How can you read the market and make a brilliant buy? The first step is to stop looking online. Physically walk through as many homes on the market as possible. Know all the inventory and the condition. Next, track them all and analyze them (with the help of a real estate agent) and see how long they took to sell (Days on Market—or DOM—are on every listing) and what the final sale price was relative to the asking price. A pattern will emerge and be clear to you regarding value in the area. There will always be an unusually high or meager sales price here and there that even the realtors can’t explain. Forget them. Focus on the pattern. When you know the market, you will not only avoid overpaying, but you won’t waste time on unsuccessful negotiations with unrealistic sellers. Knowing when to walk away from a dead-end negotiation is powerful. To do that is learn how to analyze, see the inventory and neighborhood values inside and out. What is your favorite money-making real estate tip? This tip is a big money-maker. With the right property, it can make you hundreds of thousands of dollars in profit over time. Purchasing a two- or three-family home and living in one unit for a year or two, or even more. By “owner-occupying” for some time, you’re allowed to put less of a deposit down than if you just bought it as a straight investment property; plus, the other renter is paying most of your monthly mortgage payment. It keeps your living expenses extremely low and allows you to save enough money for a down payment on a single-family home for yourself—and keep the multi-family home as an asset that produces great annual passive income for years to come.
Katie Severance
What are a few key first-time homebuyer mistakes to avoid? The biggest mistake to avoid is picking the wrong city, town, or community. Owning a home in a town that you later learn does not suit you can be debilitating. Selling and moving is an expensive mistake to correct. It is also physically and emotionally disruptive to your life. The need to thoroughly research a town, its people, and its culture cannot be understated. Making an offer before you know the market well should be avoided. This is how buyers end up overpaying and not getting the big profit down the road associated with smart homeownership. In the worst case, it can lead to owing more on the home than it is worth. That is a quick sale. And that can also lead to personal bankruptcy. Not understanding how to negotiate well. There is an art to negotiating, and while it is simple, it is difficult—because it requires doing a bit of homework and having the fortitude to walk away. A new kitchen is seductive. I know! But you can re-create a great kitchen anywhere. Don’t be captivated by someone else’s upgrade—because you are probably paying a premium for it. Buy a home in the right location and get the best price, and then use the savings to renovate the kitchen your way. Not performing a thorough inspection. This is obviously how a buyer ends up with a money pit—or a home subject to climate change or other environmental hazards. Picking the wrong loan product. The type of loan you choose has a significant impact on the monthly payment for the next 15-30 years. It’s something you want to get right from the outset. Otherwise, you’ll find yourself re-financing the loan at some later date to get the best deal—one that you may have missed the first time around. • 54 | OUR CITY, YOUR LIFE | MARCH/APRIL 2021
