Every once in a while, I wonder what it would be like to move from Richmond to somewhere else. Maybe Portland. I hear Chicago is fun. And if I made this move but I wasn’t a real estate guy, didn’t have a license or a couple decades of experience, how would I start looking for a home? How would I, as a real estate pro, advise me on buying in an unfamiliar market?
Here is what I would say…
Finding a Realtor
This seems pretty simple: I would talk to a bunch of Realtors and work with the person that I like best. Too often, people feel as if they have to work with the first they meet. Once you’ve found the person who speaks your language, check them out. Determine if they’re more buy side or sell. Do they work with the properties or neighborhoods that interest you? Or are they going to try to sway you to an area they feel comfortable. Because what you want—what you need—is unbiased advice.
Use the local MLS
Don’t be swayed to think that a Trulia/Zillow/Realtor.com is going to give you the “local” information. Get access to the local MLS immediately. It gives immediate notification if a property falls within your set parameters. You’ll get the most current information and you won’t have to weed through all the noise that comes from Trulia or Zillow.
Explore Every Neighborhood
If you’re going somewhere that is truly new, do yourself a favor and go wide in your search. Be flexible. And once you’re signed up on the local MLS portal, include PENDING and SOLD properties.
Why go broad? Because every neighborhood and asset type is related in some way, and knowing what’s going on at every level will give you important info. Overly narrow searches might lead to you missing a real value.
And the pending and sold thought? It’s critical that you know how quickly properties are moving. This will tell you a lot about the strength of the market.
Talk to Everybody
I would talk to everyone I could about any area I was interested in. What are the schools like? When did the neighborhood pop? How close to downtown? What’s the commute like? Everybody has a different story to tell, and each one will have a different perspective on why that’s the place to move. Soak in every bit. Use it to build your local market knowledge, then form your own opinion.
It’s in the Data
When I got closer to getting serious, I would first take a look at inventory. Sold and pending properties are helpful, but looking at what’s on the market, for how long, and what the pending sales are will really bring it into focus. A good agent will make this happen quickly.
Raise Your Virtual Antennae
Start reading everything you can from that city to get a perspective on the economy and what’s happening. Local websites have a lot to offer in that regard. It will quickly give you a sense of what this new city is all about.
Leverage Your Realtor’s Relationships
Don’t hesitate to use your Realtor’s connections – particularly when it comes to lending. You want them to have experience working with each other. If something goes wrong, it’ll get fixed more quickly when you know who to call. The way we benefit from using certain people is because they’re good and they make our deals go more smoothly.
I’m not saying that you don’t compare lenders. You have to to keep them honest. But we use people who are skilled because our reputations are on the line. Just beware of mortgage companies promising the moon when it comes to mortgage rates. There’s a good chance they want to get you on the hook and then go from there. Good lenders and attorneys will know how to deal with late-in-the-game problems. I also truly believe that when a lender chooses whose file to work on, they are going to work on the file that came from a great referral source first and all of the others second. Be a ‘priority’ file.
How to Get the Best Rate
Call three lenders on the same day and ask for a pre-qualification letter on an identical property using an identical loan product. This will give you the best chance to see through fee structures and therefore which lender prices its money best. Because they use it to generate profit. And if you tell them what you’re doing, they’ll know you’re serious and informed. Don’t worry if they don’t like it. And if all there costs are about the same, use the one recommended by the Realtor.
Final bit: stay focused.
Look at the new notifications and try to figure out if the new listing is likely to sell quickly or slowly to test your understanding of the market. Once you start getting a feel for knowing which properties are going to move most quickly, then you’ve learned something about your market.
Cut through it all, find good people, and get high-quality information. Do this and you’re going to be happy about the end result.