Frequently Asked Questions
The home selling process can be complex and confusing whether you’re selling your first home or haven't sold a home in quite some time. The best way to ensure that you maximize your return and achieve your goals is to be well-informed, fully prepared, and research the alternatives. Today there are many ways to sell your home; among them are: full-fee, percentage based, traditional Realtors, flat or set-fee Realtors, limited service offices, by owner, and “instant offer” services. Each has its own set of potential advantages and disadvantages. Which one will serve your needs and help you achieve your goals?
The home buying process can be complex and confusing whether you’re buying your first home or your tenth. The best way to ensure you are not overwhelmed by the process is to be well informed, properly prepared and seek the services of an experienced Realtor.
We have compiled a list of the most frequently asked questions by home sellers and buyers like you in order to help you to be well-informed and properly prepared. Check back often as our list is constantly updated.
There is no simple answer to this frequently asked question. Every real estate market is different; therefore, the best time to sell a home will be different in each community. In this area, the spring and fall months are usually the best time to sell your home if the only consideration is market timing—which is probably not the case.
Since every home seller’s situation is different, you should discuss the timing of your home sale with your Realtor. In some cases, selling a home during the fall and winter months may actually be better than waiting until the spring market. Why? Well, we may be expecting rising interest rates. Maybe we’re expecting a general economic slowdown. Perhaps it is best for you to arrive at your new location prior to spring or summer. Or, perhaps there is reason to be concerned about increased competition in the spring.
As you can see, there is not a simple, universal answer to the question, “When is the best time to sell my home?” Our experienced Realtors would be happy to provide a free consulation to help you determine the best time to market and sell your home.
You should interview several different Realtors from different real estate brokerages. Today you can do all kinds of research online. Often the most successful Realtors have a complete online presence. Usually, you can find lots of reviews on sites like Facebook, Google, Zillow, and the Realtor's own site or blog.
You might want to find a Realtor who specializes in your area, or one who has extensive overall experience. A long track record of success is certainly good, but not necessarily the only qualifier you should use. These days you will also want to seek out alternative fee structures. Don’t assume you need to hire an agent that charges a percentage-based commission. There are flat-fee and set-fee alternatives that can save you thousands of your hard-earned equity dollars.
You can also ask for recommendations from your friends and family. What experience did they have when selling? Did they get the results they wanted, or the service they were promised?
You should find out if the agent you are considering is a full-time Realtor. Will they be available to you? Do they work evenings and weekends? Some Realtors have limited hours or work multiple jobs. Will you be working directly with them at all times, or do they have a team? Either way is fine, assuming you’re comfortable with the arrangement.
Ultimately, after doing your research, consulting friends and family, and interviewing several agents, the best way to choose a Realtor is to work with the one you are most comfortable with considering all that you’ve learned about them.
The best Realtors offer so much more than a sign in your yard and a listing in the MLS (Multiple Listing Service). The best Realtors can save you, and make you, a lot of money. Their advice can protect you from mistakes and give you an edge when buying or selling. The best realtors will understand your goals and personal style; they will know how you like to communicate, understand your tolerance for risk, provide access to a great network of other trusted professionals, and so much more.
A great Realtor will provide lots of relevant data with experienced analysis for you. They will counsel you regarding market timing, pricing, marketing, staging, potential improvements, etc. The result will dramatically and positively impact your outcome.
A CMA is a Comparative Market Analysis. A comparative market analysis (CMA) is an estimate of value provided by a licensed Realtor. The value estimated in the CMA is based on the selling prices of similar homes in your area. To create a CMA, a Realtor considers the average price of recently sold, active, and expired listings that are comparable to the home being valued. He/she will adjust for differences in location, condition, or quality. While most often used by seller agents to determine a listing price for a home, CMA’s can also be used by buyer agents.
As you might expect, the answer to this question is “it depends.” Some improvements will almost certainly improve the value of your home and cause it to sell faster. These types of improvements will provide a solid return on investment (ROI) and should be considered. Other improvements might be too unique, specific, or expensive to be of much value. They will provide little or no return on investment and should be avoided. The best way to determine which improvements make sense for your home today is to speak with an experienced Realtor. Ultimately, you want to end up with the most money in your pocket. This is often a combination of making the right improvements (and not the wrong ones), pricing the home appropriately, professionally marketing it, and controlling your real estate fees. As we say “sell fast, for the most money, at the lowest cost.”
Your Realtor will be able to provide guidance by using a CMA, assessing the condition of your home, and reviewing the competition. A good Realtor will ask a lot of questions in order to understand exactly what you are trying to accomplish, when you want to do it, and your budget for making it happen. Essentially, a good Realtor will want to identify your “why and when” for moving. Together you will build a real estate plan that includes the listing price of your home.
A seller’s market is a time of increasing demand for homes. At its height, a seller’s market will be one of very tight supply and steadily increasing prices. There are more buyers looking for homes than homes being marketed for sale.
A Seller’s market can be very localized or much broader. Generally, it will depend on economic opportunity. If lots of jobs are being created, there will likely be housing shortages and price increases to follow.
Low interest rates can also encourage buyers to enter the market—causing a decrease in available homes, driving prices up, and creating the conditions of a seller’s market.
There are often multiple answers to this question, and again “it depends” is not inaccurate. A professional Realtor should be able to provide information and data to answer the question “how is the market doing right now” as it relates to you. What you really want to know is “how is my market doing right now?” Market conditions can differ from region to region, neighborhood to neighborhood, and by price range, construction style, age, school district, and more. You might read in the local paper that the real estate market in your area is hot or cold, but what you may not know is that this statement is accurate only for a certain price point, zip code, or school district.
Your Realtor should be able to show you comparable sales, discuss average days on market (how long is it taking to sell a home) and how the average is trending, the ratio of list price to closed price (how much are sellers negotiating off of their list price), the current absorption rate (how many homes are being purchased verses the number of new listings) and how the rate is trending. All these data points will help you understand “how the real estate market is doing right now” as it relates to you.
DUE DILIGENCE FEE:
"Thank you, seller, for taking the house off the market while I do my inspections, order an appraisal, get quotes, etc."
As a buyer you are risking money and time for the ultimate right to control a property. The seller is risking the opportunity cost of limited market exposure and squandered selling time. There is no standard dollar amount - it is whatever number both parties can agree on. This fee is NOT REFUNDABLE, though it will be credited back to you at closing if you follow through with the transaction.
DUE DILIGENCE DATE:
“During this time, I will do everything necessary in order to have peace of mind that I want to move forward with the purchase of this property”.
You need to be able to make an informed decision about your ability and desire to complete the transaction on or before your Due Diligence date. Typically, this date is at least a few weeks after the Effective Date (when the contract has been signed by both parties) so that you have time to get results back from inspections, negotiate repairs, finalize financing, etc. This date should also be at least 7-10 days before the settlement date so that there is time for packing and relocation plans of both parties. Up until this date at 5pm, for whatever reason, if you as the buyer decide to back out of the contract, you will be refunded your Earnest Money Deposit. If you back out on this date at 5:01pm or later, then this deposit will be given to the seller.
The simplest way to answer this question in short form is the following bullet point list:
- Save for a down payment or secure assistance or gift funds
- Get pre-approved for a mortgage by a local lender
- Find a local, full-time real estate agent that specializes in working with buyers
- Go house hunting with your agent
- Submit an offer
- Close on your home
Contact Us for a complete guide to the purchase process.
There are two correct answers to this question. The first, is start with an experienced Realtor who can help build a real estate plan for you at no cost. During your free consultation you will cover the entire home buying process and discover if you are ready to purchase a home.
The second answer is to start by speaking with a mortgage lender. Your mortgage lender can help you understand your borrowing power – how much home you can afford – and how much money you’ll need to have saved (if any).
If you are a first-time buyer your Realtor or mortgage lender may discuss various first-time home buyer incentive programs with you. These programs which vary from county to county could provide down payment funds for you.
Either your Realtor or mortgage lender can also help you understand what the closing costs associated with your purchase will likely be. They can also discuss various sources of funds to help cover these costs, including your savings, gifts, seller contribution, or assistance programs.
In any case you will need a pre-qualification or pre-approval letter from your lender before you can get serious about your home search.
The short answer is, it depends. Your down payment can be as little as $0 with 100% financing or as much as 20% or more of the purchase price depending on the loan program and type of purchase. The down payment for an investment home is generally much more than for a primary residence. Your local mortgage lender can help you sort through the numerous options.
When you are working with your buyer’s agent – you need to know how much house you can afford. You don’t want to house hunt for a home you cannot afford, or conversely, needlessly settle on something less than you wanted.
Another important reason to get pre-approved is that a seller won’t take your offer seriously without a letter from your lender. In a competitive market this could be the difference between wining the bid for your dream home and not even being considered by the seller.
The agent’s name on the For Sale sign in the yard is the listing agent. They are working for the seller – not you! You need a professional, licensed real estate agent working with and for YOU! Your advocate! That person can help you find and secure your dream home, guide you through inspections, appraisals, surveys, and more - every step along the way.
Interview a few agents before you decide. Find a real estate agent that specializes in working with buyers. Ask questions. Meet them in person. Does this person work in real estate full-time? How long have they been an agent? Do they know the area? Are you comfortable with them?
A full-time real estate agent is a professional who dedicates each day to work in the field. They do not have another job. Real Estate is not a hobby. They are there when you need them, every day. Because they are in the field every day, they offer a wealth of current experience and advice. Buying a home can be complex, it’s best to work with a Realtor who has navigated the process many times before.
Currently, in almost all cases, your buyer’s agent will be compensated by the listing firm which will “share” part of the fee they charge the seller to list and sell the home you are purchasing. In some instances, for sale by owner for example, it will be necessary to ascertain what the seller intends to do regarding compensating your agent.
Your mortgage lender is a valuable member of your real estate team. The best lenders will provide critical information and alternatives that could serve to save you thousands of dollars – now and in the future. In our experience the only way to get the absolute best advice in a timely manner with nothing left to chance is to work with a quality local lender. Someone you can sit down and talk with. We haven’t found a reason to work with a virtual lender when a local lender is just as competitive and lives in your community.
Historically, owning a home has been an excellent method of savings. For many people the equity built over years becomes a huge part of their nest egg. The equity you build also provides a certain amount of security in case of emergencies and can be the source of funds for future needs.
It’s also true that rental rates are at all-time highs while interest rates on mortgages are at historical lows. With interest rates so low, it is often cheaper to pay a mortgage than rent.
Whether you should rent or buy is also a function of how long you expect to live in your next home. If you have a very short-term horizon (less than 3 years), you should probably rent as the benefits of owning will likely be less than the costs associated with purchasing.
This is a complex question. If you qualify to do so, purchasing before you sell can significantly reduce the stress of your move. You can take some time to prepare your new home just the way you want it, and then move at your own pace.
Another advantage is that the offers you make won’t need to be contingent on the sale of your existing home – very important in a competitive marketplace.
The downside could be carrying two mortgages for some period of time. What if your existing home does not sell quickly? How will you react to that? Do you have more than enough current income or enough reserves to weather a slow market for your current home?
It depends. How much preparation did you and your agent do before you even looked at houses? There is no right answer. There is nothing wrong with purchasing the first house you see if you are well prepared. Conversely, it may take numerous showings before you find your dream home. Either way works well depending on the situation.