Getting Started
Your first step toward buying your new home will be
to analyze your needs.
Determining whether you can afford to buy a home as well as how much
you can afford to spend without overextending your budget is an
important first step.
How much house can you afford?
The amount of money you can afford to spend on a
home is a combination of your cash on hand, your salary, and your
outstanding debt. Generally, you can afford a home equal in
value to between 2 and 3 times your gross income.
Why you should work with a Realtor
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.
Choosing a Realtor
Whether you are planning to purchase a home, sell
a home you already own, or both, statistics show that you will
benefit from using the services of a Realtor. These benefits
include both higher profits and an overall smoother transaction.
You will be spending lots of time with this person for several
months, so it is best to make sure you choose someone who
understands you and your particular situation.
If you have a home to sell, look for a Realtor
who is familiar with your neighborhood. No one can be an expert in
every part of a city, but many people who work in real estate pride
themselves on being extremely familiar with a small section of
streets and homes. Ask your neighbors for recommendations or look at
"for sale" signs that are currently posted in front of homes in your
neighborhood.
Home Inspections
As a buyer, you are entitled to know
exactly what kind of house you are getting. Don't take for granted
what you see and what the seller or the listing agent tells you.
An inspection is an opportunity to have
an expert look closely at the property you are considering
purchasing and getting both an oral and written opinion as to its
condition.
You have to demand an inspection when
you present your offer. It must be written in as a contingency; if
you do not approve the inspection report, then you don't buy. Most
real estate contracts automatically provide an inspection
contingency. When in doubt, ask!
Loan Applications
Mortgage Lenders make no bones about it:
They are tougher on second-home loan applications than on
primary-home loans. Why? Because the finances of a second-home buyer
are, by definition, stretched thinner. The result is that
second-home rates traditionally run one-quarter to one-half point
higher than those for first residences. Ditto for origination points
on vacation-home loans.
Title Insurance
The primary purpose of title insurance
is to eliminate risks and prevent losses caused by defects in title
arising out of events that have happened in the past. To achieve
this goal, title insurers perform an extensive search of the public
records to determine whether there are any adverse claims on the
real estate being transferred. Those claims are either eliminated
prior to the issuance of a title policy or their existence is made
known to the buyer, seller and lender and excluded from coverage.
Title insurance is purchased with a one-time premium when the real
estate is transferred.
The selling process
The first step in the selling process is deciding
you want to move. Next, you'll want to find the right real
estate agent to help you.
Once
you have selected some potential agents you should set up an
appointment with them so they can answer your questions and
concerns. Some questions you should ask in order to help you in the
decision-making process include: How long have you been in
business? How long have you sold houses in this area? How many
houses have you sold in the past year? What is your commission?
How would you market my house? How are meeting with potential
buyers organized? Who will coordinate? Who are your references?
Pricing a home
Pricing your home is the first thing
buyers notice about your property.
Compare your house to others that are
in the market. If you use an agent, he/she will provide you with a
Comparative Market Analysis (CMA). The CMA will reflect the houses
in your price range and area sold within the last 6 months, the
asking and selling prices of houses, a current inventory of houses
on the market, and features of each house on the market
Overpricing
If you set your price too high, then
the chance of alienating buyers is much higher. You want your house
to be taken seriously, and the asking price reflects how serious you
are about selling your home.
Making your home look its best
If you want buyers to be interested in
your home, you need to show it in its best light. A good first
impression can influence a buyer into making an offer; it influences
a buyer emotionally and visually.
Some things to consider include:
-
Landscaping - Has the front yard
been maintained? Are areas of the house visible to the street in
good condition?
-
Cleaning or Redoing the driveway -
Is your driveway cluttered with toys, tools, trash etc.?
-
Painting - Does both the exterior
and the interior look like they have been well taken care of?
-
Carpeting - Does the carpet have
stains? Or does the carpet look old and dirty?
Marketing your home
Advertising -
The REALTOR'S® largest expense has
traditionally been classified advertising in the local newspaper.
However, today properties are also exposed through popular Internet
home search/listing services, radio and television promotions, and
real estate guides. Even with all these additional advertising
avenues, "For Sale" signs on the front lawn are still remarkably
effective. Many REALTORS® use brochure boxes along with these signs
to market the property. When appropriate, and with your permission,
your agent may send a mailing about your property to neighbors.
Sometimes one of them has "a friend or relative who always wanted to
live near me." You never know.
Showings & Open Houses - To
prepare your home for viewing, make it as light, cheerful and serene
as possible. Your REALTOR® will probably find a tactful way to
suggest that you not be present while the house is being shown to
prospective buyers. This is done because your presence will inhibit
their actions and conversations.
Tips for an Open House -
-
Pull the drapes back
-
Light lamps
-
Simmer a few drops of vanilla on the stove
-
Light your fireplace
-
Set the dining room or kitchen table if you
have particularly nice linen or china
-
Put fresh towels in the bathroom
-
Leave the house so your REALTOR® is free to
deal with prospective buyers in a professional manner.
5 reasons a property sells
Of the
five reasons a property sells, listed below, you control 4 of the 5.
Location of your property - you have no
control over the location of your home, but its location helps
determine its value.
Price of your property - the right price can only be determined by a well-researched
computerized marketing evaluation. As a home seller, you should get a market analysis comparing your home to similar properties that have recently sold and are currently on the market.
Marketing - Marketing your property in a structured, planned
and professional manner is the major differentiator between various
Real Estate Agents. A clearly designed and professional marketing
campaign and strategy that will reach the widest buyer audience is
absolutely vital to the sale of your property.
Condition of Property - your home's
condition is vital to a sale. A clean, well-maintained
property enjoys a competitive edge over all the others on the
market. You'll sell faster and at a higher price if you "Stage
manage" your property to enhance its appeal.
The Agent You Select - The real estate agent advises you on
market conditions, pricing, "staging" recommendations, contracting,
financing, appraising, marketing and closing the sale of your
property.
An Offer!
Your offer is the first step toward negotiating a
sales contract with the seller. Since this is just the beginning of
negotiations, you should put yourself in the seller’s shoes and
imagine his or her reaction to everything you include. Your goal is
to get what you want, and imagining the seller’s reactions will help
you attain that goal.
The Closing
The "Closing" refers to the meeting where ownership of the property
is legally transferred to the buyer. Your agent will be present
during the closing to help explain the process and forms to you and
make sure everything goes as planned. By being present during the
closing, he or she can mediate any last minute issues that may
arise.
As the seller, you will need to be prepared to hand over any
necessary documentation regarding the property and, depending on the
arrangements made during negotiations, you may be required to have
done something specific in order to close.
