1. Get your financial ‘passport’ in order
Kathy Braddock, a managing director at William Raveis NYC, urges all first-time buyers to have all their financial ducks in a row before making an offer. "Get your financial passport in order — talking to a bank, talking to a mortgage provider and really figuring out what you can afford," she says. "Be careful, because you have to take into account all of your lifestyle expenses."
Sometimes a bank will pre-qualify you for a mortgage that is more than you can afford, Braddock cautions. "If there's something special you're saving up for, you need to put those numbers into the equation because the bank or the mortgage company is not going to do that. And you never want to end up being 'house poor,' where you don't have enough money left over to do the things that kind of make your life more interesting or that are special for you."
2.. Focus on your life stage
When is the best time to buy? For home buyers who are looking to settle down in a particular region or area, a recent guest explained that it has less to do with season or whether it's a "buyer's market" and more about your current life stage, what you can afford, and your needs.
"I work in strategy for a real estate company and swim every day in the data of what's going on in the real estate market across the country with mortgage rates and inventory and home prices. My advice to homebuyers is to ignore all of that," says Eric Chesin, Head of Strategy for Realogy, which owns big real estate brands such as Century 21, Coldwell Banker, and Sotheby's International Realty, among others.
I recently partnered with the company in its announcement of a new home buying program in collaboration with Amazon called TurnKey. It matches home buyers with top agents who are affiliated with one of Realogy's trusted real estate brands and upon closing on their home, Amazon delivers a complimentary Amazon Move-In Benefit, which includes $1,000 to $5,000 of Amazon Home Services and fully-installed smart home products.
Adds Chesin, "No matter what economist's advice you get, there's no macro answer that will tell you the right answer [of when to buy] locally. And, I just think that, personally, you don't time life choices by trying to time the market, whether it's real estate, stocks or anything else. The best thing you can do as a homebuyer is to get the support and advice of a really great real estate agent that knows your local market and can understand what's right for you."
3. Follow job growth
If you are interested in a home in the next "hot" part of the country, keep your eyes peeled to job market news, says Tami Halton Pardee, CEO and founder of Los Angeles' #1 real estate company. She's sold over $3 billion worth of real estate in her career.
An uptick in employment is a sign of vitality and an increasing population in the area, which tends to fuel the real estate market and long-term price growth. Many cities in Texas, including San Antonio-New Braunfels and Dallas-Fort Worth-Arlington are among the fastest-growing in the country on this list.
"I try to read everything to see what companies are moving in. If there's any big tech companies moving in [to the town or city]. I just do a ton of research. I read, read, read, read, read, and see what companies are going in, because the jobs are going to bring in the people, right? I think it's important to have a leg up on that."
4. Target the sweet spot
Location can be, as we just read, very important to a home's value, but Sidney Torres, a real estate entrepreneur and host of CNBC's The Deed, says buyers are best off targeting areas that are a few miles away from the nicest section of town.
"Sometimes to get a better deal, you want to go a little bit further away from the super nice neighborhood. You've got the hot spot and the fringe, and you always want to be right in the middle — in the sweet spot," he told me. "You have so much more opportunity for your equity to grow within your asset ... within your first home purchase, if you buy in an area that's in between that really hot spot and not too close to the fringe."
5. Make your offer earlier in the week
While trying to time your purchase right can be a tough move, making an offer earlier in the week can sometimes earn you a better deal, says Scott MicGillivray, Host of HGTV's Income Property.
"Go shopping on a Monday, Tuesday, or Wednesday. If you're shopping for real estate on a Saturday and Sunday, you're not getting deals," he says. "A seller is much more difficult to negotiate with on a weekend than they are on a weekday. During the week, they're distracted with work, the kid's routines, and they're probably not getting a lot of other offers on a Monday, Tuesday, or Wednesdays. Chances are, they'll very quickly and efficiently entertain your offer."
6. Have an exit strategy
If you're interested in making a real-estate investment, as opposed to a long-term purchase that you will primarily live in, know that there are risks involved and have a plan in place in case you need to offload the property sooner than later. Josh Altman, star of Million Dollar Listing Los Angeles told me that, "In good markets or bad markets, you always have to look at what your exit strategy is in a worst case scenario."
He adds, "When I buy a property now to develop, I don't go off of the number of what everybody else's saying it will be worth. I go off of the number that I know that I can literally get rid of this property tomorrow for this price if I fire sale it. And I need to be okay with that."
Farnoosh Torabi is a financial expert, hooked on helping Americans live their richest, happiest lives. She is a bestselling author, sought-after speaker, and television personality. Her podcast So Money has been downloaded over 10 million times.
