SS183: Mastering the Real Estate Buying Process

SS183: Mastering the Real Estate Buying Process

There are many steps involved with purchasing a piece of real estate. In this episode, Charles discusses how real estate investors can master the real estate buying process.

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Talking Points:

  • There are several steps involved with purchasing a piece of real estate. Here is a general outline to help guide you through the process:
  • Self-Evaluation
    • Self-evaluation is the process of assessing our situation and our goals. What is the end goal of purchasing a property? How much time do you want to dedicate to managing the property? What type of property would you like to purchase? Do you want the property to be turnkey?
    • What is your financial position? What is your income, savings, and credit score? What is the total amount you would like to use towards a home?
  • Research the Market
    • Once you have defined your goals and your situation, start reviewing your target market. What areas and neighborhoods within your market fit your goals and finances?
    • Check out recent comparable sales to gauge fair market prices and start calculating what it would cost to purchase the property with closing costs. What would be the monthly mortgage payment?
    • Start driving the potential areas that fit your criteria and get a feel for the different neighborhoods within them.
  • Will you be using a buyer’s agent? Most buyers, especially first-time buyers, utilize a buyer’s agent when purchasing a home. Will you? If so, this is the time to start interviewing them.
  • Start Looking at Active Listings
    • Get pre-approved for a mortgage.
    • Search on market properties and start attending open houses.
    • Keep track of the properties you are reviewing, either online or in person, and note their condition and pros and cons. Are they going under contract right away or sitting on the market?
    • Do the properties in your price range meet your criteria, or do you realize that you need to adjust your buying criteria?
  • Start Making Offers
    • Once you find a property that meets your criteria, make an offer. Consider the contingencies that you would like included within that offer.
    • Negotiate the terms with the seller and agree on terms and price.
    • Speak to your lender and begin the formal loan process.
  • Home Inspection, Appraisal and Contingencies
    • Hire a qualified home inspector to review the property’s condition. Possibly hire more specialized contractors if the inspector notices a potential issue.
    • Review the inspection report and negotiate repairs or adjustments where necessary.
  • Finalize Financing
    • During the inspection period, you will also be finalizing your financing. Providing all necessary documentation to the lender for approval.
    • Review and verify the loan terms and closing costs
  • Closing Process
    • Review the closing statement, all fees, terms, and costs
    • Schedule the final walkthrough of the property to confirm its condition
    • Prepare the funds required for closing; this might be a cashier’s check or possibly a bank wire transfer to your attorney’s office or title company.
    • Sign all legal documents
    • Transfer utilities to your name

Each real estate transaction is unique, with its own problems and challenges. However, being well-prepared and educated while having professionals you trust alongside you will make the process much smoother.

Transcript:

Charles:
Welcome to Strategy Saturday; I’m Charles Carillo, and today we’re going to be discussing mastering the real estate buying process.

Charles:
So there are several steps involved with purchasing a piece of real estate, and here’s a general outline to help guide you through the process. Number one is self-evaluation. Now, self-evaluation is a process of assessing our situation and our goals. What is the end goal of purchasing a property? How much time do you want to dedicate to managing the property? What type of property would you like to purchase? And do you want the property to be turnkey or do you mind if it’s a fix or upper? What is your financial position? What is your income savings and credit score? And what is the total amount that you’d like to use towards a home? Number two is researching the market. So once you’ve defined your goals and your situation, start reviewing your target market.

Charles:
What areas and neighborhoods within your market fit your goals and finances? Check out recent comparable sales to gauge fair market prices and start calculating what it would cost to purchase the property with closing costs. What would be the monthly mortgage payment? You know, start driving the potential areas that fit your criteria and get a feel for the different neighborhoods within them. Number three is figuring out will you be using a buyer’s agent? So most buyers, especially first time buyers, utilize a buyer’s agent when purchasing a home. So will you. If so, this is the time to start interviewing them. Next is start looking at active listings. So get approved for a mortgage if you haven’t done already and search on market properties and start attending open houses, I would keep track of the properties you are reviewing, either online or in person. Know with their condition, the pros and cons, and are they going under contract right away?

Charles:
Are they sitting on the market? And this is gonna help you really gauge where the market is for the properties you’re looking at. Do the properties in your price range meet your criteria, or do you realize that you need to adjust your buying criteria? So maybe you’re looking for a specific house in a specific area and you wanted it to be turnkey. And now you’ve realized after attending some open houses and reviewing some sales, you’ve realized that you might have to be looking for a property that’s more of a fixer upper, if you wanna buy one that size in that area. Number five is start making offers. So once you find a property that meets your criteria, make an offer. Consider the contingencies that you would like included within that offer. Negotiate the terms of the seller and agree on terms and price. Speak to your lender and begin the formal loan process.

Charles:
Number six is the home inspection, appraisal and contingencies. So hire a qualified home inspector to review the property’s condition, possibly hire more specialized contractors if the inspector notices a potential issue. For example, my brother just bought a house and when they were going through the home inspection, the home inspector said, noted that there might be issues with the ac. So he brought in, he hired a AC person, or he had a relationship with one, so they did it for free, but you would hire one, they’d come in, they could review exactly what was wrong with it, and he found out there was only something that would be a few hundred dollars to fix. So it wasn’t a huge issue. But if you, something like that gets picked up by your home inspector, make sure you bring in a professional. They say, you know, the roof might be a little dated or this, bring someone in, review it.

Charles:
Especially now with insurance prices so high, you wanna make sure that any of these problems, these are things that will trigger higher insurance policies and possibly keep you from getting coverage. So you wanna make sure that you know, these especially these costly issues that you bring in someone that’s specialized to do it. When you review the inspection report, negotiate repairs or adjustments where necessary. If it’s something small and you really like the home, I probably wouldn’t do anything. If it’s something larger that’s when you’re wanna start talking to the seller and seeing what you could work out. But it all depends on what you’re doing. If it’s something that you’re gonna repair or replace anyway, I probably wouldn’t put it into negotiations either way. Number seven is finalize the financing. So during the inspection period, you’ll also be finalizing your financing, providing all the necessary documentation to the lender for approval, review and verify the loan terms and closing costs.

Charles:
And number eight, finally, the closing process. Review the closing statement, all fees, terms and costs. Schedule the final walkthrough of the property to confirm its condition. Prepare the funds required for closing. And this might be a cash’s check or possibly a bank wire transfer to your attorney’s office or to the title company, sign all the legal documents, transfer utilities to your name, and then you’re off and running. So each real estate transaction is unique with its own problems and challenges. However, being well prepared and educated while having professionals you trust alongside you will make the process much smoother. So I hope you enjoyed. Please remember to rate, review, subscribe, submit comments and potential show topics@globalinvestorspodcast.com. If you’re interested in actively investing in real estate, please check out our courses and mentoring programs@syndicationsuperstars.com. That is syndication superstars.com. Look forward to two more episodes next week. See you then.

Charles:
Have you always wanted to invest in real estate, but didn’t have the time, didn’t know where to find the deals, couldn’t get the funding and didn’t want tenants calling you. Since 2006, I’ve been buying income producing properties and great locations that provide us with consistent passive income. While we wait for appreciation in the future and take advantage of tax laws while we’re waiting and unlike your financial advisor, we invest alongside our investors in every property we purchase. Check out to investwithharborside.com. If you like the idea of investing real estate, if you like the idea of passive income partner with us at investwithharborside.com, that’s investwithharborside.com.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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