We have a sister/cousin/best friend that just obtained their real estate license. We feel like we should use them. What do you think? We are often asked for pricing and marketing advice from sellers who have hired a friend or family member. We are unable to help them because they have a signed contract or agency agreement with another agent. Personally, we have found it tough to help our friends and family as it pertains to a business transaction. Both sides have emotional ties to the other person and it sometimes becomes difficult to separate those. We recommend that you "interview" your friends and family as you would any other agent. If you feel they do not have the expertise and experience you are looking for to guide you through the selling process, chose an agent who does. It is our recommendation that you let your friends and family know that due to your close relationship you prefer to separate business from the personal aspect of your lives. Many agents desperately need a closing to stay afloat in the real estate business. We do not recommend hiring someone who must have your closing to pay their bills that month because many times they are not working in your best interest.
We plan on building a home. Do we need an agent to help us with that or can we just use the builder representative? This is one of the most common misconceptions. Buyers often feel that they should just sign the paperwork at the sales office and accept the terms and price that are offered to them. While dual agency is allowed in the State of Iowa those salespeople represent the builder first, not you. In reality no one is looking out for only you or your best interest. We often can negotiate required earnest money, pricing, upgrades, and more. Typically the builders have already factored the unknown agent commission into their pricing anyway. Since they are planning on paying a buyer's agent wouldn't you prefer that someone is only looking out for your best interest?
Should I buy or continue to rent? One of the biggest advantages to buying a home is that every payment is one step closer to owing your home outright. When you rent you are helping someone else own property and will not see a return on that money. Certainly owning a home brings many advantages such as tax advantages, freedom to decorate and renovate, more privacy, and appreciation on your investment. Since interest rates today are so low, it actually can be cheaper to pay a mortgage right now than paying rent. However, there are many questions that you should ask yourself before deciding to buy a home. Are you financially ready? Do you plan to stay in one location for 3 years or longer? Are you ready for the responsibility of maintaining a home? If your answer is yes than calling yourself a homeowner might be the right decision. If your answer is no than than renting might be a better option. We recommend talking with a mortgage lender and a real estate sales professional to help guide you through this process. They are more than happy to assist you in making that decision.
Should I consult a lender or bank before looking at homes? YES! There are many reasons why you should talk with a bank and get pre-approved before looking at homes. The biggest reason being that a mortgage lender can help you understand exactly how much you can afford. You will only hurt yourself by looking at homes above your budget as it can be really hard to come back to reality of your budget after you have seen homes you cannot afford. A mortgage lender can also help you determine what loan program is the best for you, especially if you are a first time home buyer. There are many programs available that can even offer grant money back in the right situations. Consulting with a lender will determine the best mortgage program for you and give you an understanding what the costs are associated with buying a home.
Who pays the realtor fees when buying a home? In our market the seller actually pays all real estate brokerage fees. The fees they pay are split between the listing brokerage and the selling brokerage. As a buyer you are not responsible for paying any of those fees so utilizing a buyer's agent is to your advantage. When you use a sales agent to assist you in purchasing a home you are ensuring that someone is protecting your interest and only negotiating on your behalf.
What is a Short Sale? A short sale transaction means the sellers proceeds upon sale will be less than the balance of debt secured with liens against the property. The seller would have to write a check in order to sell their home and cannot afford to do so. Many times this is just a pre-curser to the home going into foreclosure. Since a third party mortgage holder is involved with the sale there are many hoops to jump in this type of transaction. Short sales are not impossible to purchase but will require time and patience. Do not enter into a short sale purchase if you have a deadline to move. Timing on when a short sale property can close is a big unknown.
What is Earnest Money? Also referred to as a good faith deposit earnest money is a deposit to show the seller you are serious about your offer. This money is held in Trust by the listing brokerage. It is a deposit and will be returned to the buyer as a credit at closing. Check with your real estate professional to find out how much earnest deposit is typically provided for your area.
Is a home inspection necessary even on a new construction home? A home inspection is not required but recommended. The purpose of a home inspection is to identify any hidden defects with the home and is really the most effective way to identify any issues prior to closing. Most certified home inspectors will inspect the roof, plumbing, HVAC system, appliances, electrical, windows, and foundations. You may also have additional testing or inspections done like a radon test, septic or well inspection. In our local market a termite inspection is required by the seller to complete. All other inspections would be a buyer expense.
How much updating or work needs to be done to my home before I sell? The thought of having to de-clutter, update, and repair your home can be overwhelming. For many homeowners this may even prevent you from listing and selling your home. Don't panic, very often there is less to do than you think. There are some projects and repairs that will definitely make a difference when selling your home and other projects will not make a difference. Before you spend a ton of money and give up precious time consult your real estate sale professional. They will be able to help you prioritize projects/repairs and give you an idea on what has to be done, what can be done if you have the time and money, and what not to bother with. Many agents will also give you staging advice to showcase your home in its best light.
How much is my house worth? There are many factors that are considered when pricing a home. Not only are recent comparable sales reviewed but price, condition, location, and amenities are considered as well. Many people tend to over inflate the positive attributes their homes have and forget about the flaws. It is sometimes difficult to set aside an emotional attachment to the property and look at the pricing realistically. To get a general idea on the value of your home look at properties that have sold and closed within the last 6 months. Try to stay as close to your own neighborhood as possible and only look at homes similar in style, size, and age. If you price your home too high it will tend to stay on the market for a while causing buyers to question what is wrong with it. Pricing too low can also have negative effects by possibly causing a bidding war inflating the price, which can lead to appraisal issues down the road. For a detailed market analysis and current pricing strategies contact your local real estate professional.
How long will it take to sell my home? Currently in the Des Moines metro area houses spend an average of 70 days on the market. However the length of time it takes to sell a home varies wildly depending on price, location, and condition. Pricing correctly and marketing your home in many places will increase exposure and be the biggest driving factor for a faster sale.
Is staging my home really important? According to Realtor.com on average a staged home sells 88% faster than a home that is left as is. The reason staging works is it gives buyers something visually pleasing to look at and provides them with ideas what their lives will look like in this space. Whenever possible choose neutral colors for paint and flooring then accent with your own flare. Buyers can have a difficult time envisioning living in a space that does not match their lifestyle or belongings.
Should I be present when buyers view my home? No! In my experience buyers become very uncomfortable when the homeowner is present or even on the premises. They feel as they cannot make a comment or ask pointed questions about the home without being heard or offending the owner. It is natural to disagree or argue when a potential buyer makes a negative remark. It is better to let their agent talk through their concerns than disagree and potentially lose a sale.
How are real estate professionals compensated? In our market real estate commission is paid by the seller. One of the biggest misconceptions is that real estate agents bank the entire commission amount. Unlike lawyers or accountants who typically charge by the hour or doctors who are paid by procedure or appointment, real estate agents don't get paid until they close a sale. Commission rates can vary but typically 6-7% for a full service brokerage in our market. This is shared between both the listing brokerage and the selling brokerage. Agents are then paid by their brokerage or company they affiliate with after the sale is completed.