Real Estate 101: How To Be A Better Buyer

It’s tough for buyers to be fully aware of what they’re entering into when investing in real estate. Whether it be a shortage of marketing materials, a lack of knowledge on all the factors of a building, or an underwriter leaving out a lease clause, buyers should be prepared to face a number of challenges.

Buyers may think that it is only the broker who needs to have a plan to sell; think again. It is necessary as a buyer to formulate a strategy considering that different properties may require different plans.

As a buyer, it’s not surprising if the following questions are entering your mind (and staying there):

-Where is the market headed?

-Am I buying at the right time?

-What is my investment goal?

-Do I have (or need to have) a plan B?

Tips to Follow as a Real Estate Buyer

1) Know your strategy.

Be firm on your position and know your parameters. Some brokers may try to push a buyer into a deal. While not all pushing is bad, a buyer must be ready for this. If a deal ends up moving outside of these set parameters, make sure you understand the implications of going outside of these parameter before moving ahead. Know what is absolutely important to you, and stick to your guns.

2) Do your homework.

Make sure to dig in quickly. Ask lots of questions. It is a good idea to include a list of initial underwriting questions. Do your due diligence and enter the market as prepared as possible. We have a number of checklists available if you’d like one. Please contact us for more information.

3) Disagree without being disagreeable.

For a brokered deal, always remember that the broker’s job is to market and promote a property. I’ve found it beneficial to have the initial conversation be open and appreciative. I strive to be pleasant and appreciative, regardless of the other side’s demeanor or response. This helps you to keep a positive outlook and makes conversations with brokers go much more smoothly.

The same applies to conversations with the owner. Go in with a win-win mindset, rather than adversarial. There are cases where some people respond better to a challenge, but most human nature is such that confrontation begets defensiveness and hiding; don’t give someone a reason not to talk to you. Referencing the tried and true maxim: “it is easier to catch a fly with honey than with vinegar,” kindness and genuine respect can take you very far. You might even make a few new friends and learn something unexpected in the process as well!

Be thoughtful with questions and comments; this will promote respect from both parties. Tone and attitude are very important to creating a positive transactional environment, and this comes from developing an understanding of both the market and the broker.

As a buyer, you are the main driver of the real estate market — remember this! You hold power in your hands. Take advantage of this, but remember the suggestions outlined above. Investing in real estate is a two-way street, requiring cooperation and communication from both sides. We published an article earlier this year outlining effective forms of communication during the acquisition cycle that illuminates this point more clearly. As a buyer, always remember to ask thoughtful questions, keep a positive tone and outlook, and have a strategy that you stick with. Remembering these tips will make you a formidable buyer.

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