Recently, social media was agog with the story of experience versus expectations of subscribers to landed property offered by a real estate company. It is a story of expectation versus experience because, in any real estate transaction, it takes two to tango.
Recall that in the previous part of this guide series, I wrote about previous real estate investment experiences. As human beings, our experiences, exposure and expectation are a vital part of us. Real estate experiences play a major role in the course of a real estate investor’s future investment journey. Your exposure can also fuel your expectations.
Since previous experiences will always find a way to feature in subsequent purchases, it is only okay to own the experiences and draw unbiased lessons. Especially if you are an ambitious or serial real estate investor. A one-time purchaser who is lucky to have it good at the first shot and stops at a one-time real estate purchase may not have to bother. The experience and outcome of subsequent investment in real estate should be better than the previous one.
Given that several offers will always be on the table, one way to create for yourself a great real estate experience and a profitable outcome is to ask this important question;
1. What can stop you from buying land or a house that you have checked out? In other words, what can disqualify a land or house from you buying it.
Viewing or inspecting a property that you wish to consider for investment or purchase has become an important rule in recent times. Interestingly, some people start to pay for a property from the point of the first viewing. While brokers or agents may like that, this is not the best way for you as an investor. If you are not a serial developer who understands how the real estate game plays out, don’t be in a rush to drop a cheque.
Your answer to this question is like creating a checklist that helps you apply brakes when buying impulse sets in. The answer checklist will also help you overcome an obstacle to getting a great property deal. With this answer checklist, you would have also defined your expectation. Below are some of the conditions that can disqualify a property that you may have viewed. This list is not exhaustive. You should add yours.
- When the price is okay but you don’t have enough cash
- When your instinct sets in.
- When someone you respect is not in support of the purchase of the property
- When due diligence is not yet done or after a report says it is not okay to buy.
- When the entity offering the deal is not popular or vice versa.
For instance, if a property appeals to you and you are under pressure to part with cash, the fact that you have not yet carried out detailed due diligence should stop you from making a deposit. Especially when there are no conditions for a refund based on agreed terms. Although, research shows that insufficient cash to buy a property tops the list of the conditions that prevent people from buying a property that they must have viewed and find appealing.
A real estate purchaser in this age and time, who wishes to enjoy the full value of an identified property for as long as they desire to, must take real estate due diligence literacy important. You should not be caught buying any property until detailed due diligence have been carried out. Being literate about due diligence does not make you a lawyer and does not replace a real estate professional. It only makes you a well-informed and prudent investor who places high value on him or herself. Send us an email at email@example.com if you wish to stop being a victim of real estate due diligence illiteracy.
Having created a checklist of what can stop you from buying a property that you have viewed, a next question to address is;
2. If you were to research or conduct due diligence on a plot of land or house that you intend to buy so that you will be sure that you are buying right, what are the major things you would look out for?
This question bothers only on due diligence. Due diligence is like solving riddles around a particular piece of property that you have identified to buy or invest in. The success of every real estate investment or purchase depends on the quality of due diligence carried out. The report of quality due diligence is what first determines if you should buy a property or not.
Worthy of note is the fact that there are different formulas and approaches to real estate due diligence. Thus, for an investor who wants to minimize unpleasant outcomes in real estate, setting your expectations for a due diligence exercise is important. But how do you set expectations for due diligence when you do not know what it should deliver to you? Remember, in every real estate transaction, the buyer is at the receiving end. Your money is more at stake.
Therefore, having a basic list of what quality due diligence should unveil regarding an identified piece of real estate saves you a whole lot. This list also reflects your expectations and serve as a guide for the professionals you would engage for the service. You would also be confident in your purchase and hold the property without fear for as long as is necessary.
About the Author
Oluwakemi Adeyemo is a highly sought Real Estate Investment Advisor and Coach. The expert who help investors to make more money in real estate. She believes that real estate is designed to sustain human existence and is the bedrock of wealth creation. Her job is to get to know your investment goals and provide you with expert yet relevant analyses on real estate investment options.
She has helped investors save more than ₦550,000,000 that would have been lost in real estate. She has also assisted to source vantage properties for businesses and individuals within record time. Closed transactions well over ₦1,350,000,000.00 and counting.
She researches a lot and scrutinizes real estate investments so you don’t have to. She helps institutional investors analyze investments and optimize profit in real estate. Her skill and expertise help individual investors understand better the concept of real estate, prevent regrettable mistakes and boost investor confidence. She is also an Author and Column contributor in Businessday Newspaper, BellaNaija and Nairametrics.