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Buying or Selling a Home
• Buying A Home
• Why Get Prequalified?
• Why Get Pre-Approved
• Selling Your Home
• Preparing Your House To Sell
• 2 Reasons Houses Don't Sell
• Should You Use an Attorney?
• Tax Consequences
• Moving
All real estate licensees are not the
same. Only real estate licensees who are members of the NATIONAL ASSOCIATION
OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR
"®" logo on the business card or other marketing and sales literature. REALTORS®
are committed to treat all parties to a transaction honestly. REALTORS® subscribe
to a strict code of ethics and are expected to maintain a higher level of knowledge
of the process of buying and selling real estate. An independent survey reports
that 84% of home buyers would use the same REALTOR® again.
1. Your REALTOR® can help you determine
your buying power -- that is, your financial reserves plus your borrowing
capacity. If you give a REALTOR®
some basic information about your available savings, income and current debt,
he or she can refer you to lenders best qualified to help you. Most lenders
-- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources
to assist you in your home search. Sometimes the property you are seeking
is available but not actively advertised in the market, and it will take some
investigation by your agent to find all available properties.
3. Your REALTOR® can assist you
in the selection process by providing objective information about each property.
Agents who are REALTORS® have access to a variety of informational resources.
REALTORS® can provide local community information on utilities, zoning. schools,
etc. There are two things you'll want to know. First, will the property provide
the environment I want for a home or investment? Second, will the property have
resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate.
There are myriad negotiating factors, including but not limited to price,
financing, terms, date of possession and often the inclusion or exclusion of
repairs and furnishings or equipment. The purchase agreement should provide
a period of time for you to complete appropriate inspections and investigations
of the property before you are bound to complete the purchase. Your agent can
advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence
during the evaluation of the property. Depending on the area and property,
this could include inspections for termites, dry rot, asbestos, faulty structure,
roof condition, septic tank and well tests, just to name a few. Your REALTOR®
can assist you in finding qualified responsible professionals to do most of
these investigations and provide you with written reports. You will also want
to see a preliminary report on the title of the property. Title indicates ownership
of property and can be mired in confusing status of past owners or rights of
access. The title to most properties will have some limitations; for example,
easements (access rights) for utilities. Your REALTOR®, title company or attorney
can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in
understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through
the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR®
can give you up-to-date information on what is happening in the marketplace
and the price, financing, terms and condition of competing properties. These
are key factors in getting your property sold at the best price, quickly and
with minimum hassle.
9. Your REALTOR® markets your property
to other real estate agents and the public. Often, your REALTOR® can recommend
repairs or cosmetic work that will significantly enhance the salability of your
property. Your REALTOR® markets your property to other real estate agents and
the public. In many markets across the country, over 50% of real estate sales
are cooperative sales; that is, a real estate agent other than yours brings
in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information
about your property to other real estate agents through a Multiple Listing Service
or other cooperative marketing networks, open houses for agents, etc. The REALTOR®
Code of Ethics requires REALTORS® to utilize these cooperative relationships
when they benefit their clients.
10. Your REALTOR® will know when,
where and how to advertise your property. There is a misconception that
advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies
show that 82% of real estate sales are the result of agent contacts through
previous clients, referrals, friends, family and personal contacts. When
a property is marketed with the help of your REALTOR®, you do not have to allow
strangers into your home. Your REALTOR® will generally prescreen and accompany
qualified prospects through your property.
11. Your REALTOR® can help you objectively
evaluate every buyer's proposal without compromising your marketing position.
This initial agreement is only the beginning of a process of appraisals,
inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help
you write a legally binding, win-win agreement that will be more likely to make
it through the process.
12. Your REALTOR® can help close
the sale of your home. Between the initial sales agreement and closing (or
settlement), questions may arise. For example, unexpected repairs are required
to obtain financing or a cloud in the title is discovered. The required paperwork
alone is overwhelming for most sellers. Your REALTOR® is the best person to
objectively help you resolve these issues and move the transaction to closing
(or settlement).
Buying a home Why Get Prequalified? Why Get Pre-Approved? Selling your home Preparing Your House to Sell Reasons why houses don't sell Should You Use an Attorney? Tax Consequences Moving!!!
Real estate transactions involve one of the biggest financial investments most people
experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000
income tax problem, would you attempt to deal with it without the help of a CPA? If you
had a $100,000 legal question, would you deal with it without the help of an
attorney? Considering the small upside cost and the large downside risk, it
would be foolish to consider a deal in real estate without the professional
assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
Source - NAR
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When looking to buy you should consider the use of an experienced REALTOR® to represent you
as a buyer's agent. Buying a home is a major decision and one of the largest financial investments
most people ever make. Your buyer's agent will help you to assess your buying power, search
for homes and assess a reasonable market value for your new perspective home.
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It is important to understand what you can afford to spend and borrow in order to
buy your new home. Your REALTOR® can help you with this process.
Most lenders require that a buyers monthly housing costs do not exceed more than 28%
of their monthly gross income (pre-tax). Monthly housing costs include the mortgage
payment (interest and principle), real estate taxes, and insurance. If you can't afford
a downpayment of 20%, Private Mortgage Insurance payments may also be required.
If you have long-term debts (such as education loans or car payments) your
monthly payments, including your housing costs, should be less than 36%
of your monthly gross (pre-tax) income.
There are alternative lending options for first time home buyers and vetrans using VA and FHA
loans which are more flexible then they above guidelines. There are also adjustable-rate
mortgages which may allow you to qualify for a higher loan amount because of the reduced
monthly payment (no principle payoff during the term of the loan - balloon payment due at end of loan)
Your REALTOR® can help you make the basic calculations.
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Many lenders will pre-apprvoe prospective buyers for a
mortgage loan. Getting pre-approved is a more
involved process then getting pre-qualified but should help you to fully understand
what you can afford to buy. TO get pre-approved, you will need to give the lender
your pay information, document your assets, allow them to do a credit check and
answer any other questions the lender may have; you may have to pay an application
fee. This step should only be taken if you are a serious buyer.
As a pre-approved buyer may make you more attractive to
sellers since your lender will have committed to loan you the funds
stated in their pre-approval letter, subject to their approval of the house
you select, an appraisal, any changes in your financial condition since the application was
submitted and any other terms the lender may require. If the situation arrises where there are multiple offers
being placed on the same house, your pre-approval documentation
may give you the edge over competing buyers. Your REALTOR® will
advise on submitting your pre-approval letter with your offer.
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When selling your home, it is best to allow the buyer and their agent to
tour your house while you are not there. Buyer's need to feel at home
in your house to picture themselves living there. They need to feel comfortable
in the house and free to talk with their agent. With the seller present, most
buyers will feel uncomfortable in the house; they are less likely to ask their agent
questions and will end up rushing through the visit. It is best to let your agent
represent your interests and show perspective buyers the house.
The best thing for you to do as a seller is to plan to be out of the house on weekends
and to work with your agent to make showing the property as easy as possible.
Keep the house clean and ready to show at all times and work out reasonable showing requirements
with your agent; but recognize that buyer's will simply move on to the next house if your house can't
be seen on their time schedule.
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When planning to sell your house it is important to understand that you are competing against
all the other properties for sale in your price range, not only in your town but possibly
with the houses in surrounding towns too. This doesn't mean you have to do lots of work, but may have
to make some minor changes. You may have lived in your house for many years
and have it the way you like it; the problem is that the average buyer may not like it that way.
If you have converted your dining room to an office or bedroom for example, most buyers
are going to want a dining room - if it doesn't look like a dining room, they won't picture it as
one. Talk with your Realtor and trust their experience as they make suggestions on possible changes
to relocate furniture, put items in storage or add some design elements to enhance your
houses potential.
Remember, the goal is to sell your house for the best price possible, as quickly as possible. Living with some minor changes for the time it takes to sell is a minor concession and may help you to reach your goal of selling.
Over the long-term, most home improvements are best done for your own enjoyment. Keep your house
maintained well and your landscaping clean. Document any major improvements you make
so you can show future buyers when those improvements were made and keep warranty information for roofs,
applicances and major systems like the boiler/heater, AC and hot water system.
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There are two primary reasons why a house or condo doesn't sell:
1) The Asking Price is Too High
The main reason houses (and other property) doesn't sell is because seller's want more money than a
ready, willing and able buyer will pay at the time. Buyers are quickly able to get a feel for the market
and will recognize homes that are overpriced; if they are represented by an experienced buyer's agent, he/she won't even
waste their buyer's time showing overpriced homes.
Sometimes a house may be overpriced because of rapidly changing market conditions, or
because a seller wants, or needs to sell for more then the house is worth.
In most cases, if a home is not under agreement within the first 60-90 days, it is probably overpriced.
In this situation, seller's typically make the mistake of reacting too slowly and refusing to
lower the price substantially enough to bring the asking price in line with current market
conditions. During market downturns, seller's usually are not willing to accept that
the value of their hous has dropped and end up chasing the market downwards. This means that
the value drops faster then the seller drops the price; the house remains overpriced and
ends up sitting on the market for an extended period of time.
Market values are determine by comparable home sales; sellers and buyers should
request that their agent provide comparable properties to substantiate a suggested
list price or offer price.
When selling a home, the seller should meet with multiple agents and should consider the advantages of
working with a Realtor. The seller's agent should present the seller with
a CMA (comparable market analysis); the CMA compiles recent sales of similar homes,
homes on the market and recently expired. After reviewing the CMA, the seller can
make an informed decision regarding the initial asking price for their home.
2) Condition of the Property
Most home buyers are not in a financial position to conduct substantial improvements after
the initial purchase, so the properties that are in the best condition are typically easiest to sell
Sellers on the otherhand typically don't want to spend any money fixing a home to sell it and national statistics
demonstrate that most major home improvements will not increase the value of your home sufficiently
to cover the cost of those improvements. Some minor improvements can be made to best position your
home to sell. Since each house is unique, your agent can discuss specific recomendations for your consideration
after touring your home, but somme examples are: painting the inside and possibly the outside,
cleaning and removing clutter, setting up rooms for their intended use, new light fixtures and
some minor landscaping can make a big difference attracting prospective buyers.
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Yes. Buying/selling a house requires the signing of legally binding
documents with the exposure to substantial liability and financial commitments.
You should have your own attorney who will represent your interests and insure you fully understand the
commitments you are agreeing to in the various documents involved in all real estate transactions.
Your REALTOR® is not an attorney and cannot provide you with legal advice.
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If you are a married filing jointly, you will be able to sell
your house for up to $500,000 over your cost (original purchase price plus
improvements) tax-free, provided you have occupied the property as your
principal residence during two of the last five years. Single taxpayers can
sell their house for up to $250,000 over your cost. Home owners are eligible
to exclude these capital gains once every two years.
Your REALTOR® is not a tax advisor, please consult your tax advisor to discuss
your specific situation.
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Moving can be an exciting and trying experience; whether you are moving across town or across the country.
Local moving companies are usually very competitive; interstate movers can be
competitive and are worth considering. Moving rates can be negotiable so
don't be affraid to ask if they can do better.
When shopping for a mover, you should use your network of friends, co-workers
neighbors and others to look for recomendations. Call several companies for
estimates and ask how their rates are calculated. Make sure the company you select
is insured and obtain verification of their coverage limits and policies.
Moving charges are usually provided in two parts: packing and loading/unloading.
Packing your own items may save you money but may also limit the mover's liability coverage.
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