Jason Robie: Are you Real Estate

When I built my home in Lincoln I had a decent job, had been there almost seven years, had good credit and had a sprinkle of money in savings. That said, I still did not feel ready to jump into the deep end of the real estate pool. It is one thing to find a home you like and buy it. It was a bit more than I expected to have to “GC” the construction of the home, wriggle the finances for three lots of land (split from a single lot), work with the town, banks, construction companies, attorneys and more. But still, with the help of a few invaluable mentors, a business partner and lots of time, we got it done.

Getting into real estate seems a bit overwhelming at first, but when you find yourself in the thick of things it tends to be a far more manageable process. There are a few things that you should consider before jumping in though. Let’s peruse a few of those today.

It is no secret that money plays a large role in your investment into real estate. There are countless calculators that help you determine what you can afford. It will also be very helpful for you to speak to an experienced real estate professional to get a bit more insight into the process. Someone who has been in the business (or even an experienced friend) can educate you on the additional costs like insurance, inspections, HOA fees, taxes and likely PMI. Armed with those additional facts, you can establish the savings account and ensure that you are ready for them when they creep up.

Another seemingly obvious consideration is knowing the type of home you want. If you are not building your own home, the available inventory will have something to say about your options. But even with that limitation the options are going to be a bit overwhelming. The best advice I received was to create a “wants” and “needs” list before you ever even launch that browser to start your search. The list of “needs” will help focus your search and eliminate those homes that don’t quite make the cut regardless of how adorable they may be. This process also helps focus your search by price range. You may quickly realize that you can’t afford a home with an indoor football stadium, as much as we both agree that item belongs on the “needs” list.

Assuming you will not be paying cash for your new home, you would not be considering this is you didn’t have good credit. Looking back over your financial history it should be free of large, untraceable debts, bankruptcy filings, missed payments, etc. Banks love to see relationships with financial institutions lasting over a year and they love to see a consistent pattern of payments and paid off debts. The good news is if your credit has a few blemishes, you can take a few months to get it tidied up. While you can’t erase the poor decisions you may have made years ago, you can take some time now to clean up what is current and show a pattern of responsible behavior.

Speaking of consistency, it is important that you intend to stick around the neighborhood for the coming couple of years. Not only will the front-loaded expenses of the home purchase still be fresh in your wallet, the ability for the home to appreciate is quite limited in a short time. The general rule of thumb for buying a home is 3–5 years. If you think your job is in limbo or you are itching to answer the call of the Rocky Mountains, perhaps holding off on buying a home is the best option. But if you are sticking around, imagine the money you would spend in rent for those same 5 years being funneled into the account for your very own home.

“Many people are more ready for buying a home than they realize, the main missing ingredient is education” noted Badger Realty agent, Susan Solar. She continued, “Once first time buyers understand the financial requirements balanced with the benefits of home ownership, they are awakened to the potential and reality in front of them”.

Susan is right. If you are considering home ownership, put down the newspaper and call your real estate professional today. It is true. You may not be ready to dip your proverbial toe into the real estate world just yet. But it would be great to know if you were and equally great to get educated on the path to get there.