I recently bought real estate in New York City. Exciting right? Well now, it is exciting, yes. But I can tell you that while I was going through the process, it was not exciting at all.
There were so many times where I felt defeated, as if the universe were trying to tell me to stop. But I didn’t. And I got my new home. And I could not be happier about it.
There are so many things that I wish I had known before buying real estate. It is not as simple as “I have enough money for that, let me buy it!” There is so much more to it. And there is so much more that I did not know and had to learn along the way.
6 Things I Wish I Knew Before Buying Real Estate
1. Just because you put an offer in does not mean you are automatically accepted.
Depending on the place, there may be multiple offers. Because of this, there is a great chance that you may not be picked by the seller.
It is so important when you go to look at a home you are interested in to speak with the seller and tell him or her why you want to buy the place. Have them get to know you. This way, when it’s time for them to decide who gets it, they know that your intentions are pure and have a face to the name.
2. Your offer is going to be different than the selling price.
This can mean that it can be more or less. A lot of this will depend on if it’s a popular place and there are other offers on it.
If you have not made the highest offer on the place, there is a chance the seller will not go with you. However, sometimes, the seller puts the home on the market at a higher value, knowing that they will not get it. You have to be strategic.
3. You do not have to work with a real estate agent, but you may want to.
I personally worked with a real estate agent. As I was buying, I did not have to pay him anything — he took a cut of the selling price from the seller. Check out this guide on real estate commissions for more information.
My real estate agent guided me through the process of purchasing. He advised me the offer I should submit to the seller (that got picked!). He connected me directly with the person at the bank who would be handling my mortgage — someone that he had worked with a lot in the past (and, who I can attest, was a Godsend). He was there to answer any question I had during the process. To me, he was a reassuring figure that I could lean on during this long and tedious process.
4. You will need a real estate attorney.
I remember my real estate agent asking me for the name of my real estate attorney and I had no answer. I was entirely unprepared! This is something you absolutely need.
They will be the one dealing with the seller’s attorney, going through all of the contracts, and advising you on everything legal. They will also need to be present at your closing, which they coordinate the set-up for. Because of them, you do not even need to interact with the seller directly, as your attorney will just be speaking with their attorney.
5. If you are taking out a mortgage, you cannot make any financial changes during the process.
That’s right, if you are waiting on the bank for a mortgage, during this process, absolutely no changes to your financials can be made. This can hinder the process, resulting in you getting denied for your mortgage.
Even if you get a new job, with a higher salary, you need to triple check that this is okay. Banks do not like to see financial changes while processing your potential mortgage, and it can hurt you. If any changes need to be made, talk to your contact at the bank as soon as possible.
6. It takes a long time.
There is so much paperwork that you cannot even imagine. The contract is one set. If you are taking a mortgage that’s another set. Getting all of your W2s from the past few years. Bank statements. Reference letters. Letters from employers. And so on and so forth. This does not end until you go to closing, where you will spend over an hour just signing your name and initials everywhere.
Purchasing property varies from state to state, even city to city. But the above are some general things that you will need to know prior to purchasing any real estate. It can be a very stressful time, especially when you feel as though you are in limbo because you are waiting to hear if your offer was accepted or if your mortgage was approved. But, in the end, when you are sitting on your couch in your own home that you own, it is worth it.