I have found a house in the area I am looking for where the numbers work out well. I have been speaking with a few banks/credit unions this past week and have received closing cost summaries. I have not yet been pre-approved but I have a pretty good idea of what I can afford after talking to the loan officer about my financials.
I have NOT been working with an agent but I think I should start talking some ASAP to find one that I can connect with. Does that sound right??
What should my next step be? Should I reach out to some of the agents that have been recommended? Will they tell me what the next steps are and hold my hand through the process? Should I reach out directly to the listing agent ( I heard this is probably not a good idea - at least for my first time). Should I reach out to insurance companies for quotes? Should I get preapproved before talking to ANY agents?!
Sorry for the questions but I am so new at this and want to do everything right! Thank you!!!!
For your first deal-I would use a buyer's agent. Somebody on your side to make sure all the i's are dotted and t's crossed. When talking to agents, ask questions about their experience working on investment purchases. Of course all of them will probably tell you they have worked with investors before, so listen for more specifics to help you decide who has the right set of eyes that can really take the right second look at your first deal.
Congratulations, and welcome to the world of REI!
Not sure what you're plan is for this property. As your own home? Flip? Rent? But if this house is actually a good deal, then it might not last long. I would recommend getting your own agent. I know around here its basically free because they split their profit with seller agent for no extra charge for you. Get someone who has a lot of experience specifically in the area you are looking. They will be able to help you through the process better. Also in order to put down a legitimate offer on a property, you will need a pre-approval, or proof of funds. But start with an agent. They may be able to lead you to a lender they have used before. Good luck!
Hi Brittney are you buying this property as an investor or home owner?
I would suggest either way you find your own buyer's agent as they have your best interest at heart and can guide you along the way since this is your first property.
Let me know if you need help along those lines.
@Brittney Lynn , congrats on finding something!
I would go ahead with the pre-approval process, your agent will probably tell you to do that anyway. It makes for a much stronger offer. I would reach out to agents in your area that are recommended on the site, because you want an agent that understands investing. The agent should be interviewing for a job! Ask them whatever questions pertain to your situation and needs. Be upfront and honest with them with your needs, respectful of their time and efforts, and you will have a great relationship. If you do this, a good agent will know if they have the ability to help you or not, and if not, will direct you to someone who can. Again, that's why I would encourage you to go with an agent that has been recommended by someone you know and trust. If I'm the listing agent, then yes! But, for your best representation, get your own.
You could start getting insurance quotes, those usually don't vary a whole lot, as long as they know the vitals on the house that can be gathered from assessors website.
Keep asking questions, that is why you are here :)
I recommend a buyer's agent. It doesn't cost you anything and gets someone else to help you along with the paperwork.
The pre-approval process is a pain in the butt now. So start immediately. Unlike the old days, you have to go through an entire vetting process just to get a pre-approval letter. You can start looking at places, but I haven't dealt with any seller's agents in the last few months that will take an offer without a pre-approval letter.
Reach out to the insurance companies as well. Ask the seller's agent for the current policy details as well as the cost. Then call that company and see if they'll continue the policy with a new owner (you).
Thanks so much @Charmaine M. @Sean Connolly @Jason Crain !
This is my first property, multifamily, I would be living in one of the units so this would be a buy & hold.
One more dumb question...
At what point would I put an offer on the house?
I would want to know what the current rents are at the house, walk through it, find out why the sellers are selling and try to uncover any issues (old roof, furnace, foundation etc) before putting in an offer. If I had an agent, do we request the Schedule E and do an inspection first before making an offer?
EX- Say the house is listed for $500k. Do I put an offer in for (as en example) $450k based on what the listing agent says to my agent or do I get the Schedule E, do the inspection/check for issues and THEN put in an offer.
Sorry for the newbie question :)
The first thing i would suggest is to get pre-approved and then try to get comps for the area on the specs of the property you are interested in, this should should give you a good idea of a starting offer.
When you submit your offer, make sure you have good a contingency in place, in case of any unforeseen problems.
Thanks @Charmaine M. ,
That seems nuts! Putting in an offer solely based on comps in the area. What if houses are going for 500k, and one is listed for 650k - I would think the sellers would laugh in my face!
Brittney, the comps are used to give you general idea of the market in a particular area. It can be used as a negotiating tool with the seller.
Buying as an investor, you certainly do not want to overpay!!
Got it! But I am still unclear on when I would make an offer and when I would be able to see the financials of the property/inspect.
Does the offer have to be made before any of this can happen?
You definitely need your preapproval before you make an offer. You will certainly "view" the inside of the property prior to making an offer. The purchase contract will have an inspection contingency period. Once you have an executed contract, then you can do as thorough inspection as you want. The seller may, or may not, provide a schedule E on a 4 plex...I wouldn't necessarily care if he did or not, as it may not be accurate anyway. And yes, Sold Comp.s are the only thing that matter, as to value. Just because someone else may have a property "listed" at 20-25% above market is irrelevant. The seller either agrees to your price, or he doesn't.
If it is a property that you are worried will not last on the market, then you need to find a buyers agent who can lock it in for you, and make that happen without a proof of funds while you finish that process with the bank.
If this property has been sitting on the market, and you have nothing to worry about, then go ahead and get pre-approved and move from there.
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