervised over 45,000 residential units.