1. Relying on The News for Direction
If you want to know the latest about Levi whatshisname and Bristol Palin. News is the way to go.
Mainstream media are helpful for many things--what's happening in your community, events shaking the world, who's hot who's not or if you want to know if it's going to be sunny tomorrow.
They are not to be relied upon for real estate advice.
I have observed this trend for the last five years. Back In late 2005, I don't remember whatever in the big news centers talking about the falling existing home sales. If they mentioned it, they never got their hands dirty. Nobody wanted to be a 'gloom and doomer' and hurt anybody's feelings.
This prolonged until the first quarter of 2007. Maybe the conjecture why they haven't been sufficient is they rarely do their own in-depth research. Instead they call manufactures experts (cnbc seems to like this setup), commonly a broker or an owner of a firm in the manufactures and asks for their feedback--that's the equivalent of asking your barber if you need a haircut.
What You Can Do: Talk to your local university real estate research guy. You can find his name straight through the small firm development center. If in Reno, call the town for Regional Studies, University of Nevada Reno (775) 784-1771 or Email: nsbdc@unr.nevada.edu.
Or you can Google e.g 'San Francisco supply and Demand', ' San Francisco midpoint home price'. Find a local expert. And make sure he is one.
"You cannot give what you don't have" my mom used to say.
2. Looking at Homes Before Getting Pre-Approved. Test-driving the Mercedes
...when you were in the market for a corolla.
Car dealers custom this. Realtors shouldn't.
Avoid Looking at houses if you haven't been pre-approved. This will help you in two ways: You'll know what you can afford. Maybe you view you can only buy a 0,000 home when in reality you can go up as much as 0,000. Usually, it's the other way around. You will save your wife a lot of time and heartache by Looking at homes close to what you were approved for.
What You Can Do: As a rule of grandma's thumb when buying something-conservative is commonly better. And it's very hard, I know, believe me I've been there. Especially if the numbers say you can 'afford' it.
"We are consumed by desires to buy things we don't need, with money we don't have, to impress citizen we don't like"
- Patrick Morley
3. Listening To Rich Dad--only
Ladies and gentlemen thank you very much for reading. Have a good day. and the preacher is left with empty chairs.
'I had two fathers, a rich one and a poor one...' this is how the New York Times Bestseller for 260 weeks starts.
Like many, I read his book seven years ago. Call me corny but I was a fan of Robert Kiyosaki's preachings.
Scores of citizen devoured Rich Dad Poor Dad and even before turning page 206 was on their way to buying two homes for 'cashflow' to retire by the time they turn 45. Don't laugh, because that is exactly what happened to thousands of would-be investors. Including the author of this article.
The good: opened my eyes to the rat race. The idea of buying earnings generating assets, Not liabilities ('doodads', e.g boats). Tax avoidance vs. Tax evasion. Robert's search for financial literacy in our schools. Good storytelling.
The bad: Focused too much on borrowed money--"other people's money". Made investing in real estate sound too deceptively easy. Does not give a complete photograph in his speculation strategies--makes it sound overly simple. To be fair, his other books tell more about pitfalls and definite strategies (but I wonder how many citizen go on to read the other books after being divinely inspired by the first?).
But I have to say that he was one of the three citizen who warned me about the incoming real estate crash way back in early 2006.
Conclusion: Read it to be encouraged. But know this is just the beginning.
What You Can Do: Get speculation advice from the left (wise, thriving and old people--grandparents, friends etc.) and to the right (Kiyosaki etc., avoid Mr. Trump though).
'Make everything as straightforward as possible, but not simpler'
-Albert Einstein
4. Being Clueless On the market
Understanding your market can put you ahead not by ,000 or ,000 or even 0,000 but as much as 5,000. Or if you choose not to heed, pick 5,000 from your pocket.
My client April (not her real name) was strongly advised (with graphs to show her) to sell her house in August of 2007. She waited till the market got 'better'. We could have sold it at 5,000. Now, it's worth 0,000
We go to the doctor for an X-ray before an operation. Nurse asks us 200 questions. We buy a ,300 Flat screen Tv and we do two hours of research on the internet.
We should do the same when buying a house. Ask questions. Be inquisitive (e.g what part of Reno has the most demand? Which area is retention up best in value?).
You'll be very delighted to know that it's not hard to find the answers to these questions.
Some citizen avoid the real estate statistics game because professionals make it sound like biochemistry. It's not. Like basketball and courtship (roses, rocks and romance), stick to the fundamentals; midpoint price, supply and demand.
Don't rely on your agent's view on the market. We are merely messengers to what the market is saying--the cupido for you and the market's romantic bliss-based on hard facts and easy to understand graphs, of course.
They say that all markets are local. That a struggling real estate market in Reno may not ring true for Dallas.
It's true. But push it a bit more. sufficient agents--like good lawyers, search for loopholes---"hyper local". Meaning, they can find out that Reno's home prices might be falling at 10% a year but homes in South Reno under 0,000 are stabilizing because of brisk demand. Stuff like that.
Also, be nice to your agent when inquiring. Try not to come off as knowing more than them. Their last name is not Einstein, but their job is to find answers to your questions. But you need to ask--this is the biggest speculation you'll ever make in your life.
What You Can Do: Learn the midpoint home price trend for your city and area (go back two years or more if possible). supply and interrogate (at least two years).
"Advertising citizen who ignore research are as hazardous as generals who ignore decodes of enemy signals."
-David Ogilvy, (Inspiration for the hit show 'Mad Men').
5. Not Paying attentiveness to Hoa Fees
Hoa (Homeowner relationship Fees) fees can vary widely in price, from as little as (sometimes ) to as much as 0 or more a month.
These fees raise your monthly housing budget.
For example, condos in Reno have higher fees (0) than houses (). Exclusive communities tend to have higher Hoa's. Somersett is a popular exclusive community in Northwest Reno but many citizen are turned off by the 0 Hoa fees.
Things you may want to know:
Hoa are not negotiable. Expect to pay them on a monthly basis.
Hoa fees will likely convert over time.
Learn the Hoa rules: Know what's allowed and what's not (e.g white picket fence).
Make sure the home you want to buy is not already out of compliancy with Hoa rules Buying into an existing problem can be a headache.
reconsider your temperament. One of the major benefits of homeownership is the potential to customize and alter the property to suit your needs, but Hoa rules can indubitably interfere with this.
Find out what the monthly dues cover. Will you still have to pay extra for garbage pickup? Is cable included? compare dues for the involved or neighborhood you are considering to the midpoint dues in the area. Keep in mind that you will have to pay for recreational facilities either you use them or not.
There's no cap on approximately all Hoa.
Hoa are not regulated.
The good side of Hoa: The services covered under Hoa fees may include: lawn and scenery maintenance (for your property, base grounds or both), snow removal, community amenities, such as swimming pools and tennis courts, safety services, trash dismissal and utility fees, just to name a few.
"Be thankful we're not getting all the government we're paying for"
- Will Rogers
6. Not Computing for property Taxes
This is tricky because you will not know how much it is until the home is already yours. But a good rule of thumb is newer homes cost a lot more.
In Reno, a 2005 built home may cost ,000 - ,500+ / year in taxes. On the other hand, a 1970 built house costs 0-,300.
Things you may want to know:
Property taxes vary from city to city and are affected by both local and state tax laws.
property taxes reflect the changes happening in the city. If the city is experiencing high increase and the increased infrastructure and city assistance needs that go with it, property taxes may be assessed and raised annually. If the city is not experiencing growth, taxes may remain unchanged for years.
Make sure you get what you pay for. If you're paying big money on taxes make sure that it goes back to you by having good schools, infrastructure etc.
Sources: life123.com
What You Can Do: If you're buying a new home (you won't know the taxes until home is yours), find similar homes in the area (price, age and size). Note: this will only give you an estimate. If you're buying an existing home, the agent will be able to give you the last payment the former owners were paying.
"The art of taxation consists in so plucking the goose as to fetch the largest number of feather with the least number of hissing."
-Jean Baptiste Colbert
7. Hiring a 'Yes' Agent
Lastly, hire an agent that will guide you to all that we've been talking about and more.
Like marriage, I think it's vital to have a love-hate relationship with your popular agent. It's more fun and profitable that way. There will be ups and downs, and you shouldn't avoid it. Why? Because a good agent won't all the time tickle your ears-they might need some scrubbing once in a while. And vice-versa.
Effective agents are passionate agents. A good agent are like Jim Stockedale (Vietnam Pow) "confront the brutal facts but never lose hope that in the end you wil prevail."
"It is difficult to get a man to understand something when his salary depends upon his not insight it"
-(hopefully not one of my clients)
Confessions of a Weary Reno Buyer's Agent - 7 Deadly Sins My Clients Have Committed
No comments:
Post a Comment