FAQ
Commonly Asked Questions in Real Estate
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Selling Your Home - General
How much is the commission? Selling your home - Appraisals & market valueHow is a home's value
determined?
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Selling Your Home - GeneralIn the Real Estate business, this is one of the
most asked questions. The answer is as important to the home seller as it is
to the listing agent. An important
consideration when establishing commission is to find out what level of
marketing your agent is willing to provide. Will it be on MLS, or will it be
exclusive? It is imperative that your home be listed at a competitive rate
of commission so that it is attractive to the agents that may bring in the
buyer. Instead of asking what the rate of commission will be, ask yourself
"How much do I want to 'net' from the sale of my home?" If you receive the
money that you need from the sale of your home at a competitive rate of
commission, everyone will be happy. MLS, or Multiple Listing Service, is a service provided to Real Estate
Professional whereby they can market your home to agents everywhere. The
information on your home will be available on the MLS website, as well as in
the MLS books. A good example of the benefits of this is to suppose that
there is an agent in another state that has a client moving to South
Florida. The other agent can easily access the list of homes available
either via the Internet. If your home is not listed on MLS, then that buyer
may not find out about your home until after they've made an offer on
another home. How long will it take for our house to sell? This is a question that your agent can never answer. There are many
factors involved in the length of time it will take for a home to sell. The
most important being price. Most people have an idea as to what their home
is worth to them, and it can be tough to decide on the right price. Often
people look at what they paid for their home, or what they have spent on the
house while they've lived there. Your home must be priced according to what
other homes comparable to yours have sold for. This is where the comparative
market analysis becomes the most accurate way to determine the value. Your
Real Estate agent will provide you with the information necessary to price
your home according to the current market place. The best way to see that
sold sign go up quickly is to make sure that your home can compete with the
other homes on the market as far as appearance and price.
Can other Realtors show people our home? Surprisingly, many people don't know that usually, any agent can show any
home that is currently on the market. Often times people will jump from one
agent to the next during their home search, not realizing that they can look
at all of those homes with only one agent. Once you have your home listed on
the MLS, you are allowing every agent the opportunity to bring clients in.
When people choose to have their home listed on an exclusive listing
agreement, their agent is able to co-operate with the other agents in the
area so that they may bring their homebuyers to see your home as well. There
are cases where a seller wishes to deal with only one agent during the sale
of their home, but more often all agents can show all homes. Realtors have a
moral obligation to their purchasers to show them every home currently on
the market that may suit their needs, including the listings of other
agents. Selling your home - Appraisals & market valueHow is a home's value determined? You have several ways to determine the value of a home. What is the difference between market value and appraised value? The appraised value of a house is a certified appraiser's opinion of the
worth of a home at a given point in time. Lenders require appraisals as part
of the loan application process; fees range from $200 to $300. What standards do appraisers use to estimate value? Appraisers use several factors when estimating a home's value, including
the home's size and square footage, the condition of the home and
neighborhood, comparable local sales, any pertinent historical information,
sales performance and indices that forecast future value. A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property's value, most people turn to either an appraisal or a comparative market analysis. An appraisal is a certified appraiser's estimate of the value of a home at a given point in time. Appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account. Most appraisals cost about $300. A comparative market analysis is a real estate broker's or agent's informal estimate of a home's market value, based on sales of comparable homes in a neighborhood. Most agents will give you a comparative market analysis for free. You can do your own cost comparison by looking up recent sales of
comparable properties in public records. These records are available at
local recorder or assessor offices, through private real estate information
companies or on the Internet. Buying a Home - GeneralHow do I get the real scoop on homes I am looking at? Home inspections, seller disclosure requirements and the agent's
experience will help. Disclosure laws vary by state, but in some states, the
law requires the seller to complete a real estate transfer disclosure
statement. What are some tips on negotiation? The more you know about a seller's motivation, the stronger a negotiating position you are in. For example, seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called "motivated sellers" include people going through a divorce or who have already purchased another home. Remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller's asking price stacks up. Some experts discourage making deliberate low-ball offers. While such an
offer can be presented, it can also sour the sale and discourage the seller
from negotiating at all. What contingencies should be put in an offer? Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction. A buyer could forfeit his or her deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract. The purchase contract must include the seller's responsibilities, such
things as passing clear title, maintaining the property in its present
condition until closing and making any agreed-upon repairs to the property. Can you buy homes below market? While a typical buyer may look at five to 10 homes before making an offer, an investor who makes bargain buys usually goes through many more. Most experts agree it takes a lot of determination to find a real "bargain." There are a number of ways to buy a bargain property: * Buy a fixer-upper in a transitional neighborhood, improve it and keep
it or resell at a higher price. Buying a Home - FinancingHow do you choose between fixed and adjustable rates? There is risk involved in selecting an adjustable rate mortgage, or ARMs, because rates may go up. On the other hand, a fixed-rate loan offers good protection against rising interest rates but the borrower is stuck with the initial rate if interest rates drop. Statistics show that home buyers who have chosen ARMs since 1981 have saved thousands of dollars. For a period, the percentage of home buyers applying for ARMs rose substantially, then buyers and homeowners began flocking to fixed-rate loans. Whether to opt for a fixed or adjustable rate mortgage is a matter of personal choice. The first route offers stable payments; the second offers lower initial payments. Another consideration is the length of time a buyer plans to own the
home. If you're planning on moving within three or four years, an ARM makes
sense even if rates do nothing but rise during that period of time. How do you qualify as a first-time buyer? In general, lenders define a first-time home buyer as someone who has not
owned any real estate -- whether a personal residence, vacation home or
investment property -- during the past three years. When is the best time to refinance? It depends on how long you plan to hold on to your house and if you have
to pay anything to refinance. In addition, it also depends on how far along
you are in paying off your current mortgage. What can I do if I have bad credit? While some people have rebounded from a foreclosure to buy another home within several years, credit problems stemming from a foreclosure can continue much longer for others. Real estate experts say you should be candid with your lender in
discussing these issues. If your bankruptcy resulted from losing your job
due to your employer's financial difficulties, a lender probably will look
upon your situation more favorably than if your bankruptcy was caused by
overextended credit cards. |