Looking for the perfect book to help guide clients through their home buying journey? Check out columnist, radio talk show host, and real estate expert Ilyce Glink‘s latest book: BUY, CLOSE, MOVE IN! How to Navigate the New World of Real Estate–Safely and Profitably–and End Up with the Home of Your Dreams (HarperCollinsPublishers, 2010). The book walks prospective buyers through the process step-by-step and answers commonly asked questions. Readers will also gain tips and insight into making real estate decisions that are right for them.
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Why Buy This House over That House? Learning Selectivity
First-time and repeat home buyers often feel as if they are looking for that one elusive property that can only be the house of their dreams. It’s as if they’re looking for a needle in a haystack. The reality is so much better than that: there are plenty of needles and plenty of haystacks. Unlike your parents or grandparents, you probably will not live the rest of your life in the first house you buy. You’ll move two, three, or four times or more over the years because of a transfer or a promotion or because you want different amenities or a different neighborhood.
Experienced investors understand that there are many properties that fit their particular financial parameters and can work as successful and profitable investments over time. But understanding why one property will work as an investment and another will not is a skill that you’ll want to develop over the years.
If you’re buying a home to live in, you’ll want to spend some time figuring out what you want in a house and what you can’t live without, and hand those lists over to our agent. If you’re buying for investment, you should think about what level of amenities and size are most desired in a particular neighborhood and how much you will need to spend to get a home in rentable shape.
You should get these thoughts on paper, too, and hand them over to your agent who can help you scour the neighborhood looking for homes that are for sale and figure out which ones best meet your needs. If your agent is doing her job, she’ll present you with a bunch of properties that meet all of the items on your reality check and include at least some of the items on your wish list. In a strong buyer’s market, that list of properties could number in the hundreds, depending on where you live. In a strong seller’s market, there could be just a handful.
Being able to differentiate between desirable properties is a quality I call “selectivity.” You have to be able to look beyond the decorating (which is notoriously difficult) and decide if the house meets enough of your wants and needs to work for you over the time span you have in mind. The time issue is key: if you’re going to live in the property, you have to know about how long you plan to live in the home and then add or subtract a few years to account for changes beyond your control, such as transfers or housing market crashes; if you’re going to rent it out, you’ll need to know how long you plan to own it, how much you can get in rent, and whether you can get someone to sign a multiyear lease to develop a cash flow projection you can count on.
Excerpted with permission of the publisher HarperCollinsPublishers, this chapter continues with tips on how a buyer can narrow down their choices to select a property best suited for their family. To buy BUY, CLOSE, MOVE IN!, visit www.harpercollins.com.