All you Buyers Waiting on the Sides Lines,
Wait no longer. Now is the time to start buying investments, particularly real estate investments. Today, I put in an offer for a 4 family property in New Britain, Connecticut, and I am feeling the excitement as I wait to hear back from the seller on my offer. This was a long time coming, and I am excited that at 25 years old, I can afford to purchase a home that was once out of my financial reach.
How did I go about it? Well, there are a few things that every prospective buyer of real estate must do in order to prepare himself / herself for a purchase of this magnitude. This is what I did to get ready:
1. Contact a real estate agent: This is the starting point. A good real estate agent knows the process of buying a home inside and out. They understand an agent's role is to facilitate the transaction, and not interfere with it. By facilitating, real estate agents provide buyers with important contacts that will all work as a team to help the buyer purchase a property. Key contacts are as follows:
-Mortgage Broker / Banker: This person will analyze your financial capabilities and tell you if you can obtain a loan or not. This person also will provide you with a powerful weapon known as the "Pre-Approval" letter that is submitted when you make an offer on a property.
-Inspector: This person protects you as the buyer by inspecting the property you are looking to purchase. He will perform various tests as instructed: Pest inspection, Radon Test, and will report the results to you, the buyer, in order for you to make an informed decision about your property purchase
-Lawyer / Attorney: This person also protects you by reviewing the purchase contract and keeping on top of deadlines stipulated in the contract. A good attorney will take over the process, even from the Realtor once the contracts have been signed, in order to ensure no contingencies and stipulations are violated.
-Insurance Agent: This person will provide you with the necessary home insurance that all banks require on the property. I shopped around for this individual, and noticed there were many price ranges among the vendors. It is important to get the coverage you need, and nothing more.
The Real Estate Agent is the starting point that will move you through the process in a smooth manner. The other professionals will also help you move smoothly through the process.
2. Gather the Necessary Financial Documents: This part is so important and most people are very unorganized when it comes to their financial documents. In order to get a bank loan, various items must be provided to your mortgage broker. The type of documents I obtained were:
-2 most recent pay stubs
-3 most recent tax returns
-3 months bank statements of all bank accounts
-CHFA Class Certificate (If you are getting a state FHA loan, you must take a class)
-Other documents on demand.
Depending on the loan product, you will be asked for different items by your Mortgage Broker / Banker.
3. Have Patients: This is perhaps the most important part of the process. If your like me, you are just itching to buy a property to take advantage of the amazing benefits to home ownership, especially if you are a first time homebuyer like myself (8k! Tax Credit), but you must have patients. So far, I have gone the distance only to realize that banks are more conservative than I thought. You will have set backs, but the set back teach you valuable lessons that you will remember and will help you avoid the same mistakes the next time you make an offer.
So buyers, join the rest of the crowd. Currently, the largest buyers that I am seeing in the market are investors. Don't miss out on the opportunity to create massive amounts of wealth for yourself and your families. Don't try to time the market, that is virtually impossible. Now is the time to buy!
Realtor, Keller Williams Realty Partners