2.) KWS Realtor offers objective information and opinions. A great real estate agent will guide you through the home search with an unbiased eye, helping you meet your buying objectives while staying within your budget. Agents are also a great source when you have questions about local amenities, utilities, zoning rules, contractors, and more.

3.) We give you expanded search power. You want access to the full range of opportunities. Using a cooperative system called the multiple listing service, your agent can help you evaluate all active listings that meet your criteria, alert you to listings soon to come on the market, and provide data on recent sales. Your agent can also save you time by helping you winnow away properties that are still appearing on public sites but are no longer on the market.

4.) We stand in your corner during negotiations. There are many factors up for discussion in any real estate transaction—from price to repairs to possession date. A real estate professional who’s representing you will look at the transaction from your perspective, helping you negotiate a purchase agreement that meets your needs and allows you to do due diligence before you’re bound to the purchase.

5.) KWS Ensures an up-to-date experience. Most people buy only a few homes in a lifetime, usually with quite a few years between purchases. Even if you’ve bought a home before, laws and regulations change. Real estate practitioners may handle hundreds or thousands of transactions over the course of their career.

Over the many years that we’ve been serving real estate investors, one of the most-asked questions on our site, kwsrealtor.com, has been, “How do I get started in real estate investing?”

People from all over the world have been coming to KWS Realtor to find the answer to that question. While some people may lead you to believe that there is a simple answer that works for everyone, that just isn’t the case. We’ve built this guide to help simplify the process of figuring out how YOU can get started.

Of course, this guide is not an all-encompassing “how-to” manual. It will not cover every aspect of real estate investing. Instead, it will provide a broad-strokes overview of the best ways to start down your path to financial freedom through real estate investments.

Are you ready to begin?
As you work your way through this guide, remember that this is not all-encompassing. It is a 40,000-foot view of how real estate investing works, and is designed to give you the basic tools to get past the all-important question of how to get started.

As you read along, take note of any questions or highlight pertinent information, and then visit kwsrealtor.com to search the site and ask questions on our forums to learn more about anything that’s still on your mind.

For those unfamiliar with our site, KWS Realtor is an online community of real estate investors with the largest collection of advice for new and experienced investors. It is free to join and to begin participating, learning, and growing.

If you are new to KWS Realtor, start with our real estate forums. The KWS Realtor forums contain more than 4,000,000 posts about every aspect of real estate investing, updated hundreds of times a day. Search through the site or create a new thread and ask any questions you’d like; many of our 1.3 million members will be there to help answer them.

Also, check out the KWS Realtor blog, which holds more than 9,000 articles from experienced investors in many different real estate investing niches, and the KWS Realtor podcast, now the leading real estate podcast on iTunes. These sources, along with hundreds of other pages on the site, make KWS Realtor the largest source of real estate investing knowledge on Earth.

It is perfectly natural to be intimidated, but our goal at KWS Realtor is to help you overcome your fears and countless questions by providing as much free information as possible and helping you make the best decisions for your own needs.

How to invest in real estate
There are many places you can put your money besides underneath your pillow, including in stocks, bonds, savings, mutual funds, CDs, currencies, commodities, and of course, real estate investments. There are positive and negative aspects to each investment option, but since we’re here to learn about real estate, we’ll focus on that and that alone.

One of the most common reasons people give for investing in real estate is that they are seeking out financial freedom, but there are others as well. Of course, each person will have their own personal reasons. They are typically seeking one or several of the following:

Appreciation
Cash flow
Depreciation
Leverage
Tax benefits
The decision to begin investing in real estate is a personal one, and we absolutely recommend making sure that you and your family are 100% committed.

The Buying Process
You can get a home loan for a rental property just as you would with a residential property. However, take note of these major differences between the two.

Loan products – You won’t qualify for some of the loan products that are available to homebuyers, such as FHA or USDA loans.
Down payment – You will generally need at least 20% of the property price for your down payment and this cannot come from gift funds.
Reserves– You will need more reserves than if you were buying a personal home. You may need to have enough cash on hand for six months of payments on both your home and any rental properties you own.
If this is the first property you are buying as an investment, you must use your non-rental income to qualify. This will be in addition to any other mortgages you currently have. If you already own rental properties and can prove that you have at least two years of experience in the field, you may be able to include rental income from other properties.

If you are looking to refinance rather than purchase a rental property, you can add the accrued rental income to your loan application.

You cannot use any gift funds for the down payment unless the person is on the title or is classified as an interested party, such as a co-applicant. You can use inheritance funds for your down payment as long as the source of the money can be traced.

The Benefits of Buying Properties for Rental Income
What are the reasons you would want to buy properties and rent them out? For many, there is the allure of having an income after retirement. Your tenant’s rent may cover the monthly mortgage payment until it is paid off, at which point the payments become an extra income stream.

Real estate can also be a wise investment due to appreciation. You may be able to sell the property at a much higher price in the future vs. the current value so you can use that money to pay for retirement. The fact that tenants paid your mortgage means the sale price is almost all profit. You may also choose to leverage the home and accumulated equity to pay for ongoing expenses, such as college tuition.

How to Prepare for Buying a Rental Property
If this is your first time buying a rental property, you must know several things. By conducting due diligence and making a plan, you may be able to avoid problems down the road.

Know what you will do if you don’t get the property rented right away. In this scenario, you will have to carry the mortgage payment, taxes and insurance.
When something breaks, you will have to fix it – and perhaps more quickly than you would fix your own property.
This is not a liquid investment and should not be considered a quick source of cash.
Research the responsibilities and considerations of being a landlord and become well-acquainted with the area where you are buying. Determine the potential return on your investment. Decide if you will manage the property yourself or spend the additional money to hire a management company.

Buying an investment property to rent out is not a get-rich-quick scheme, but a long-term investment that may yield good returns over time. If you are prepared and have a lender that you can rely on, this can be a lucrative investment for the future.

Plan Ahead
Making product selections early can prevent delays later. Develop a plan that clearly defines the goal for your renovation. Your needs and wants for the project should be included in an outline of the work that needs to be completed. Proper planning can also help keep you on budget. “You’ll end up making the same decisions, but you’ll know what they’re going to be and what they’re going to cost ahead of time,” explains Ridley Wills, founder of The Wills Company, a design-build firm in Nashville.

Set a Home Renovation Budget
Your home renovation budget should include the costs for building materials, labor, building permits, and decorative finishes. Start by determining the amount you want to spend and then finalize your financing. Remember to reserve at least 10% of your budget for unexpected costs. Request cost estimates from multiple contractors. If your cost estimates exceed your budget, eliminate project elements that are a lower priority.

Consider the Best Way to Finance Home Improvements
A personal loan is one way to help fund your new renovation. First, choose a lender who will listen to your situation and do what’s right for you and your family. Next, consider a fixed rate and flexible repayment terms, and set regular monthly payments to allow you to plan your finances. Discover Personal Loans make the process easy with no lengthy process or collateral required, plus they let you borrow up to $35,000 to fund a home repair or remodel project.

Make a Home Renovation Timeline
Begin planning by selecting a desired start date. You and your contractor will need to calculate the length of time needed for each portion of the project. Determine which part of the remodel needs to be completed first and which parts of the project can be completed concurrently. Make sure your renovation timeline allows time for shipping and delivery of materials as well as time for prepping the project area. The renovation completion date should be set with a few extra days in mind to address unexpected issues.

Hire A Listing Agent
Decide On A List Price
Understand How Long It Will Take To Sell
Renovate, Repair And Stage The Home
List The Home
Market Online And Offline
Settle On A Final Offer
Anticipate The Costs Of Selling
Assemble Your Documentation
Close On The Sale
Let’s dive into each of these steps and what you can expect.

1. Hire A Listing Agent

Unless you want to learn how to sell a house by owner, your home selling journey will likely begin by finding a seller’s agent, or listing agent, who is familiar with your local market. Although they wear several hats, listing agents are responsible overall for representing the seller in a real estate transaction. That includes advertising the property, creating listings and researching pricing using comparative market analysis.

If you haven’t yet found the right agent, here are a few places to begin your search.

Check out Rocket HomesSM: Learn more and sell with a Rocket Homes Verified Partner Agent by visiting RocketHomes.com/sell.
Reach out to friends and family: There’s no better referral than one that comes from a trusted friend or family member. If you have a personal contact who has sold their home recently, it’s worth your time to see if their agent is a good match for you.

Look online: According to the NAR, 74% of REALTORS® use Facebook to grow their client base. If you’re not able to find an agent in-person, continue your research on social media or the agent’s website.

Take a tour around the neighborhood: Odds are, you’re not the only homeowner selling your house in the area. If you’re struggling to find an agent, try contacting the numbers you see on “For Sale” signs around the neighborhood. You can also tour an open house and introduce yourself to the agent hosting the event.

Contact your previous buyer’s agent: The buyer’s agent you worked with to buy your current home may not work with sellers, but there’s a good chance they have connections to other agents in the area.

Before your agent lists your home for potential buyers, they may ask you to sign a listing agreement. Essentially, this contract gives your listing agent permission to find a buyer for your home and highlight their commission on the deal.

Make sure you’ve done your due diligence and requested referrals, read reviews from other sellers and interviewed the agent before your pen hits the paper.

2. Decide On A List Price

With your agent at your side, it’s time to research the market and make a few important decisions about your home sale. Most importantly, you’ll want to determine the right list price.

The list price, or asking price, represents the amount you as the seller want a buyer to pay for your home. An effective asking price considers several factors in the final sum, such as the state of the market in your area, the condition of the property and seasonality. For the most part, the comparative analysis your agent conducts will help you understand how much similar homes in the area are going for, and what you can reasonably expect to sell.

Your real estate agent can guide you to a number, but the final call rests in your hands. Also, remember that an asking price is not necessarily how much you can sell your home for.

3. Understand How Long It Will Take To Sell

Similar to buying a house, the home selling process doesn’t happen overnight. However, knowing how long it takes to sell a house can help you set the right expectations and keep the sale moving as quickly as possible. Here are some of the most important factors at play:

Time on the market: The longer your home stays on the market, the longer the entire sale process will take. If your home has been listed for a while without any bites, you may want to budget even more time into your schedule. Buyers may begin to assume there are problems with a house that’s been listed for longer than usual.

Current market conditions: The difference between a buyer’s market and seller’s market could mean the difference between a lengthy transaction and a fast turnaround. When the supply of homes exceeds demand from buyers, sellers will have to compete with other homes for sale, which could be challenging if you want to sell your house fast.

Asking price: If buyers believe your home is overpriced, you’ll be hard-pressed to find a buyer right away. That’s why determining a reasonable price with your real estate agent is so important. If your home isn’t attracting any offers, consider returning to the drawing board and offering a more competitive list price.

A low home appraisal: A home appraisal determines the fair market value of a piece of real estate. Home appraisals that are much lower than the agreed-upon price often slow down the selling process or jeopardize the transaction completely.

Although the timeline for selling a house is partly outside of your control, there are some tactics you can use to make your home more attractive to buyers. That begins with making the home as presentable as possible.

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4. Renovate, Repair And Stage The Home

One of the most common questions first-time home sellers have is, “Should I renovate my home before selling?” The answer to which depends on a few factors.

Renovations not only make a home look more enticing to potential buyers, but the right improvements can also increase your home value. Not all renovation projects are worth the cost, time and effort they’ll take to complete, however. Your real estate agent should be able to advise you on the top areas of focus that will help your property attract the best bid.

Once you’ve completed repairs, you’re ready to stage the house. Start with a top-to-bottom cleaning and spend time on both the interior and exterior. As you scrub down appliances and declutter each room, you should also depersonalize the space as much as possible. Removing unique decorations, painting over any rooms with loud wall colors and stowing away family portraits can all help the buyer imagine the home as their own.

Sellers who don’t have the time or energy to stage a home themselves should try shopping around for home staging companies. These businesses help sellers furnish, decorate and redesign a space – both physically and digitally. Adding this cost will bite into your bottom line, but the expense may be worth it for sellers who need a speedy sale or want to stand out against other houses in the neighborhood.

For more tips on which types of improvements you should make, read our article on how to get a house ready to sell.

5. List The Home

Now that your home is in good shape, you’re ready to list the home and attract buyers. The real estate firm or agent who represents you is responsible for this step. Once they’ve shared your home on the multiple listing service – which is a database of every home currently for sale in the area – buyer’s agents will be able to view your property and some basic property details.

6. Market Online And Offline

Advertising your home for sale helps your listing reach the right buyers and put you in the best position when it comes time to accept an offer. Even if you haven’t sold a house before, you’re likely familiar with open houses, “For Sale” signs in the front yard and other traditional marketing tactics.

However, in today’s real estate landscape, sellers may need to adapt to new marketing strategies to compete.

Let’s look at an example. In order to prioritize the health and safety of buyers and sellers, many agents have conducted home showings during COVID-19 online. Online home tours use an array of technologies to imitate the experience of an in-person walkthrough.

The widespread adoption of online listings signals the importance of digitally marketing your property. Here are a few tactics you should consider:

Invest in professional-grade photography for your online listings: High-quality images put your home in the best light for buyers who prefer to shop for homes online, and an excellent photographer can help you capture areas that you and your agent may otherwise miss.

Work with an agent who is comfortable with virtual tours: Although virtually guided walkthroughs are becoming more popular, not every listing agent may have experience arranging them. Before you hire your agent, ask them if they have the experience and equipment to stage virtual tours.
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Visit Rocket HomesSM to get a proven real estate agent that’s handpicked just for you.

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7. Settle On A Final Offer

With the right marketing strategy in place, you should begin to see offers roll in. Next, you’ll have to choose the right buyer and offer.

For many sellers, choosing which offer to accept is pretty simple, with the home usually going to the highest bidder. But there are a few other factors you should weigh beyond price. Are there any cash offers on the table? Or, is the buyer applying for a loan, and do they have a preapproval or just a prequalification? Is the buyer’s offer attached to any contingencies, and what contingencies are they willing to waive? Do the buyer’s proposed negotiations align with what you need from the deal?

With these questions in mind, you’re better prepared to accept the best offer all-around and move toward closing.

8. Anticipate The Costs Of Selling

Selling comes with a number of expenses that you’re responsible for paying. Here are the main costs of selling a house to keep in mind.

Closing Costs
Although buyers and sellers pay different fees at closing, both parties are responsible for closing costs as they finalize the transaction. Closing costs for the seller usually include attorney fees, escrow fees, outstanding HOA fees and property taxes up to the official closing date.

You may also end up covering some additional closing costs on behalf of the buyer. Sellers often pay the real estate commissions for both the buyer’s and seller’s agents, which is around 5% – 6% of the total loan amount. As part of the offer negotiations, the buyer might ask you to pay some of their closing costs; this is called seller concessions.

Capital Gains Tax
If your home has increased in value more than $250,000 from the time you purchased the home (your real estate cost basis) to the time of your home sale, you should also keep the capital gains tax on your radar. Essentially, a capital gains tax is an expense you would pay on any asset that has appreciated in value. Many sellers will be exempt from paying a capital gains tax, though this does depend on your unique situation.

Moving Expenses
Even if you plan to recruit friends and family to help move you out, there’s a good chance that moving out of your home will cost you something. If the timing’s right and you can buy and sell a home at the same time, you can have your movers move everything in one fell swoop. But if there’s time between when you buy and when you sell, you’ll also need to budget in the costs of storing and relocating your belongings.

9. Assemble Your Documentation

Closing on the sale comes with its fair share of paperwork, and it’s never a bad idea to begin preparing the documents that you’ll need to provide or sign.

Seller’s Disclosure: Also known as a property disclosure, a Seller’s Disclosure is a legal document that lists and explains any defects in the home. In an effort to protect buyers, these types of disclosures are required by most states.

Closing Disclosure: Though the Closing Disclosure is presented mainly for the benefit of the buyer, you may also receive a copy if you’ve agreed to pay some or all of the buyer’s closing costs.

Deed and transfer documents: Your deed is the document that allows you to transfer title to the home buyer. Along with other transfer documents, you’ll need to sign the deed to certify the transfer of ownership.

Government ID: Both buyers and sellers should bring a photo ID to verify their identities while attending the closing.
10. Close On The Sale

With the rest of the process checked off, you’re ready for the final step – closing on the home. For home buyers, closing means attending the closing date. Sellers, on the other hand, are not always required to attend their closings. If you’ve already signed the necessary paperwork, certain states allow your attorney to represent your side of the transaction in your absence.

For sellers who have the opportunity, skipping out on the table closing presents both pros and cons. Sellers who don’t attend can avoid the risk of any final conflicts with the buyer, but some attorneys or agents may prefer for you to attend regardless. In the event that you do not attend, your attorney or agent should be granted power of attorney to sign any remaining documents on your behalf. Keep in mind that you may be required to attend closing if you’re planning on renting the house from the buyer through a rent-back agreement.

With closing completed on both the buyer’s and seller’s ends, you’ve successfully sold your home to its new owner.

Generally speaking, a credit score of 620 is the minimum credit score for a conventional loan, although some lenders look for a score of 700 for new homebuyers. It is important to keep in mind that the lower your credit score, the higher your interest rate is likely to be. With a higher credit score, you’ll likely qualify for a lower interest rate. If you find that your credit score is lower than you anticipated, you can research how to increase your credit score quickly so you can start house shopping.

2. See how much you can afford
After you know you’ve checked your credit report, the next step in the homebuying process is to determine your budget. The fastest way to get a sense of how much you can afford is with an online mortgage calculator. A mortgage calculator will estimate your mortgage payment, including the principal and interest, taxes, insurance, HOA, and PMI. You can also find out how much you can afford with a home affordability calculator. Another important cost to factor into your budget is closing costs, which are typically 2%-5% of the purchase price.

After you determine how much house you can afford, you should begin saving for a down payment. The down payment is usually 20% of the home’s final sale price, but if you decide to put less money down you may need to pay private mortgage insurance (PMI). Some mortgages for first time homebuyers may not require the full 20% down. In fact, there are little to no down payment home loans out there for those who qualify, such as the VA loan for those that served in the armed forces.

3. Get pre-approved with one of KWS superior lenders
When researching how to buy a house, you will want to get a mortgage pre-approval. Getting pre-approved initiates the mortgage process with a lender and tells you how much you can borrow. It also allows you to move faster when you’re ready to make an offer. It is important to get quotes from multiple lenders, rather than choosing the first mortgage lender you come across or even your current bank. Different lenders offer different mortgage options and rates, so research is key in finding the best rate for your home buying goals.

4.  Call KWS to find your agent
Choosing the right real estate agent can be the key to finding the right home and getting the best deal. When determining how to choose a real estate agent, it is always important to do prior research and ask a variety of questions to find the best fit for your home buying journey.

5. Work with KWS to start searching for your new home
The next step when buying a house is to start browsing homes for sale in your area. It is important to use your wish list to inform your home search. That way, you’ll be able to narrow down your search to the specific price range, style of home, location and neighborhood, and other amenities when searching for homes on the MLS.

6. Attend open houses and take home tours
You’ll then want to start attending in person or virtual open houses and home tours. These tours can help you identify the type of home you like, the layout you want, and the features you want or don’t want in your home. When you’re touring multiple homes, it’s easy to confuse the different features or concerns you have about one house with another you’ve seen, so take notes as you’re touring. Don’t forget to pick your agent’s brain and ask for their input.

7. Make an offer
Once you’ve found the house you’re looking for it’s time to work with your real estate agent to make an offer. Discuss your offer strategy with your agent: Is the home priced fairly? What will make your offer stand out? Your real estate agent will know what is best for the housing market conditions. They will take into consideration your budget and the asking price for comparable homes in your area when making an offer that will stand out to home sellers.

8. Prepare to negotiate
In understanding how to buy a house, know that you’ll likely receive a counter-offer and need to negotiate with the seller. Your agent will help you through the negotiation process and decide what the best option is: waiving contingencies, raising your earnest money or overall price, or changing the closing date. Expect that you may go back and forth with the seller before reaching an agreement on the offer.

9. Inspect the home
One of the most important steps to buying a house is a home inspection, which identifies existing structural, electrical, or plumbing issues with the home. You’ll want to hire a professional home inspector to conduct a thorough inspection of the home’s condition.They will test the operational status of all major systems – plumbing, electrical, heating, and cooling – and check the roof, the foundation, and the home’s exterior. If the inspection report indicates any major issues with the home, you can try to negotiate repairs or a lower price with the seller.

10. Get the keys
You’ve reached the final steps to buy a house. On your closing date the money has been exchanged and the title is now in your name. A title company or real estate attorney will close the transaction and you will typically get the keys after 5 p.m. on your close date. Depending on if your house is turnkey ready or not, there might be some maintenance and remodeling you want to complete before moving in. You’ll also want to think about hiring movers, buying new furniture and appliances, setting up your utilities, etc. You’ll pay for these after the house is yours but may want to factor them into your budget or create a separate post-move budget.