As a founding member of KWNYC and current ALC Board Member, GieFaan Kim is amongst the top quality professionals, who sets himself apart from the rest with his philosophy on modeling his business around the clients and not the deal. To ensure you save on time and to put you in the best position, here are the 5 things he wants you to keep in mind when buying:
Whether you’re buying for the first time or investing to add to your portfolio, every buyer should take the proper necessary steps when purchasing real estate.
1. Know Your Financial Status
This means officially get the current updated status of your financials. If you are a cash buyer, simply double-check. If you are financing, you shouldn’t even be looking at real estate until you are pre-approved by a lender.
“I know I have great credit and I have the savings for this, I’ll get qualified when we find a place.”
Many times there are sneaky pests in your credit history of which you may not be aware. If there happens to be anything to clean up in your credit report, you’ll need a bit of time to do it so start now. Also, it never hurts to be prepared. In fact, being prepared is an essential element to winning a bid. When presenting an offer to a seller, a pre-approval letter will certainly strengthen the offer and put you in the best position possible to win.
2. Get a Consultation
This doesn’t necessarily mean speak with a real estate broker, although it’s one of your best options. It definitely doesn’t mean go get advice from your neighbor who watches Million Dollar Listing. A consultation can come from any real estate professional who is actually active in the market and familiar with the practice, and typically a strong real estate broker is the best source. There are other professional advisors to hire if you wish, but a real estate broker’s consultation tends to be complimentary.
Knowing the market is important, but knowing the process is just as important. Many buyers feel that the hunt is the hard part. In fact, finding the property is many times the easy part. Numerous deals fall apart after an accepted offer because of something that happened during the contract process. Be prepared and the ride will be as smooth as possible.
3. Comparable Research
When it gets down to bidding and negotiating, one must know the numbers. This is far easier said than done as there are dozens of factors that come into play when valuing a property. So how does one properly assess the value?
Hiring an appraiser is an option some people take. If you are financing, an appraisal is necessary anyway but that comes after the contract is signed. You are welcome to hire an appraiser to come in prior to bidding, and the main risk for that is the loss of time. If you are delayed submitting an offer because you’re waiting on the appraisal report, there’s a chance someone else could lock up the deal before you.
4. Expect the Compromise
There’s a saying that there’s “Never a Perfect Deal” because something has to be compromised. If you’re one of the lucky few that lands a “perfect deal” then congratulations to you, now go play the lottery.
Holding out for the perfect home will tend to be your Achilles heel. If you want space, views, renovated finishes, and a W/D in Chelsea for 15% less than the market value, you won’t buy anytime soon.
Prioritize what is most important to you. Is it price? Is it location?
If the features of the home are most important, then likely “Price” is near the bottom of the priority list. And likely that’s the thing you’ll need to compromise as you’ll need to raise your budget.
5. Work with a Real Estate Agent
This is the simplest answer overall. Working with a professional can help you get started with the necessary first steps, give you professional advice and consultation, provide market analysis, negotiate, and more. Negotiation is a skill that not everyone has, and working the market daily gives them better insight on the properties.
Different agents provide different values, just like stock brokers. Most will be able to help with arranging services from start to finish (staging your home for sale, marketing, post-move, etc).
Don’t just meet one agent and commit. When buying, treat yourself like a seller. Interview professionals who are ready to take you seriously and commit to you. And most importantly, select a representative who is not only skillful but keeps your best interests in mind.