Real estate is a funny industry – it can be incredibly rewarding one day and catastrophic the next. Some people have made outright fortunes by investing in real estate wisely. Others have lost their shirts. Some have found the home of their dreams while others have ended up with a money pit.
Shelter is one of the basic necessities of life and, consequently, an entire industry has grown up around it – real estate. And where there’s industry, there are lots of people — both good and bad — looking to satisfy a need or desire such as money, security, etc.
Unfortunately, not everyone has the best intentions nor is everyone capable of doing what they set out to do. We deal with people like this on a daily basis. The big question is: How can I protect myself so I don’t become a victim?
Here are some tips to help you navigate the real estate world and still come out on top…. or at least still wearing your shirt…..
1. Interview, Interview, Interview. If you’re going to use a realtor to buy or sell your house, then by all means don’t just sign up with the first one you talk to. It’s not a one-size-fits-all decision. Talk to many people and don’t be afraid to ask hard, sometimes uncomfortable, questions. The same goes for attorneys, home inspectors, mortgage brokers, general contractors (definitely general contractors!) and anyone else who plays a role in your success.
2. Verify Credentials. Oh, you didn’t ask for references? Tsk, tsk, tsk. Ask for references and then CHECK those references. Trust me when I say that in real estate, talk is CHEAP. Many people talk a good game but can’t back it up with a list of satisfied customers.
3. Educate Yourself. You know what can throw potential scammers for a loop? When they realize that you know how their job works. When a less-than-ideal intentioned contractor hears you discuss different types of grouts, laminate thickness, paint finishes, roof pitch, joists and more, their evil plans are likely to get squashed. You don’t need to be an expert, but brush up on just enough lingo to sound like it’s not your first rodeo. Planning to meet a realtor for the first time about listing your house for sale? Look up the comps yourself ahead of time so you don’t get pitched an overpriced listing agreement that will never work.
4. Create a Paper Trail. Handshake agreements have their place, but real estate isn’t one of them. Hundreds of thousands — or sometimes millions — of dollars can exchange hands in one transaction alone. Wouldn’t you want that transaction airtight? Keep track of everything — contractor payments, legal documents, HUD statements, contracts and anything else that you think you may need later. A little extra work staying organized now could payoff BIG TIME down the road if things go south. Trust me on this.
5. Reality Check. Real estate isn’t usually for newbies to tackle alone, whether you’re a new but intended professional or if you’re just buying or selling your own principal residence. But even if you decide to forge ahead solo, don’t be afraid to ask friends to review your plans or any hurdles you come across. If an electrician seems to be taking advantage, call up a couple friends and get their opinions. Same with an attorney’s questionable advice. Sometimes we lose objectivity — and common sense — when we get emotionally attached to a project. And real estate is a VERY emotional industry!
So there you have it – 5 ways to avoid being a real estate victim. Do you have your own tips or horror stories avoided? Share below!