Step by Step - Buying First Property

[Chris Rusoff]

Ok, here's the deal. I've been spending hours and hours looking at single and multi family homes for the past week or so. I've been searching out of state, because New Jersey properties really just aren't an option for me right now. I've come across a lot of, what seem to me, like good deals. However, everytime I find one, I realize I don't know what to do next. I don't know how to make the move. And then I usually just move on and forget about it.

I have never purchased any piece of real estate in my life, and I just don't know how to do it. And the fact that I am looking out of state doesn't make it easier. I have no out of state connections in any of the markets I've looked at.

So, what do I do?!

I would like to be able to get there and see the property also before I make a deal. But will I be able to book a flight and get out to wherever the property is before someone else snatches it up?? I need to find a realtor, property manager? Get a home inspector? Do I form an LLC first??

Help! How do I buy a house?!

[Seth Williams]

Hi Chris Rusoff - while I don't entirely understand your situation (e.g. - what types of properties you're looking at, whether or not these properties are listed by a real estate agent, whether or not you need financing, what the purpose of your investment is, etc.) - it's really not hard to move forward once you know you want to pull the trigger and purchase.

The first step is to send an offer (contingent upon an inspection period, when you can get in the property and have a good look at what you're buying). Your offer is usually accompanied by a deposit (usually $500 - $1,000) to let the seller know that you're serious, and to make the contract legally binding if/when the seller accepts.

To make an offer, you can work through the real estate agent (assuming it's listed on the MLS), or you can write up your own purchase agreement and send it directly to the property owner.

If you need financing for the property, you'll want to be sure you're pre-approved for a mortgage in the amount that you need (this will ensure that you're not wasting everyone's time), or you can even propose that the seller finance the sale for you (although this is a much less conventional route).

If/when your offer is accepted, you generally have a set period of time to call an inspector (if you want) and/or walk through the property yourself to check it out. If you see any big problems, you can try to renegotiate the price lower. If everything is acceptable as-is, you can schedule a closing date and take possession as quickly as your banker, closing agent and seller are able to move.

There are other things that need to be handled during this process as well (appraisals, title work, etc.) - but these items are usually taken care of by your bank and/or closing agent.

Is this making sense?