Are you shopping for a new home or looking for a new real estate investment? If so, there’s a fair amount of work to do before you make an offer or sign any contracts.
You need to research real estate in your area to find the right price, location, and building for your needs. For example, if you’re planning on raising a family in the home, find out about the local school district, crime rates, and nearby parks. If you’re looking for a commercial real estate investment, find out about drive-by traffic, foot traffic, business opportunities, and commercial growth.
We’re here to make your life easier. Keep reading for a complete guide on buying real estate.
1. Shopping Within Your Budget
Your real estate research should begin at the bank. You need to know how much money you can afford to spend when purchasing real estate. Look at your monthly income versus your expenses to identify your monthly budget.
Looking for Great Deals
Once you determine your price range, you can start looking for properties at competitive pricing. Shopping for great deals is a fundamental aspect of real estate research. Take your time to see what’s available in your area before committing to a property.
We recommend shopping for expired real estate listings. These are listing that spent too much time on the market and were taken down because the building owner fired the real estate agent or gave up trying to sell it.
By shopping for expired listings, you can find rock-bottom prices. The sellers will be grateful to receive any offer at all, which gives you more leverage.
Getting Pre-Approved
Before placing an offer on a home or commercial building, get pre-approved from your bank to understand your loan eligibility. This will tell you your maximum spending budget, as well as the interest rates for which you are approved.
This can save you a ton of frustration (and embarrassment) if you place an offer on a home for a price you can’t afford. And remember, you don’t have to use the lender that pre-approved you. You can shop around for other lenders and better terms.
2. Finding the Right Location and Neighborhood
Making an investment that will remain beneficial to your family or business goals means buying real estate in the right location. If you’re looking for a home in which to raise your family, this means finding a neighborhood that’s safe, friendly, and accessible to quality schools. You’ll also want to find out about the home’s proximity to parks and playgrounds.
If you’re purchasing real estate for commercial purposes, the right location depends on the type of business that will operate out of the building. Retail spaces will thrive in areas with high visibility, consistent foot traffic, and drive-by exposure. However, if you’re investing in a residential rental unit, you’ll want something that provides more peace, quiet, and privacy.
A real estate agent would be a valuable asset if you’re unfamiliar with the area. Most real estate agents operate in their hometowns. They are incredibly knowledgeable about the area and the surrounding neighborhoods.
3. Prioritizing Your Needs
To adequately research real estate, you need to think about your priorities. Using the example above, if you want to raise a family, you need to find a home that can accommodate several children, sleepovers, birthday parties, pets, etc. Don’t buy a home that you will outgrow in a couple of years.
You also need to think about your lifestyle. If you enjoy entertaining guests, you need a house that has plenty of room, a large kitchen, and outdoor living space.
If you’re purchasing real estate for your business, you need to find a building that:
• Fits within your budget
• Is big enough to allow growth
• Is suitable for your industry
• Has the appropriate city coding
For example, if you’re opening up a gym or fitness center, a small space designed to be a hair salon might not be a good fit. If you’re opening up a small bakery, an industrial warehouse isn’t right either.
4. Identify the Annual and Monthly Costs
Earlier, we talked about buying real estate within your budget. However, this means doing some extra research to find out what your annual and monthly costs will be outside of your loan or mortgage payments.
While determining your price range, you also need to consider:
• Realtor fees
• Closing costs
• Monthly loan payments
• Insurance
• Property taxes
• Utilities (gas, electric, water, waste removal, etc.)
• Services (phone, internet, cable, etc.)
• Building maintenance and repairs
• Property maintenance
• HOA fees
• And more
Don’t overextend your finances, which will create complicated issues down the road. This is especially important if you’re starting a business. Nearly 50% of businesses fail in the first five years, typically because they can’t make ends meet.
Start small in a price bracket you can comfortably afford. Then, you can scale your business based on sales and customer growth.
However, the same rule applies when buying a home. Staying well within your price range is one of the most important real estate buying tips.
You don’t want to find yourself between a rock and a hard place if you have a financial emergency. Additionally, if you max out your monthly budget on mortgage payments, you’ll have a hard time saving, paying off debt, paying for vacations, having extra spending money, etc.
5. Working with the Right Professionals
Finally, to competently research real estate, you need to hire the best professionals in the industry. First and foremost, this means working with an experienced realtor from the area. Find a residential or commercial realtor based on the type of property you’re investing in.
They can help you find the right building in the right neighborhood. Real estate agents also have experience negotiating with sellers. They might be able to get you a lower price than you expected.
Furthermore, real estate agents have valuable connections with other professionals that can help you. This includes contractors, mortgage lenders, insurance providers, and other local business owners.
Do You Need to Research Real Estate Before You Buy?
No matter what type of property you’re buying, you must research real estate before you make any decisions. Purchasing real estate is no small commitment. The property you choose will have profound consequences for years to come.
Take your time and follow the realtor tips in this article to find the best property for your needs. And if you’re looking for more helpful content, check out the rest of our blog before you go. Our articles are full of information, advice, how-tos, and more.
