As star of HGTV’s “Flip or Flop,” Tarek El Moussa knows a thing or two about buying homes. Beyond purchasing places to flip, the professional house hunter received his real estate license at 21 (he's 36 now). After the housing bubble burst, he switched gears from selling mega-mansions to flipping properties. He recently gave Realtor.com his best home-buying advice. Here are some of his top tips.
Get pre-approved before shopping
El Moussa says getting pre-approved for your loan rather than just getting a pre-qualification letter is important. It will give you a better idea of what you can actually afford, as opposed to what you think you can afford, so you’re less likely to have your hopes dashed or time wasted.
“[B]e serious about the financing...,” El Moussa writes. “There's a big difference between what banks say they are willing to lend you and what they actually end up lending.”
Have a poker face
Gushing about a home in front of the listing agent (at an open house, for example) just gives the seller more leverage when it comes time to negotiate. "Real estate agents are amazingly good at reading emotions and using every bit of that knowledge to negotiate to the last penny," he tells Realtor.com.
Instead be vocal about the issues you see.
"I once had a client walk into my listing and, from beginning to end, complain about how awful the house was—in front of the owner, no less," writes El Moussa. Later, "they put in a low offer, and it was accepted, all because this buyer had made the seller painfully aware of all the problems with his property. Talk about the power of suggestion!"
Stay on budget
When El Moussa was 21-years-old, he splurged on his first home and it put him in a crunch. “With no money for furniture, I ended up living in an empty house for nearly nine months,” El Moussa writes on Realtor.com.
Now, El Moussa cautions first-time buyers against overspending, including taking into account Homeowners Association dues or fees, taxes or special insurance expenses, which many forget about but can easily add up.
Indeed, Adam Contos, co-CEO of real estate company RE/MAX, previously told CNBC Make It, “The key is understanding the monthly costs of owning, and making sure, before you move forward, that your income covers it all with enough left over to fund the life you want," Contos says.
And according to El Moussa: “Financial peace of mind is worth its weight in gold."
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