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How Are Real Estate Agents Paid When You Sell Your Home

June 27, 2017 By Deborah Ward

You’ve decided to sell your home but aren’t sure how it all works for a seller. After all your current home was your first home purchase. So you have a lot of questions, the least of which is how your Realtor gets paid.

I mean, who has hundreds of dollars laying around to pay an hourly fee to a professional? Relax, that’s not how this works.

Commissions

Unlike many other kinds of professionals such as lawyers or accountants, Realtors do not bill their clients by the hour. They are paid when, and only when, your home sells. But what if the house sells, but the contract falls through? That happens all the time! Am I supposed to pay them then? And how do I know how much to pay them?

Again, relax, “when it sells” means they collect a check when the deed is signed and money changes hands.

So how do they get paid and how do we know what to pay them, you’re thinking

Well a Realtor works with you, the seller, for however long it takes to sell your home, or until the listing contract you have with them expires. If the home doesn’t sell, they aren’t paid for their time.

Realtors are paid a commission. This commission is based on the sales price of the home and the percentage of that sales price is spelled out in the listing agreement you have with them. The average commission percentage is 6%.

As the seller, you pay the commission

How that works is pretty simple. When you go to settlement to sign all those papers the lawyer or title company will know ahead of time what the percentage is for the commission.

They will prepare a statement that both buyer and seller sign. This statement has all of the financial information surrounding the sale on it: sales price, taxes due, money due from the buyer to the mortgage company, money due from the seller for fees, etc.

One of those line items is the Realtor’s commission. It is taken from the proceeds of sale and a check is cut right then for the Realtor. So technically no money directly out of your pocket, but paid from the lump you are getting at the settlement table.

My #1 Suggestion For Cleaning Out Your Home For Sale

June 20, 2017 By Deborah Ward

You hear the advice all the time, declutter and clean out your home before you put it on the market! But what do you do with all that stuff? The point of decluttering is to move it out of view and make your spaces look bigger. How can that happen if they are in your storage space?

The best idea yet is to rent a storage space or a portable storage space

The most popular one is PODS®. Another is 1-800-PACK-RAT. These companies offer varied services. Usually a customer will order a portable container which is then delivered to the location where you need it. You fill it up and lock it up, then you can do a few things. You can leave it on site. You can have them pick it up and store it. You can have them deliver it to your new home. Or all of the above. Or some of the above.

So why use that instead of a storage space?

Well, there are a few reasons. While that storage space may be cheaper, you have to pack, drive the boxes and stuff over to it, unpack the car or truck into the storage space and then repeat until you are finished moving. Then you have to do it all over again when you move into your new space.

With a portable storage space you have it brought to you

You can take the time you need to pack it up and since it’s where you are packing, you can forego the driving back and forth to the storage place and the multiple moving of boxes and stuff from one place to another. Then they send a driver to come get it and take it to a secure space where it is stored for you until you are ready to move again. Then they take it to the new space for you and leave it until you are finished unpacking.

So what does that mean for selling your home? Less clutter, no boxes stored in closets and a faster sale!

Deborah here…I really do give ALL of my clients this advice! I find that using PODS will make your entire home sale process easier and less of a pain while it is on the market!

How Big A House Does Your Family “Need”?

June 13, 2017 By Deborah Ward

Small spaces seem to be all the rage, but sometimes a bigger house is what a family needs. So how do you know if you really need a bigger home or really just want one. How big a house does your family really need?

Start by taking a look at your family and their habits

Several things can help you make the decision about how big or small a home you need. Start with your family size. Do you have a bunch of kids or just one or two? Even if you have just two, are they the same sex?

If you have three or more children or even a boy and girl, having enough bedrooms so that they have their own rooms, or boys in one and girls in another, means needing at least three bedrooms or more.

Extended family?

Next consideration might be your extended family. Living in Florida means that your home may just become vacation central for your extended family and friends. So having a home with an extra room or two for guests could come in handy.

Another extended family consideration could be whether there is extended family that will be living with you permanently. Does your mother or mother-in-law (or father or father-in-law) or a grandparent, sibling, etc. live with you? Those family members will need their own space and bath.

If you like to entertain in your home having a lot of space is important. Inside you’ll need a bigger kitchen and extra baths. Outside having a big deck or patio will mean space to have plenty of friends and family over to visit.

Lastly, do you work from home?

Having distance from the working area and living area is important for the person who works from home. At the very least, having an extra room with a door can give a dedicated area to work. So figure out if you really do need more home, and then get looking!

How “Tiny” A House Could You Live In?

June 5, 2017 By Deborah Ward

You’ve seen it on TV; the “tiny house” craze. People living in what is basically a small trailer with all the bells and whistles of a bigger stationary home. It seems to signal that people are starting to tire of the “McMansions” on postage stamp sized lots. But really, how tiny a home could you live in?

Typical Florida home

The typical Florida small home was built in the 1950s. There were a huge number built. They are usually around 1100 square feet in living space and have 2 bedrooms, 1 bath a kitchen and living room. Some have garages. It’s not a huge home. The bedrooms are typically small as are the kitchens. The idea of large, open concept homes wasn’t part of the lingo in the 1950s!

So who does these smaller homes fit?

Smaller families, couples and singles. 2 bedrooms works for a small family of 3 or 4, especially if the kids are same sex or very young. 2 bedrooms works for a couple or single leaving a bedroom for a guest room or home office. With all there is to do in Florida, who needs a huge house with huge rooms? You’ll be spending more time outdoors anyway!

Smaller can be better!

Less time cleaning with less space to clean. Less expensive to heat or cool since it’s smaller. Easier and less expensive to decorate and furnish. You don’t have to go as extreme as the tiny house shows demonstrate, but going small is a good option.

Do You “Bring Money To The Table” if Your Dream Home Doesn’t Appraise?

May 30, 2017 By Deborah Ward

You looked at dozens of houses and finally found the home of your dreams. You made an offer and it was accepted and the appraisal was ordered. Fantastic! Or not… the home doesn’t appraise for your offered amount. Now what?

Some reasons it doesn’t appraise enough

This happens a lot. If the markets are rising appraisals and comparable sales don’t keep pace which can mean lower appraisals affect sales.

Sometimes it’s the fact that distressed sales, meaning foreclosure sales and short sales, skew the appraisal. That affects the ability of buyers to get a mortgage for the home.

Generally lenders will only lend funds up to a certain percentage of the appraised value of the home. Typically this is 80% of appraised value or loan to value as they call it.

If your appraisal is too low you can do a few things

One is to walk away. Why start out with a home with a negative equity value?

Two, you can go back to the sellers and renegotiate the sales price. More likely than not there will be a contingency clause in your contract that will allow that.

Third, you can ask for a second appraisal. It’s possible that the first appraiser’s estimate wasn’t accurate. It may mean asking for a value appeal where the original appraiser reconsiders, or asking your lender if they would accept a second appraisal.

The last thing you can do is just come to the table with more money to make up the difference.

That brings up a few questions

First, do you have it? Remember the mortgage lender is going to ask you for proof of where the extra funds came from which could also affect getting your mortgage.

Another question you should ask is would you pay more for a car, dress or couch than its worth? Then why would you buy a home for more than it’s worth? Think it through, talk with your Realtor and make the best decision for you.

Sometimes it is worth bringing a bit of money to the table to get your dream home and sometimes it just isn’t the best solution. Only you can make that call!

Should You Live In An HOA Controlled Development?

May 23, 2017 By Deborah Ward

If you are looking for a new home in Florida you will be finding that many are in communities that have homeowners associations (HOAs). You’ve heard many things about them, but aren’t sure if it is something that will be good for you. So let’s look at the pros and cons of owning a home in a HOA.

Standard of community appearance

One major thing an HOA does for all the homeowners in the community is uphold a standard of community appearance. The bylaws and rules of the HOA will outline what those standards may be. Typical rules include the upkeep of your lawn and landscaping, house exterior upkeep and paint colors, improvements to your home, and what kinds of vehicles can be parked outside your home such as boats or RV’s.

In some situations HOAs also provide maintenance and services such as trash removal and lawn care are handled by the association, leaving less work for the homeowner. Typically, common areas are maintained by the association, which can include pools, tennis courts and gyms, community centers and walking trails.

The HOA will also act as manager if there are problems like dogs barking, loud music or other disputes. HOAs also charge monthly fees to cover the services and maintenance.

Pros

Knowing all these things can tell you pros and cons. Pros are that your homes value will stay higher because your neighbors can’t let their properties become overgrown, paint them some wild color and keep 14 dead cars and a boat on their property. It also can mean less work due to the maintenance and enjoying amenities without having to put the work into caring for them. It can also help you stay friends with your neighbors even if you have complaints about them.

Cons

The cons are a bit more difficult to see, but are there. The most obvious one is that monthly fee. It’s not optional. If you fail to pay it the HOA can place a lien on your home and ultimately you may lose your home. Others are a bit harder to suss out, but have to do with your personality. If you are more of a free spirit who likes to do things your own way the rules of an HOA can be rather restrictive. If you are the kind of homeowner who feels that your property is YOURS and no one can tell you what to do with it, an HOA may not be for you either.

Knowing yourself is important, so weigh those pros and cons and see how it fits.