Buying a Home? Avoid These Common Mistakes That Could Cost You Big Time
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All right so at this point we all know about America's favorite pastime and no I'm not talking about baseball, obviously I'm talking about scrolling through Zillow listing of houses that you can't afford. Now anybody who watches my videos know how much I appreciate Zillow. Okay, no but seriously I know that none of you listen to me so I'm going to teach you the right way to look at houses and see past all the ***
Howdy everyone, it's Or Yochanan and let me start by saying that this video is applicable for any type of house search, primary residence, investment property or unobtainable dream home.
Let's start with the tools;
So while Zillow is a great tool for browsing for pictures, it's a sub-optimal tool for getting accurate and reliable data. Now when you're seriously searching you should have your realtor connected to their multiple listing service, the MLS and yes I am fully aware that the UI looks like it's from 2005 proudly designed by Stevie Wonder, but the data is accurate and updated. So if you absolutely despise the looks and I can blame you, make sure to vet properties from Zillow and Friends by looking at the MLS as well. So you don't add up spending time looking at an active property from Zillow that is actually under contract.
Been there, done that.
Moving on to the Pre Tour stage and let's talk about diamond in the rough, so take note of listings without any photo also with ugly or blurry pictures when you're searching for a good deal. There are a lot of people who Skip these houses but I have found excellent properties multiple times by taking the time to look at them, take advantage of the reduced traction. The other thing you can do is sorting by the number of days a house has been on the market and do it in reverse; get the older one first, this way you can find a good deal because the listing agent might have made just critical mistakes and squandered their time on the market, when in fact these houses have nothing wrong but a badly presentation.
The second thing I want to speak about is due diligence and equity, and how do you do that, well first you start with reviewing the disclosures and it's important to know a seller who is selling a home in Texas, must inform you if they have any major changes made to the house. The main Big Ticket items on a home are the roof, HVAC, and windows, the backend situation is also important when it's applicable. Make sure that you know the age of these systems, along with any repairs or replacement that took place. Some Realtors failed to mention it in the listing which is literally leaving money on the table for us to pick up.
Also be sure to check if there's any history of issues with things like the foundation, the plumbing, or the termites, are there any warranties for any of these, if you can't find this information your agent should be able to obtain it. This is a huge way to weed out houses before wasting your time on them.
The third thing I want to speak about is location. It's important to review the area as well. I assume that at this point you have a general idea of where you want to live, but you want to take note of anything that jumps out prior to even go into the house. Let me give you some examples, pull the property on the map and note is it near any a major noisy roads, business Parks, train tracks, louder with locations can be annoying and make resale harder later on. So be aware to make note of anything that you want to verify in person prior to actually going there. It's also an opportunity to test your agent and see if they make a point out of it. When I looked for my first house in the US the agent took me to a house right by the railroad, and I found about it myself and she never mentioned it, meaning that she was either not trustworthy or incompetent, and needless to say neither of these options were acceptable to me.
Okay so you picked out a few houses to look at in person, it's time to put on your Spice Girls playlist, I mean rock music, and head over to do a few tours. When I do a tour I always drive through the neighborhood with my clients before even going to a house. Find any amenities, like Pools, Parks, and Golf courses, people can tell pretty quickly whether they connect with an area and that's a huge part of whether or not you like the home. Now remember, tearing down a wall is simple, moving a house from a bad neighborhood, kind of impossible. So when at the actual home conduct a visual inspection, large cracks in the driveway or throughout the house can indicate Foundation problems. Check the windows for fogginess or cracks, this can be expensive to fix later. If the house was staged in the photos, take special notes of any areas that are covered by rugs or art, as these are sometimes used to hide issues. Be aware of what is a show stopper and what is actually shouldn't be a terrible layout, might be an automatic no.
On the other hand, things like purple paint or stain floorings or brown walls and ceilings, a true story can be an opportunity. These are cheap and easy fixes and well they can be a chance to get a good deal for looking past what other people want.
If you're looking at the flip house it is important to pay extra attention, if you don't know whether the house is a flip or just updated, ask your agent to check their listing history. Some flippers are good, but many cut corners and use cheap materials in an effort to maximize their profits. Look at the material used and the finishes to get an idea of the quality of the work. Are the cabinets new or just painted, did they update the baseboard, these are small items but often show the quality of a flip as a whole.
Prepare to Engage
Alright, next item in line prepare to engage. So you've toured houses and fallen in love with the perfect one. Now for the fun part, more work before putting in an offer it's important to do your due diligence on the home. Is the house in an HOA, check the monthly dues. If this is your investment, make sure that there are no restrictions on leasing the property. If it's for an Str, consider that both HOAs and CD codes can enforce restrictions and ensure your plan are applicable. Look at the tax rate, taxes can vary a lot in Texas, so be aware that what you're buying into to avoid surprises.
Homestead exemptions, don't apply until the tax year after you purchase so they can update it and they're going to so for recent changes assume you'll be paying taxes on the full amount of your purchase and perhaps be pleasantly surprised later.
Are there any outstanding loans or leases, if a house has a solar panels, this is particularly important to check out and you want to make sure that they're going to be paid full at closing by the seller. Is the house priced well - well ask your Realtors to run a comparative market analysis - CMA, and if it comes with you. Make sure that proper adjustments are made according to the differences between the properties. I highly suggest to do the CMA live with the realtor, don't let them send it to you - you want to look at the data together, you want to make sure that everything is being adjusted accordingly, and everything is being accounted for, and nobody is cherry picking the properties that present a nice story for you to execute on. Now this portion is a bit tricky, so Sam Maze and adjustments can be subjective in nature and it can be hard to determine if the realtor's opinion is unbiased, or salesy - is that a word, I personally keep track of every pre-offered CMA run and later compare it with the actual figures. I'll share it here somewhere so I can track and refer to my own performance, but I've yet to learn of anyone else who actually does that. I refer to the performance because it's important to know what they are, so you can understand how accurately, statistically speaking the projection is going to be. Use the price from the CMA portion to determine your engagement price, now remember that although you want to secure the home, you do not want to do it at all cost, knowing what the fair market value is will help you to balance out your desire to secure the lowest possible price with the opposition of trying to get your offer to be seriously considered. Offering too low can backfire, now these last two portions can be an entire video on its own, so let me know in the comments if you'd like to learn more about how to properly understand market value along with various strategies of Engagement and hint it's not as easy as always lowball, there's a lot of nuances for a successful negotiation.
Once you feel comfortable with all of this information, it is time to put an offer on the house. A good realtor should do a lot of this for you, but many don't this is why it's so important to be in the know before entering this process.
Now as always, if you have further questions I am available both in the comments down below and on social media, follow us on Instagram for more educational content about real estate in general and Austin in particular.
I hope you found this video insightful and I'll see you on the next one.
I think at a time you bring is a swear your face sweet
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