Best reasons to sell my home before I buy a new one.

Selling your existing home first is best in most circumstances. Sellers may not accept an offer that is contingent upon the buyer selling their existing home. If you buy first you may end up paying large monthly payments on a Bridge Loan while waiting for your old home to sell.

Best reasons to buy before I sell my home.

You may end up paying large monthly payments on a Bridge Loan while waiting for your old home to sell. However, if you buy first you will know where you are going and how much it will cost.

When is a good time for a buyer to buy and a seller to sell?

Buyer's Market: An oversupply of homes for sale will benefit the buyer with more choices and the ability to negotiate lower prices.
Seller's Market Homes in short supply will benefit the seller with quicker sales and higher prices.

How will the current supply of For Sale properties affect the sale of my home or the purchase of a new one?

The current supply of homes For Sale will affect both the length of time a home is on the market, and the final sales price.

Should I wait for interest rates to come down before I buy?

There is no way to know what will happen. If home prices rise while you wait for interest rates to come down you could still pay more for a house. The best time to buy in most cases is when you are ready.

Should I wait until I have a larger down payment?

Not necessarily. You might look into a low or no down payment loan program from a quality Lender or Mortgage Broker. Ask about getting pre-approved for a loan.

Can my parents help with my down payment?

Many loan programs will allow your parents to help with your down payment (as a gift not a loan). You might look into the various types of loans available from a quality Lender or Mortgage Broker. Ask about getting pre-approved for a loan.

How much can I afford?

Many factors determine how much you can afford.

• The amount of cash you have for down payment and closing costs.
• The amount you owe on other debts.
• The type of loan and the interest rate.

It is a good idea to talk to a quality Lender or Mortgage Broker. Ask about getting pre-approved for a loan.

Can the seller provide the financing for a buyer?

Financing the sale of a home can be a good investment for a seller that owns his home free and clear. This should be done just as it is at a Bank or other Lending Institutions. First a credit check on the Buyer followed by a recorded First Mortgage Note and Deed of Trust.

Can I buy a For-Sale-By-Owner for less money?

You may pay less for a FSBO property because the seller is not paying a Broker to market it. There are usually more FSBO properties available during a Sellers Market, when there are more buyers than there are properties For Sale. Make sure you have checked comparable sales prices and that you understand all the points of the purchase contract. You will want to protect yourself with inspection, title and appraisal contingencies. Also it may be wise to have all of the paperwork looked at by a Real Estate Attorney before you sign.

Why do I need a good Real Estate Agent?

A good agent can save you time and money. With their experience in the real estate market, they can be counted on for guidance, negotiation skills and for coordinating the transaction. They have an enormous amount of information at their disposal. If you are buying, they know about the current market values and the homes available for sale. If you are selling, they know how to reach the largest number of potential buyers.

What makes a good Agent?

As a seller you want your home exposed to as many buyers as possible, as a buyer you want to have available to you many homes to choose from. Look for an agent and company that are members in good standing with the National Association of Realtors, the local BOARD OF REALTORS and its Multiple Listing Service (MLS). The agent should specialize in and work your local area. You should feel at ease with the agent, that he or she is trustworthy, dependable, competent and committed to giving quality service. Also the agent and his or her company should have a good reputation and be sincerely interested in helping you.

Can anyone be a REALTOR?

Only licensed Agents and Brokers that have became members of the NATIONAL ASSOCIATION OF REALTORS and agree to abide by the organizations Code of Ethics and Standards of Practice may call themselves REALTORS.

Reasons to hire a local Agent.

Agents who specialize and work in your area are going to better understand area prices, sales history, and the best ways to market homes in your neighborhood. Your property could be at a marketing disadvantage with an Out of Town or Out of Area listing agent. If you are buying, a local buyers agent will have the experience to understand pricing and value in your market and will be more informed about the homes that are available.

What is the Multiple Listing Service (MLS)?

Quite simply, it is a system in which Member Brokers agree to share information and commission on houses listed on the service. So for example, if you list your house with a Broker that is a member of the area MLS, any other Member Broker can sell your home. If you are a buyer and the Broker you are working with is a member of the area MLS, your agent can show you and help you purchase any home listed by any Member Broker.

What about buying the biggest house on the block?

Buying a moderate sized home in a neighborhood of larger, more expensive homes is usually a better investment because the neighborhood tends to add value to the smaller home. A large expensive home in a neighborhood of smaller, lower priced homes, tends to be worth less because of its location.

Why would a property be overpriced?

It could be that the home has been listed with an agent who is not familiar with the area market. Perhaps the property is very unique and difficult to price due to the fact that there are no comparable properties. It may also be that the seller has over improved or done costly repairs and is trying to recoup his investment, even though his property is not worth the price.

Fixer-upper?

A fixer-upper may or may not be a good idea. Be sure you know what repairs need to be made and what they are going to cost. Also, make very sure that the value of the property after repairs will be high enough to pay you for your effort.

What about the neighborhood?

Whether you are buying or selling, the neighborhood has a lot to do with the value of a home. A home in one neighborhood may have a very different sales price than the very same home sitting in another neighborhood. A homeowner needs to be careful not to over improve his home, because the neighborhood may prevent him or her from getting the price they need to recoup their investment.

How important is property condition?

In general a home will sell quicker and a buyer will pay more for a home in Move-In condition. A buyer with the time and know how may be interested in a fixer upper, but one that must hire a contractor to do repairs and remodeling would more likely look for another home.

Resale Value and Location.

Location is always important. Homes in good locations tend to hold their value and sell quicker for more money. A home may seem to be a good deal, however if it is in a less desirable location, or the rest of the neighborhood is in decline, it may not be such a bargain.

What about Curb Appeal?

Curb Appeal is a term for what a buyer can see from the street. A house that is neat and clean with a well maintained lawn may make a buyer want to see more. Curb appeal can also refer to a house that looks charming and has nice architectural features. An appealing home will usually sell quicker for more money.

Market Value?

Market value is the price a willing buyer will pay for a property at a given time. Recent sales of comparable properties in your area are a good gage of the market value of a home.

Comparative Market Analysis (CMA)

An estimate of the value of a property based on an analysis of sales of other properties with similar characteristics, and used by brokers to help sellers set a likely selling price. An experienced local agent can gather information for you about recent sales, homes under contract and listings currently on the market to help you to price your home. If you are buying a CMA can help you decide if a home is listed for a reasonable price.

What makes a good comparable?

The best comparables are recent sales in the same neighborhood that are as similar as possible to the one you are thinking about buying or selling.

How does the negotiation process work?

Negotiations start with the Buyers, who draw up a written offer to purchase at the price and terms that are acceptable to them. Next the sellers either accept the offer or propose a counter offer that contains the price and terms that are acceptable to them. This process continues until and agreement is reached.

What is a contract contingency?

A condition that must be satisfied before a contract is legally binding. For example, a sales agreement may be contingent upon the buyer obtaining financing. Good faith efforts must be made to satisfy a contingency.

What are some common contingencies?

Real Estate contracts commonly contain a Financing contingency, making the sale contingent upon the buyers ability to obtain a loan. It is also common for a sale to be contingent upon satisfactory Termite, Property, Water Well and Waste Water inspections. Contracts may also contain contingencies for Appraisals, Sale of the Buyers property, Lead based paint and Radon testing, etc.

Should my purchase contract contain an Appraisal Contingency?

If you want to make sure you don't pay too much for a property you may want to add an appraisal contingency to the contract. Your Bank or Mortgage Broker will require an appraisal in most cases to be sure the property is worth enough to cover the loan that they are making to you. The problem with an appraisal for the purpose of acquiring a loan is when you make a large down payment, the property may appraise for enough to cover the

Property Inspection Contingency

Property inspection contingencies are common in Real Estate contracts. Inspection of the major home systems and components, the water well and waste water system, for termites, lead based paint, radon, etc., are for the purpose of determining whether there are any material defects or conditions existing on the property, not readily apparent to the buyer, which would affect a reasonably prudent person's decision to complete the transaction.

Inspections and Inspectors

Real Estate contracts will usually contain inspection contingencies. A buyer should hire a professional inspector., Regardless of age, all homes should be inspected, just because a house may be new doesn't mean that it was built correctly. Attending the inspection will allow the buyer to ask the inspector about any found defects. Inspections should include the home and property, termite, water well and septic if applicable, etc., depending on the area in which the home is located.

What is a defect?

There are Two Types of Defects. A Patent Defect is an obvious (or visible) fault or defect in a piece of property, such as a loose gutter or a broken window. A Latent Defect is a hidden fault or defect, such as bad wiring or a termite infestation.

What if a defect is found during an inspection?

Usually the buyer and seller negotiate and try to reach agreement upon a remedy that will satisfy both. If no agreement can be reached and the purchase is contingent upon a satisfactory inspection, the buyer may have the right to back out of the contract and be refunded his earnest money deposit.

Misrepresentation?

There would be misrepresentation and grounds for legal action if the seller knowingly and deliberately makes a false statement about the property, conceals a material fact about the property or conceals a defect in the property.

Real Estate Agents must disclose all material facts.

Whether they represent the buyer or the seller, Agents are required to disclose all Material Facts they know about the property.

What about Covenants, Conditions and Restrictions (CC&R's)?

Be sure you read and understand all rules that have been established for the community or subdivision you are interested in, before you make an offer to purchase. CCR's, may prohibit any number of things, including pets, remodeling, rentals, etc.

What Next? - I have found the house I want.

First, you make an offer and negotiate a purchase contract with the seller. Next, arrangements need to be made for financing, inspections, appraisal and title work. Repairs may also need to be made before closing. Your agent will help to make the entire process go smoothly.

Many people are involved the buying and selling process.

Real Estate transactions can involve many people including the Buyers, Sellers, Real Estate Agent (or Agents), Home Inspector,Termite Inspector, possibly a Well & Septic Inspector, the Lenders Loan Officer and Processor, an Appraiser, possibly a Surveyor, Title Company Representatives, possibly an Attorney and the County Recorder.

I want to make an offer on a For-Sale-By-Owner property, what do I do?

You need to draw up a purchase contract and make your offer. If accepted, you need to make arrangements for a loan, an inspection or inspections, you need to be sure you are to receive clear title and obtain title insurance. If you are not absolutely certain of your expertise in the purchase of Real Property, you might consider hiring a Real Estate Attorney or an experienced Real Estate Broker to represent you in the transaction.

What are some of the risks involved in buying a For-Sale-By-Owner property?

One of the biggest risks of a FSBO property is that you pay too much. It is not uncommon for a FSBO to be overpriced. See as many comparable listings as possible in the same neighborhood. Also be sure to protect yourself with inspection, title and appraisal contingencies.

A Final Walk-Through

A final inspection of a property by the buyer shortly before closing, or walk-through to make sure it is in the same general condition as it was when they agreed to buy it.

Should I feel pressured by my Agent to buy or sell?

Good agents will know the market, if an offer to purchase is fair or not, which homes are a good or bad value. Your agent should help you with the purchase or sale of a home, give advice and recommendations, but never pressure or push you. Remember the agent works for you.

Glossary:
Bridge Loan:

An interim loan, usually a second mortgage, collateralized by the borrower's present home (that is usually for sale). A bridge loan is commonly used for the purchase of a new home and is paid off when the old home is sold.

National Association of Realtors' (NAR):

A professional organization for the real estate industry. Agents and brokers who become members agree to abide by the organization's code of ethics and standards of practice. Members may call themselves REALTORS.

National Association of Home Inspectors (NAHI):

A professional association of independent home inspectors whose members must meet the group's education and performance requirements. Members agree to abide by the organizations code of ethics and standards of practice.

American Society of Home Inspectors (ASHI):

A professional association of independent home inspectors whose members must meet the group's education and performance requirements. Members agree to abide by the organization's code of ethics and standards of practice.

Material Fact:

Information about a property that could affect a buyer's decision to purchase, such as proceedings that might result in a special tax bill or assessment.

NAR Code of Ethics:

A formal code of ethics and standards of practice established by NAR and by which its members must abide. Available here.

REALTOR:

A registered trademark of NAR that can be used only by a real estate broker or an associate who holds an active membership with the NAR.

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