In the current financial climate, real estate continues to be a strong investment in many areas. Informed buyers will always make the most of the real estate market. These top ten tips for buying real estate will help you go through your next real estate transaction with confidence.

TIP #1: Hire the Right Agent!

Hiring the right real estate agent is invaluable. If you’re unfamiliar with the area, the real estate agent you choose is your link to important information about schools, zoning, city and county regulations, neighborhood trends, building and remodeling restrictions and rent, and property values. Each city has different laws that govern what can and cannot be done with a property. Sanibel is one of the most beautiful cities in the United States due in part to its strict building codes and urban planning. Having experienced many aspects of real estate transactions on a personal level, I understand the situations and concerns of my buyers and sellers. I have owned property on the island for many years and have done several local real estate transactions myself. From buying and selling lots to building new homes with local builders, investing in properties that generate rental income, and utilizing tax-free 1031 exchanges, I don’t just sell real estate on the island; I invest in it because I believe there is no place in the world like Sanibel and Captiva. Whether you’re working with me or someone else, finding the right real estate agent is invaluable.

TIP #2: Use 1031 tax exchanges and save money!

1031 tax exchanges are tax-free exchanges of investment properties. Section 1031 of the Internal Revenue Code is one of the last great tax havens. If you buy a “similar type” investment property within 180 days of the sale of a similar type property and are willing to increase the amount of debt or the value of the property, your capital gains taxes they can be completely different. Having completed a Reverse 1031 tax exchange myself, I believe in using this powerful tax shelter. Please feel free to contact me if you are considering using a current Sanibel, Captiva, or Ft. Myers property in a 1031 Tax Exchange, or if you wish to purchase an investment property that may qualify for a 1031 Tax Exchange in the future. A reverse 1031 tax exchange is the same exchange concept as a 1031 tax exchange, except that you first purchased your replacement “like-kind” investment property, before selling the property to be exchanged. Learn more about 1031 tax exchanges and how to use them to your financial advantage. Please note that a neutral party must have acted as a qualified intermediary. Real estate can also be bought and sold through your self-directed retirement account. Whether you use a traditional IRA, a Roth IRA, a SEP, or company plans like 401(k), Keogh, or profit-sharing plans, research your options.

TIP #3: Prequalify for Financing!

Prequalifying for a loan may not seem like such a big deal until you find your perfect paradise property at the same time as another buyer. When a property is priced to sell, it will usually attract more than one buyer. Once a seller receives an offer, the two most important things he considers are…price and contingencies. For some sellers, a contract that depends on the buyer obtaining financing makes them uncomfortable with the offer. Remove any doubt in a seller’s mind by pre-qualifying for the amount he will be able to spend on the purchase of any property. This is especially important if your dream property suddenly has a price reduction. When this happens, it is possible that other buyers enter the scene, who did not look at that property before it was put up for sale! Often a seller will accept a financially sound contract rather than a higher offer. Get ready to make a deal!

TIP #4: Rent, Rent, Rent!

“Location, location, location,” while overused as a real estate phrase, should still and always be a serious consideration for you as a buyer! If something about a property’s location bothers you, keep in mind that the same location issue will bother any buyer you want to attract when you need to resell the property. It’s important to ask lots of questions, but it’s often hard to know the right questions if you’re not familiar with the community. That is why it is so valuable to choose and hire the right real estate agent to represent your interests when buying a property.

TIP #5: Do a home inspection!

Getting an inspection report done by a licensed professional building inspector of your choice can protect you from many defects that are hidden from view. Why gamble with such a large financial investment? Let a professional building inspector point out areas that need to be repaired or replaced that aren’t obvious. A good inspector will give you a comprehensive report that covers all the systems in the home, from electrical to plumbing, roof conditions, and structural concerns. Once you receive a report, you can begin negotiations again regarding repairs. Often a seller will agree to make necessary repairs up to a specific financial amount. When a seller lists his property “as is,” he is informing you that he is not willing to repair or replace any part of the property. If he’s interested in an “as is” property and isn’t going to grade the structure and build a new one, it’s still in his best interest to get an inspection report. Don’t trust the building inspector to look for termites and other harmful pest problems. Although an inspector will see damage caused by pests, it’s best to have a separate termite inspection done by a licensed company that understands pests and can eliminate them.

TIP #6: Get a survey and title insurance!

The surveys will show the easements, encroachments and boundary lines of a property. When inspecting a home in an established neighborhood, you are assured that property lines have been maintained. As homeowners add fences, sheds, docks, garages, and other structures to their properties over time, boundaries can be crossed by placing part of your structure on your property, or vice versa. Surveying vacant land is also important for the same reasons as a home, plus a survey will help determine the size of the home or the amount of coverage the lot will allow.

Title insurance will protect your investment from another party claiming ownership of your property. Title searches will uncover links placed on a property by sellers, or errors in previous title transfers. The last thing you want to discover when you’re in the home stretch of a transaction is that there are liens on the property, such as tax liens, undisclosed owners, easements or leases. If a claim arises after the purchase of a property, the title insurance company is there to protect your ownership interest in that property.

TIP #7: Be realistic!

“Wants” and “needs” are very different when it comes to real estate features. If every home you see has the upgrades you “want” but is above the price range you “need”… be realistic. Who wouldn’t love a large, professionally decorated, oceanfront home or condo with all the bells and whistles? Looking at properties that exceed your price range is always fun, but it can be extremely frustrating and annoying. Be realistic by looking at listings in the price range you “need”, keeping an eye out for that one special property that has the potential to become the dream home you “want”. Always look beyond furniture, wallpaper, and floor coverings to home architecture; that is when you will find properties with potential.

TIP #8: Use contract contingencies wisely!

The contingencies in a contract for the purchase of a property are designed to protect you, the buyer! It may seem silly to bring it up, but it’s important to remember to work with the seller to come to an agreement on the contract. The seller expects valid contingencies for an offer. Common contingencies include building inspections, termite and pest inspections, financing, and surveys. Many deals fall apart over small details and easy-to-fix problems. Remember that sellers get excited about your property. If you can see major repairs or replacement due to neglect or age, factor this into your offer price. The old adage “Everything is negotiable” still holds true, unless you annoy the salesperson so much that they refuse to work with you. Try to avoid listing cosmetic changes you’d like the seller to make as contingencies. Cosmetic changes are subjective, be objective when drafting a contract.

TIP #9: Understand regional health and safety issues!

An informed real estate agent will help you understand other health and safety issues that need to be considered when purchasing property. Safety and health issues may include EIFS (synthetic stucco), indoor air quality, mold, radon, and lead paint. Many of these require the seller to sign a disclosure statement, while others may not apply due to the age, type of construction, or location of the property being purchased.

TIP #10: Ask for Information!

Do not be shy. When you have hired a real estate agent to work for you, ask for information. Do you want to see all the properties in your price range, with the features you need, or just the houses a real estate agent wants you to see? You deserve all the information you need to make an informed decision. Can you imagine buying the house you thought was right for your family, only to find out that you never received information on a similar property that is perfect for all your needs? I provide many services to ensure that my buyers always have information at their fingertips.