As I mentioned in the last post, I absolutely hate doing research. So there are definitely things that I did WRONG when purchasing my first home.
What to do when preparing to purchase a home:
- Understand where you are financially. This should not be deterrent but you need to understand your credit score, how much money you owe creditors, how much money you have saved. This also inputs to understand the type of home you can afford.
- Research three types of homes. Single Family, Condo/Co-op, Multi-family. There are different laws for each based on the state and county you live in. So be sure to get an overview of the requirements for each.
- Keep all the money you will need for the investment in one account. Trust me, you will get tired of sending your mortgage lender copied of your monthly statements, so to avoid this, I kept all the cash needed for the property in one account.
- Get a pre-qualification letter or a pre-approval letter. The pre-qualification letter will give you a good idea of how much you can afford but once you are ready to move forward, a pre-approval letter is needed. This verifies you have the financial backing to purchase the home. Both can be obtained from a mortgage manager.
- Look at your network. Begin asking those around you if they know of a contractor, plumber, electrician, etc. Why? You will need those people and referrals are better than cold calling though that may be the only options. Trust me, I had to get a chimney repaired once so anything is possible when it comes to homeownership.
- Interview Realtors. Don’t pick the first realtor you come across unless they are highly recommended by someone you trust. Some realtors are more skilled in one type of property versus others. Finding the right realtor will also teach you new ways of doing things as well as have the right connections for things that may come up.
When purchasing a home always:
- Have an appraisal done. This should be required by your lender but just in case you’re paying cash, start off by knowing how much your home is valued. Never trust the opinion of the seller.
- Have an inspection done. No home is perfect and not all issues that come up in inspections are as grandiose as they sound. Speak to your realtor and contractor to understand the true cost of repairs.
- Ask for Seller Concession. Now as an owner, this gets annoying but every buyer should ask for a concession if it’s warranted. There are some sellers that may not want to do the work but have no problem taking the value from the sale of the property.
Owning a home isn’t easy and you will run into issues along the way. Just remember that after the storm, it doesn’t feel so bad. What I’ve learned over the last 6 years was priceless and God used some situations to help me pray better, give grace, and develop as a business owner.
The value of my home almost doubled in two years. I was also able to buy and sell a single family home in less than 1 year with minor updates and may a 5-figure profit.