How Looks, Contracts, and Inspections Affect Real Estate Investments

September 25th, 2008 · Comment Here · Real Estate Investing

As you may recall from the previous post Real Estate Investing Startpoints: Negotiation, Legality, and Referrals there are “a lot of important information you’re going to need to know” as a real estate investor. I want to share with you three items that I feel are imperative for you to have in order to have any sort of success in this business. You need to project a successful appearance, you need to know what’s going on with the contract and you need to fully look over the property you’re thinking about investing in.

You might read this article and think to yourself, “What does your appearance, contract situations, and inspecting the home before submitting the offer have to do with one another?” There’s an answer to this and it’s crucial for your real estate investing career: attentiveness and detail. Attentiveness to your appearance, knowing the details of the contract situation, and attentiveness to all the little details that you may find in your walkthrough of the home before submitting the contract.

Real estate investing is not a business for slackers! You can’t afford to let the little details - and when I say afford, I mean afford, as in money. You will lose massive amounts of money if you don’t focus on the details. Always think to yourself, “Would I do business with myself” Do you really present an aura of professionalism? Do you delve deep into what’s going on behind the scenes of the property you’re interested in investing in? Do you really pay attention to the problem areas of the property you’re thinking about submitting a real estate offer for?

What I want you to do is take your time and read these three items I’ve written down here. Maybe print it out and take notes as you read. As you read each of the three sections, ask yourself if you’re currently doing that. Are you looking the part? Are you investigating what’s going on with the contract? Are you paying attention when you perform the pre-offer inspection? Are you even doing pre-offer inspections? If you aren’t doing any of these, now is a perfect opportunity to shape up and improve your real estate investing tactics.

Master the Details

Look the part. People are always sizing your financial capabilities up - whether you know it or not. Whenever you’re talking to a real estate agent about buying a property, or talking to owner themselves, always project strength and the looks of someone that can do follow through with the deal. Any deal is easy if you’re going to buy the property, live in it, and then sell it. Real estate agents will take it easy on you knowing that you’ll be an owner-occupant. But as soon as you mention you’re looking at the property as an investment, you need to know and act like you know what you’re doing. Dress like someone that has the capital to follow through. Project powerful body language. Be friendly, yet professional. Act as if, even if you don’t.

Make sure you know the contract situation. If you really want a property, and the real estate agent is being wishy-washy about the property being “sort of under contract”, bluntly ask if any contracts have been signed. If the sale contract has been signed, then forget about it, unless something major happens then it’s over. But if no contract has been signed yet, you might still want to present a contract. Figure out the numbers on this potential real estate investment and if it’s really a fantastic deal, you might want to present a contract that’s higher than the asking price and/or with better terms so that the owner may choose your offer over others currently on the table. For example, if you value this house at $300,000, and they’re asking 100,000 you may want to present an offer for full asking price plus $2,000, pay it all cash, quick closing, up to month for them to move with more time if they need it. Of course, this only makes sense if there’s a huge profit potential.

Always look at the property in detail before submitting an offer. Never submit an offer without looking over the house or commercial property throughly, inside and out. No matter how good it looks on paper, you need to know if there’s anything wrong - sometimes a simple lookover can reveal major problems. Also, sellers may find it odd that you’re submitting an offer without looking at the home. By looking at the home, you’re building rapport with the real estate agent and the seller, which makes it easier for your offer to stand out amongst others. Also, by not looking at the home the seller may suspect you may have other motives with the offer and may be trying to do something suspicious. For your sake on various levels, always look at the residential or commercial property you plan on investing in before placing an offer on it.