Realtor Tips – Page 11

How Real Estate Agents Are Paid When You Buy Your Home

October 27, 2021 By Deborah Ward

You want to buy your first home, but don’t want to use part of your hard earned deposit to pay a Realtor to help you find one. Set that worry aside because as a buyer you are usually not required to pay any of the Realtors, buyer or seller. No, seriously, it’s true. Here is the rundown on how it works.

Real estate commissions

Real estate commissions, the money paid to Realtors for their services, always sound high, but they are typically shared among several people. Depending on whether your agent works for a broker or not, the commission paid is typically split between the listing agent, the agent who took the listing from a seller, the listing broker, the company employing the listing agent, then your agent, and the company who employs your agent. It may involve less people if one or the other (or both) are independent agents or if the listing agent finds the buyer.

Seller pays

Despite how many agents are involved, the commissions are paid from the proceeds of the sale, from the money that will be due to the seller. That means the seller is responsible for paying any and all agents. That doesn’t mean they pay a higher percentage of the sale if there are multiple agents. The agents share the commission in the listing agreement. For instance, if the listing agreement has a 6% commission, which is pretty typical, then the seller’s agent gets 3% and buyer’s agent gets 3%. If there are brokers involved, the percentage the agent/broker gets depends on the agreement between them.

So as a buyer, you aren’t responsible for payment to the agents, yours or theirs. So start your search and jump into the home ownership fray!

Can My HOA Tell Me What To Do?

October 27, 2021 By Deborah Ward

Homeowners Association… the words that can and do strike fear into the hearts of many homeowners.

Homeowners associations, or HOAs for short, are put in place to protect the home owners in a development and their home values. They do this through instituting rules.

Those rules range from how you can landscape your property, to what colors you can paint your home, to what kinds of vehicles you can keep outside your garage and more.

So can they tell you what to do?

In a word, yes. Those rules and regulations included in all those papers you signed when you settled on your home give them that power. They can tell you whether you can have pets and if so, how many and what kinds. They can tell you whether you can plant rose bushes or trees. They can tell you that you can’t keep your boat on your property or that your in laws can’t park on the driveway for the week they are visiting.

How do HOAs do this?

Those rules I mentioned before are known in your deed as covenants, conditions and restrictions. Your deed makes those rules and regulations mandatory. As long as they don’t violate state or federal law, you have to capitulate. The consequences can cost you. From getting behind on your HOA fees to fines for rule violations, those few hundred dollars can turn into thousands. You could even end up with a lien on your home, a garnishment of your bank accounts or paycheck or even a foreclosure.

Pick your battles!

So before you think about fighting your HOA over the trivialities of the height of a fence or shade of your home, study the rules, consult an attorney or just knuckle under. HOAs can and will tell you what to do.

Home Seller Tips – How To Pack Up and Sell At The Same Time

October 27, 2021 By Deborah Ward

Whatever the reason, you need to pack up and get your home sold. Well, since you also need to get your home into saleable shape, kill two birds with one stone and declutter while packing up.

Start as early as you can so that maybe have a yard sale and also to give yourself enough time to get everything done. Even if you have to rent a storage unit or pod for the short term, do it. Your decluttered home and packed up stuff finished will take a lot of stress from your eventual move.

Start with your furniture. Make sure that rooms are easily moved through, that each room has good flow. Store the extra away. If you are moving immediately and need all your furniture, get a few things for each room on the cheap so it looks lived it.

Next, go room by room and clean out closets. Obviously, out of season things can be packed up and removed immediately. Whatever you need to leave make sure it is neat and sparse so the closets look bigger. If you have bookshelves, parse them down as well. You can leave some personal photos, but parse them down as well. Buyers need to imagine pictures of their own family on the walls, tables and shelves.

Then in the kitchen and bath pack away just about everything on counter tops, leaving only what you need, toaster or microwave, coffee maker in the kitchen, soap dispenser in the bath. Clean out the junk drawer!!! Yes, people go through cabinets, closets and drawers. Make them all look spacious. That means pack up all the extras.

Now that things are packed, yard saled out or given away, stash the boxes and stage the house. Clean towels for the bath, etc. Not sure what to do? Check out how homes are staged in the shows on HGTV. It doesn’t need to be expensive, but make your home look inviting, spacious and clean.

Should You “Test The Market” With A High Price To Start

October 27, 2021 By Deborah Ward

It sounds like a good strategy, “test the market” by asking a high price for your home. I mean, what harm could it do and you could even luck out and get asking right? Well, not so fast. It’s not a good strategy and here’s why.

Who will and won’t see your home?

For one thing, when you “test the market” the people who can actually afford your home at the right price won’t even see it. Most people start searches online but even if they start with a Realtor, the searches the Realtor does won’t include your home. Those that do see it won’t be interested. Your home will be too small or not what their price range usually offers. Of course, that means you won’t be getting any offers. Unfortunately, your neighbor who is also selling will. Your overpriced home makes their correctly priced one look good. Not to mention that the first few days your home will be on the market are the golden ones. Most deals are made then.

Remember today’s buyers are very savvy

People know what a home is generally worth. They do their homework. They also will be less likely to want to try and negotiate a deal. If they even see the listing. That means your home is sitting and a stale house doesn’t sell for asking, or even for less than the true market price. It’s true. When you lower a price because you asked too much to begin with, those who are interested will demand a bigger discount and more concessions.

What if you do get an offer?

So let’s say you actually get a bite at your first price. Guess what? The house won’t appraise at the high price and the buyer won’t get a mortgage. No mortgage, no sale.
Oh, and if you find a Realtor who thinks it’s a good idea, find a different one!

The New Housing Boom – Baby Boomers Are Selling Their Big Homes And Downsizing

October 27, 2021 By Deborah Ward

There is a new housing boom and it’s coming from baby boomers who are selling their homes and downsizing into smaller ones. It’s a good thing for new homeowners and those upsizing as well.

As the children of baby boomers leave home for college and beyond, their parents are finding that their big homes are just a bit too big. They are also finding that they are facing a future that could mean lower incomes and inability to make larger payments on things like utilities, real estate taxes and such. The answer? Sell that big home that has the higher utilities and taxes. Use the equity as a nest egg. That also means that they will be looking for a smaller home.

That’s good news for owners of smaller homes who want to upsize for two reasons

The first is that there will be competition for their smaller homes: first time buyers and the downsizing boomers. Competition means possible bidding wars and higher prices. Those higher sales mean more money to purchase the bigger home with less debt. That’s always good news. The second reason is the higher chance of getting a cash sale. It means a faster settlement and less red tape for both sides.

Bigger homes and upsizing families

Then, of course, there is the homes that the boomers are vacating. They are the bigger homes that the upsizing families are looking for. With more and more of them available it will mean better prices for those buying. Yet another plus for those smaller home owners.

For baby boomers it means buying a home without the need for a mortgage, smaller utility bills, lower real estate taxes and costs. It could also mean adding money into the retirement sources of income.

So this housing boom of sorts is a win win for both baby boomers and the owners of the smaller homes they want.

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

October 27, 2021 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!