real estate agents

5 Things a Homebuyer Shouldn't Say to a Seller's Agent

Dan Rafter — Wed, 06 Jun 2018 08:30:23 +0000

You're touring an open house and the real estate agent running the event walks over to say hello. What should you say in return? Well, you can say hello right back. But other than that, it's best to stay pretty much mum.

The agent at an open house is a seller's agent. This individual is paid to represent the best interests of the people selling the home — not yours. If you say too much, you run the risk of accidentally providing them with information that he or she can use against you if you make an offer and eventually enter negotiations to buy their client's home.

What should you never say to a seller's agent? Here are five conversation gaffs to avoid during an open house.

1. How much you love the house

You might think it's natural to tell the agent at an open house how much you love the home you are touring. This, though, can be a big mistake when it's time to negotiate a final sales price if you decide to make an offer.

Think about it: If the seller's agent knows that you absolutely love the home, they might be less willing to advise the current owners to lower their asking price. After all, you've already told the agent that the home is a great fit. They might even figure you'll be willing to pay more because you like the home so much.

Don't say anything to the seller's agent about how much you like the home, even if you really do love it. Don't confess that the backyard is perfect for your children. Don't say how much you love the renovated kitchen. And don't mention that you can already imagine relaxing in the spacious living room. Keep these thoughts to yourself to avoid giving your seller's agent any extra ammunition during future negotiations. (See also: 20+ Questions to Ask During an Open House)

2. How soon you need to move

Never let a seller's agent know that you're getting desperate to find a home. This, too, can give an agent inside information that could be used against you.

If you tell an agent that you absolutely need to move in the next month, that agent might tell his or her clients that they should hold out for a higher final sales price. After all, you're desperate to move. The seller's agent might rightly assume that you'll be more likely to accept a higher sales price if it means getting into a new home quickly.

3. How much you're willing to spend

You likely have an upper limit for how much you can afford to spend on a home. Keep that limit to yourself. Absolutely never share it with a seller's agent.

Say you can afford to spend up to $300,000 on a home. Don't comment to the agent that you're excited the house is listing for $290,000 because it's $10,000 under your budget. If the sellers know that you can afford to spend more, they may not be as willing to lower their asking price during negotiations.

Share your budget with the agent representing you — your buyer's agent. But make sure it's a secret that the seller's agent never learns.

4. Personal details

Maybe you're looking for a home because your company transferred you to a new location. Maybe your family is growing. Maybe you've gone through a divorce and you need to downsize.

Keep these personal details to yourself. If you share them with the seller's agent, the information you've spread might once again come back to haunt you during negotiations.

For instance, maybe you need to move because you're having a baby and once that baby arrives, you won't all fit in your current home. Armed with this knowledge, the seller's agent might advise his or her clients to hold firm on their asking price. They know you're backed into a corner. You need to move to find space for your expanding family, and they have the space you need.

5. Any financial problems you're having

You want sellers to view you as a serious buyer. If you share financial struggles with the seller's agent — a past bankruptcy, a low credit score, mounds of credit card debt — you might do the opposite. If the home's sellers think you have financial problems that might prevent you from qualifying for a mortgage (assuming you haven't prequalified), they'll be less willing to enter into serious negotiations with you.

If you've had financial hiccups in the past, keep them to yourself. You don't want sellers to think they'll be wasting their time by accepting an offer from you. (See also: Everything a First-Time Home Buyer Needs to Buy a House)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Common Homebuying Myths, Debunked

Dan Rafter — Mon, 28 May 2018 09:00:17 +0000

You're ready to own a home. And you think you know the basics involved in finding one, working with a real estate agent, and applying for a mortgage. But buying a home for the first time can be a confusing process. This is especially true if you believe certain myths about searching for and making an offer on a house.

If you want to alleviate some of the uncertainty that comes with buying your first home, it's time you learned the truth about the homebuying myths too many consumers still believe.

1. Working with a real estate agent is expensive

Actually, if you're working with a real estate agent to buy a home, it's free. Buyers usually don't pay for the work their agents do in helping them find and make offers on homes. When you buy a home, the sellers typically pay the commissions of both your agent and theirs. The funds for this come from the proceeds of the home sale.

You will have to pay plenty when you buy a home, including the many fees and costs that go with taking out a mortgage and hiring inspectors. But you won't pay anything to your real estate agent. So there's no good reason to skip working with a real estate agent if you are a buyer. (See also: 5 Things Your Real Estate Agent Wishes You Knew)

2. You need a down payment of 20 percent

Applying for a mortgage is another nerve-wracking part of buying a home. You'll pay thousands of dollars to your lender and other third-party providers to close the loan that allows you to buy your new home.

But you probably don't need to come up with as big of a down payment as you think. Many buyers mistakenly think that they need to come up with a down payment equal to at least 20 percent of a home's final purchase price. That can be intimidating: A 20 percent down payment on a home costing $200,000 comes out to $40,000 — a lot of money.

Fortunately, you can buy a home with smaller down payments. FHA loans, for instance, often require down payments as low as 3.5 percent of a home's final purchase price. You can also qualify for conventional loans with down payments as low as 3 percent.

Remember, though, that you must pay for private mortgage insurance — better known as PMI — if you don't come up with that 20 percent down payment. This can add extra costs to your monthly payments until you build up at least 20 percent equity in your home. (See also: Do You Really Need a 20 Percent Down Payment for a House?)

3. Spring is the best time to look for a home

Traditionally, buyers have flooded the housing market in the spring, when the majority of single-family homes and condominiums go up for sale. However, there really is no one time of the year that is "best" for buying a home. You might even find better bargains on homes if you start your search before or after the spring.

Say you start looking in the summer. There may be fewer homes available, but you'll also find buyers who are willing to negotiate on their asking price as they become more desperate to sell. The same goes for winter, when sellers may be looking to relocate quickly. (See also: 5 Reasons Fall Is a Great Time to House Hunt)

4. The best mortgage is a 30-year, fixed-rate loan

The traditional 30-year, fixed-rate loan comes with two big positives: The monthly payment will only fluctuate slightly over the life of the loan, and the monthly payment is relatively low because the loan term is so long.

However, this doesn't mean that this loan is right for every buyer. If you take out a 15-year, fixed-rate loan, you'll have a higher monthly payment, but you'll also pay tens of thousands of dollars less in interest. If you plan on spending five years or less in the home you are buying, an adjustable-rate mortgage (ARM) might even be a better choice because it comes with lower initial interest rates.

Your best move is to work with a mortgage lender who can help you determine which loan product is best for you. (See also: Is a 15-Year Mortgage a Good Idea?)

5. Once a seller accepts your offer, your worries should be over

There is a big potential pitfall that could scuttle your purchase even after you and a seller sign a sales contract: The home you are buying might not appraise at a value that is high enough.

After you and your seller sign a contract, your lender will require that you pay for an appraiser — about $400 to $500 — to determine the current market value of the home you are buying. If that market value isn't at least equal to the money your lender is giving you, your deal could flop.

For instance, if your appraiser judges that the home you want to buy is worth $150,000 and you've agreed to purchase the residence for $225,000, your lender might agree to only loan you $150,000. That means you'll have to come up with the remainder out of your own pocket or convince the seller to lower the asking price. If these solutions aren't available, your deal could fall through. (See also: 5 Reasons a Home Sale Could Fall Through)

6. The value of the home you buy will always appreciate

We all hope that the home we buy will be worth more when it's time to sell. And often, it is. But there are no guarantees that the home you buy will appreciate in value, no matter how long you hold onto it.

Don't believe anyone who tells you that housing prices only go up. Those buyers who purchased in 2005 or 2006, at the height of the residential real estate boom, know that housing prices can go the other way, too. Many of those buyers are still living in homes that are worth less today than they were when they first bought them. (See also: 4 Worst Reasons to Buy a House)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How Long Does It Really Take to Close on a House?

Ashley Eneriz — Mon, 09 Apr 2018 09:00:07 +0000

Buying a new home is an exciting process, but there are also a lot of challenges and frustrations that came along with closing on a mortgage. Even when you and seller can agree on a closing date, this date is not set in stone and can change for many reasons.

Closing on a home purchase can take anywhere from four to eight weeks. The answer to how long your particular home will take depends on many things — you, the seller, the house, and the professionals behind the closing process. (See also: Here's What's Included in a Home's Closing Costs)

Possible delays to the home closing process

There are several things that can delay the closing of a new home purchase. While most can be resolved quickly, here are the more common causes to be aware of.

Questionable items on your credit report

Your credit report is checked a couple of times during the home buying process. If your report shows new debts, mistakes, a sudden drop in your credit score, or even a recently reported late payment, you might have to fix things in the underwriting stage of the loan before you can close.

Other life major life changes with financial impact, such as a job loss or change of marital status, can also cause a delay right before closing. (See also: 5 Reasons a Home Sale Could Fall Through)

Low appraisal

If you need to finance your home, the lender will request an appraisal of the property. If the appraisal comes back lower than the seller's asking price, the lender will refuse your loan. In order to remedy this, you will need to renegotiate terms with the seller or pay the difference with cash before the loan can go through.

Home inspection problems

A negative finding during the home inspection, such as a leaky roof or faulty wiring, will need to be repaired before you can close on the house. (See also: Thinking of Skipping the Home Inspection? Here's What It Will Cost You)

Additional documents needed

Once your home buying process begins moving forward, your finances and financial history will be looked over closely. This can result in the need for several documents and letters of explanation for certain aspects of your finances. For example, if your bank account has your maiden name on it, you'll need to explain the discrepancy.

Title problems

An issue with the title, such as a lien, will delay the home sale.

Slow professionals

Sometimes a closing delay has nothing to do with the buyer or seller, but instead with the professionals who are handling your loan. You'll work with many different people throughout the homebuying process, so if any one of them delays turning in their portion of the documents for the next step, that delay will be felt by you and the seller. The delays can come from your own real estate agent or the buyer's, as well as the lender, the bank, and even the underwriter.

Problems with the final walk-through

There is always the possibility of something going amiss during the final walk-through. The home you looked at and had inspected could suddenly have plumbing or electrical issues the day of the final walk-through. Any issues will need to be resolved before the home closes.

How to close on a home quickly

You can't control everything in the closing process as the buyer, but you can manage your responsibilities in a way that speeds up the process. Here are a few things that you as the buyer can do for a quicker home closing.

Keep a clean financial record

Even though you are excited to purchase a home, don't celebrate by spending a lot of money or opening a new line of credit. Wait until your mortgage clears before you buy furniture or a new car.

Be quick to communicate

During the home buying process, you will be asked to answer a lot of questions, provide a lot of documents, and attend several meetings. Being readily available and getting documents to the agent and lender quickly will speed up the process. Schedule the home inspection as soon as possible to ensure there is enough time for quick repairs.

A delayed home closing can be frustrating, but many of the possible delays that happen are actually to protect the buyer. Buying a house is a large investment, so it is crucial that all of the paperwork is done correctly so that you don't endure problems later.

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Things Sellers Should Watch Out for During Escrow

Damian Davila — Mon, 13 Nov 2017 08:30:15 +0000

When selling real estate, such as a home or condo, you'll have to go through escrow — a process in which a third party holds your property and the buyer's funds until both you and buyer meet your contractual obligations.

While waiting for your home to close can feel like forever (average escrow time ranges from 30 to 40 days, depending on the state and type of sale), escrow is a necessary process to make sure that your buyer is capable of making payments and your property is thoroughly inspected. Here are some key things you should do to make sure that your escrow period goes smoothly.

1. Fine tune your property's description

When you receive a first offer from a buyer, you'll notice that the offer will include a clause with a description of your property. It's best practice to add to the description, "Exact legal description to follow in escrow." This is to cover the possibility that some material changes are found during the escrow process and to set the expectation that such changes could happen. For example, an escrow officer may uncover clerical or filing errors that could affect the deed or survey of your property. Once the full legal description of your property is set by your escrow company, the company will include that lengthy description in the title report.

2. Limit additional prorations and closing adjustments

During escrow, you should continue paying all obligations related to your property, such as mortgage payments, insurance premiums, taxes, and homeowner's dues. However, your costs will be prorated once you close, usually based on a 30-day month. (The terms of the proration are usually spelled out in the purchase contract.) For example, if you were to close your sale on the ninth of the month, you would be responsible for the first nine days of the month and you would receive a refund for the other 21 days in your final payment.

Watch out if a buyer sneaks the words "any other acceptable to buyer" into the list of prorations and closing adjustments. This would open the door for a buyer to include expenses that aren't really your responsibility, such as the installation of a central air conditioning unit or keyless entry system not discussed prior to sale. If you see the phrase, "any other acceptable to buyer," include an instruction in your counteroffer to delete that description and replace with "none."

3. Keep the definition of your title objective

In your offer, you'll find a section that describes all aspects regarding the title of your property. In there, a clause will state that you agree to convey your property to the buyer free and clear of all liens and encumbrances save for some exceptions, such as an easement (somebody having the legal right to cross your property without owning it) or a rule from a homeowner's association.

Under this clause, again look out for a buyer including "any other acceptable to buyer" in the list of exceptions, which could cause delays in escrow. It's best to delete those words and replace them with "exceptions of record." Examples of exceptions of record are the discovery that a third party, such as a mortgage lender or the federal government, have a monetary claim to your property or a neighbor has invaded your property without you realizing (such as with a misplaced fence). This way, title exceptions will be set objectively and not be subject to opinions.

4. Tighten time frames for buyer's obligations

During escrow, it may seem that the seller has a long list of obligations to meet. In reality, the buyer also has several obligations, such as acting in good faith to obtain a mortgage loan, if applicable; delivering an approval letter of the mortgage; and providing actual payment.

Ask your agent what time frames are appropriate for a buyer to complete these and other obligations. Use those benchmarks to evaluate the number of days presented by your buyer to complete those tasks. Depending on your scheduled closing date, you'll often find that those time frames can be shortened.

5. Shorten time for review of seller's disclosure

As part of the escrow, you'll have to fully and accurately disclose in writing to your buyer any fact, defect, or condition that would be expected to measurably affect the value of your property. Some examples include water damage to a wooden floor, a nasty carpet stain, or termite damage. The rule of thumb is that the more you disclose, the better. It demonstrates that you're acting in good faith and accurately describing your property.

Since you put so much time and effort into this long list of disclosures, you want your buyer to review it and commit to it within a short period of time. Talk with your agent about what is an appropriate review time for the seller's disclosure in your local housing market.

6. Budget for buyer's contingencies

During the inspection, a buyer will go beyond the items that you disclosed and will also focus on his or her own checklist. Here are some examples of items that your buyer could be on the lookout for:

Installation of smoke detectors.
Inspection of moisture in a bathroom, kitchen, or other room.
Proper grounding of electrical outlets.
Installation of a ground fault circuit interrupter (GFCI) near a bathroom sink.
Replacement of broken faceplates at outlets.

Plan ahead for such expenses and build a cushion in the original listing price and counteroffer price, if applicable, to cover for such contingencies. While you want to sell your property sooner rather than later, you also want to make sure that you settle on a price high enough to cover these and all other expenses involved in the sale. Most real estate agents can show you a list of preferred contractors who can provide you quotes at reasonable prices.

7. Take out clauses to deliver existing warranties and plans

In the spirit of knowing what they're really getting themselves into, a buyer may include a clause to bind you to submit at closing all warranty documents covering improvements of the property, instruction booklets for included appliances, original blueprints of architectural or engineering drawings, and other types of documents.

Save yourself a headache and mark such clauses as "not applicable." When you're in the process of emptying your home, chances are you won't be able to find those documents or will misplace them. Don't commit to delivering those documents in writing, but feel free to provide them if they're readily available.

8. Limit scope of last-minute cleanings

When you got your property showing-ready, you probably spent big bucks in getting carpets professionally shampooed, windows professionally cleaned, and bathrooms scrubbed down. Keep all receipts for those expenses and don't budge at requests to repeat cleaning services a couple of days before closing. As long as you've done a good job to maintain the cleanliness of your home, especially if you already moved out before listing, there's no real reason to do a deep cleaning again.

9. Double check for addendums

In addition to combing through the contract, you'll also want to read through any addendums made by the buyer that could replace the rules of the contract in case of a conflict. Here are three addendums to watch out for:

Request to remedy unpermitted work: In this scenario, a buyer would ask you to get permits for any renovations completed without one. You shouldn't agree to this type of addendum because there are many instances in which you can complete renovations without a permit. Depending on homeowner's association bylaws, some renovations may not require a permit at all, such as the installation of a bathroom sink or replacement of kitchen cabinets. Other type of work completed before a bylaw being introduced may be exempt of a requirement, such as noise proofing of a wooden floor.

Concession: Reject clauses that allow the buyer to submit a repair or credit request in writing. While the buyer has the right to inspect your property in different ways, you should be the one deciding on how to procure acceptable ways to comply with the buyer's requests.

Timeline contingency: The longer the escrow process lasts, the greater the chance for a sale to fall through. Delete in its entirety any timeline addenda requesting if a deadline falls on a weekend or federal or state holiday that it be moved to the next business day.

Escrow is the final stretch of a home sale. Keep a positive attitude and stay in touch with your escrow officer and agent. You got this!

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Tips to Sell Your Condo Fast

Damian Davila — Wed, 01 Nov 2017 08:30:09 +0000

This year is turning out to be a great market for home and condo owners. Despite the consistent rise in home prices across the nation (prices saw a 5.8 percent increase in 2017), buyers are still rushing to take advantage of the lowest mortgage rates in history.

If you have been thinking about selling your condo, now may be the one of the best times. Take it from me; I was able to get the right offer for my apartment in just 21 days. Here are the key strategies to keep in mind when selling your condo.

1. Review the DOM range for comparable condos

Short for "days-on-market," DOM measure the days that a real estate property is on the market before a seller accepts an offer from a buyer, or the agreement between real estate broker and seller ends. Search online for real estate agents specializing in your building and look for a listing of the units that have been sold and are currently in escrow. That list will include the DOM for each unit.

Look at comparable condos to yours (similar square footage, floor location, and type of unit) to determine a reasonable time frame for your condo to sell. The definition of fast sale varies from property to property, but this range will provide you a better benchmark.

2. Decide what improvements are worthwhile

It takes money to make money. Before officially listing your condo, you'll need to prep it. Depending on the condition of your unit, it may just need a fresh coat of paint, or it may need a total makeover. There are several ways that you can go about deciding how much money to put into renovations.

First, attend open houses of comparable units, also known as "comps," currently listed in your building and review the listing pictures of comps currently in escrow. This will give you a sense of what caught the eyes of buyers and what type of inventory you're competing against. Put yourself in the eyes of potential buyers and think of improvements that will make your unit stand out from the competition or compensate for less desirable features (perhaps there's no ocean view, but your unit is the only one with new cabinets).

Second, review the 2017 Remodeling Cost vs. Value report from the National Association of Realtors to find out the average value that a renovation project adds to properties in your region. In 2017, a minor kitchen remodel recouped a national average of 80.2 percent of its cost while a bathroom addition only recouped 53.9 percent. Choose projects that don't break your budget and have a higher chance of boosting your asking price. (See also: How Much Are Pricey Home Upgrades Really Worth?)

3. Gather documentation and review any HOA rules

The more you know about your condo, the more prepared you'll be to address questions from buyers. For example, the presence of asbestos in the popcorn ceilings in older buildings can be more common than you think. However, your building's homeowner association (HOA) may have already done a study to find out the percentage of actual asbestos in the ceiling. If the survey reveals that the actual percentage of asbestos in the ceiling falls within acceptable standards, you don't necessarily have to remove it and can include the survey in your disclosure statement to the buyer.

Also, HOA rules can help you determine what improvements are worthwhile. Let's imagine that you have a wooden floor with partial water damage due to an open window during a storm. You're trying to decide whether to replace the floor entirely, lay down additional flooring on top, or leave the floor as is. Depending on the rules of your building, you may or may not be required to also soundproof your wood floor, which can add hundreds to thousands to your quote. Always check with your HOA before starting any work on your unit.

4. Look for ways to minimize listing costs

Skipping the standard real estate agent's commission of 5 to 6 percent sounds like an awesome idea in theory. While pocketing an extra $15,000 to $18,000 on a $300,000 condo is enticing, make sure to understand just how much easier a real estate agent can make the selling process. Even worse, you may dramatically reduce the number of potential buyers by going the "for sale by owner" (FSBO) route. Many buyer's agents won't show your property to their clients at all or strongly discourage those clients from making an offer, citing the risks of closing without a professional representing you.

Still, there are plenty of ways that you can save on listing costs while working with a real estate agent.

Ask if the commission is negotiable. Don't assume that a 6 percent commission is the default. With the rise of low-fee real estate brokerages, such as Redfin charging only a 1 to 1.5 percent listing fee, some agents are more open to negotiation in some markets.
Stage your home yourself. According to Realtor.com, a staged property sells an average 88 percent faster and for 20 percent more than one that hasn't been staged. But professional staging can be expensive: Realtor.com estimates an initial design consultation with a professional stager ranges from $300 to $600, and actual staging ranges from $500 to $600 per month per room. Staging is one area in which going DIY can help you keep costs down. (See also: 8 Ways to Stage Your Home Without Hiring a Pro)
Your real estate agent can be a useful resource to shop around for contractors for small fixes. In case a buyer were to ask for proper grounding of electrical outlets, replacement of broken faceplates, or other type of work, your agent may be able to hire a contractor at a much lower rate than one you'd find on your own.

5. Screen the clauses in your buyer's initial offer

Receiving your first offer is very exciting! Still, take a step back and thoroughly review the clauses included in that buyer's offer. Here are some things to keep an eye on. (See also: 9 Things Sellers Should Watch Out During Escrow)

"Acceptable to buyer" prorations and closing adjustments. If you were to submit a counteroffer, request to delete such verbiage from the offer. "Acceptable to buyer" adjustments are subjective and can open the door for a buyer to include unnecessary items or requests.
Tighten the time frames for any buyer's obligations. The longer that an escrow process takes, the higher the chance of the sale not going through. So, shorten review times, such as review of seller's disclosure and inspection after completing buyer's contingencies requests, whenever possible.
Watch out for additional addendums. Here's where knowing your HOA rules comes in handy. Depending on when certain work was completed on your unit, some work may not have required a permit or certain additional requirements. Going back to the example of the wooden floor, if the floor was installed before the year in which the soundproofing requirement went into effect, you wouldn't have to remedy the situation. Pay close attention to addendums requesting to remedy unpermitted work or allowing the buyer to submit a repair or credit request for repairs.

6. Understand your BATNA

Short for Best Alternative to a Negotiated Agreement, BATNA is a key concept in any negotiation. Here's why: This is the price point at which you can't do better than accepting your buyer's offer. When listing your home, you'll have to decide on the initial price. Most of the time, you want that first price to be above the lowest price that you'll accept for your condo. That way, you'll be more willing to lower the price to make a sale happen.

Pricing your home too close or exactly at your BATNA will work against you because you won't have any wiggle room to work with a buyer. Unless you're in a red-hot seller's market, you can't take an all-or-nothing approach to your condo sale. Would you be willing to go down $1,000 in price to sell your condo today, or stick to your guns and wait an extra three months? Once your condo has been on the market for a few months, your agent may ask you to lower the price. Knowing your BATNA will help you negotiate your condo sale more efficiently and potentially lower the DOM of your unit.

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Questions Real Estate Agents Hear Most Often

Mikey Rox — Fri, 11 Aug 2017 09:00:06 +0000

As a first-time homebuyer or seller, you'll probably have a lot of questions. This is par for the course, especially if you have zero knowledge of the real estate process. More than likely, you'll drill your real estate agent with queries as you navigate the buying or selling of your home. And, one of these common questions is bound to come up. (See also: 5 Things Your Real Estate Agent Wishes You Knew)

Buyers

As a buyer, you are probably most interested in what you're getting yourself into.

1. Is the neighborhood safe?

It's an interesting question, because we all have different thresholds for safety. Your licensed real estate agent is not allowed, however, to comment on the safety of the neighborhood. If you want a better understanding of the actual criminal activity in the area, you'll need to do your own research. You can use online tools to compare crime statistics between cities for a more accurate outlook.

Emile L'Eplattenier, real estate marketing and sales analyst for Fit Small Business, makes another solid point: "Always remember that crime can happen anywhere, and there is a very big difference between feeling safe and actually being safe."

2. How much will the house cost to renovate?

Your real estate agent can't give you a roundabout number on what your fixer-upper will cost to renovate, because they're not a contractor and they have no idea how expensive or inexpensive your taste may be. Joan Kagan, sales manager of a real estate listing site, often suggests to clients that they bring along a trusted contractor to help find a ballpark for this figure. Your agent may know someone who fits the bill, or, if you have a handy person in your own circle, invite them on your next walk-through to discuss your vision. (See also: 5 Home Renovations That Could Hurt Your Home's Value)

3. What do you think this will be worth in five to 10 years?

When Kagan is asked this question, she provides a democratic response: "The best way of predicting the future is to look at the past. History repeats itself. I can show you data on the average prices for over the past 10 years. Would that be helpful?"

It may be helpful, but as we all know, real estate is up and down and in between more than ever. It's probably best not to worry about the resale value in a specific time frame as much as getting the best deal you can right now.

Sellers

Sellers are most likely interested in what they can get out of it.

4. What is my home worth?

If you've decided to put your home on the market, the first question you'll have is, how much is the house worth? Unless you're being forced out by circumstance, your main goal should be to make a bit of money off your investment or at least break even.

"Before determining a listing price, sellers should take the time to go online to research local comps to help gain an understanding of their property's market value," says Michael Lissack, a Massachusetts real estate agent for Owners.com. "In addition, it's important to reach out to a trusted real estate agent who can help sellers understand their market and evaluate their home and what is it worth. For example, if a seller remodels their kitchen or adds a bedroom, agents can account for that when they are evaluating the home's value."

A good initial resource for you to size up what your home is worth is the real estate site Zillow. It allows you to search addresses in your neighborhood to see the "Zestimated" value of the homes. This can give you a head start, especially if you're comparing similar houses, both inside and out, to yours.

5. Why can't I just sell my house on my own?

Selling your own house may seem like an ideal solution to those trying to avoid commission fees and other associated expenses, but some things aren't worth the trouble. Realtor and attorney Sammi Massie points out we pay for lots of professional services. (See also: How to Sell Your Home on Your Own)

"Would you cut your own hair, fix your own car, argue your own case in court, or anything else that there are professionals for?" she asks. "Let the professional handle the sale of the most valuable possession you have; that's what they do best."

6. Why do agents get paid so much money?

It can be a tough pill to swallow when you consider how much of your home's sale price will go toward paying your real estate agent. Most agents take a 5 percent to 6 percent commission from a home's sale: So if your home sells for $200,000, you can expect to pay your agent between $10,000 and $12,000.

Still, Massie makes a good case for why agents get paid as much as they do.

"With the amount of driving, marketing, and other fees that we have to pay in order to be agents and to sell real estate, the commission is not as much as it appears," she says. "Especially if we, as agents, are still paying into our company; they take a portion of our commission with each sale."

Also consider that your home may not sell right away. If an agent spends weeks (sometimes months!) trying to find the perfect buyer, they deserve to be compensated fairly for finally making the transaction happen.

7. How's the market?

In many markets, there's a shortage of inventory and rising home prices, making it a great time to sell. But most people who sell also want to buy, and they have to be realistic.

"The same conditions that make it a great time to sell may also make it difficult to buy," Lissack explains. "And with the competitive market conditions, both buyers and sellers are seeking opportunities to save money. Consumers should look toward online brokerages that can help sellers save thousands in traditional agent commissions through flexible listing packages, and in select markets, provide a buyer's rebate of up to 1.5 percent at closing."

8. How do I know if my timing is right?

You can keep an eye on local home prices, mortgage rates, and other factors to can help you decide when the time is right to sell your home, but often sellers can't wait for everything to fall perfectly in line. For many, there is no "right time."

"Timing is determined by what is happening in that person's life — if they need a new home right away, the timing is right regardless of the market," Lissack says. "The agent's job is to build a relationship, help them understand what's happening in their market, and support their client through one of the largest transactions they'll ever make."

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Questions to Ask Before Selling Your House

Mikey Rox — Fri, 26 May 2017 09:00:09 +0000

The idea of selling your home may be exciting, but there's a laundry list of questions you must ask yourself before even thinking about hiring a realtor. From determining if now is the best time to sell, to deciding if your curb appeal is up to par, consider this comprehensive list of presale questions to get your ducks in a row.

1. What is the remaining balance on my primary mortgage and any other home equity loans I have taken out?

You first need to determine if you can afford the process of selling your home. Ideally, you'll make a profit from the sale, but this doesn't always happen.

You need to check how much you owe on the mortgages and loans you've taken out. If your property is valued at more than what you owe, chances are you'll come out on top. But if you're already underwater on your loans and market or estimated value is less than what you owe the bank, you could be putting yourself at greater financial risk by selling. You'll need to pay off those debts when you sell.

2. What am I trying to accomplish with the sale of my home?

Simple question: Why do you want to move? Is this a personal choice? Do you need more or less space? Are you financially strapped in your current home?

You need to figure out if selling your home will actually help you achieve any of these goals. Maybe you owe too much on your mortgage, or the house sells for way less than you hoped. In this case, you're already off on a bad financial foot.

3. How much repair and cleanup work is needed to get my house ready for the highest offers?

Before any potential buyer walks through your door, you have to ready your property for viewing. Smart sellers understand that this may be quite the undertaking. Attention to detail outside and inside is important to show off your home's best assets and visually persuade the buyer that your home should be their new home.

Curb appeal is also a major selling point for most buyers, which means that you may need to hire a landscaper, plant greenery, or otherwise tidy up the exterior of your property. As this may be a substantial task (both in time and money), new questions arise: Are you willing to put the time, effort, and money into doing these repairs and cleanup, or are you willing to accept a lower market value?

You may want to ask your realtor if they can recommend professional, well-reviewed vendors to do any electrical, plumbing, HVAC, sewer, roof, or painting work that needs to be done. These repairs and enhancements can be costly, so it's important to keep that in mind when moving forward.

4. Is this the right time of year to sell my home?

While interest rates generally dictate the good and bad times to sell a home, so does the time of year. Historically speaking, the months of April, May, and June see a peak in home sales, but don't get hung up on that small window — there are buyers during all seasons. You just have to accommodate your listing to the time of year.

"The weather's great, the kids are just about to finish their school term, and your garden has never looked better [in the spring]," says Michael A. Pallares, a Boston-based realtor with Andrew Mitchell & Company. "If you have to sell at another time of the year, then the right marketing tactics you choose will help bring the right buyers to your door. Selling in the fall? Promote the idea of a 'new home in the new year.' Selling in the summer? Mention how the buyers can enjoy the in-ground pool as soon as they unpack. People need a home at all times of the year, so don't stress about the 'ideal' time to sell."

5. Do I really need to hire an agent?

Though I've purchased a few homes, I haven't yet sold any. But I can tell you this: Unless you're a real estate professional who understands all the marketing and legal aspects of a home sale, you'll want to hire an agent who does. You may balk at the commission you're forking over to get the job done, but it's certainly worth freeing yourself from the burden of taking on a task that you don't fully understand. You can also be sure that the agent will try to get you the best possible price.

"An experienced realtor will take the stress and worry of selling your home right out of your hands," Pallares explains. "He or she will handle all aspects of the sale, from determining the proper market value; producing marketing materials; handling all the contracts; negotiating the best sales price; ensuring the safety of your home during all showings; and, more importantly, selling your home for the best price in the shortest time."

6. Where am I going to move?

While you're in the process of selling your current home, it's probable that you'll also be looking for a new home to move into. This simultaneous sell-and-search can present logistical problems if you're not prepared.

Should you purchase a new home first, or wait until your current home is under contract? What should your realtor write into the listing contract about delaying possession of your house? Can you afford two mortgages if you purchase your new home first?

Answering these questions ahead of time will alleviate some of the hiccups along the way (you don't want to sleep in your storage unit, do you?) and reduce your overall stress throughout the process.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Home Listing Gimmicks to Watch Out For

Mikey Rox — Tue, 04 Apr 2017 08:30:20 +0000

Searching for a new home? It's an exciting process, but you need to keep your wits about you to see through the smoke and mirrors. I caught up with a few real estate agents recently who revealed some of the tricky tactics some agents use to reel you in hook, line, and sinker.

1. They set the asking price too low or too high

When a home is listed for a price that is unusually high or low for the area, it's usually to manipulate potential buyers. The listing agent is telling the seller to "draw in buyers to initiate a bidding war" with an enticingly low asking, or to capitalize on a hot market by shooting for the stars.

I currently have one of my homes on the market. It's priced above market value because my listing agent told me that the market is saturated with all-cash buyers who'd snap my place right up. A month later, zero offers. As such, the price reduction will now be rather significant to compete with the comps in my area.

Don't be manipulated by a deceptive asking price. Know your market and bid accordingly.

2. They intentionally misrepresent the property in photos

All the homes I own were first on my list to look at because the listings had clear, thorough photography. But real estate photos can be tricky. I've found listings online that featured no photos — huge red flag! — and some that have even used stock photos to show a similar unit or property, but not the one that's actually being sold. That's just the tip of this iceberg.

Mortgage broker Giustin Valnova of Just 4 Mortgages says, "Another major red flag to look out for is listings that have photos that don't tell the full story. If there's a major problem area of a certain room, the seller may try to cover that up by taking strategic photos that purposely ignore parts of the room. If photos are very zoomed in on a certain area, or are taken in a way that excludes part of a room, you should start asking why."

A good way to see if this tactic is being implemented is to look at the floor plan, if the listing includes one. You can often use that to figure out if any part of the house has been excluded, or if — for example — the kitchen photo has been taken from the center of the room and only focuses on one area. Also, anything heavily filtered, out of focus, or badly lit may be intentionally done to hide or misrepresent what it really looks like.

3. They use deceptively positive keywords

Perhaps you've found a home described as "quaint," "intimate," or "cozy." Maybe it excitedly proclaims to have an "efficient" kitchen or laundry room. While these all sound like pretty appealing qualities (who doesn't like cozy?), more often than not, these are just crafty codewords for "small." And this isn't the only cleverly-worded trick up real estate agents' sleeves.

A house with "charm" and "character" may in fact have plenty of both, but prepare yourself; it's also probably really old. The same goes for "vintage." A listing that describes a bathroom or kitchen as having plenty of "vintage charm" might just mean that room hasn't been touched since the 1950s. If a home is "secluded" or "off the beaten path," you may enjoy some peace and quiet living there — while also having to make day trips to the closest grocery store. "Custom" and "one-of-a-kind" are other words to be wary of. They may sound fancy, but a home that was "customized" to the previous owner's tastes probably has some eccentricities you simply won't like.

To be fair, no house is going to be perfect. And no real estate agent is going to list off a home's less pleasant features when they're trying to make a sale. It's up to you as a buyer to read between the lines of a listing.

4. They stretch the truth with bold claims

Listing agents will do just about anything to draw a buyer in, even if that means sometimes bending the truth. While most agents won't straight-up lie to you about a property, there are manipulative ways to make the listing seem more attractive than it really is by massaging the facts.

For instance, "Some agents will market their listing results as 'sold for over asking price,' when the asking price was artificially low," says Paul Lisanti, a Keller Williams Edge Realty agent. "Many consumers assume that the asking/listing price was at/around market value when in fact it was considerably lower. This strategy can work for sellers and it can also backfire. If a property is worth $300K and listed at $250K, when it sells for $285K, who is the real winner?"

5. They put artificial pressure to bid

The listing agent might tell you that they've already got bids flooding in, and the sellers are eager to make a decision in days, when it's simply not true. They are looking to close the deal even if it means that the sellers lose out on the best offer. They might also pressure the sellers to make a decision before giving it a real chance to be available on the market. This might be because they want to sell to their own client, giving themselves both the seller and buyer agent fee, or they just want their fee sooner rather than later. While you won't know for sure whether they're telling the truth, you shouldn't let an agent pressure you into making such a big decision without thinking things through.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to House Hunt Without Leaving Your Couch

Mikey Rox — Tue, 04 Oct 2016 09:00:13 +0000

Buying a new home can be exciting, but the process of hunting for one isn't always aces. Between work and personal obligations, your time may be too tight to drive from one bad house to another, just to be disappointed after each walk-through. Yes, it's time-consuming and exhausting, but the search has become a bit easier. With advances in technology, you can hunt for and purchase a home without ever leaving your own house these days. Here's what you need to do.

1. Check Out Mortgage Calculators

Using a mortgage calculator doesn't take the place of speaking with an actual lender and getting preapproved for a home loan. But a mortgage calculator is an excellent starting point because you can plug in different variables — such as an estimated interest rate, home price, and mortgage term — to learn how much you can afford to spend on a property.

Some calculators only estimate principal and interest, whereas more advanced calculators include estimations for taxes, insurance, and PMI. As long as you know the average prices of homes in your area, you can use a calculator to assess whether you can realistically afford to buy in a particular area. Calculators can also compare the cost of renting versus buying.

2. Compare Mortgage Options Online

It isn't enough to use a mortgage calculator; you also need to know your home loan options. Nowadays, shopping for a home loan and comparing mortgages has never been easier. Websites like Realtor.com and LendingTree.com allow borrowers to compare mortgages offered by different online lenders. You can even request free rate quotes directly from local lenders.

Before purchasing a home, always get quotes from at least two or three lenders to ensure you're getting the best deal. Buying a home is expensive, but working with the right lender can help you save on interest and closing costs.

3. Research the Multiple Listing Service

The multiple listing service, or MLS, is a website real estate agents use to post their property listings. This is an excellent tool for house hunting without leaving your house.

Before modern-day buyers had access to this invaluable tool, finding a property meant spending hours driving through neighborhoods in search of "For Sale" signs. This was tedious and prolonged the home search. The multiple listing service lets you search properties online based on specific parameters. The search results provide a listing of homes matching your criteria.

You can search homes located within a particular ZIP code or price range, and you can narrow the results according to number of bathrooms or bedrooms. Not only can you find properties, some websites offer information on local realtors. If you're not working with a real estate agent, you can find contact information for agents and interview a few. Some websites — such as Zillow — have a feature that lets you read real estate agent reviews.

Be aware, however, that the MLS doesn't have information on every house for sale in the area. Some sellers don't list with an agent. Therefore, you should also search other reputable websites, including FSBO.com and Owners.com.

4. Take a Virtual Tour of Properties

One painstaking thing about buying a house is spending hours touring properties with your real estate agent. It can take hours to drive from one property to the next, and it often takes several days to tour every property your realtor pulls.

What if there were a way to speed up the process? Better yet, what if you could tour properties without physically being there? This is becoming more and more possible with virtual reality technology.

This feature isn't available for every property or in every housing market. But if you're fortunate enough to take advantage of virtual home viewing, house hunting can become less of a chore. Wearing a virtual reality headset, you can take a 360-degree tour of properties for a buying experience unlike any other. And since you're not driving from property to property, you'll save time and tour more homes in a shorter window.

5. Set Up Email Alerts

The local real estate market changes from day to day. Homes are constantly being removed from and added to the MLS. To stay on top of what's happening in your community, you would have to check online real estate listings every single day. And unfortunately, your schedule might not allow this type of commitment.

To make the search easier, go to different real estate websites and sign up for email notification. Based on your preferences, you'll receive an email whenever new listings matching your search criteria and price range appear on the site. You'll stay in the loop and learn about new property listings without having to drive up and down the neighborhood.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Only 5 Rules of Home Buying You Need to Know

Dan Rafter — Thu, 19 May 2016 09:30:24 +0000

Buying a home can be stressful and complicated. But if you follow just five basic rules, you'll make the challenge of buying a home a bit less intimidating.

1. Meet With a Mortgage Lender Before Touring Homes

Touring homes is the fun part of buying. But before you start looking at properties, you need to meet with a mortgage lender.

That's because a lender can pre-approve you for a mortgage loan. To do this, your lender will run your credit. You'll have to provide copies of such documents as your last two paycheck stubs, bank-account statements, W2s, and tax returns. Your lender will take this information and determine if you qualify for a mortgage loan, and how large that loan can be.

This is important for house hunters. Once you know that a lender will approve you for a mortgage loan of $200,000, you won't waste time looking at homes that cost $300,000.

Make sure, though, that you get pre-approved and not pre-qualified. A pre-qualification is when a lender takes down your information by phone and tells you how large of a mortgage loan you can afford. But in a pre-qualification, lenders don't actually verify your financial health as they do when pre-approving you.

2. Review Your Credit Reports

You have three credit reports, one each maintained by the credit bureaus of TransUnion, Experian, and Equifax. These reports list how much you owe on your credit cards and any other loans. They also list if you've missed any payments or paid any bills late. They'll list, too, any negative judgments such as recent foreclosures and bankruptcies.

You can order one free copy of each of your three credit reports every year from AnnualCreditReport.com. Once you do, study the reports to make sure that the information contained in it is accurate. If it's not, it could cause your credit score to fall.

3. Order at Least One of Your Credit Scores Before You Start House Hunting

Speaking of credit scores, this three-digit number is critical to anyone buying a home. Lenders rely on your credit score to determine how much of a risk you are. If your score is low, say under 640 on the FICO scale, you'll struggle to get a mortgage loan without paying an exorbitantly high interest rate. If your score is above 740, though, you'll generally qualify for the widest variety of mortgage loans and the lowest interest rates on these loans.

To determine how strong your credit score is, you'll have to order at least one of your three reports, one each maintained by the credit bureaus again. You can order your score from Experian, Equifax, or TransUnion for about $15.

4. Reduce Your Debt

There's another number that lenders look at when you apply for a mortgage loan — your debt-to-income ratio. This ratio compares your monthly debt obligations with your gross monthly income. If this ratio is too high, you'll struggle to qualify for a mortgage.

Lenders prefer that your total monthly debts, including your estimated new monthly mortgage payment, equals no more than 43% of your gross monthly income. If your debt-to-income ratio is too high, cut down as much of your debt as possible — maybe starting with credit card debt — before you start looking for a new home.

5. Interview to Find the Right Real Estate Agent

When you're buying a home, you get to work with a real estate agent for free. When you find and buy a home, your agent is paid by the seller, who uses part of the profit of the home sale to provide your agent with a commission. Because of this, there's no reason not to work with a real estate agent when you're buying a home.

But you do want to work with the right agent, so schedule interviews with several. When you're speaking with agents, ask them some key questions: How long have they worked as real estate agents? Do they work often in the neighborhoods that you're targeting? How much of a home's asking price do they shave off on average for their buyers? Do they represent both buyers and sellers or are they exclusively buyers' agents?

Be sure, too, to ask agents for referrals from past customers. You'll want to talk to some of these past customers to determine how responsive and effective an agent was for them.

Is our list of rules too short? What other rules should home-buyers heed?

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Choose a Real Estate Agent

Camilla Cheung — Thu, 26 Jan 2012 11:24:13 +0000

Buying or selling a home is one of the biggest financial transactions you will ever make, and it’s important to have a real estate agent who can give you a true idea of your options, explain the details of the transaction to you, and help to navigate any potential problems. But how do you choose a real estate agent? How do you avoid the untrustworthy agents and find someone who is professional and has your best interest at heart? (See also: When Should You Fire Your Real Estate Agent?)

1. Have High Expectations

If your expectations for a real estate agent are simply someone to chauffeur you to houses and unlock the doors, or someone who will just list your house for you, your expectations are too low, and they will be self-fulfilling. Think of a realtor as a professional, not a salesperson, and hold them to the same expectations that you would hold any other professional, such as a CPA, an attorney, or a doctor. This is the person who will be advising you on how to spend a huge chunk of money. The agent should be able to educate you on your options and help you to understand the consequences of whatever choices you decide to make.

2. Look for Certain Qualities

In the current market, there are few easy deals to be had in real estate. Many transactions, especially complicated ones such as short sales, require someone with the skills and expertise to navigate all of the potential problems. Whether your real estate agent has the right skills may affect whether or not you are able to buy or sell a home at all. Markus Brown, a real estate agent in Orange County, says these are the top qualities you should look for in a real estate agent:

Organization skills and detailed knowledge of the stacks of paperwork and legal issues that are involved
Negotiation skills — someone who can deal efficiently with problems as they come up, who has good people skills when dealing with opposing agents
For sellers, a marketing strategy and experience marketing homes
Excellent communication skills — someone who can explain things to you in terms that you understand, empowering you to make the right decisions

3. Interview Your Potential Agent

Brown says, “Sellers usually interview agents, since they are paying them, but buyers often don’t think of interviewing agents, to their detriment.” Whether you are buying or selling, take the time to interview at least three real estate agents. You can meet real estate agents through referrals from family and friends, or you can find them at open houses. It’s a good idea to visit an open house and talk with a real estate agent face-to-face before requesting an interview. If an agent isn’t interested in being interviewed, find someone else.

Be careful about working with family or friends who are real estate agents. Buying or selling a house is possibly the biggest financial transaction of your life, and you deserve to work with the best person for the job. Family obligations should have no place in this business transaction, and if a deal goes sour, it may cause awkwardness and heartache in the end.

When interviewing a real estate agent, Brown suggests the following questions:

How long have you been in the business?

This is the agent’s opportunity to explain how they gained the skills for the job. How an agent answers this question can provide insight into the way they think and work. Agents who use this question to brag about how amazing they are instead of how they helped buyers and sellers accomplish their goals might be the sort of people who talk more than they listen — a bad sign. Remember, just because someone has been in the business forever doesn’t mean they’re the right person for the job; sometimes someone with less experience can be just as knowledgeable and may have other skills that will be valuable.

Can you describe the process, from start to finish, of buying or selling a house?

How well does the agent explain things to you? Do you have a clear picture of the process, and do you feel empowered rather than belittled? Never work with an agent who talks down to you.

Can you describe how you treat the offer process? How do you submit my offer to the seller? (Or, if you are the seller — how do you assess potential offers?

Does the agent present offers in person? Do they try to meet with the listing agent to establish a good rapport? How will the agent discuss potential offers with you, and what strategies do they have for responding to offers?

4. Look for Red Flags

At the end of the day, you have to decide whether you feel comfortable working with a particular real estate agent. If something about them feels untrustworthy, go with your gut and look for someone else (there are plenty of agents out there). Be especially wary of working with the following:

Agents who talk more than they listen, or talk about themselves more than they listen to you.
Agents who are part-time — either they can’t cut it in the real estate world and have to hold on to a day job, or they won’t have the detailed knowledge and expertise of someone who makes it their primary business.
Agents who are desperate for your business. If they are trying too hard to gain you as a client, chances are they will not give you objective advice. An agent who wants to close the deal too much may pressure you into something you aren’t happy with.

Have you had a good experience with a real estate agent? What qualities made that agent successful?

This article is from Camilla Cheung of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Big Mistakes You Can Make When Selling Your Home

Camilla Cheung — Mon, 14 Nov 2011 09:36:38 +0000

My husband and I were recently in the market for a home, and we spent several weeks viewing condos and houses. In our dealings with sellers and their agents, we began to notice certain common mistakes that put us off considering the purchase of these homes. Buyers can be “scared off” by unprofessionalism on the part of the listing agent, cosmetic problems in the home, and other pitfalls.

I spoke to Markus Brown, a real estate agent in Orange County, California, about the top mistakes that sellers make when trying to sell their homes. If you are considering putting your home on the market, be sure to avoid these home-selling blunders. (See also: 5 Tips to Sell Any Home Fast)

1. Not Interviewing Multiple Agents

Brown explains, “The sad truth is that many people will spend more time researching what point-and-shoot camera to buy than the agent they choose to help them sell a home worth hundreds of thousands of dollars.” Your choice in a real estate agent can have an enormous impact on your ability to sell your home. Don’t go with the first face you see on a billboard at the bus stop. Make your wants and goals clear to potential agents and judge whether they are competent or not. While what goes into interviewing and choosing an agent merits another article in itself, meeting several potential agents can help you to make your decision.

Good agents are worth their fees and are confident of their value. Be wary of anyone who isn’t willing to spend time with you and explain the details behind selling your home. Ask the agent for referrals from other clients, and be well-informed yourself so that you know the right questions to ask.

2. Not Preparing Your Home for Showings

Your home should be in perfect repair and spotlessly clean for every single showing. Buyers don’t know (or care) whether your home was clean yesterday, or whether you had a bad morning. What matters is what they see when they walk through the door. We’ve been in homes where the owners didn’t bother to clean up the cereal boxes or breakfast dishes, and in one home, a member of the family was actually still in bed when we entered the bedroom. Needless to say, we left in a hurry.

Your home should be decluttered, and to a certain extent, depersonalized. That means taking down the walls of family photos, cleaning up piles of junk mail, and removing the kids’ art from the fridge. Potential buyers should be able to visualize themselves and their belongings in the home.

Brown advises sellers that it is worthwhile to fix some of the little things around your home. Chipping paint, missing grout, broken outlet covers, scuffs in the paint — these are all cheap fixes but if not addressed, will send the impression that the home “needs work” and will deter potential buyers.

Sellers should not be present for showings, so after letting buyers in, go outside while they are viewing your home. Having the occupant of the house at home prevents buyers from talking freely and from exploring every inch of the space. It creates an awkward situation where buyers want to leave quickly.

3. Not Preparing Yourself Emotionally

Sellers are understandably emotionally attached to their homes and often feel that their homes are special. They may feel discouraged when they receive low-ball offers or when a home takes a long time to sell. Being realistic about the market and focusing on your end goal will help to combat some of this pessimism.

4. Not Being Available for Showings

We’ve contacted sellers who were unwilling to work around our schedule. Sometimes the seller needed to run errands or go shopping and was not available to prepare the home for showing or to let us into the property. Buyers won’t coddle you while trying to coordinate their schedules with their agents as well as with you; they’ll simply move on to the next house. Showings by appointment only should be avoided, as they create the need to coordinate more people’s schedules.

5. Inadequate Marketing

According to Brown, “Photographs of your home are the core of your home’s marketing exposure.” Your photos create the first, and sometimes most lasting, impression of your home, so make sure they’re good. In one horror story we’ve heard, someone actually posted a listing with the masking tape outline of a body on the floor clearly visible in the photo.

Photographs taken by a professional photographer are cheap (around $100) and are absolutely worth it when you consider the value of your property. On your online listing, your agent should upload as many pictures as the listing allows. In addition, make sure your agent has a reciprocal agreement with other agents in the area, allowing other agents to bring buyers to view your home. If your area has an MLS (Multiple Listing Service), make sure the listing information on the MLS also gets listed on Zillow, Redfin, and other real estate websites.

6. Unrealistic Pricing

Price your home too high, and many buyers won’t even see it when they search real estate listings. For instance, my husband and I searched for homes under a certain price range (let’s say, $300,000). Any homes listed for $309,000 didn’t even show up on our search. Homes at $299,999 did.

Sellers who have an emotional attachment to their homes may price their homes too high because they perceive them as being better than comparable homes on the market. You need to look at your home objectively and realize that buyers are comparing your home to even the lowest-priced short sale properties in your neighborhood.

7. Lack of a Focused Objective

When you’re selling your home, you should focus on why you want to sell your house. What is your objective? Do you need to sell your home so that you can retire, change careers, or otherwise move on with your life?

Too often, Brown says, sellers get so focused on the price of their homes that they forget about their ultimate goals. For example, if a perfect buyer comes along with a pre-approved loan and offers a few thousand dollars under the asking price, often sellers will get so caught up with trying to get their asking price that they don't consider the offer. Because they are so focused on those few thousand dollars, they are unable to achieve their goals, and they continue to be unhappy in their situations. Ultimately, when you’re selling your home, you need to know what you want, and why, to move forward to achieve that goal.

Have you sold (or bought) a home recently? What tips would you give to people who want to sell their home?

This article is from Camilla Cheung of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Real Estate Agents: Do We Really Need Them?

Carlos Portocarrero — Mon, 19 Oct 2009 16:42:19 +0000

M and I have been looking to buy our first place for just under two years now. Then our real-estate agent insulted my wife and we decided to put the search on hold (besides, we need to save more money).

The incident with our agent, along with the whole search process, got me thinking about why we even need these people to "represent us" when we buy and sell homes. With all the tools available online and the prevalence of social-media sites that allow everyone to share what they know, all the information you could possible want is available to you if you just do a little digging.

I understand the argument that a real-estate agent can get all this information for you — that's his/her job. But why wouldn't you be willing to do the research yourself when you're about to make the biggest purchase of your life? It's almost like going through a travel agent — does anyone do this anymore? Typically, you can find a better price by just going online and booking the trip yourself. No need to go through a middle man. (See also: The Process for Purchasing a House With Cash)

For Example

Let's say I want to buy a house in a certain neighborhood. I could use Redfin to get all the basic details about the property, and even stuff like recent price drops. That's everything you'd find on an MLA listing. If I want to see what the facade of the building is, I'd use Google's Streetview function.

Still not convinced? Do what M and I did — we hopped on our bikes and rode around for ourselves. Sure, it was research, but it was also fun. And like I said, this is a big deal, so why wouldn't you put in some work yourself? After all, it's your money and it's going to be your house.

What else would you need an agent for? To tell you that the building across the street is owned by a guy names Stan who is "great" and will never build up to block your great view? Is that worth thousands of dollars in commissions? Not to me it isn't.

Just like Yelp can give me tons of feedback about a restaurant, I can get just as much feedback about a neighborhood or an area by doing a little research online. It's all out there, you just have to find it.

What About Viewing Places?

Here's how viewings typically went for us: we found listings on Redfin or other real-estate sites and sent them to our agent. He called the agents on the other end and scheduled (his assistant scheduled them, actually) viewings one after the other so we could go see four or five places in one night. Awesome!

But it was still us sending him new listings that we were interested in. We were doing the work, he was doing the "scheduling." Then one day we were out and about and I saw a For Sale sign (these become like catnip after a while) in a nice neighborhood. I really wanted to check the place out so I just called up the phone number on the sign and left a message. The agent called me back the next day and said she could show us the place the very next day.

No agent, no fuss.

Why would I go through an agent when I could just do this myself?

I Know, I Know

I know that I'm probably a little bitter right now because of the recent incident I had with our agent. I know that having someone with experience help you out with what is a huge deal can be very helpful. But are they really worth the thousands of dollars they get for basically doing the busywork that you or I or anyone could do?

All because we're afraid to do it ourselves?

This article is from Carlos Portocarrero of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why you can't trust a real estate agent.

Paul Michael — Thu, 05 Apr 2007 22:53:56 +0000

Surely a real estate agent would want to get you the very best price for your home. After all, they earn commission. The more they sell it for, the more they make, right? Well, the popular book Freakonomics , which I'm reading and devouring right now, proves this is not the case.

Now, I'm not saying all real estate agents are doing this, neither are the book's authors Steven D. Levitt and Stephen J. Dubner. But it does cast a huge shadow of doubt over the entire real estate industry. Judge for yourselves.

Here's the game, and how it's played.
It's all based on incentives...what's in it for you, what's in it for them. And it also plays on your fears. Fears that you don't know how to sell your home, that it will be on the market for years and that, of course, you won't get the best price. So, you call a real estate agent and use their huge knowledge of the market to sell your home quickly, easily and for the very best possible price.

And that's the sticking point.

Due to the way commission is structured, it's not in the real estate agent's best interests to get you the best price for you home. Let me repeat that...it is not their priority to get you the most money for your house.

No, they want a good price, but they want a quick sale. It is far more profitable to get you to take the first reasonable offer that comes along, than wait another week or two and get $310,000 instead of $300,000.

The incentive problem.

Let's looks at that more closely. At first it seems well worth the wait. Two weeks for $10k. For you, it is good. Of that $10k you get around $9400. The other $600, that's the 6% commission fee, gets split 3 ways. Half goes to the buyer's agent. Then the real estate agent gets $150 and her firm gets the other $150.

$150? For all that time and extra work? Not so great now, and you know, I'd feel the same way.

Just look at the numbers. It's simple math.

Sell the house now for $300k, make $18k commission and get $4500 cold hard cash.
Or, wait for two weeks or more, do a lot more hard work, sell for $310,000, and get $4650 cash.

It's clearly not worth the wait, when you could sell early and start work on another commission. This is the problem. Big incentive for you, tiny incentive for the expert. And the experts have many tricks up their sleeves to ensure a quick sale and easy ride.

The code words used in Real Estate ads.

There are good words, and bad words. Most of the time, you can make an educated guess.

Consider these terms when selling a home. Five are good, five bad. Could you tell which?

• fantastic
• granite
• spacious
• state-of-the-art
• !
• Corian
• charming
• maple
• great neighborhood
• gourmet

Well, here's the answer. The words in italics are good. Why? Because they say something positive and definite about the house. You may or may not like granite, but there's no denying the implication of rich and aspirational. The same goes for corian, maple, state-of-the-art and gourmet. Whatever you feel, you cannot deny the meaning.

Now look at the other words. Spacious? What does that mean? Is it impractical, badly laid out, cold, roomy, who knows? Charming is just as banal and ambiguous. And as a writer, I know that using anything like fantastic or ! means you have nothing of substance to say. When a house is fantastic, you don't have to say so....it sells itself. And great neighborhood basically means it's not the best house on the block.

When you know how to read the code, and it's not difficult to figure out, you know what the agent is trying to do. Through the use of this language, they're saying "this house isn't so hot...maybe you should make a lowball bid, it may just get accepted." And when a bid does come in that's lower than you'd like, hey guess what, you should take it. After all, that nicer home across the way hasn't sold yet and it's been on the market for months.

What happens when a real estate agent sells her own house?

That's when the data get's even more interesting. She'll use descriptive words that mean something. Terms like "move-in-condition" and "granite" will be on there. Ambiguous phrases like "immaculate" and "wonderful!" will not.

Studies performed by Levitt and colleague Chad Syverson also proved that real estate agents hold out for more money when they sell their own homes. Of the 100,000 home sales they looked at, real estate agents kept their homes on the market for 10 extra days and made 3.7% more money.

So, what next?

The Internet is your friend. Information that used to be at the disposal of the experts is now readily available. Do some homework. See what is selling, for how much and where. And don't let the real estate agent pressure you into taking a lower bid because the market is "just in a terrible state right now." As sure as night follows day, the same agent will tell a buyer "pay more, the market is really moving."

It's truly a cat and mouse game.

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The cost of a free ride - why not to use a buyer's agent

Ken Rick — Sat, 03 Feb 2007 04:12:44 +0000

Recently, my wife and I were house shopping and we decided to make an offer on a condo. It was advertised for $345,000, but we thought we could get a better deal by contacting the seller's agent first. It wasn't the first time we tried this trick — we had previously bought our house in Fresno with only one real estate agent, and it worked out great. So we threw out a low-ball offer of $325,000 and, to our surprise, the seller's agent was very eager to work with us. He negotiated on our behalf with the seller, and basically came back and said that if we could raise our offer to $327,000, we could have the deal. There was a pending offer of $335,000, but if we wanted it at $327,000, he would convince the seller to give it to us. Why would the seller's agent go so far for us? Why would he bend over backwards to try to make the deal happen, when we were offering a lower price? Was this a breach of his fiduciary duty?

It's called dual agency. That means the seller's agent can represent you (the buyer), and your adversary (the seller). It's completely nonsensical, but, so long as this system exists, you might as well use it.

There is a 6% commission in a real estate broker contract that is split 50/50 if two real estate agents are involved (buyer and seller's agents). If only the seller's agent is involved (that is, he or she finds the buyer and represents the seller), then such an agent gets 100% of the 6% pot. In my case, if the condo was sold for $335,000 in a two-agent deal, the seller would receive $314,900 in cash (after 6% reduction for commission) afterwards and the seller's agent would pocket $10,050 in cash (3% of sales price). However, if the condo was sold for $327,000 in a one-agent deal and the seller's agent was smart enough to reduce his or her commission (say, to 3.5%) to make the deal happen, everyone wins. The seller would receive $315,555 cash (after a 3.5% reduction for commission), the seller's agent would receive $11,445 cash (3.5% of sales price), and the buyers would receive an $8000 discount on the house.

If you haven't figured out the trick by now, I'm trying to say that you should call the seller's agent when looking at a house. To recap, here are the reasons why you should use only the seller's agent:

1. Reduce Commissions

They can reduce their commissions from 6% to 3% and still have it worth their while to do the deal with you. A 3% reduction in their commission represents thousands in savings!

2. They'll Persuade on Your Behalf

There is a huge incentive for the seller's agent to persuade the seller that you are the right person to close and that your offer is the best (sellers don't always look at the highest offer, they also care about which buyer is actually going to close the deal).

3. No Buyer's Agent Pressure

Buyer's agents are especially evil, not because of their moral character, but because of the incentive system. They don't make money unless you actually get your offer accepted. So there is incredible pressure on them to persuade you to overbid in you offer. If you overbid, there is a greater chance that your offer will be accepted. You don't need that kind of pressure when committing yourself to the most expensive purchase of your life.

4. Seller's Inside Info

The seller's agent actually has a lot of useful information that is helpful in the home-buying process. They know if the seller is motivated, whether other offers are pending, what complaints have been made about the house by other potential buyers, etc. Since the seller's agent also becomes your agent in the deal, they have a duty to advise you (and possibly even reveal this juicy info to you). However, if you use a buyer's agent, you have absolutely no access to the good information.

This article is from Ken Rick of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: