By Tina ChadhaPublished: October 16, 2013
Interest rates are creeping up, and you’re tired of throwing away your paycheck on rent. More and more, home ownership feels right for you — even in this market. But before you start scanning listings, Gary Malin president of Citi Habitats, offers this advice.
“First and foremost, you need to [research and] understand the market conditions, which makes the process less scary for people,” he says. “Once they understand that there’s tight inventory, they understand that prices are a certain way.”
Set a price
“You should always set a price for which you’re willing to spend,” Malin says. “Obviously everyone wants to get a deal. But in this market, which is a hot, competitive market, with lots of potential buyers for very limited inventory, you may need to pay asking price or potentially above ask to secure the apartment of your dreams. So set a price point you’re willing to go to. Try to obviously get it to be less, but if you have to get to that price point, don’t get upset that you didn’t get what you perceived to be a deal.”
Have the papers ready
“Have all your finances ready to go — you’ve gone to your mortgage broker, you’ve been prequalified, you know what you can afford, you have your down payment ready. You’ve done everything to put yourself in the best possible position to close quickly, because you’ve done the due diligence before actually going out and looking for a home. A lot of first-time homebuyers say, “Oh, I’m going to put my toe in the water.” What happens when you find the home of your dreams but you ended up losing it because you dragged your feet on all the other things that somebody else was more prepared to act on? I think if you’re going to make the decision to get into the market, you should go full-force. That doesn’t mean you have to buy anything, but you want to put yourself in the best possible position to succeed if you do find something that you want.”
Don’t stress out
“The first thing I tell a first-time homebuyer is to have fun with the process. If you take the process so seriously, issues that really aren’t issues — like a homeowner who isn’t negotiating with you — seem insurmountable. There are always ebbs and flows in the deal that ultimately work themselves out. But that’s why you have people there, like an attorney and broker, to guide you. So enjoy the process. Be proud of what you’re about to do, and rely upon the professionals there to keep an even keel, because if you get too emotional, it can make the process more frustrating.”
Know when to walk to away
“Know when this deal is not working for you. Know what your drop-dead point is. Determine that before you start the negotiation process. If [the deal] gets beyond that point and if someone is trying to tell you why you should go outside of your comfort zone, walk away and find something else.”
How to find a broker
“Speak to all the people you know that have bought,” Malin says. “Personal references are the best way for most things to happen. Find out if they had a good experience with the individual. Do some research on that individual. If the person is in the market and they work for a reputable firm, the most important thing is to see if that person is someone you can relate to and they can relate to you.
You can really create the environment that you want. For instance, I’m a responsive human being. I get back to everyone that works with me very quickly. If I was going to be engaging a real estate broker the one thing that would be very important to me would be for them to understand the way I work. … It makes a better working relationship.”