Owning land and a home is one of the biggest dreams of many people. For them, the security of shelter is a powerful thing to have, since it means having a safe place to live regardless of the weather.
However, even with a large wad of cash on hand, the pandemic poses certain challenges to people wanting to buy a piece of land with a house already built on it. By deftly navigating the intricacies of real estate, you can smoothly call yourself an owner of an awesome piece of property.
Be sure to keep these tips and tricks when scouting for house and land during the pandemic:
Get pre-approved for a home loan/mortgage
Quite a lot of land and homebuyers commit the blunder of shopping for real estate properties even without the benefit of a pre-approved mortgage. This is a non-issue if you have large cash that could pay for the property upfront, but is a definite no when you’re working on a tight budget.
As such, be sure to prepare all the necessary documents and have a chosen lender approve your mortgage application first before you even think of looking for a property to buy. Knowing that you have a pre-approved mortgage will give you the confidence to shop around and negotiate with sellers better since you have an idea of the amount that your lender would give you. Plus, most sellers prefer pre-approved buyers, thereby giving you the edge when you’re against several other prospective homebuyers.
Don’t buy a ‘lesser’ home
Many first-time homebuyers think that they could only get an X amount-priced home, only to find out that they could have purchased a home that is significantly more expensive than the one they settled for first. This mistake of buying a ‘lesser’ home is quite prevalent and is therefore a pitfall that you must avoid.
If you have a $2,000 monthly budget for a property and you have a 3.5 percent fixed-rate mortgage for 25 years, for example, you can buy a home that is valued at $400,000. But with a 3 percent fixed rate on a similar mortgage period, you can buy a property that is more than $100,000 higher in value than the one with a higher mortgage rate. In short, a simple and careful calculation can help you buy a home that is more expensive in value with the mortgage rate as the determining factor.
Never pay too much
In the real estate realm, there’s that ever-present trend of eager homebuyers paying too much money for a piece of property. While this may hardly be a fuss-worthy thing for cash-laden individuals, it can be a huge deal-breaker for home hunters with a small wriggle room budget-wise.
This happens when homebuyers pay for a home they really like at a price point that is significantly above the prevailing market price. This typically occurs because of intense bidding wars among buyers, especially if the property has a lot of great features that the same set of buyers happen to covet.
The bottom line here is to do your research and see just how many properties with similar attributes sell for, so you won’t end up paying too much for a property when you can easily get another one for a much lower price tag.
Avoid buying blind
Buying a property blindly happens when a home buyer offers or pays for a property without even stepping in front of the property’s main door. While this may be understandable given the COVID-19 restrictions and worries, today’s digital technology makes buying a home without seeing it first quite a risky move.
You can avoid buying a property blind by asking the seller or your agent to give you a walk-through of the property via Zoom, FaceTime, and other communication apps. Some sellers post a virtual tour of their respective properties, so there’s no excuse for you to make an offer to any property without knowing first how it looks from the outside in.
Consider hiring a licensed agent
For some, hiring a licensed real estate agent may seem like an unnecessary step but it’s actually one that you’ll benefit from in many ways. With a licensed and experienced real estate agent working on your behalf, you’ll benefit from the agent’s knowledge of the real estate market. The agent will search for properties within your budget and make the necessary arrangements with sellers, always keeping your best interest in mind.
Buying a property in the middle of the COVID-19 pandemic shouldn’t be a painful experience, but a smooth one if you’ll keep in mind these five things.