1 – Have your team set up in advance
Before starting your hunt, it is important to have your team set up in advance. Having your REALTOR®, lawyer, insurer, mortgage broker and/or banker, and contractor on hand and ready to work for you will prove to be an invaluable asset. Be sure to meet, interview, and build a mutual a comfort level with each of these professions. Since these professions get paid to work for you, its best to use them to your fullest advantage.
2 – Know your pre-approval amount
If you will be obtaining a mortgage on the property, I suggest finding out the amount of mortgage you will qualify for, along with the terms (i.e. interest rate, amortization period, payment amount etc). Keep in mind that the pre-approval is just for the dollar amount of a mortgage; it is not an approval on just “any property”. The bank will likely need some comfort knowing that there are no significant expenses coming up in the future that may impact you as a borrower.
3 – Stick to a budget
This cannot be overstated. To avoid overspending, you must know what your affordability is and what your costs will likely be at the end of the project. Using a spreadsheet to organize your anticipated costs, and updating it frequently to reflect actual numbers will be your best friend.
4 – Spend appropriately on finishings
Keeping in mind your budget, it’s important not to overspend on finishings as you may not get a return on them in the future. For example, if you want to install a waterslide, do it because you want one, but keep in mind this might not help the value of your property as much, as say, an updated kitchen. And if you do update your kitchen, be sure to spend appropriately. For example, if granite countertops and stainless steel appliances are the norm in your area, try to use the same grade or slightly higher without breaking your budget. It pays to shop around and with a little perseverance, you will no doubt find a deal.
5 – Don’t rush the purchase
The old adage “buy low and sell high” remains relevant to this day. Make a mistake, and you’ll leave money on the table, or worse yet, be under water. A plan of attack is necessary to acquire any property. Take your time, be on the lookout with your Realtor® , and be ready to write an offer when the right opportunity presents itself.
6 – Inspect, Inspect, Inspect!
Don’t underestimate the importance of a home inspection! A good home inspector will carefully examine the property, room by room, inch by inch, inside and out to help determine if there are any “hidden” issues in the prospective home. This this information, you can make an informed decision and pick out a winner!