To Use a Real Estate Agent, or Not: Pros and Cons
Just about everyone is involved in the real estate market at some point in life, be it as a homeowner, investor, landlord or all three. No matter what, though, anyone who enters the market should be looking for the best deal, saving money that can be reinvested or kept in reserve. In order to get the best possible deal in this market, weighing one’s options is essential. Going about selling one’s house the right way can save thousands of dollars and make this complicated and difficult process easier. The first decision a prospective seller needs to make is whether or not to use a real estate agent to help manage the task. Both options have their benefits and downsides, so it is important to carefully consider this decision.
Good real estate training can help a homeowner make an educated choice on this matter. Using a real estate agent to sell one’s home means working with an expert on the local real estate industry. A good real estate agent has access to a wide range of marketing tools. She knows how to show a house and how to interact with potential buyers. Real estate agents can help with all aspects of the house selling process, including listing, pricing, making offers and counteroffers, and dealing with the necessary documentation. Working with a real estate agent generally gets houses sold quickly and at a fair price. Although there are many benefits to working with a real estate agent, this process also has several significant drawbacks. Most agents require a certain commission to be paid based on the house’s final sale price. Although this gives the agent an incentive to sell the house for as much as possible, it still cuts into the seller’s bottom line. Furthermore, a given real estate agent may be trying to sell many houses at once, and could send prospective buyers to other homes instead of the seller’s. There is a chance that one home may stay listed for many months while the agent sells other houses. The home owner’s other primary option is to try and sell the house himself. Perhaps the greatest benefit of this option is financial: The homeowner does not need to pay a commission. One hundred percent of the sale price goes directly to the seller. Additionally, the homeowner can really push the selling points of his own house since that is the only property he wants to sell. Trying to sell without an agent’s help also has many downsides.
The homeowner must do plenty of market research, show the house to prospective buyers himself and carry out negotiations personally. This is a substantial time commitment that many people simply cannot fit into their busy schedules. In addition, the homeowner does not have access to a real estate agent’s resources and network of contacts, which makes the process substantially less efficient. Taking real estate courses can make this difficult process easier. Although not paying a real estate agent can save the seller plenty of money, many homeowners do not know how to gauge the market and price their homes accordingly. Selling the house too cheaply can more than offset the savings from not using an agent. Conversely, many homeowners price their homes too high, at prices where they do not sell. The best real estate courses provide homeowners with the tools to price their homes ideally. When weighing these two options, it is important to consider the potential cost of using a real estate agent versus the benefits of working with a professional. Homeowners who wish to do their own selling should investigate training options to make sure they will get the best deal.
First Time Home Buyer Tips
•Pre-qualify for a loan
Being pre-qualified for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer.
•Shop for mortgage rates and terms
A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years,
that’s $12,600.
•Using a buyer agent
A buyer agent is legally responsible for representing the buyer’s interest in a real estate transaction. Generally, the buyer agent is compensated by the seller at the time you purchase a new home. There are some limitations to using a buyer agent, however. Before
you decide, have a Realtor explain the advantages and disadvantages of using a buyer agent.
•Features that help or hurt resale value
In some areas, a swimming pool actually detracts from a home’s value and makes the home harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. Your Realtor can point out features that
hurt, as well as those that help, resale value.
•Rate the houses you tour
After touring each home, write down what you liked and didn’t like. Develop a rating system which will help you narrow the field down to the house that’s the best for you.
Tips when you’re buying your first home
Whether you have spent years saving and preparing to buy a home or you still aren’t sure if it is something you can even dream of, the questions surrounding a first-time home purchase can feel endless. Here are some tips to help you with the process of becoming your own landlord:
1. Pre-qualify for a loan
Being pre-qualified for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer.
2. Shop for mortgage rates and terms
A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that’s $12,600.
3. Use a buyer agent
A buyer agent is legally responsible for representing the buyer’s interest in a real estate transaction. Generally, the buyer agent is compensated by the seller at the time you purchase a new home. There are some limitations to using a buyer agent, however. Before you decide, have a Realtor explain the advantages and disadvantages of using a buyer agent.
4. Determine features that help or hurt resale value
In some areas, a swimming pool actually detracts from a home’s value and makes the home harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. Your Realtor can point out features that hurt, as well as those that help, resale value.
5. Rate the houses you tour
After touring each home, write down what you liked and didn’t like. Develop a rating system which will help you narrow the field down to the house that’s the best for you. Whether you have spent years saving and preparing to buy a home, or you still aren’t sure if it is something you can even dream of, the questions surrounding a first-time home purchase can feel endless. Here are some tips to help you with
the process of becoming your own landlord. Ask us for a home comparison guide to make this process a lot easier.
Additional Costs to Consider Before Buying a New Home
When calculating the cost of buying a new home, many people forget to include some of the miscellaneous fees, taxes and insurance costs associated with owning property. All of these additional costs can definitely add up, and put what you thought was an affordable home out of your financial reach on closing day. Some of these costs are one-time expenditures that can be included in the closing costs, or even in the mortgage payments, but others, such as property taxes and homeowners association fees, can wind up as monthly or annual expenses for which you need to budget appropriately.
Here’s a list of 13 additional costs you may incur when you buy a new home. Budgeting in advance will help you turn what might be a financial nightmare into a smooth transition as you move into your dream home.
1.Appraisal fees.
The lending institution handling your mortgage may require an appraisal on the property before they proceed with the loan.The buyer is responsible for this cost, which may run between $175 and $300.
2.Property taxes.
Your lending institution may opt to include the cost of your property taxes into your mortgage payment, depending upon the size of your down payment or other factors. If they choose not to do that, you will be responsible for the annual or bi-annual payments yourself, and you may need to provide annual proof to your lending institution that these taxes have been paid.
3.Survey fees.
Your lending institution may require an updated property survey if you are not the first owner or original owner
of the property. Surveys can be moderately expensive, ranging from $700 to $1000.
4.Property insurance.
Your lender will require proof that you are carrying a homeowners insurance policy on your new house that will
adequately cover the replacement value of your home, which is different from the purchasing price.
5.Service charges.
Most utilities, such as water, power and cable, may require additional deposits or installation fees for a change
of service.
6.Legal fees.
A lawyer with experience in real estate should always review all the paperwork for the purchase of a home
before closing. Rates can vary greatly according to the expertise of the lawyer, and the size and complexity of
the real estate transaction.
7.Mortgage broker fees.
Mortgage brokers can charge you a fee to secure your financing with an appropriate lending institution,
although many will try to get the lending institution to share or absorb these fees.
8.Mortgage loan insurance fees.
This type of insurance, which can cost from 0.5 to 3.5% of the total mortgage, can usually be worked into the
monthly mortgage and property tax payments.You may be able to avoid this type of insurance if the equity in
your house is great enough.
9.Moving costs.
The costs for a professional mover can be as much as $100 for a van and three movers.These prices can rise
significantly during peak seasons.
10.Maintenancefees.
Condominiums, townhouses, and single family homes in planned communities may also charge a monthly
homeowners association fee for the maintenance of common grounds, recreational areas, and other amenities.
11.Water quality certifications.
If the water supply for your new home is provided by a well, then you should have the quality checked by a lo-
cal expert.These fees may or may not be the responsibility of the new owner, depending upon where you live.
12.Local improvements.
Property taxes can be affected dramatically if large municipal improvements, such as the addition of sidewalks,
water treatment centers or sewage systems, have been made recently.
13.Land transfer taxes.
These taxes are generally assessed whenever a piece of property changes hands.The amount can vary greatly,
especially if the value of the land has increased substantially since the last change of ownership
Finding a Reputable Mover in Dallas
There are various ways to locate a reputable moving company in Dallas. The easiest method is by consulting your family members or friends how have had an experience with a moving company. Your family and friends may be able to give you recommendations as well as share with you the bad experiences they encountered. This way you will be able to build a list of moving companies which you want to evaluate further.
Once you have developed a list of moving companies you want to consider in Dallas. You can leverage on resource websites that help evaluate these companies based on price, service, and other factors. These websites keep a database of all the moving companies in Dallas that consist of their address and phone numbers should you wish to contact the company. Through these resource websites, you can rest assure that the moving companies are licensed and qualified as a mover.
The resource website also post testimonials and reviews of past clients. This is where you can obtain further details about the moving company in terms of timeliness of their delivery and the competency of their staff. However, testimonials and reviews are rather subjective. Past clients can be very critical with a small mistake made by the moving company. Therefore, it is good to read the testimonials and reviews in an objective manner.
Besides that, resource websites provide free moving cost calculation. This quotation is a rough estimate based on the details given by the potential customer pertaining to distance of the move. Certain resource websites are able to provide a breakdown of the costs based on the various routes that the mover’s truck can take to the destination. This service makes it easy for you to quickly compare prices and then cross out the moving companies that charge to high for an equal service.
Finally, after narrowing down your selection, you can visit the specific company website to gather additional information on their extra services such as free packaging, free installation, and others. You could also visit the office of the moving company to speak to the sales associate and detail out the price and services they offer.
5 Home Buying Tips
Even in the best of circumstances, home buying or selling is stressful, and some of the biggest potential deal-breakers lurk in the time right before the sale closes. Home buying stress can be easily avoided, however, with the following five home buying tips.
Home Buying Tip #1 – Home Inspection Results
Todays home purchase contracts typically include a home inspection contingency clause, which allows the buyers to choose and hire a home inspector to thoroughly evaluate the property. Once the contract has been signed, the home inspection usually happens quickly. Arriving with the buyer, the home inspector will go through the entire property for a thorough two- to three-hour evaluation of a homes structural and mechanical condition. Home inspectors may also do tests for radon gas, check for wood-destroying insects or perform other services requested by the buyer.
Findings can range from minor issues calling for low-cost repairs to major toxic troubles like the presence of underground oil tanks, mold, asbestos, termite infestations, rodent overruns, and lots of dangerous lead paint. Depending on the severity of the findings (which, by the way, are only reported to the hiring party), there is either a new round of home buying negotiation accommodating the price and execution of repairs, or an abrupt halt to the home buying proceedings due to costly and dangerous problems.
Here’s a home buying tip to help sellers avoid potential these hassles: before you list your home, have the home inspection done. That way, you’ll be fully acquainted with possible issues and have the opportunity to correct them or, as several states require, will be prepared to make a complete and honest disclosure that will reduce your liability as well as surprises during the buyer’s inspection. Thus, lower unnecessary anxiety and allowing a smoother transaction.
To find a local, qualified home inspector and more home buying tips for home inspections, visit the American Society of Home Inspector where you can also get acquainted with the home inspection process via a virtual home inspection.
Home Buying Tip #2 -Stubborn Sellers
Combined with results of the buyer’s home inspection, home sellers not wanting to back down on price is another factor that can bring negotiations to an end. It’s no surprise that the seller should want to get the best price possible for their home, a factor that’s magnified in the current housing market. But being unwilling to budge after a home inspection reveals negotiable fixes can result in a bigger cost: no sale at all.
“It’s all a matter of the individual,” says Ken Gunther, president of First Interstate Financial, a mortgage banking group based in Shrewsbury, New Jersey. Most sellers obviously have a number in their mind, thinking, I’m not going to sell this house unless I can clear X number of dollars, or I need to clear X number of dollars so I can move to the next property. As a result of that, there isn’t the home price flexibility that you sometimes need.
Home Buying Tip #3 – Unexpected Appraisal Results
If things have gone smoothly during the home inspection process, another possible bump in the home buying road is a post-inspection home appraisal yielding a value different from the contracted price. How significant that difference is can again be in the eye of the beholding home buyer.
For instance, a home buyer who has the finances to manage the contracted price, wants the home, and plans to be in it for an extended period of time, but may feel that they’ll be able to come back and gain that value differential in a future market upswing. While another buyer in different circumstances will respond with a demand to go back to the negotiating table for a better deal and the seller may refuse, ending the process.
Home Buying Tip #4 – Financial Fumbles
Sudden status changes or other bad news regarding personal finances can also derail a home buying or selling deal. Credit score is one, although Gunther notes this is a rare surprise in the present market since most realtors require buyers to be pre-approved by the lender before the home search begins. More common and less predictable are sudden income changes that hit after approval and during the purchase process: a job could be lost, depended-upon overtime hours could be cut, or stock options designated for a down payment could unexpectedly drop in value.
Another thing that first-time home buyers in particular may not count on is the expense of home ownership above and beyond monthly mortgage payments like a furnace that gives out or a water heater that leaks. If unprepared for these costs, a financial freak-out may happen.
“Home buyers should really sit down and write a budget checklist, because we’re qualifying them for a loan on their gross income, not their net,” says Linda Neal, underwriter at First Interstate Financial Corp. Say I’m qualifying someone for $3,000 a month in income, but when it comes down to it, they’re only netting $2,000. When you calculate your mortgage, your taxes, your insurance, your utilities. Everything is higher than when you rent. You’re adding costs when you purchase a home.
Home Buying Tip #5 – Legal Loopholes
Legal surprises can leap out during the fast-paced, stressful days before a sale is finalized. It’s important to have an attorney’s representation during the contract period. A survey may reveal that a property line doesn’t fall quite where you thought it did, limiting your future plans; an easement can put you in an uncomfortable relationship with the city or state government; or previous bidders may not have been properly released from their contract and still have a legitimate claim on the home you’re planning to buy. So, be sure to get a legal professional involved in the process to ensure that every “i” is dotted and every “t” is crossed.
Finally, be aware of potential penalties and fees related to cancelling a purchase contract to buy or sell a home. These vary according to the agreement structure and policies of the professionals involved, but the more you know ahead of time, the better off you’ll be if a deal-breaker enters the home buying or selling picture.