• 5 Questions to Ask Yourself Before Buying Real Estate

5 Questions to Ask Yourself Before Buying Real Estate

Buying real estate can be either a wonderful or disastrous experience. It all depends on the steps you take in the process. There are 5 simple questions you should ask yourself before buying, no matter what type of property it may be – new home, resell, investment property or commercial real estate. Among the considerations are why, when, where, what, and how to buy real estate?

Step 1 – Why are you buying real estate? Making a decision to buy is usually preceded by necessity or desire. Do you need to change where you live and/or work? Do you want to own investment property or buy commercial real estate for your business? It’s an important decision that has a myriad of considerations. Your family may be growing and you need more space, or perhaps your kids have moved on and it’s time to downsize. Maybe you have a new job and need to be closer to work, or move to another city. Or could it be that you’ve always wanted to by your dream getaway place on the coast, in the hills, or on a ranch. You might be looking find a place to conduct business and need the perfect site – location, location, location! No matter the scenario, define your “why”. Ask yourself, “Why am I looking to buy real estate?” Be sure to have a definitive why.

Step 2 – When should you buy real estate? This question has a simple answer. Market values go up and down. Interest rates rise and fall. Sometimes your situation dictates. No matter the case, the time to buy is when you can afford it and as circumstance dictates. If you plan to buy real estate with cash, then you have a fairly good idea of what you want to and can spend. If you intend to get a loan to buy real estate, then be sure to consult with your banker or a mortgage professional to find out how much you qualify to buy. This saves you and your real estate agent more than just time and can help prevent you from making a poor financial decision.

Step 3 – Where should you buy real estate? If you’re buying a home, consider more than just your desire to live in a particular location, even though that might be the only thing that matters. Are you raising children and want a good school district.? Maybe you’re retiring and looking for a place you can enjoy the rest of your life? Do you need to live in a particular location because of work? And do you want amenities nearby, or prefer the solitude of living in more spacious surroundings? If you’re looking for a business location, you should consider proximity to clients, potential for growth, exposure and accessibility. There are many other considerations, but these are the most important.

Step 4 – What should you buy? Always buy what you can afford, and never more. When buying a home, buy what meets your needs in the foreseeable future. Unless you expect to put money into improvements or a renovation, be sure that what you are buying is acceptably livable upon closing and move-in.

If you are looking to buy investment property, consider what may provide the highest rate of return, as well as an exit strategy if or when you are ready to sell. There is a maxim in real estate investment that goes like this . . . “You make you money when you buy, not when you sell!” Consider also how you will manage the property – what it will cost to maintain, and the possible income generating opportunities from the investment.

If for business, what you buy is determined by a congruent list of needs. Some of the more important considerations are how much and the type of space you require, zoning that may affect the type of business you operate and ability to conduct business in that location, opportunity for expansion, and how conducive the location is to traffic, if your business depends on it.

Step 5 – How should you buy real estate? There are basically two ways to buy – with or without Realtor representation.  Professional guidance is always recommended. Real Estate professionals tend to know the markets, and typically have access to information an unrepresented buyer does not. They typically have a list of the numerous contacts required to help you conduct fluid transactions through to closing.  Buying without the assistance of a professional real estate agent could leave you blind and clueless, and possibly subject you to undesired liability, in some cases.  There are countless benefits to retaining a qualified Realtor as your buyer’s agent.

For more information on this topic or to inquire about Sandy Hoffman Properties and how we can serve your real estate needs, don’t hesitate to contact us either by phone, form or email.

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