9 Ways to Turn a Solid Walkthrough to a Solid Negotiation
Posted by resident
If you’re new to real estate investing, trying to determine how/when you should buy a place you plan to resell, rent, or rehab, these tips will guide you through the rough spots of deal-making:
1. Do your homework
If you know the specific location where you want to buy, compare listing prices of similar homes in the area. In this buyers’ market, you can afford to make a lower offer than the listing price. Yet keep in mind that insultingly low offers will only make for bitter sellers, so plan to make as fair a judgment as you can, keeping in mind that, right now, the ball is in your court.
2. Know what cards you hold
Talk to mortgage institutions before you start negotiating. Knowing exactly what you can afford will guide you to properties within your budget, meaning you won’t waste your or the seller’s time. Also, being prequalified immediately makes you a more serious buyer and thus more attractive to sellers.
3. Ask questions
Bring a standard list of questions to ask for every home walkthrough, but do your research and ask very specific questions on the nuances of each home. What are the maintenance costs like? What appliances need to be updated? This can all affect your offer, if you decide to make one.
4. Engage the seller
“Oh, I love these window treatments and that refrigerator. Can these stay with the home?”
You may have already known that the treatments and appliances stay with the home, but if you are visiting with a home seller, asking “dumb” questions will engage the seller to talk in greater detail about the extras and amenities offered with the home. The more you know, the more negotiating power you will have.
5. Use “positive manipulation”
Manipulation isn’t always bad–you know that the seller wants to sell the home. Understand the selling motives, and let them work in your favor. If you know the sellers are moving because of a job, they will want to sell as soon as they can. When time is of the essence, offer them expedience and you might be able to make an offer in your favor.
6. Call their bluff
Take a closer look at the home. Notice wear and tear, scuffing, and the overall condition of the home. If the seller claims “new” carpeting and you can see that it clearly isn’t, they could also be bending the truth about much larger issues. Don’t buy Funny Farm when there are countless new and impeccably maintained homes on the market.
7. Always be willing to walk
While you may not literally be “walking away” from the home, many sellers are certainly eager to grab your attention if you express a mild interest in the property. If they know that you are interested, but more than willing to look elsewhere, they will use what they can to grab your attention. Lowered prices, add-ons, and included amenities can sweeten any deal.
8. Act fast
While it’s comforting to know that you’re buying in a buyers’ market, your ideal property is still liable to be taken by someone else. If you find the home that you really want, don’t hesitate to make the offer. While the odds may favor you, don’t forget that there still are other buyers to compete with.
9. Know that your best ally is yourself
After you’ve gained all the knowledge you can about the home, the seller, and your own finances, trust yourself to make the best decision. Knowing that you have a multitude of choices means that you deserve to find your dream home! Playing “dirty” really means that you should be a savvy buyer, with lots of knowledge (and the favorable market) on your side.
Buying a Property in the Philippines from an Individual
Posted by resident
Before closing that sweet deal with an unknown property seller in the Philippines, save yourself from wasted time and money by running a checklist:
Make sure that the “Transfer Certificate of Title” is authentic.
The easiest way to check if the title to the property you are buying is authentic is by getting “Certified True Copy” of the title from the Register of Deeds. This office is usually located at the city or municipal hall where the property is located. Ask the seller of the property for a photocopy of the title -you will need the title number and the name of the owner to get a certified true copy of the title from the Register of Deeds.
Verify that title is clean and not mortgaged
You can check at the back of the title with the heading “Encumbrances”. This page must be empty if you are told that the title is “clean”. But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the “Encumbrances” page, this is of course all right.
Make sure that the land described on the title is really the land that you are buying
You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don’t have any street name and number to pin point a property, it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.
Make sure that the sellers are the real owners.
If you are buying from an individual property owner, ask for identification papers like passport or driver’s license, it is also a good idea to talk to the neighbors to confirm the identity of the sellers (you might as well ask some history of the property).
Confirm that the yearly real estate taxes are paid.
Ask for a copy of the Tax Declaration and Tax Receipts to confirm that real estate tax payments are up to date.
If the above check list is in order, you may proceed with the purchase.
Real Estate Investing
Posted by resident
Real estate investing involves the purchase of real estate for profit. Profits are made by renting out properties or improving it then resell it for a capital gain.
Advantages
The biggest factor in marketability of an investment is supply and demand.
The first big advantage is that it is an extremely expensive product. This means that in each sale you make, you generate more profit potential.
Second advantage is that it is much easier to finance real estate than any other product as you have the ability to borrow based on the value of the property, where only a fraction of the purchase price is needed as downpayment.
Knowing your neighborhood better than a real estate investing expert is an advantage especially if the REI experts were in another part of the world. A beginner can exploit this advantage in his local market.
Another way for a beginner to get started in real estate investing with minimal risk is to hunt for good deals for another more experienced investor. This way, a beginner learns to find and recognize value.
Disadvantages
Real estate needs maintenance and taxes to be paid. During a real estate boom, speculators can be prone to make purchases without pre calculating the costs involved in the purchase and for the ongoing costs of a property like maintenance and taxes. The real estate can then sometimes work against them instead of for them, realizing a loss at resale.
Have you ever thought of investing in real estate lately? Would you like to share your thoughts by leaving a comment below?