Why should I work with a real estate agent when selling a home?
When you’re ready to sell your home it can seem attractive to try and go it alone especially if you’ve read success stories online or seen them on TV. The truth is selling your home is not a simple or straightforward task. The experience that a seasoned Realtor brings to the table is invaluable. They will not only ensure your house is priced competitively for your local market, but they also bring years of negotiating tactics to the table ensuring you get the best price for your home. Certified Realtors are the experts when it comes to real estate contracts guaranteeing you are protected legally from start to finish throughout the entire sales process. And maybe most importantly if you are like most people trying to juggle the commitments of family, work, and life, you simply do not have the ability to dedicate the time and resources needed to sell your home.
What improvements/repairs should be made when selling a home?
When you are ready to sell your home, there are several areas you are going to want to address to make sure your sale doesn’t fall through and your home doesn’t end up back on the market. The National Association of Realtors data has shown that many home sales that fall through are because of a repair-related issue. With that in mind, the most common areas that a home inspector or appraiser will flag that can lead to your sale falling through are faulty wiring, poor grading and drainage, issues with the roof, issues with the foundation, faulty plumbing, and faulty HVAC systems.
Should I sell my current home before buying a new one?
This is the most scrutinized question in the Real Estate Industry and one that doesn’t have a simple yes or no answer. The first thing you need to do is understand the current state of your local real estate market. Are you in a buyer’s market or a seller’s market? After understanding the state of your local real estate market, the next thing to take a look at are your finances and what options are available to you if you had to potentially carry two mortgages. Once you have a better understanding of these two major factors, here are some tips for both types of markets: If you are in a buyer’s market, meaning the inventory of homes available for sale is high, then you should most likely list and sell your current home before buying a new one. If the opposite is true and your current market is a seller’s market, then you have more financial options available to you that can make the potential of carrying two mortgages at once while you are trying to sell your current home more feasible. If you find your dream home in a seller’s market, you can always make a contingent offer on the home, or you can apply for a Home Equity Line of Credit on your current home or apply for a Bridge Loan. We recommend you consult a licensed Realtor before making any decision as this can be a very difficult situation to navigate.
What is a seller’s market?
A seller’s market arises when demand exceeds supply, meaning there is a shortage of homes available in your local market. Because there are fewer homes for sale, the sellers are at an advantage and homes typically sell much faster, causing buyers to compete for sought after homes. As a seller, it’s important during a seller’s market that you not only focus on the highest offer but that you also evaluate the financial strength of each buyer. Just because buyers say they’ll pay a certain amount for your home doesn’t mean that they will qualify for a loan. Lenders will not allow buyers to borrow more than the appraised value of your home.
What are the first steps to buying a home?
When you are ready to buy a home the first thing you are going to want to get taken care of is getting pre-approved for a loan. To get pre-approved for a loan, a lender is going to want some very specific details from you, including your current income, the amount of money you have in savings, your credit score, and your credit history. All of this information will help lenders determine how much money they’re willing to loan you. The next step in buying a home is finding the right real estate agent to represent you. Real estate agents are important partners when you’re buying a home. Their knowledge of neighborhoods, school districts, local taxes, and the home buying process as a whole is irreplaceable. Most importantly, as a home buyer, it shouldn’t cost you anything to work with a Realtor. Their commission is usually paid by the home seller, so you will have an expert working on your behalf at no cost.
What credit score do I need to buy a home?
There is not one set credit score needed to buy a home. Of course, the higher your credit score, the higher your chances are to be approved for a loan. Each lender has the right to set their own standard, but most require a score of 620 or higher to be approved for a home loan.
What is an Earnest Money Deposit?
If you are ready to buy a home and want to show that you are serious about purchasing the home, you can offer to make an earnest deposit to show your commitment to the seller. Most sellers expect an earnest money deposit be made by the buyer because it protects the seller if the buyer backs out of a deal. It’s typically around 1% – 3% of the sale price and is held in an escrow account until the deal is complete. If all goes smoothly, the earnest money is applied to the buyer’s down payment or closing costs.
How much do I need for a down payment when buying a home?
Your minimum down payment depends on a few different factors, including the type of mortgage, the lender, and your finances. Putting at least 20% down on a home will increase your chances of getting approved for a mortgage at a decent rate and will allow you to avoid mortgage insurance (PMI). But a 20% down payment is not required. For example, FHA loans require a down payment of as little as 3.5%, and VA loans oftentimes do not require a down payment at all. When working your way through the home buying process, it is highly recommended to consult a qualified mortgage lender first to figure out what financial course of action is best for you.
Do I need a home inspection when buying a home?
The simple answer is yes. Whether you are buying or selling a home, you should absolutely hire a home inspector to look over the property. If you’re buying a home, you want to make sure that the residence doesn’t come with any costly surprises. If the home inspection does find expensive problems, you can ask the sellers to make the repairs themselves prior to closing, reduce the sale price, or provide you with a credit at closing so that you can hire someone on your own to repair the problems. Also, if the inspector finds a number of serious problems, you may be able to back out of the deal and get your earnest deposit back without losing any money. If you’re selling, ordering a home inspection prior to listing makes sense too. This way, you can uncover any serious problems and fix them before the buyer’s inspection. This will eliminate any surprises that could cause the sale of your home to fall through.
What is title insurance and who pays for it?
If you take out a mortgage loan when buying a home, your lender will require title insurance. This protects the lender’s interest in your property until your loan is paid off or refinanced. The law that decides who pays for title insurance differs from state to state and sometimes can even change from one county to another. For lender title insurance, the cost almost always falls on the buyer. For owner’s title insurance, the cost and who pays for it is negotiable, but most oftentimes the seller will pay for the policy to entice buyers to purchase their home and ensure the deal goes through.
We hope this FAQ has been helpful, but if you have any other questions or concerns for us, feel free to reach out anytime!