“There is never a wrong time to buy real estate. When times are good, people complain about the deals they have missed. When times are bad, they claim they can’t buy at the top thinking that prices will fall and, therefore, it’s not a good investment.” – Donald J. Trump.
As President Donald J. Trump said, there really isn’t a bad time to buy real estate; just ask Black Rock. Any time you can acquire land or property on the land, it’s a good thing. It’s still scary, no matter your reasons because it’s a risk, a calculated risk, but still a considerable expensive risk. When you buy property, you want to make sure that you are doing your homework and talking to knowledgeable people and, better yet, decent humans to look out for you. Here are eight things you should know before buying a house.
Let’s Buy A House!
- Use a trusted realtor
I know some people think they can sell their own homes; let’s face it, it’s not rocket science. However, it is a complicated legal process that you want to ensure you aren’t screwing it up somehow. None of us like salespeople, and that’s ultimately what a realtor is, but the fact is we need them, even if it’s to take the liability and be the fall guy if anything goes sideways. A good realtor will truly protect your interests. Remember, buying a house involves a contract.
- Don’t buy for the life you have today
This will be one of your life’s most significant financial purchases, so think long and hard about it. The here and now, the tomorrow, and the ten years from now. Are you planning on getting married? Are you planning on Having kids? Staying at your current job? Prepping for a post-apocalyptic world? Storing ammo and firearms to help protect your land when the world goes to hell in a handbasket? Well, you get my point, long term, let’s think long term. Depending on the market and the terms of your loan, you may not pay down any real equity between five and seven years: if you aren’t sure that your house will be the house for you in a few years, you may want to keep looking; and find something with a bunker.
You Can Always Refinance
- “Marry the price, and date the interest rate.”
Don’t get so caught up in the interest rate and get scared off just because of the loan. One of the key tings to know before buying a house is lenders love to be able to assist in refinancing, and it keeps their businesses going. Lenders are always willing to work with you on refinancing, and the best prices on houses usually come with the worst time for interest rates. So, remember you don’t have to be afraid.
Marry the price and date the rate, you can break up with that crazy rate when the interest rates start the downward spiral, and then you pounce, but best grow a pair and man up to do what most aren’t doing in markets like this one right now. Well, the smart, wealthy ones are. They’re buying the houses that are plummeting in price and taking the risk but don’t worry. When the market goes back up and the interest rate goes back down, all of those investors will be very happy to sell their properties back to you and a much higher price, and that is the payout when you are willing to take that risk.
- Location, location, location
I know we should all be “in the know” enough these days to ensure you don’t accidentally end up in a place like Portland, or Los Angeles, where the homeless are allowed to poop in the streets. Or worse than human feces in the street, you could end up in wasted spaces such as Aurora or Denver, CO, or Ashton, ID, where BSL exists (breed-specific legislation). That’s right, no pitbull or pit bull-like dogs are legal to home because of biased ignorance. Just Do Your Homework because you never know.
Hidden Costs Of Real Estate
- Taxes and cost of living
If you want to move states, check out the local school districts, the taxes, and the cost of living. Again, we all should know better than intentionally moving to a place such as California, but they are the leader in state taxes at 13.3%, Hawaii at 11%, and Oregon at 9.9%. At the same time, states like Wyoming, Texas, and Nevada have some of the lowest state taxes.
Make sure you decide if you are an HOA kind of person or not! Some of these HOAs make it their life mission to keep you under their thumb and make sure you pay your dues. Then again, if you’ve ever lived on a street with that one pink house, the five cars parked in the street, or the dogs chained up out back that are in serious need of a visit from the Human Society, then you may be one for HOAs and their policing. Make sure you decide before looking at properties.
Marry For Money
- How much do you qualify for?
Talk to a lender and get prequalified. This can be the most stressful part of this process, knowing what you want but not sure if the bank will agree that you are a good enough person to deserve it. I know they base this amount on things such as your income, the longevity or security of your job, how much money you make, or if you’re more affluent than the other guy. I know the bank isn’t there to judge you based on how much money you have or make or need. Wait, actually, that’s precisely what they’re supposed to do.
Don’t panic, though. Many good lenders out there genuinely do get the warm and fuzzies even when they help “the poor” obtain a home mortgage loan and see good, hard-working people get a chance at homeownership. Make sure you take your time and find a lender that gives you the warm and fuzzies before working with them.
- Save for a down payment; Just kidding!
I know grandma and grandpa did it, mom and dad did it, auntie and uncle always told you to make sure you do it. Make sure you painstakingly save 20% to 30% before considering buying a house. Because everyone nowadays has the opportunity to save an average of $100k for the purchase of their first home. Maybe if you went to college, had a decent paying job, met the lady of your dreams, and quickly became a two-income house with no kids and two great salaries, you can work towards that and one day reach it.
Or, you can talk to an intelligent, savvy lender that will tell you that tons of programs and banks can get you into a loan for 3% to 5% down without having to kill yourself to save a ton of money just to give it away and still end up with a hefty payment. Make sure you do your homework and find a suitable lender and a good realtor.
Final thoughts. It’s not really that hard. You just have to want it, and someone will always be willing to help you achieve it. It’s not unattainable, as some might make it sound. It is work and research, but if it’s your dream to own a house or land one day, you can and you will; unless the government decides otherwise.