Buying: How to Navigate the Jungle

Most people are familiar with the fact that the real estate bubble popped. This has meant some severe challenges for lower income homeowners, or owners who just bought homes that were above their means financially. This is why it can definitely be said that it's a buyer's market out there. What that means is that there's a lot of homes for sale, which means a lot of options for buyers, and also low prices. In fact, in many parts of the state, prices are as low as they've been in many years. Homeowners are selling, and those that couldn't make their mortgage payments are having their homes foreclosed, which drives prices way down. But while this is bad for homeowners, especially those who got in over their heads, this is great for young buyers, or those wanting a second home.

The key to successful buying in this market is to make a fair offer, and don't encumber it with too many sale-delaying terms. Although there are lots of places for sale, there are also a lot of buyers coming into the market. Sellers, especially if they are banks or lenders, as is the case with a foreclosure, don't want to wait around while you sell your current home or wait for your investment fund to expire. They want to sell now, and will go with an offer that allows them a quick sale.

If you're new to the market, be sure you've qualified for a mortgage loan before you get too serious about buying. If you haven't already done so, visit a bank or other lending institution and tell them what you want to do. They'll want to see your financial information such as employment history, annual income, tax statements, credit rating, etc. Then, assuming you qualify, they'll tell you what they'd be willing to lend you. This tells you what price range of home to look at.

Knowing what you can afford is important. Remember my first paragraph? Don't make the same mistake so many buyers did 5 or so years ago and buy more than you can afford. Settle for something a bit smaller, and if you are dreaming big, put in some sweat equity to make the home more valuable. Then wait for a good time and sell again. Real estate is a bit of a game. It takes effort and careful timing, but if done right can really earn you a lot. Your home is probably going to be the biggest asset you've got. Work at it and it'll be even bigger.

If you're second home, be prepared to manage two mortgages. Are you going to rent out one of the homes? If so, be sure you are capable of dealing with strange tenants. Study up on homeowners and tenants rights. There are an awful lot of rules and regulations surrounding what can and can't be done, and many of them are put in place to protect the tenant. before you kick them out, raise the rent, or even stop by, be sure what you are doing is well within the law. You must be prepared to pay both mortgages on your own if your home is vacant, or if a tenant defaults on their rent. Plus, you will be expected to maintain the property, and can expect to get some phone calls from tenants asking for things once in a while. Some people are great at property management while others loathe it. If you suspect you fall into the latter category, consider hiring a property management company to do it for you. This seriously cuts into your profits, but it could be the difference between failure or success.

If you're considering buying a foreclosure, be careful. You should probably seek the advise of a real estate professional. While many of these can be great deals, some are not. You need to know the difference. Try to look through the home (sometimes this isn't allowed), and get the home inspected for any potential damages or health hazards like mold or pests - especially if it's been abandoned, which is sometimes the case.

Whatever you do, be careful, and do your research. Buying is exciting and can be very rewarding. If done smartly, it can net you the biggest profit of your life. So take your time and know what you're getting into, get professional help from a qualified Realtor®, then GO! Once you're ready, be confident and move forward without delays.