What Can Homebuyers Learn from Investors?

I read a post today on the things today’s buyers are looking for in purchasing a home. The list included upgrades, an open kitchen, green features, phenomenal price, incentives offered, etc. All the things on the list were things I too would love in a new home. But the problem is that some buyers are looking for the whole shebang, and they actually end up losing out on some fantastic homes.

Investors understand how to find a property and get a great deal, because they are looking at the purchase as a business decision, with no emotion. They focus on price, location, and rentability. Those looking for a home to live in don’t quite have the ability to approach the purchase with the same perspective – and rightfully so – but can learn some valuable lessons from the investor. Here are some ideas on how to find your perfect home, even though it may have a few flaws.

1.  Make a wish list. It is important to prioritize your needs. For example, location is always key. Do you want to be in a certain community, close to schools, work, shopping, transportation? These should go on the top of your list. Price of course is equally important, so set a budget. You can put other things on your list, like type of counters, flooring, yard, etc. Prioritizing them will make your decision, when the time comes, less difficult.

2.  Focus on the first few things on your list, first. If you walk into a home and try to find everything on your list chances are you will be out of luck. But if you find the first five things and you have a good feeling about the home, you can work around the missing items (see #4).

3.  View many properties, narrow it down. See everything there is to see that meets the majority of your criteria, then make another list of the things you like and don’t love about each property that has potential. It helps to do this on one page, with columns, so you can compare. Visualization makes a difference in narrowing down and focusing on those that are truly homes in which you can see yourself living.

4. Negotiate! Remember that it is a buyer’s market! If a home has carpet that is not to your taste try writing an offer while taking into consideration the price of new flooring (if you want $20,000 wood floors and the home has linoleum this might be stretching, so speak with your agent). You can also ask for credit through escrow. Of course, this may not work if you are purchasing a short sale or lender-owned property, and they are usually priced lower than comparable sold properties in the area. But either way you can always try to negotiate, and then decide if it’s worth it. I had a buyer who didn’t like the colors in a home, but liked the home. I pointed out that paint is one of the easiest and least expensive ways to completely change a home, and got a verbal estimate from my painter on doing so…some people don’t think that way so consider possibilities.

The key to finding a house that can truly be a home is to keep an open mind. By working closely with an agent who is an area expert, you can use the comparables and negotiating power to your advantage. Also keep in mind that when the investor buyers are out in force, like they are now, it is usually the best time to buy – before rates rise. Happy house hunting!