To be competitive in today’s real estate market, you must come to the table ready to put your best foot forward—and we don’t mean in a Louboutin heel. If you’ve got ’em, do wear ’em, but sellers and lenders don’t care what you’re wearing if you don’t have the financial chops to back it up. Before viewing a single listing, here’s where we suggest you start… by investing in yourself. (And don’t worry, we’ll be with you every step of the way.)
Build Your Credit
You’re likely not paying 100% cash and we often wouldn’t recommend that route. Financial expert Nicole Lapin breaks down the need-to-know credit score info here but long story short, if a lender is financing part of your purchase, the best credit score you can possibly earn for yourself will impact if you can get a loan, how much you can qualify for, and what it’ll cost you in interest.
Build Your Safety Net
Let’s be frank: s*** happens. But a setback doesn’t need to derail you completely. This starts with having an emergency fund and a day-to-day savings plan but doesn’t stop there. Once again, check out Nicole Lapin’s savings guidance here, too.
Diversify Your Investments
While we love real estate as a great source of return on investment, we don’t believe in having a single strategy or category for investing your money and building wealth. We hope you’re also taking advantage of employer-matched retirement contributions, index funds, and chilling (the last Nicole Lapin shoutout for today, promise).
Build, or Source, Your Down Payment
First-time home buyers and buyers shopping for their primary residence may have more flexibility with how much down payment they need to be prepared to bring to their closing day but for second-home buyers and investors, you should be prepared to start with no less than 20% of your purchase price as a down payment. This can come from personal savings, equity in other properties, etc.
Determine Your Budget
How much are you prepared to be on the hook for each month? This doesn’t just include your mortgage but also taxes, insurance, utilities, and—here’s where being an owner is different than being a tenant—maintenance, repairs, and updates.
Closely Evaluate Your Options
It’s time to bust out the highlighter, red marker, and magnifying glass. Every property in your consideration set needs to be inspected with a fine-tooth comb, beyond the physical aspects covered by a licensed home inspector. We’re talking about HOA fees, property management documents and agreements, third-party costs for cleaning and booking (for investment and rental properties), and beyond. The list might seem limitless, and it can be, and will definitely vary by property, and this is one of the top reasons you want to work with an experienced REALTOR® on your side. Another consideration is to ask this bottom-line question: “How will this property continue to help me invest in myself?”
Now, we’re finally ready to schedule some showings!
But that’s another topic for another day. 😉
Required Disclosure: We are not attorneys, accountants, or financial advisors. Nothing on this site constitutes professional and/or financial advice, nor does any information constitute a comprehensive or complete assessment of your own unique situation. The views we provide are based on our experience and education but you’re encouraged to develop your own well-researched game plans.