As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing or renting a home or office space. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new space in Illinois.
Get pre-approved. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at Geneva real estate you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Qualifying for a commercial lease can be significantly more complex, but your local realty specialist can help put you in touch with the proper lender and generally walk you through the pre-qualification and budgeting guidelines.
Choose your mortgage carefully. The emphasis, when it came to mortgages, used to be on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.
Commercial real estate loans are a little different, especially when thinking about your business entity’s financial track record. Pay special attention to the loan term and amortization period– you’ll want to make sure your company’s financials are prepared for your loan’s balloon payment.
Do your homework before bidding. Before you make an offer on a Geneva home or office space, do some research on the sales trends of similar real estate in the neighborhood. Consider especially sales of similar properties in the last three months. For instance, if homes or buildings have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.
Not sure where to start? Ask your local Geneva realty expert for guidance and keep these top Illinois real estate tips in mind.