What Is a Real Estate Agent’s Commission?
Ever wonder what exactly a Real Estate Agent does? Are they worth the commission? Ever wonder if you’re paying too much for commission? Even consider going it your own via FSBO?
You may have a great Agent and they don’t communicate with you all they’re doing. Or, you may also have a rock star agent and who’s doing so much it hasn’t even occurred to you all the fine details going into your home sale.
Here are a few facts that might help you sleep at night and have some peace about residential real estate commissions:
1. Real estate agents are sole proprietors
That means that even if they are a part of an agency, they are small business owners and cover all their own costs and carry all the risk. Do you own or have you ever owned your own small business? Then you know you wear ALL the hats and all the responsibility falls to you. Not to mention, your rather high tax rate!
They invest in you and your home. If they take on a listing, that means they’ve calculated the cost of marketing, photos, and time – lots and lots of time. High quality marketing – online and offline – and maybe even virtual tours. All that cost money. There’s considerable overhead if you are active in the field.
They have no salary and no real predictability in income. One deal may have to last them many months or maybe even longer.
2. The sale of your home may be covering for the loss of another
Deals fall through ALL. THE. TIME. Your particular sale may go pretty smoothly – great! I guarantee you it has ended up covering for a major loss on another deal. It’s the nature of business.
3. The real work begins once a contract is accepted
It may feel like all an agent does is show up sometimes for an open house here and there and put a sign in the yard. Or every time they come over, they’re telling you things you need to spend money on. But the real work is done behind the scenes and is intensified once an offer is accepted. Getting to the closing table is more and more challenging.
Pat Vredevoogd-Combs, a former president of the National Association of REALTORS, testified before the House Financial Services Committee on Housing to stark federal complaints about residential real estate industry pricing.
She submitted a list of 184 things that Listing Agents do in every real estate transaction as a part of her testimony to the committee. She stated, “By all accounts the general public is not aware of all the services that agents provide to sellers and buyers during the course of the transaction, probably because most of the important services are performed behind the scenes.”
Here is the list of (just) 184 things residential real estate agents do:
1. Make appointment with seller for listing presentation.
2. Send a written or e-mail confirmation of appointment and call to confirm.
3. Review appointment questions.
4. Research all comparable currently listed properties.
5. Research sales activity for past 18 months from MLS and public databases.
6. Research “average days on market” for properties similar in type, price and location.
7. Download and review property tax roll information.
8. Prepare “comparable market analysis” (CMA) to establish market value.
9. Obtain copy of subdivision plat/complex layout.
10. Research property’s ownership and deed type.
11. Research property’s public record information for lot size and dimensions.
12. Verify legal description.
13. Research property’s land use coding and deed restrictions.
14. Research property’s current use and zoning.
15. Verify legal names of owner(s) in county’s public property records.
16. Prepare listing presentation package with above materials.
17. Perform exterior “curb appeal assessment” of subject property.
18. Compile and assemble formal file on property.
19. Confirm current public schools and explain their impact on market value.
20. Review listing appointment checklist to ensure completion of all tasks.
Listing Appointment Presentation
21. Give seller an overview of current market conditions and projections.
22. Review agent and company credentials and accomplishments.
23. Present company’s profile and position or “niche” in the marketplace.
24. Present CMA results, including comparables, solds, current listings and expireds.
25. Offer professional pricing strategy based and interpretation of current market conditions.
26. Discuss goals to market effectively.
27. Explain market power and benefits of multiple listing service.
28. Explain market power of Web marketing, IDX and MLS.
29. Explain the work the broker and agent do “behind the scenes” and agent’s availability on weekends.
30. Explain agent’s role in screening qualified buyers to protect against curiosity seekers.
31. Present and discuss strategic master marketing plan.
32. Explain different agency relationships and determine seller’s preference.
33. Review all clauses in listing contract and obtain seller’s signature.
After Listing Agreement is Signed
34. Review current title information.
35. Measure overall and heated square footage.
36. Measure interior room sizes.
37. Confirm lot size via owner’s copy of certified survey, if available.
38. Note any and all unrecorded property lines, agreements, easements.
39. Obtain house plans, if applicable and available.
40. Review house plans, make copy.
41. Order plat map for retention in property’s listing file.
42. Prepare showing instructions for buyers’ agents and agree on showing time with seller.
43. Obtain current mortgage loan(s) information: companies and account numbers
44. Verify current loan information with lender(s).
45. Check assumability of loan(s) and any special requirements.
46. Discuss possible buyer financing alternatives and options with seller.
47. Review current appraisal if available.
48. Identify Home Owner Association manager is applicable.
49. Verify Home Owner Association fees with manager–mandatory or optional and current annual fee.
50. Order copy of Home Owner Association bylaws, if applicable.
51. Research electricity availability and supplier’s name and phone number.
52. Calculate average utility usage from last 12 months of bills.
53. Research and verify city sewer/septic tank system.
54. Calculate average water system fees or rates from last 12 months of bills.
55. Or confirm well status, depth and output from Well Report.
56. Research/verify natural gas availability, supplier’s name and phone number.
57. Verify security system, term of service and whether owned or leased.
58. Verify if seller has transferable Termite Bond.
59. Ascertain need for lead-based paint disclosure.
60. Prepare detailed list of property amenities and assess market impact.
61. Prepare detailed list of property’s “Inclusions & Conveyances with Sale.”
62. Complete list of completed repairs and maintenance items.
63. Send “Vacancy Checklist” to seller if property is vacant.
64. Explain benefits of Home Owner Warranty to seller.
65. Assist sellers with completion and submission of Home Owner Warranty application.
66. When received, place Home Owner Warranty in property file for conveyance at time of sale.
67. Have extra key made for lockbox.
68. Verify if property has rental units involved. And if so:
69. Make copies of all leases for retention in listing file.
70. Verify all rents and deposits.
71. Inform tenants of listing and discuss how showings will be handled.
72. Arrange for yard sign installation.
73. Assist seller with completion of Seller’s Disclosure form.
74. Complete “new listing checklist.”
75. Review results of Curb Appeal Assessment with seller and suggest improvements for salability.
76. Review results of Interior Decor Assessment and suggest changes to shorten time on market.
77. Load listing time into transaction management software.
Entering Property in MLS Database
78. Prepare MLS Profile Sheet–agent is responsible for “quality control” and accuracy of listing data.
79. Enter property data from Profile Sheet into MLS listing database.
80. Proofread MLS database listing for accuracy, including property placement in mapping function.
81. Add property to company’s Active Listings.
82. Provide seller with signed copies of Listing Agreement and MLS Profile Data Form within 48 hours.
83. Take more photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography.
Marketing the Listing
84. Create print and Internet ads with seller’s input.
85. Coordinate showings with owners, tenants and other agents. Return all calls–weekends included.
86. Install electronic lockbox. Program with agreed-upon showing time windows.
87. Prepare mailing and contact list.
88. Generate mail-merge letters to contact list.
89. Order “Just Listed” labels and reports.
90. Prepare flyers and feedback forms.
91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability.
92. Prepare property marketing brochure for seller’s review.
93. Arrange for printing or copying of supply of marketing brochures or flyers.
94. Place marketing brochures in all company agent mailboxes.
95. Upload listing to company and agent Internet sites.
RELATED: Your Custom Home Marketing Plan
96. Mail “Just Listed” notice to all neighborhood residents.
97. Advise Network Referral Program of listing.
98. Provide marketing data to buyers from international relocation networks.
99. Provide marketing data to buyers coming from referral network.
100. Provide “Special Feature” cards for marketing, if applicable/
101. Submit ads to company’s participating Internet real estate sites.
102. Convey price changes promptly to all Internet groups.
103. Reprint/supply brochures promptly as needed.
104. Review and update loan information in MLS as required.
105. Send feedback e-mails/faxes to buyers’ agents after showings.
106. Review weekly Market Study.
107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale.
108. Place regular weekly update calls to seller to discuss marketing and pricing.
109. Promptly enter price changes in MLS listings database.
The Offer and the Contract
110. Receive and review all Offer to Purchase contracts submitted by buyers or buyers’ agents. 111. Evaluate offer(s) and prepare “net sheet” on each for owner to compare.
112. Counsel seller on offers. Explain merits and weakness of each component of each offer. 113. Contact buyers’ agents to review buyer’s qualifications and discuss offer.
114. Fax/deliver Seller’s Disclosure to buyer’s agent or buyer upon request and prior to offer if possible.
115. Confirm buyer is pre-qualified by calling loan officer.
116. Obtain pre-qualification letter on buyer from loan officer.
117. Negotiate all offers on seller’s behalf, setting time limit for loan approval and closing date.
118. Prepare and convey any counteroffers, acceptance or amendments to buyer’s agent.
119. Fax copies of contract and all addendums to closing attorney or title company.
120. When Offer-to-Purchase contract is accepted and signed by seller, deliver to buyer’s agent.
121. Record and promptly deposit buyer’s money into escrow account.
122. Disseminate “Under-Contract Showing Restrictions” as seller requests.
123. Deliver copies of fully signed Offer to Purchase contract to sellers.
124. Fax/deliver copies of Offer to Purchase contract to selling agent.
125. Fax copies of Offer to Purchase contract to lender.
126. Provide copies of signed Offer to Purchase contract for office file.
127. Advise seller in handling additional offers to purchase submitted between contract and closing.
128. Change MLS status to “Sale Pending.”
129. Update transaction management program to show “Sale Pending.”
130. Review buyer’s credit report results–Advise seller of worst and best case scenarios.
131. Provide credit report information to seller if property is to be seller financed.
132. Assist buyer with obtaining financing and follow up as necessary.
133. Coordinate with lender on discount points being locked in with dates.
134. Deliver unrecorded property information to buyer.
135. Order septic inspection, if applicable.
136. Receive and review septic system report and access any impact on sale.
137. Deliver copy of septic system inspection report to lender and buyer.
138. Deliver well flow test report copies to lender, buyer and listing file.
139. Verify termite inspection ordered.
140. Verify mold inspection ordered, if required.
Tracking the Loan Process
141. Confirm return of verifications of deposit and buyer’s employment.
142. Follow loan processing through to the underwriter.
143. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale.
144. Contact lender weekly to ensure processing is on track.
145. Relay final approval of buyer’s loan application to seller.
146. Coordinate buyer’s professional home inspection with seller.
147. Review home inspector’s report.
148. Enter completion into transaction management tracking software program.
149. Explain seller’s responsibilities of loan limits and interpret any clauses in the contract.
150. Ensure seller’s compliance with home inspection clause requirements.
151. Assist seller with identifying and negotiating with trustworthy contractors for required repairs.
152. Negotiate payment and oversee completion of all required repairs on seller’s behalf, if needed.
153. Schedule appraisal.
154. Provide comparable sales used in market pricing to appraiser.
155. Follow up on appraisal.
156. Enter completion into transaction management program.
157. Assist seller in questioning appraisal report if it seems too low.
Closing Preparations and Duties
158. Make sure contract is signed by all parties.
159. Coordinate closing process with buyer’s agent and lender.
160. Update closing forms and files.
161. Ensure all parties have all forms and information needed to close the sale.
162. Select location for closing.
163. Confirm closing date and time and notify all parties.
164. Solve any title problems (boundary disputes, easements, etc.) or in obtaining death certificates.
165. Work with buyer’s agent in scheduling and conducting buyer’s final walkthrough prior to closing.
166. Research all tax, HOA, utility and other applicable prorations.
167. Request final closing figures from closing agent (attorney or title company).
168. Receive and carefully review closing figures to ensure accuracy.
169. Forward verified closing figures to buyer’s agent.
170. Request copy of closing documents from closing agent.
171. Confirm the buyer and buyer’s agent received title insurance commitment.
172. Provide “Home Owners Warranty” for availability at closing.
173. Review all closing documents carefully for errors.
174. Forward closing documents to absentee seller as requested.
175. Review documents with closing agent (attorney).
176. Provide earnest money deposit from escrow account to closing agent.
177. Coordinate closing with seller’s next purchase, resolving timing issues.
178. Have a “no surprises” closing so that seller receives a net proceeds check at closing.
179. Refer sellers to one of the best agents at their destination, if applicable.
180. Change MLS status to Sold. Enter sale date, price, selling broker and agent’s ID numbers, etc.
181. Close out listing in transaction management program.
Follow Up After Closing
182. Answer questions about filing claims with Home Owner Warranty company, if requested.
183. Attempt to clarify and resolve any repair conflicts if buyer is dissatisfied.
184. Respond to any follow-up calls and provide any additional information required from office files.
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7 Questions to Ask a Home Inspector Before Your Home Inspection Even Begins
Given a Home Inspector is charged with checking out a home for any flaws before you buy it, s/he’s an important safeguard who could protect you from purchasing a lemon—and squandering tons of cash in repairs.
So, how do you find a reputable home inspector?
It boils down to interviewing home inspectors to gauge how thorough a job they’ll do. To help, here are some of the best questions to ask.
Bonus: This will also help you know what to expect! Knowledge is power, my friends.
1. “What do you check?”
A lot of people don’t know exactly what a home inspector is going to do… it’s a lot! A home inspector scrutinizes a long list of more than 1,600 features on a home. They inspect everything from the roof to the foundation.
Going into the inspection with a clear understanding of what the inspector can and can’t do will ensure that you walk away from the inspection happy.
2. “What don’t you check?”
There are limits. For instance, inspectors are restricted to a visual inspection – they cannot cut holes in walls for that look behind the curtain.
As a result, an inspector will often flag potential problems in the report and you will have to get another expert – a roofer, HVAC person, builder, electrician, or plumber – to come back and do a more detailed examination.
3. “What do you charge for an inspection?”
Home inspections usually cost between $300 and $600, though it will depend on the market, the size of house, and the actual inspector. Generally, you’ll pay the inspector the day of the inspection, so you’ll want to know in advance how much and what forms of payment are accepted.
Beware of inspectors who quote you a very low price. That’s often a sign they’re having trouble getting customers.
Spending on a good inspector will more than pay for itself in the long run.
4. “How long have you been doing this?”
Or perhaps more important: How many inspections have you done? A newer inspector doesn’t necessarily mean lower quality, but experience can mean a lot—especially if you’re considering an older home or something with unusual features.
5. “Can I come along during the inspection?”
The answer to this should be a resounding yes! Any good inspector will want prospective owners to be present at the inspection.
Seeing somebody explain your house’s systems and how they work will always be more valuable than reading a report, and it gives you the opportunity to ask questions and get clarifications in the moment.
If an inspector requests that you not join him, definitely walk away. Run!
6. “How long will the inspection take?”
Inspections often take place during the work week, when the seller is less likely to be around. Knowing how much time you’ll need to block out will keep you from having to rush through the inspection to get back to the office. You’ll get only a ballpark figure, because much will depend on the condition of the house. But if you are quoted something that seems way off – such as a half-day for a two-bedroom apartment, or just an hour for a large, historic house – that could be a red flag that the inspector doesn’t know what he’s doing.
7. “Can I see a sample report?”
If you’re buying your first home, it can be helpful to see someone else’s report before you see your own. Every house has problems, usually lots of them, though most generally aren’t that big of a deal. A sample report will keep you from panicking when you see your own report, and it will give you a sense of how your inspector communicates. It’s another opportunity to ensure that you and your inspector are on the same page.
Always remember that your Patrick Parker Realty Real Estate Expert has a network of trusted home professionals and experts we’ve been working with for years. Don’t be afraid to ask us for referrals.
Do you have Home Inspector nightmare stories to tell as tales of caution? How about Home Inspection successes? Share your comments the Patrick Parker Realty Facebook Page, Twitter or LinkedIn, or on our Instagram feed. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this one delivered straight to your inbox. You may unsubscribe at any time.
Avoid These 5 Major Mistakes People Make When Hiring a Mover
Moving is stressful. And when you’re busy finding a new place to live, selling your current home, and then packing up your entire life, selecting the crew who will move your stuff is likely last on your to-do list. That’s ironic, because you’ll be entrusting them with all your life’s possessions.
Even if you manage to hook up with The Most Amazing Moving Company Ever, we can’t promise bad stuff won’t happen. But you can prevent some unnecessary duress if you have the right team in place. The process starts by schooling yourself in what not to do.
Here are five of the top mistakes people make when hiring a mover…
1. Waiting too long
So you’ve wait until the weekend before your move to make those calls to moving companies. Well, if you procrastinated in your search, you won’t leave any time to do adequate research and get estimates. That means you might not get the best rate (spoiler: Moving’s expensive!) and worse – you could get scammed.
Plus, delaying selecting a mover can reduce your options – and unfortunately, unlicensed and unethical operators rely on this aspect of human nature to take advantage of consumers.
Take the time to get three in-home written estimates and, time permitting, visit the moving company in advance of making your final decision.
2. Being a total cheapskate
No, you don’t want to pay more than you have to for a move. But beware of being too budget-conscious.
One of the biggest mistakes you can make is going with the cheapest estimate. The cheapest bid typically means that the company uses casual, inexperienced laborers who don’t care a whole lot about your belongings.
Conversely, higher-end estimates almost always assure trained, professional, and experienced crews who will show up, smiles on their faces, and move your stuff safely and efficiently.
In other words: If there is a hiccup, they will figure it out. They’re not leaving your stuff on the front lawn.
Disreputable movers often lure customers with lowball prices and then hit them with unreasonable charges or, in extreme cases, even hold their belongings for ransom.
This actually happened to an educated member of the Patrick Parker Realty team after being displaced by Hurricane Sandy. There weren’t many choices due to so many displacements, but this member of our team did all her research. However, when the movers showed up that day, they turned out to be an outsourced crew by the original moving company she had hired.
So be diligent from the time they arrive at your door. Look for consistencies and inconsistencies, such as license numbers that should appear on the moving truck. Make sure everything that was discussed beforehand, is what is being delivered the day of your move and all paperwork being presented to you before the work begins aligns with all conversation and paperwork you’ve kept during the research process.
3. Not asking the right questions beforehand
A professional mover will be happy to answer any questions you may have, so if they seem uncertain or won’t give you straight answers, that’s probably a mover to avoid. Ask them about the moving process so you understand what they will be doing and when they will be doing it, from start to finish.
Here are some questions we recommend asking before selecting a moving company:
• Are you licensed and insured?
• Are you a certified professional mover who meets the standards of the American Moving & Storage Association?
• Are you a member of your state’s moving association?
• What price are you willing to put in writing as a “not to exceed” threshold price?
• What are the dates you can commit to for pickup and delivery for my move?
• Can you give me some references of people you have recently moved?
• How are your crews selected?
• Have you ever done business under another name?
• What actions do you take to ensure that the people who come into my home are skilled, professional, and safe?
4. Falling for fakes
The internet is awesome. right? Whether you’re looking for comprehensive info on the best mortgage rates, or you simply must know immediately the name of that song that goes; “da-da-da-da-dah-ooh-ooh-yeah”, the web is there for you.
And it’s there for you to find your next mover, too. But we shouldn’t have to tell you that online info can lead you astray. Double check your info by getting moving company referrals from an industry trade association or use a site that verifies and vets moving companies.
Sure, there are sites like Yelp you can rely on, but don’t do yourself a favor thinking that if you use a pay-for site like Angie’s List that the search results are any more credible. Our aforementioned team member, that’s where she first found her mover before she performed her interview and research. When she contacted Angie’s List to make them aware of what happened, she was told that their listings are paid listings and they do not vet the businesses on their site. That is disturbing given what Angie’s List and other site’s like these imply in their ads.
Another word of caution: Beware of blindly trusting that the company you’re hiring is who it says it is… another scheme; some disreputable movers try to lure customers in by using names that are similar to reputable companies. Check the reputable company’s website to make sure the local agent is affiliated with the brand name it is claiming.
In addition, disreputable movers are often changing their name to escape consumer groups and bad reviews. Be cognizant of where your Mover is located on Google Maps and if there was ever another moving company located at that address, it a red flag. Sometimes you’ll find, as our team member did, there’s not even an office located at that address.
According to the American Moving & Storage Association, the lack of a physical, local address is a telltale sign of a fake mover. Here are other red flags:
• No federal motor carrier number, which shows the mover is registered with the federal government for a state-to-state move
• Movers who refuses to visit your home to provide a written estimate for an interstate move… Responsible moving companies will provide in-home estimates and explain why the pricing is the way it is
• Movers who seem uncertain or unresponsive, especially when asked about their claims process if something gets damaged or lost
Ultimately, add this to one of the many reasons you should never buy or sell without a Real Estate Agent. Your Agent has a huge network of trusted professionals that handle every aspect of the buying/selling/moving process. Do not hesitate to ask your Agent for a Moving Company referral.
5. Agreeing to pay a deposit or pay in cash
If you’re moving across town, this one’s a huge red flag.
Typically, you should not be required to pay a deposit to have your items moved, most companies request payment at the time of delivery.
If you’re moving out of state, your moving company could request a deposit. But make sure it’s reasonable.
A reasonable down payment should be in the hundreds of dollars toward your state-to-state move, rarely exceeding 20%.
Similarly, avoid movers that demand cash instead of allowing payment by credit card.
We hope you don’t, but do you have moving horror stories to share? What tips would you add to our list? Sound off on the Patrick Parker Realty Facebook Page. You can also visit our Twitter, LinkedIn or Instagram feeds. And don’t forget to sign up for our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
5 Crucial Questions Home Buyers Should Ask Sellers Before Moving In
Moving into a home you’ve just bought is exciting—and sometimes exasperating. That’s because, although you might love your new place, you don’t know it all that well—which means that sooner or later, you’re bound to end up in a situation where you’re floundering cluelessly with the circuit breaker, or petting a neighbor’s seemingly adorable Pomeranian who nearly nips off a finger. Home, sweet home, right?
Yet you’d be surprised by how many of these unfortunate surprises home buyers can circumvent merely by asking the person who sold them the home some pointed questions before moving in. Sure, you’ll also be soaking up intel from the seller’s disclosure agreement, the home inspector who gave a thumbs-up to the place, and eventually even the neighbors. But truth be told, there’s nothing better than hearing about a home straight from someone who’s been living there for umpteen years. So go ahead and ask!
FREE DOWNLOAD: The Ultimate Home Buyers Guide
Just keep in mind that some sellers might feel tight-lipped if they think your questions might jeopardize the sale. As such, many of these questions are best asked near the end of the process—like during your walk-through or at closing.
1. Are there any special quirks about the house?
A thorough inspector will point out any oddities that are unsafe or devalue the house, but only someone who’s lived there will have a handle on all the unique characteristics worth mentioning—light switches in unexpected places, doors and windows that stick up or down, poltergeists, you name it. This question is most effectively asked during the final walk-through.
RECOMMENDED: ‘I’m wondering if you can tell me anything I might need to anticipate moving forward?’ Be subtle but persistent.
2. Have you had any past problems with the house that you’ve fixed?
True, sellers are often required to disclose most existing problems or issues related to the home. But what about past problems that have since been repaired?
RECOMMENDED: ‘I’ve read the disclosure statement. Is there anything else that has happened or that you’ve done that would be helpful to know?’ Use the disclosure as a jumping-off point to learn about what’s not listed.
3. Where are the water shut-off valve, sump pump, circuit box, and more?
Hopefully, the home inspector will locate all of these things and point them out to the new buyer as part of educating them about their new house, But not all inspectors do. So these are some important safety questions.
Ask the seller to show you not only the location of these valves, switches, and pumps, but also how they work. If you’re moving into an older home, chances are that many of the utility features will be unique in their operations, so rather than fumble around blindly, it’s a no-brainer to lean on the seller.
4. How is the neighborhood?
This is a great question to help establish rapport between buyer and seller, and is also best asked near the end of the buying process.
RECOMMENDED: ‘Tell me about the neighborhood.’ Keep it light.
Often the good, the bad, and the ugly will tumble out if approached conversationally. While you’re at it, if you’re new to the area, consider asking the seller for recommendations for everything from grocery stores to their favorite restaurants.
5. Is there anything you want to leave behind?
This one doesn’t so much help you get to know your home, but it might result in a few nice bonuses. It’s worth a shot to see if the seller is willing to part with large items he or she might not want to bother moving.
Most things that are being left, such as appliances, are dealt with in the original contract, but as it gets closer to closing, sellers are often wanting to unload some other things too. You might get lucky and wind up with something great.
Are you a recent homebuyer? Do you have questions you wished you asked? Let us know on the Patrick Parker Realty Facebook Page or on our Twitter, LinkedIn or Instagram Feeds. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
5 Reasons You Should Never Buy or Sell a Home Without a Real Estate Agent
You’re DIY’ing this real estate thing, and you think you’re doing pretty well—after all, any info you might need is at your fingertips online, right? That and your own judgment.
Oh, dear home buyer (or seller!)—we know you can do it on your own. But you really, really shouldn’t. This is likely the biggest financial decision of your entire life, and you need Real Estate Agent if you want to do it right.
1. They have loads of expertise
Want to check the MLS for a 4B/2B with an EIK and a W/D? Real estate has its own language, full of acronyms and semi-arcane jargon, and your Real Estate Agent is trained to speak that language fluently.
Plus, buying or selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. Real Estate Agents have the expertise to help you prepare a killer deal—while avoiding delays or costly mistakes that can seriously mess you up.
FREE DOWNLOAD: The Complete Home Buyer Guide
2. They have turbocharged searching power
The Internet is awesome. You can find almost anything—anything! And with online real estate listing sites such as yours truly, you can find up-to-date home listings on your own, any time you want. But guess what? Real Estate Agents have access to even more listings. Sometimes properties are available but not actively advertised. A Real Estate Agent can help you find those hidden gems.
Plus, a good local Real Estate Agent is going to know the search area way better than you ever could. Have your eye on a particular neighborhood, but it’s just out of your price range? Your Real Estate Agent is equipped to know the ins and outs of every neighborhood, so she can direct you toward a home in your price range that you may have overlooked.
3. They have bullish negotiating chops
Any time you buy or sell a home, you’re going to encounter negotiations—and as today’s housing market heats up, those negotiations are more likely than ever to get a little heated.
You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?
And it’s not just about how much money you end up spending or netting. A Real Estate Agent will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.
4. They’re connected to everyone
Real Estate Agents might not know everything, but they make it their mission to know just about everyone who can possibly help in the process of buying or selling a home. Mortgage brokers, real estate attorneys, home inspectors, home stagers, interior designers—the list goes on—and they’re all in your Real Estate Agent’s network. Use them.
FREE DOWNLOAD: The Complete Home Sellers Guide
5. They’re your sage parent/data analyst/therapist—all rolled into one
The thing about Real Estate Agents: They wear a lot of different hats. Sure, they’re salespeople, but they actually do a whole heck of a lot to earn their commission. They’re constantly driving around, checking out listings for you. They spend their own money on marketing your home (if you’re selling). They’re researching comps to make sure you’re getting the best deal.
And, of course, they’re working for you at nearly all hours of the day and night—whether you need more info on a home or just someone to talk to in order to feel at ease with the offer you just put in. This is the biggest financial (and possibly emotional) decision of your life, and guiding you through it isn’t a responsibility Real Estate Agents take lightly.
Did you try the DIY route and the go Agent? Tell us about your experience. Sound of on the Patrick Parker Realty Facebook Page, our Twitter or LinkedIn Feeds or on our Instagram account. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
Assessed Value vs. Market Value: What’s the Difference?
Homes don’t come with sticker prices set in stone. Rather they are moving targets – that’s what makes buying and selling real estate so fun! (Or frustrating, depending on your perspective.) And, as a buyer or seller, you will likely hear two “prices” thrown about: assessed value and market value. So what’s the difference?
While assessed value and market value may seem similar, these numbers can be different – typically assessed value is lower – and they’re used in distinct ways as well. So, let’s clear up any confusion so you can wield these terms to your advantage.
What is Market Value?
The technical definition of market value is “the most probable price that a given property will bring in an open market transaction.” Or, in plain English, “It’s the price that a buyer is willing to pay for a home, and that a seller is willing to accept.”
Real estate agents are trained to pinpoint a home’s market value, which is done by looking at a variety of characteristics, including the following:
• External characteristics: Curb appeal, exterior condition of the home, lot size, home style, availability of public utilities.
• Internal characteristics: Size and number of rooms, construction and appliance quality and condition, heating systems, and energy efficiency.
• Comps or comparables: What similar homes in the same area have sold for recently.
• Supply and demand: The number of buyers and the number of sellers in your area.
• Location: How desirable is the neighborhood? Are the schools good? Is the crime rate low?
A home’s market value often is a good starting point for all kinds of things. For one, listing agents use market value to help sellers come up with a fair asking price for their home. And, since buyers shouldn’t just trust what sellers say their place is worth, their own agent can also estimate the home’s market value and come up with a different price that they think their clients should offer. No number is right or wrong; the ultimate deciding force is what price a buyer and seller are willing to shake hands on to close the deal.
What is Assessed Value?
When trying to understand the assessed value of a property, you must know who is doing the assessing and why the property is being assessed.
Municipalities, mostly counties, employ an assessor to place a value on a home in order to levy property taxes on it. To arrive at a value, the assessor (similar to a real estate agent) looks at what similar properties are selling for, the value of any recent improvements, any income you may be making from, say, renting out a room in the property, and other factors – like the replacement cost of the property if, God forbid, it burns down in a fire (which sounds dark, but assessors are thorough professionals who consider every possibility).
In the end, the assessor comes up with a value of your home. Then, he multiplies that number by an “assessment rate,” a uniform percentage that each tax jurisdiction sets that is typically 80% to 90%. So if, say, the market value of your home is $400,000 and your local assessment rate is 80%, then the assessed value of your home is $320,000.
That $320,000 is then used by your local government to calculate your property taxes. The higher your home’s assessed value, the more you’ll pay in taxes. You can check with your local tax assessor for a more exact figure for your home, or search by state, county, and ZIP code on publicrecords.netronline.com.
What Assessed and Market Values Mean to You?
While a home’s market value can rise and fall precipitously based on local conditions, assessed values are typically more immune to fluctuations. (Some states prohibit the assessed value from rising more than 3% a year even if market value increases.)
But the bottom line is, don’t get bent out of shape if you hear your assessed value isn’t as high as you’d hoped. Assessed value is used mostly for property tax purposes. Home buyers and sellers, on the other hand, look more to market value instead.
However, assessed value can come up when you buy or sell a home because this number, unlike the more subjective market value, is public knowledge contained in property records. So, rising assessed values bode well when home sellers try to justify their sale price to a buyer: “Hey, the assessed value is $310,000, and I’m only asking $320,000.” Likewise, buyers can use assessed value to justify a lower price: “Hey, the assessed value is $260,000, and you’re asking for $300,000. What gives?”
But the thing to remember with both assessed and market value is that at the end of the day, the price of a home is all in the eye of the beholder. The only number that matters is what a buyer and seller can agree sounds right, so don’t take any number you see too seriously.
What has your experience been with market value vs assessed value when selling or buying your home? Sound off on the Patrick Parker Realty Facebook Page or on our Twitter or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
6 Bad Habits to Avoid If You Hope to Sell Your Home in 2017
Everyone has a few flaws. But if you plan to sell your New Jersey home in 2017, these foibles can literally cost you—we’re talking tens of thousands of dollars. What’s more, many homeowners may not even be aware that certain actions can hurt their odds of selling their home (that is, until it sits on the market with no takers).
To help clue you in, here’s a list of regrettable blunders to kick to the curb starting now, even if you plan to put your home on the market next year:
Bad Habit No. 1: Overimproving your home
Dying to install new kitchen cabinets or retile your master bath? Home sellers often assume any upgrades they make to their home will pay them back in full once they sell, but that’s rarely the case. On average you will recoup just about 64% of the money you spend on renovations once you sell—and certain improvements can actually work against you if they’re unusual or undesirable in your market.
For instance, as much as you may be dying for a bidet in your bathroom, many others may not. Likewise, even if you consider a new swimming pool a plus, many homeowners don’t want the hassle of maintaining it (or the dangers if they have young kids).
Do this instead: Check out blog post on Home Improvements that offer the Biggest Return on Investment to see which upgrades provide the best value – and ask your Agent for advice on which amenities are hot (or not) on the Jersey Shore.
Bad Habit No. 2: Renovating without permits
We know it’s a pain to apply for permits before you knock down that wall or add a deck, but this corner-cutting will come back and bite you when you decide to sell. Without proper permits, buyers may worry whether the work done on your place is up to code—and as a result refrain from making an offer.
Do this instead: Don’t be a scofflaw; pull necessary permits. Usually, building permits are required for any renovation that involves opening/building walls, electrical, and plumbing changes.
Bad Habit No. 3: Limiting showing hours
Sure, no one wants to leave their home at dinnertime. But buyers are busy juggling work, family, and looking for a new home. If you limit showings to a few hours on weekends, you might miss a potential sale.
Do this instead: Stay flexible and cooperate with buyer’s agents who want to show your house, even if it’s inconvenient.
Plus, limiting showing times gives buyers the impression that the you may be a “difficult” seller. That can turn them off even more.
Bad Habit No. 4. Overlooking curb appeal
Even if you lavish tons of attention on prepping the inside of your home for buyers, it’s easy to overlook the outside. But keep in mind, your curb appeal is the very first impression buyers have of your home, so it pays to put some elbow grease into prettying up the exterior, too.
Do this instead: Make sure your paint job is pristine and your lawn is tidy and mowed. Also replace dead shrubs, prune trees, put out some potted plants, mulch garden beds, and freshen mailboxes.
Bad Habit No. 5: Relying heavily on open houses
Open houses were a great way to sell a house in, like, 1975. These days, the vast majority of houses are sold through the Internet.
Do this instead: While you can and should hold open houses, don’t depend on them too much. Look for Agents who mine for buyers by using the Internet and Social Media.
Bad Habit No. 6: Not following your Agent’s advice
Sure, you no doubt know more about your home than anyone else. But your Real Estate Agent knows more about how to sell it. And your Agent may make some suggestions you might not like to hear, like that you need a new paint job or that the asking price you had in mind needs to be lowered a bit. It’s tempting to take offense or just ignore this advice, but if you do, you could risk seeing your house sit on the market and grow stale.
Do this instead: Listen to your Agent. That doesn’t mean blindly following all advice. But when it comes to pricing, consider the comps your agent presents, not your gut feeling or wishful thinking. Agents buy and sell hundreds of houses in their career; you’ll probably buy and sell a handful in your lifetime. You’re paying for their experience, so follow their advice.
Want advice about selling your home? Contact us today for a free consultation or visit us on Facebook, Twitter, or LinkedIn. And don’t forget to subscribe to our monthly HOME ADVICE™ email newsletter for articles and tips like these delivered straight to your inbox.
Buying a Home? 4 Demands to Make on Your Real Estate Agent
Are you thinking of buying a home? Are you dreading having to walk through strangers’ houses? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of buying.
You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish an average agent from a great one.
Here are the top 4 demands to make of your real estate agent when buying a home:
1. Tell the Truth About the Price
When making an offer on the home you want to buy, make sure that your agent walks you through their plan for getting both the seller – and the bank – to accept that price. Too many agents will just take the offer that you suggest and then try to ‘work’ both you and the seller in the negotiating phase later. In a competitive market, you need an agent who is going to help you make the best ‘initial offer’ so that you stand out from the crowd. Every house in today’s market must be sold twice – first to you and then to your bank.
The second sale may be more difficult than the first. When prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the selling price when performing the appraisal for the bank. A red flag should be raised if your agent is not discussing this with you at the time of the original offer.
FREE DOWNLOAD: The Ultimate Guide to Buying A Home
2. Understand the Timetable with Which Your Family is Dealing
You will be moving your family into a new home. Whether the move revolves around the start of the new school year or a new job, you will be trying to put the move to a plan.
This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. Your agent cannot pick the exact date of your move, but they should exert any influence they can to make it work.
3. Remove as Many of the Challenges as Possible
It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.
Remember: If you have an agent who was weak negotiating with you on parts of the purchase offer, don’t expect them to turn into a superhero when they are negotiating with the seller for you and your family.
4. Find the Right HOUSE!
There is a reason you are putting yourself and your family through the process of moving.
You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with buying. Do not allow your agent to forget these motivations. Make sure that they don’t worry about your feelings more than they worry about your family; if they discover something needs to be done in order to attain your goal, insist that they have the courage to inform you.
Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT!
Tell us about the experience you had with your Agent. What made them good? What made them GREAT? Sound off on the Patrick Parker Realty Facebook Page or on our Twitter or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this one delivered straight to your inbox.
27 New Year’s Resolutions for Homeowners
Heading into a new year, we feel an obligation to make resolutions.
Personal resolutions can be motivating, exciting or just plain silly. This year I will… eat healthier, save money, run the Long Branch 5K, learn to surf in Monmouth Beach, do the Asbury Park Polar Bear Plunge.
As a homeowner, resolutions can also be empowering. Some are mission-critical for a solid financial year, others maybe fall in the wish list.
Need ideas? This list should get you started:
1. “Lose weight.”
Losing the weight of excess possessions save time (you know, like looking everywhere for your shoes in a cluttered bedroom), money (where did I put that bill?) and your mind (psychologists agree that clutter and stress go hand-in-hand).
2. Get organized.
The logical next step to decluttering is to find a logical place for what’s left.
Need inspiration? Walk through a home storage store or get yourself on Pinterest for some seriously clever organizational ideas.
3. Save energy.
Saving energy is good for the planet and it’s also great for your pocketbook. EnergyStar appliances are just the start.
• LED bulbs are much more efficient and now come in warmer tones and dimmable options for a more homey feel. Use a lighting calculator to measure energy and cost savings.
• Water heaters expend energy storing hot water. The Department of Energy says tankless water heaters are 8 percent to 34 percent more energy efficient than standard water heaters, depending on usage.
• Going solar no longer has to be ugly roof additions. Have you seen the new Tesla solar tiles?
Saving on energy can even have some great tax implications! Check out our article on the best energy enhancements for optimal tax write-offs.
4. Build green.
Going green is more than energy usage. It’s also about sustainability and healthful choices in finishes.
• Change out laminates and carpets for natural hard surfaces.
• Remove asbestos (with a professional).
• Use sustainable and recycled materials like bamboo, cork and Vetrazzo.
• Need to paint? Go with a low- or no-VOC non-toxic paint.
• If you’re texturizing a wall, try Earth plaster instead of gypsum.
5. Get healthy.
Create a workout space, so there’s no excuse when the weather turns. If you’re looking to move, check out neighborhoods with nearby trails, fitness centers and amenities.
6. Just fix it.
You’ve walked by that broken switch plate how many times?
Go through the house like a home inspector and create a checklist of repairs that need to be done. When it comes time to sell and appraise your house, you’ll be glad these were done.
7. Set yourself (debt) free.
Those who carry debt and struggle to pay it off are twice as likely to develop mental health problems, according to a study by John Gathergood of the University of Nottingham.
Paying off debt sets you free in so many ways, plus it’s great for your credit score. Think of all the things you could do in the future with the money you save on payments and interest (maybe even pay off your home early — see #20).
8. Remodel right.
Is it time to update a dated bathroom? Replace the garage door?
If you’re wondering what improvements will lead to a better return on investment when you sell, check out our article on which home renovations offer the greatest return on investment. Our Agent’s can also tell you what improvements are best for your neighborhood and house type.
9. Maximize your mortgage.
A recent Zillow study showed that Americans spent more time researching a car purchase than their home loan. Since the Fed announced that it’s planning three rate hikes in 2017, it’s wise to refi sooner than later.
Have you reached the loan-to-value needed to remove your mortgage insurance? Make an appointment to talk to a lender for a mortgage checkup.
10. Learn to DIY.
The more minor fixes (and if you’re really skilled, major fixes) you can do yourself, the more money you save.
11. Plan to maintain.
Create a maintenance calendar to remember those routine maintenance tasks, such as replacing furnace air filters, changing smoke detector batteries and winterizing sprinklers.
Whether it’s a paper calendar or your iCal on your phone, plan out scheduled maintenance so you won’t hear that relentless beeping of the smoke detector in the middle of the night — or run out of propane before the steaks are done (tragedy!).
Is this the year to buy a rental property? Or a vacation home?
This will really require you to understand your financial situation, so talk to your financial advisor and an Agent who understands investment properties.
13. Take an inventory.
That new flat screen television and 360 viewer you got for Christmas are going to need coverage. If disaster happens, do you really know what’s in your house?
14. Do the double check.
The Insurance Information Institute says a standard policy covers the structure and possessions against fire, hurricanes, wind, hail, lightning, theft and vandalism.
Most other disasters are add-ons. Talk to your insurance agent and make sure you have not only enough property coverage but also enough liability coverage.
15. Get a “CLUE”.
Your homeowners’ insurance premiums are dependent on a number of factors, such as credit score and the Comprehensive Loss Underwriting Exchange (CLUE) report of claim history.
You can request a free report from LexisNexis.
16. Make your neighborhood better.
Get involved with your local HOA, neighborhood watch or community events. The first step to a better neighborhood is your personal involvement.
For news, information about issues that effect your community and to keep in touch with your neighbors; you can also join the Community Facebook Pages and Group we maintain. Like the Bradley Beach, New Jersey Facebook Page or join the Groups for Bradley Beach, NJ Residents, Ocean Township, NJ Residents or our Jersey Shore and Monmouth County Lifestyle Group.
17. Save water.
Dry climate areas struggle for water in dense population centers. Watering restrictions can turn your grass brown and overuse can cost you with tiered billing. Even the New Jersey climates experience seasonal droughts or below average reservoir levels.
Xeriscape what you can outside and look for indoor appliances that use less water. If you live in a state with conservation legislation, get those regulators on your shower heads and hoses.
18. Get dirty.
Landscaping is essential to curb appeal. So this year, really plan to keep up with it or think about going to a more easy-care style.
Out back, consider a garden to save money on better produce. Get a composter for garden and food waste.
19. Plan for emergencies.
Natural disasters and social disruptions are unwanted, but they happen. To be ready, you actually need to prepare!
Do you have a family evacuation plan? Emergency supplies? Go to ready.gov for a ton of ideas on prevention and disaster preparedness.
20. Get smart.
Smart home features make your home more efficient and easy to use, even remotely. Look for these to be the “wow” factor that could make your house stand out. Who doesn’t love Alexa-enabled appliances?
21. Make extra mortgage payments.
You can take thousands of dollars and years off your mortgage by putting an extra amount towards the principal each month. For a $400,000 at 4.25 percent interest with 25 of its 30 years left, you could save $21,107 and take two years off by paying an extra $100 per month.
RELATED: How To Pay Your Mortgage Off Early
What could you save? Try Bankrate’s handy extra payment calculator.
22. Pay off your second mortgage.
Whether it’s a one- or multiple-year plan, it won’t happen if you don’t budget for it.
23. Scrutinize your property tax.
If you live in an area where your home value has dropped since the last assessment, you need to really look at that bill.
Is the assessment correct? Is it going up faster than the sale prices of comparable homes? You can appeal via your local appraisal review board.
24. Optimize your withholding.
If you’re a first-time homeowner, you’re going to enjoy those new deductions. Be sure to talk to your tax advisor about adjusting your paycheck withholding accordingly (unless you like Uncle Sam making money off your income instead of you!).
25. Pay bills, especially your mortgage, on time.
It goes a long way to improving your credit. “The longer bills are paid on time, the higher the FICO Score should rise,” says myFICO. “That’s because as recent “good payment” patterns appear on a credit report, the impact of past credit problems on a FICO Score fade.”
26. Cook dinner.
You know that fabulous kitchen you had to have when you bought your home? Use it!
The USDA’s 2016-17 Food Price Outlook shows the price of groceries decreased in 2016, with a less than 1.5 percent increase in 2017, but restaurants will continue to climb beyond 2016’s 2.4 percent increase.
You’ll also eat healthier at home by controlling what goes into your body. If you own a home with a less-than-stellar kitchen, cooking will probably motivate you to make some appliance and feature upgrades that will pay off when you sell.
27. Get hip.
Dated cabinets and 1980s fixtures don’t help your resale value. Evaluate your style and start looking at upcoming (not past) trends.
Although we’re still in a “sellers’ market” that will likely change in the next few years. A modern home (unless it’s a historic property) is simply more appealing and makes the buyer feel like it’s move-in ready.
Your house is your biggest asset. While not all of these resolutions are essential, aim to start out by focusing on your mortgage and personal finances. What do you have to add? Where might you start? Sound off on the Patrick Parker Realty Facebook Page, on our Twitter or LinkedIn feeds. And don’t forget to sign up for our monthly HOME ADVICE eNewsletter for articles like this one delivered straight to your inbox.
Here’s to a healthier, happier and successful New Year!
Buying In 2017? 7 Steps You Must Take Now
If you’re thinking about buying a home in 2017, October to December is the perfect time to “warm up” for the house hunt so you can hit the ground running in the new year. And whether you’re looking in Lake Como, New Jersey or Lake Como, Italy… the prep work is relatively the same.
Here’s what prospective homebuyers should do to ready themselves for buying a home. From organizing finances to saving money to finding a real estate agent and mortgage lender, there is plenty to keep you busy!
1. Check Your Credit Score
A credit score is a numerical representation of your credit report. FICO scores range from 300 to 850, and the higher your score, the better. Good credit is like gold when obtaining a mortgage. A higher credit score should net you a lower mortgage rate. That lower rate, even if it’s only 1 or 2% lower, can mean saving thousands of dollars per year.
If your credit score falls short, get busy repairing it.
RELATED: How to Improve Your Credit Score
Correct any errors that might be on your report, start paying all your bills on time, and get your credit limit raised. Note, though, that you shouldn’t max out your card each month. It’s best to use 30% or less of your total available credit.
2. Don’t Open New Credit Cards
Tempting as saving at the checkout line can be, opening new credit cards may hurt your chances of getting a mortgage, or at least of getting the best rate on a loan. What could save you a few dollars now could cost you far more in the long run if your mortgage payments will be higher.
By opening the account, you have created another line of credit. That credit line, and what is borrowed, can change the application numbers and jeopardize the application.
And along those same lines, don’t overspend during the holiday season. Especially on impulse purchases that can be tempting during the holidays.
3. Suggest Financial Gifts for The Holidays
Besides the mortgage loan, you’ll need a sizable amount of cash to buy a house. There’s the down payment to consider, closing costs, and moving costs.
You should also set aside money for unexpected repairs and costs. Not being prepared is probably why nearly half of millennials incurred up to $5,000 in unexpected costs during the mortgage process, according to a recent TD survey.
A potential solution? Bulk up that emergency fund. Instead of getting gifts for the holidays, prospective homebuyers can suggest cash instead that will be put toward their home. And remember, you might be getting some money back after you file your tax return. Don’t blow it on vacation. A tax refund is a great way to add to your cash reserves for a down payment.
4. Interview Potential Real Estate Agents
If your neighbor, relative, or friend of a friend happens to know (or is) a real estate agent, that’s great. This person might be the perfect agent for you. But you owe it to yourself to shop around.
RELATED: How to Interview a Real Estate Agent
Look for an agent that is knowledgeable, good, integral, and can assist you in reaching the goal of homeownership. Make sure they are not a novice, new, or just unaware of how to do a specific transaction. The end of the year is usually a slow time for agents, so take this opportunity of their extra time to truly dig deep during your interview.
5. Keep Tabs On Interest Rates
If you hear that interest rates are at historic lows or that interest rates are on the rise, you should not assume that you can get the rock-bottom rate. Not everyone gets the same interest rate on a mortgage loan. It depends on your financial picture and on the lender you choose.
Everyone knows that home prices are, at least to some extent, negotiable, but loans can be the same. Shop around for the lowest interest rates. Note that closing costs can vary too, so discuss with your real estate agent ways to keep yours down.
6. Find A Mortgage Lender
Before you even start looking for a home (and yes, we even mean browsing online listings), look for a mortgage lender to find out if you can afford to buy a home. If you can’t right now, there’s no use torturing yourself by finding your dream home that’s just out of reach.
But how do you find a lender? If you have a trusted Real Estate Agent with deep roots in the community, start by asking them. They will likely have a network of qualified professionals who can help. Or, if you have a bank you’ve been with for years you can ask them
Compare [that lender] with two others. Look at what they offer, costs, points, and how long to close.” Once you know how much home you can afford, perform your home search based on your preapproval amount or less.
7. Get Preapproved
When a lender gives your financials the once-over and preapproves you for a mortgage, you’ll be able to show sellers that you really can buy their house.
But how do you get preapproved? By preparing a few documents, which you can do several months in advance of the actual purchase.
Here’s what you need to buy a house:
• Tax returns for the past two years
• W-2 forms for the past two years
• Paycheck stubs from the past few months
• Proof of mortgage or rent payments for the past year
• A list of all your debts, including credit cards, student loans, auto loans, and alimony
• A list of all your assets, including bank statements, auto titles, real estate, and any investment accounts
FREE DOWNLOAD: The Ultimate Guide to Buying Your Dream Home
Do you plan to buy in 2017? How are you getting ready? Share your tips on the Patrick Parker Realty Facebook Page, on our Twitter feed or on LinkedIn. And don’t forget to subscribe to the monthly Patrick Parker Realty HOME ADVICE email newsletter for articles, tips and guides like this delivered straight to your inbox.
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