Investors Beware: Don’t Fall for These Real Estate Blunders

At times, the real estate market appears truly hot and moves up really fast. Many people think it’s similar to a stock market, but the reality is different. For a successful real estate investment, a long-term approach is required.

Here’s a list of some common, but costly mistakes to avoid in the real estate field:

Selecting a house on the basis of current décor

Keep in mind that when you buy a home – the house is more important than the things within it. Look beyond decorative items and try to see how strong the bones are. Pay attention to things like the square footage and floor plan to figure out whether your belongings will fit appropriately.

Buying without research

Researching the neighborhood is of utmost importance before you select a property. You’re buying more than simply a house – you’re buying a piece of real estate with land around it. Find out details of the area and amenities. Also study the school system to ensure your address is in line with the appropriate school district. Try attending a community meeting if you can.

Buying without an expert inspection

Home inspection professionals can reveal many things about a property that might not be visible to you. Make sure you hire an expert with a good referral and sound experience in the field. Insist on a written report which includes photos. Photographs will help you see the condition of areas you might miss out in the normal course.

Not considering hidden costs

There’s more cost involved in buying a home than what you pay upfront. There’s a lot of spending beyond that. Find out the details regarding property taxes, water bills, and electricity bills.  You also need to consider investing in required furnishings before you move in.

Incorrect bidding at an auction

Though a starting bid for a property on auction might sound like a great deal; you can’t be sure that the same will hold true for the final price. Plan a strict budget in advance and make sure you don’t exceed this in the excitement resulting from a bidding war.

Also keep in mind that with an auctioned property, you will not get any warrantees and guarantees. You’ll not be able to get the home inspected too. Find out all associated liabilities like liens and taxes payable which might convert a good looking deal to a really bad one.

Not marketing your home correctly

When it comes to selling your home, you need to market it in different ways. Simply putting up a "for sale" board isn’t enough- you need to deploy other marketing tools too. Discuss marketing options with a real estate agent and what he can contribute.

Putting up photographs and having virtual tours online is a good idea. Include floor plans as well. These enable buyers to see the complete layout of a home and decide if it’s suitable for them.

Not getting an agent

It's important to have an expert at your side who understands all complexities. You cannot get included in the multiple listing service (MLS) without hiring an agent. Because of this, other agents will not know that you’ve put your property up for sale. Also, when prospective buyers come, you’ll have to show them around yourself.

5 Options to Consider if You Can’t Find a Buyer

Selling a house can be difficult if there are too many houses in the market. If you have a home for sale, you probably already know how difficult it is to find a serious buyer in the existing real estate market scenario. Now, in case your search for a buyer is taking longer than you expected, here are a few options you can consider:

Rent the house 

Renting allows you to generate some income from a property that has been in the market for a while. Of course, you can't make a lot of money by renting, but this is definitely an option you can consider if you feel that finding a home buyer is taking longer than usual. What's more, if you place it on rent for long enough, the market conditions in your locality may improve. People who hold on to their property during a slump will be able to sell it for a higher price when the economy recovers.

Not every seller will want to rent his house. They suspect that the renter will not take proper care of the property. What's more, renting your house to the wrong person can invite a lot of trouble. Evicting a problem renter may take many months and cost a few thousand dollars.

Lease the house

Leasing your home is another option you can consider. When you lease your house, you will receive an extra fee besides the standard monthly rent. Of course you will have to sell the house to the renter at a later time in the future for a pre-determined price. Now, in case the renter decides not to buy the house later, you can keep both the rent and the extra fee.

Rent the house for short periods

If your house is in the vicinity of a tourist spot, you can consider renting it for short periods. Some companies also rent homes to provide accommodation to their non-permanent employees. In popular tourist areas, you can find brokers specializing in short-term rentals.

Sell the house to a realtor 

Some big realtors buy homes and later sell them for a profit. Since they have huge cash reserves, they will have no trouble holding on to the property until they find a good buyer. However, you can't expect these buyers to offer a good price. You may consider this option only if you are desperate to sell or are willing to accept a lower price.

Short sale

This is the least attractive of the five options we discussed here. Lenders want to avoid foreclosures at any cost. So if you are unable to pay off your home loan, the lender might even consider selling your home for a price less than the actual value of your loan. This allows the bank to get a bad loan off their books. They also save the expenses involved in the foreclosure process.

The bottom line

Depending on the market conditions, finding the right buyer may take a year or more. None of the options discussed in this article are ideal; nonetheless they allow you to generate some income while you are still holding on to your property.

Remember, you can always rely on a free home valuation report from Neighborhood IQ to help you in the selling process. Also, the Home Loan Advisor can analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm, and match you with potential lenders.

Turn Your House into a Goldmine – Buyers Just Cannot Say No

When a buyer enters the real estate market, they are looking for a house that they can fall in love with. As a seller, your job is to function as a catalyst so that the buyer ends up finding their dream house in your place. Your buyer does not care if you are unaware of how the real estate market works – they are concerned with something more fundamental and mundane – finding the house of their dreams. You just need to understand what the buyer wants. It needs some psychological skills to know what exactly a buyer is looking for. Present your home to them in their own terms and they won’t be able to say no.

You do not need a degree in psychology (although it may help) to understand the buyer’s mindset. Put yourself in the buyer's shoes. Ask yourself, “What am I going to look for in my new home?” Ask your family and friends. You will notice they are mostly looking for a house that is bigger than the previous one, and which does not require maintenance. Therefore as a seller, your task is to make sure your house appears bigger and better to the buyer.

There are several ways to make your house look bigger. If you remove everything but the most essential furniture, you will immediately notice a difference. Get rid of small items and clutter, open the windows, turn on all the lights when the buyer comes to visit, and paint your house with warm, welcoming colors.

Maintenance is a major turn-off for buyers. Pay attention to plumbing and upgrade wiring and electrical switches. If you can convince the home buyers that your house is maintenance-free, you can easily add a few thousand dollars to the online value report which buyers today use to find the true worth of a house. One such report is available on Neighborhood IQ and you can see the real worth of your house there, click here to see what your home is worth... for free.

In addition to these two essentials there is a third effective method to make your house irresistible to buyers – dressing up. Surveys have shown that dressed houses sell quickly. One such survey in California found a dressed house stayed in the market for only 13.8 days, compared to 30.9 for undressed houses.

It is advisable to hire a professional dresser, if you have indeed decided to sell your house. The National Association of Realtors (NAR) has calculated the value of a house goes up by 8 to 10 per cent for sellers who spend about 1 to 3 per cent of the home value on dressing up.

While spending money, do not invest in themes. Very few people will like the theme you have chosen. You can instead focus on the kitchen, or you can create a curb appeal. The use of fancy colors gives an appearance of luxury. Last minute inexpensive dressing up – placing fresh flowers inside your house – can be useful. To conclude, if you can spend some time with decoration magazines to find out what is trending, you can easily add a few thousand dollars to the value of your house.