Realtors handle a multitude of transactions throughout the year. Their clients range from renters to first-time home buyers, sellers and experienced investors. They make a career out of helping individuals understand the housing market, mortgage loans, buying and selling, and even transitioning from homes for their clients. It is our Realtor’s job to keep us in the loop on market trends, the best time to buy and sell, industry changes, and advise us on the best way to market our home.
We have compiled a list of “frequently asked questions” various Realtor are asked on a regular basis. This compilation will hopefully help explain and clarify many of the questions you may have when you find yourself buying, selling or investing.
What services will my agent/Realtor perform for me?
A full service real estate agent will typically perform close to 200 functions in return for their sales commission. Here are just a few of the services (depending on if you’re buying or selling) a realtor will perform: prepare marketing strategy, review all contracts, bids and offers, evaluate market conditions, asses homes, verify qualifications, perform negotiations, answer questions and perform an array of analyses along with countless other tasks for their client.
What are the benefits of a Realtor?
A Realtor may have additional knowledge about a specific area or home, they’re experienced negotiators, they have access to pre-listing and newly listed homes or market trends, and they follow a strict code of ethics code of conduct and want to earn your business and trust.
How do I know when I’m ready to purchase my first home?
That question can really only be answered by yourself. Ultimately you will be the one that has to make and live with your decision to buy a home, it is a big but rewarding commitment. You can start by asking yourself a few short questions to determine even if buying a house is plausible for your current situation.
- Am I ready to settle down in one specific area and live?
- Do I have a steady source of income/employment and have stability in income over the last 2-3 years?
- Have I saved enough for a down payment?
- Do I have too much debt (more than I make)?
- Do I have derogatory credit or a good record of paying obligations on time?
- Have I evaluated my budget and made a list of what I need in a home?
If you can answer these questions solidly, then you’re more than likely ready to purchase a home.
How does a lender determine what I can afford and the max they will lend?
All lenders use your debt-to-income ratio as a main factor when determining a maximum loan amount. That ratio is your gross income (minus) your reoccurring expenses or debts. The lender will also look at your savings, credit score and monthly potential earnings.
What are the best questions to ask when considering a home for purchase?
Your questions should focus on the history of the home, past or present maintenance issues and if anything is currently broken or will need to be replaced in the future. You should also ask about the neighborhood, schools, nearby shopping and how the area responds to inclement weather (especially rain or flooding). If the owner has owned the home for a long period of time you may want to ask about the tax history and any increased pattern and also if the home has held its value compared to other nearby homes. Make sure you receive clear answers from the seller’s agent and if you feel you didn’t get a solid answer to one or more of your questions, then discuss it with your agent.
How do I make an offer on a home?
You and your real estate agent will have a discussion and evaluate the home before making an offer. It will also depend on how long the home has been on the market, the demand of the home (consider other offers or competition) and your budget. Your offer will be comprised of the following information: amount of earnest money, down payment and financing terms or method of payment, price you are offering, desired closing date, terms of the contract or offer and any special provisions you want included. Note that a sale commitment depends on negotiating a mutually beneficial contract with the seller, not just making an offer.
What can I expect during the closing process and what are all the fees?
The closing process is the final step before you can move into your home and legally gain possession. The closing will legally and successfully transfer the ownership and deed of the home and record it. It will be the facilitation of the financial transaction and title process. Some of the fees you can expect are: escrow fees, property taxes (prorated), interest (paid from date of closing to 30 days before first monthly payment), loan origination fees (in some cases), recording/transfer fees, survey fee, title insurance, documentation preparation fees, clerical fees and any commissions. You will get your keys at the closing unless otherwise negotiated.
When is the best time to list and sell my home?
You can list and sell your property anytime you want but keep in mind the market is temperamental and specific times or trends will allow for a hot/cold sales market. Real estate property sells all-year round but really it is driven by supply and demand and other specific economic factors and it can be seasonal too. The particular time of year you choose to sell your home can make a big difference in how long it stays on the market and your bottom line selling price. Typically the real estate market starts buzzing around the early spring and can get busy but by the time it hits the end of summer (July and August) the activity has dwindled. July and August are usually the slowest months for real estate listings and sales, simply because people tend to take a vacation. There is a market pickup right after the summer sales slump, normally after the school season starts and that usually lasts through the fall. When entering the holiday season the amount of homes on the market decreases significantly. Sellers are unsure if their home will sell due to the holidays and holiday spending. Most sellers don’t want strangers coming in and out of their home during those times due to holiday entertaining stress or a surplus of gifts in the home. However, there may still be buyers in the market looking for a home prior to the New Year but now they have fewer homes available to select from. Homes that are actually listed on the market during the holiday season have less competition.
How do I decide my list price or home worth?
You can use a few methods like having an actual appraisal done or you can use a comparative market analysis. You and your realtor will need to sit down and get on the same page when pricing your home before it is even listed. You can factor in recent sales around you and include any upgrades you’ve made as a solid starting point.
What should I do before I list my home and should I repair anything?
Again, this is something you and your realtor need to discuss before you do anything radical. The main thing to do prior selling/showing your home is declutter, clean and arrange furniture pleasantly before you spend any money repairing things. You can tackle minor repairs that are inexpensive like a leaky faucet, broken light fixture or stained carpet. However, don’t invest tons of money in cabinets, countertops and new flooring unless you and your realtor determine it will make a big impact in your bottom line.
What should I do if I don’t get many showings or offers on my home?
Evaluate your marketing plan, sales price and overall current market conditions. If those things are favorable and you and your realtor are in agreement, then take a look at your home. Make sure it is clean and there are no foul odors or unsightly messes and make sure you are making your home welcoming. Furthermore, make sure your accommodating to any and all showings.
We hope this list has helped with a few of your most common questions and eased any stress you feel when shopping for a new home or listing your home for the first time.