Why don’t I ever get any hate mail? Seriously, if anyone on the Internet deserves a poorly worded death threat, it’s me. But oddly enough, I’ve not yet received anything blatantly negative. How disappointing.
Usually when people write to me, they ask my advice about real estate investing… as if there is some secret formula I could give them that will make them rich in 5 years! Guaranteed! Unfortunately, there is no such formula. But even if there was, I probably wouldn’t tell every random Joe about it. After all, if everyone started making shit tons of money, there would ultimately be less money for me. And I’m greedy.
On the other hand, I absolutely loathe it when people make obviously stupid financial blunders. I’m not quite sure why, but it kills a little piece of my soul, people! So I guess I can find it in me to share a little bit of what I’ve learned over the years.
[Obligatory warning that will most assuredly be ignored: As with everything else I write, the following advice should be taken with a grain of salt.]
The very first rule of buying real estate is simple: Never Fall in Love. The very second you fall in love with a property, you will overpay for it.
Should you ever find yourself walking through a house and audibly planning where you want to hang pictures of your children, I want you to do me a favor. Stop for just a second and take a look at your real estate agent’s crotch. If he’s male, he’ll likely be sporting a boner. Because, really, nothing spells ‘total fucking patsy’ better than you picking out the perfect spot for your litter box during the open house.
Real estate agents want you to fall in love. Once you’ve fallen in love, they know you’re an easy sell. A buyer who makes googly eyes at the back yard will likely not bother to, say, call up the county auditor and see how much similar properties in the neighborhood have sold for. A buyer in love will not haggle too much on the price (ensuring a bigger commission for both agents) and he may even overlook a waterfall in the basement or an army of termites under the floorboards.
In short, a buyer in love is nothing more than a fool with a lot of money. Please don’t be one of those fools.
Remember, no matter how perfect a house may seem at first, there are hundreds of thousands of other houses out there even more perfect that you haven’t even seen yet. Even if there is something special about the house, it can be replicated almost anywhere else. Trust me, it can. The only difference between a decent house and a great house is the price. Forget about the fireplace, the light fixtures, and the garden. Focus on the price. For the right price, any house can be perfect.
When you walk through a property, try to at least appear neutral. It’s OK to point out things you like about it….just make sure to notice the negatives as well. Don’t ask about shit like the school systems or whether or not there’s a park nearby. For one thing, those are things you are more than capable of finding out on your own. For another thing, your real estate agent is a trained predator. If he even gets a hint that you’re planning your future in that house, he will be all over you like a shark on a bleeding fish.
Don’t believe me? Walk through a property with your agent and pretend to fall in love with it. Gush over its unique charm and tell your agent where you plan to put your Grandma’s hope chest. Then sit back and wait.
In less than 24 hours, your real estate agent will call you and frantically inform you that someone else is getting ready to put an offer in on the house! Or maybe they already have! You better make an offer really quick (Preferably, a high one!) or else you’ll lose your dream house forever! And then, oh my fucking God, where will you put your china cabinet?!
Nine times out of ten, no one else is interested in the fucking house. Your real estate agent was simply trying to create a sense of urgency, hoping against hope that you’ll throw logic out the window and act purely on emotion. Don’t fall for this bullshit.
What I do in situations like this is calmly state, “I’m sorry, but I refuse to compete with another buyer for a property. So, if someone else is interested, let them buy it. I’ll find something else. However, if the buyer falls through, give me a call. I may still be interested.”
Without fail, I’ll get a call a week or so later telling me the other buyer fell through. Am I still interested in the property?
Another sneaky thing real estate agents do is convince sellers to take their property off of the market periodically. Then, they re-list it. They do this because they’d rather tell a potential buyer that the property has only been on the market 4 days and will probably go fast! The reality of the matter is the property has probably been for sale for months and the sellers are getting desperate.
The best way to avoid getting suckered with the ol’ re-list trick is to know the area you’re planning to buy in. That way, when the agent tells you the property is HOT!HOT!HOT!, you can say, “That’s funny. Because I drive past this house every day on the way to work and I’ve noticed it’s been vacant for months.”
Shuts em up every time.
I guess you can tell by the tone of this article that I don’t like real estate agents very much. Some moguls swear by a good real estate agent, claiming that they are invaluable in helping them sniff out really great deals. In my case, I’ve never had a real estate agent try to turn me on to something that I’ve hadn’t already seen for myself.
Personally, I usually refrain from hiring a ‘Buyer’s Agent.’ Instead, I typically make my offers directly to the Seller’s Agent. The main reason for this is because I’ve noticed an agent is more motivated to make a deal happen for me when they know they don’t have to split a commission with a Buyer’s Agent. It is more profitable for them personally to convince a seller to let the property go for a lower price and collect a full commission.
In the end, it doesn’t matter if you’re buying investment properties or your dream home. You simply must research your individual market in order to gain the experience necessary to determine a great deal when you see one.
Also, please keep in mind that my advice merely reflects what has worked for me in my market. So please spare me the inevitable (but annoyingly hysterical) comments where you insist that if you attempted my technique the market would collapse, the sun would implode, and Dick Cheney’s cock would turn black and fall off.
That shit is getting so old.
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- Real Estate Pet Peeves
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- When It Comes to Money, Don’t Play Nice