October 2, 2018
Buying and Selling a Home
Whether you’re a first-time home buyer or you’ve purchased a home in the past, you know how overwhelming and intimidating the buying and selling process can be. Between all the paperwork and different things to remember, it can become difficult to keep it all straight. To make things a little easier, we’ve compiled a list of the most important things to consider when buying and selling.
Buying Tip #1: Consider the Condition
If you plan on purchasing new construction, make sure it was built by a reputable builder who used quality products. If a builder rushed to meet a deadline or used low-cost material, the property could end up costing you more down the road. Likewise, if you opt for a fixer-upper, be sure to consider all the extra expenses you could potentially incur from a remodel project. What will the total cost of renovations be? Consider permits, repairs, and possible inspection contingencies. How much time will it take? Remodeling a home isn’t as simple as they make it seem on television. Make sure you are totally prepared before any final decisions are made.
Buying Tip #2: Shop for a Lender
Anytime you make a big purchase, it’s important to shop around. Just like car prices fluctuate from dealer to dealer, lenders have different rates and fees associated with buying a home. Ensure you’re getting the best rate available by checking out at least two or three different lenders.
Buying Tip #3: Get Help if You Need it
If the stress of searching for a new home and dealing with all of the fine print becomes too much, consider hiring a buyer’s agent. Buyer’s agents essentially do all the work for you—they will find potential homes, work and negotiate with the listing agent and/or seller, and write contracts for you. As the buyer, you are typically not charged for this service; their commission is paid for by the seller. If this seems like the right option for you, be sure to find a trustworthy and reputable agent who will keep your interests their top priority.
Buying Tip #4: Get a Home Inspection
Once you have found a home and make the initial offer, it’s imperative that you order an inspection. Home inspections thoroughly examine the condition of the home and determine potential defects. Once disclosed, the buyer and seller can negotiate which items, if any, need to be taken care of before closing. According to the U.S. Department of Housing and Urban Development (HUD), inspections can range from $300-500. While this cost may seem steep, it outweighs the risk you undertake by not getting an inspection.
Buying Tip #5: Explore the Neighborhood
Do your homework before buying. Do you like the location and neighborhood? Test drive commutes to work and other important locations, such as the grocery store. Whether you have kids or not, do some research on the school district—they have quite an impact on property value!
Buying Tip #6: Understand All the Costs
When buying a home, there are many costs to consider. Depending on the type of loan you qualify for, down payments can range anywhere from 3.5 to 20 percent of the home’s value. Buyers are responsible for the lender’s appraisal, home inspection, and some closing costs. Closing costs include a variety of fees and can vary greatly between lenders. Branch Counsel Scott Hutchison at Knight Barry Title, Inc., says one of the most important things to remember when buying is to make sure you will not be “living for your home.” While there are many costs associated with just the purchase transaction alone, he states, “Be sure that after making the monthly payment for principal, interest, taxes, and insurance there is enough money available to cover all your remaining expenses. You should still be able to get an occasional night or two out per month as well.” By understanding all the costs, you can create a budget that’s best for you and your family. Buying a home shouldn’t be a financial burden—it should be an exciting milestone in your life.
Selling Tip #1: List at High Buying Season
When you decide to list your home can make a huge impact on the time it takes to sell. Prime buying season typically starts in April and lasts through June or July. Sometimes it will pick back up again after Labor Day, but this can be a gamble as it depends on the market. For the best chance of selling, get prepared ahead of time and consider listing in spring.
Selling Tip #2: Price to Sell
Research the market before listing your home. What have other homes in your area sold for in the past? What prices are competing properties currently listing for? It’s important to understand these statistics when determining your own pricing strategy. Despite your home’s true market value, if other properties in the area are selling for substantially less, your home will not sell. Hutchinson says, “Everyone wants to get top dollar for their home…[but] if you have decided to sell your home because you are committed to moving to another home, your primary objective is to get an offer on your house and close; therefore, listing the home for sale at a realistic price is the key.”
Selling Tip #3: Educate Yourself or Get Help
If you’re listing your home as for sale by owner (FSBO), it’s important to do your research on real estate regulations. You will need knowledge of various legal contracts and the ability to complete them on your own. You will also want to consider having your home featured on multiple listing service (MLS). MLS is the primary channel agents and brokers use for exchanging property information. For a fee, you can use websites such as mlsmyhome.com to get your property on MLS for a certain period of time. Lastly, make sure you market everywhere—Realtor.com, Zillow, Craigslist, social media, and more. The more channels you use, the better off you’ll be. If you decide to go through a realtor or listing agent, they will handle all of this for you. They are experts in real estate and will be able to guide you through the entire selling process, providing you with everything you need. Realtors typically charge a 6 percent commission rate, which is sometimes split with the buyer’s agent.
Selling Tip #4: Establish Curb Appeal
First impressions matter when it comes to selling a home. The exterior of your house is the first thing buyers will see, so it’s important to spruce it up. You don’t need to hire a professional landscaper, but trim the bushes, pull the weeds, add some flowers, and make sure things look appealing.
Selling Tip #5: Take Care of the Quick Fixes
Fixing things up goes a long way in making a sale. You’ll need to consider which updates are worth the cost. Does the kitchen need a face lift? While it may not be cost-effective to undergo a complete remodel, updating cabinets or countertops could make a huge impact. Are there any leaky plumbing fixtures? Get some fresh coats of paint on the wall, patch up cracks in the ceiling, clean the carpets—do whatever you can to make sure your house is in the best condition possible prior to listing.
Selling Tip #6: Stage for Success
Buyers want to envision themselves in their new home. Keeping family photos and other personal touches out in the open can actually turn prospective buyers off. Be sure to clean up the clutter, empty some items out of the closets, and keep the rest neatly organized. Appliances, fixtures, curtains and drapes should all be kept clean and looking fresh. Maximize the natural light throughout your home—it should look bright, spacious, and feel welcoming.