Knowingly or unknowingly, people make mistakes now and then while trading in real estate. The choices made by the people can direct them to one of the paths – success or failure. We all are human beings, therefore, mistakes are unavoidable, but your reaction to those faults can make all the distinctions between a successful trade and a premature exit from the real estate arena.
Here are some of the mistakes to be avoided while dealing in real estate:
- Real Estate is Not Stock Market: Some people tend to treat real estate as stock market because it is really hot, appreciates swiftly, and appears glamorous. But dealing in real estate is not any close to dealing with stock market. Investment in real estate must be a long-term discourse.
- Analyze your Investment Profile: Deep understanding of one’s self investment profile is a prerequisite with real estate. Some people are quickies while others are long racehorses, some people are way too adventurous and flip for instant profits while others prefer a long-term steady cash inflow, whatever is your investment pattern, thoroughly analyze it and then make a move.
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- Not Only Trust, But Verify: You should not simply rely on the presentation shown by the sales guy while taking an investment decision. You should verify the facts and figures and properly validate the presentation otherwise you may be fooled. Real estate is an industry where you may encounter a con anytime, so be vigilant.
- Do Not Buy just looking at its Décor: The main thing you need to keep in your mind while looking at a sample flat or someone’s residence that you are not going to buy the items placed inside the house, make sure to watch ahead of the decorations. Focus on the floor plan and its measurements.
- Don’t Be in a Rush: There is an old saying, “bulls and bears make money, but pigs get crushed.” The real estate marketplace is a seasonal market. If you have decided initially to hold a property for long term, you should not be in a hurry to sell over market hunches.
- Purchasing Property without really seeing it: In today’s hi-tech informational world, it is very easy to get deceived in the name of technology by showing forged pictures and virtual tours of the property under consideration. Also, it is really tough to truly get a sense and feel of a residence by merely looking at it on the internet. You should essentially visit the property yourself.
- Choosing a Wrong Agent: Always remember that the real estate agent will be functioning with you during your complete course of property trade, plus how knowledgeable and informative he or she is also matters. Therefore, real estate agent needs to be carefully picked for your own good.
- Not hiring any Agent: There’s a lot more to marketing a house than merely putting a ‘For Sale’ sign on the front gate. Real estate agents help you in getting multiple-listing service, no agent means no MLS which means other agents will not have information about your property that it is for sale.
- Not hiring a professional Home Inspector: Not spending money and time to hire a home inspector could be one of your biggest mistakes. Even for real estate deals involving less money that might be all hard cash, you can negotiate a better price or avoid a money pit altogether with the guidance of a home inspector.
- Neglecting the Mortgage Pre–Approval: When you are entitled for pre-approved loan, now you just have to find your dream home knowing the exact financial details. Some homeowners allow only those real estate agents to display their home if they have a pre-approved mortgage letter. That signifies that the buyer is really sincere about buying the property.
- Keeping your Cash May Not give you Desired Returns: We all grew up learning that you shell out cash for all the things, including your home. Living a debt-free life is a grand way to live. However, investment in real estate is a different game altogether. Spend a portion of your hard cash to buy 5 homes in place of one. And voila! Your tenants will pay the costs of your mortgage in the coming 20 years, and now you have 5 properties providing steady cash flow in place of one. Let the tenants pay off your loans and you get the profit.
- Over Thinking: Over thinking is by far the main mistake one can make while trading in real estate and letting the 6 inch think-pad between my ears come in the way. Moreover, being exceedingly hopeful on timelines and expenses linked with the acquisition (one must always be prepared for the worst case scenario) and not assessing enough on my investment choices.