Buying or selling a home can be challenging for a first-timer; there are many steps, tasks, and requirements to have a successful experience. That is why we decided to reach out to experienced realtors and asked them all you need to consider before buying or selling your home and what you can expect from the buying process itself, plus tips to make life easier after you buy your first home.

There are several ways to increase the curb appeal of your home when selling:

  1. Keep the lawn and landscaping well-maintained and clean.
  2. Paint or power wash the exterior of the house to give it a fresh look.
  3. Make sure the front door is in good condition and gives a good first impression.
  4. Add outdoor lighting to highlight the house and landscaping at night.
  5. Use outdoor decor, such as flower pots or a new mailbox, to add personality and charm to the exterior of the house.
  6. Make sure that the windows are clean and in good repair.
  7. Consider pressure washing the driveway and walkways to make them look new.
  8. If you have a porch or deck, make sure it is clean and in good condition.

Make some changes inside your home to increase the appeal and value of your property when selling your home.

  • Keep in mind that new and well-maintained appliances, such as stoves, are a strong selling point.
  • Address any issues regarding your HVAC, plumbing, and electrical systems before selling.
  • Show documents of regular maintenance and repairs to reassure potential buyers.
  • Highlight any energy-efficient upgrades or features in your home, such as energy-efficient appliances or solar panels.
  • A potential buyer may request a home inspection, so ensure everything is in place.

When selling your home, it’s important to also think about protecting your investment. A home warranty can provide valuable coverage for essential systems and appliances, offering peace of mind to potential buyers and potentially making your property more attractive in a competitive market.

What are the signs you should sell your home?

One of the most common (and obvious) signs that it’s time to sell your home: you’ve run out of space! Whether you’re having children, adopting pets, or have a growing collection of vintage arcade games to display, the need for more living space is a universal struggle. That being said, however, the opposite—having too much space—is a common issue, too. For empty nesters whose children have gone off to college or retirees with no more use for a home office and backyard trampoline, downsizing is the name of the game. Moving into a more appropriately-sized home can increase your quality of life, but it can also result in a nice chunk of change in the disposable income account!

Another tried-and-true sign that it’s time to sell your home is when your income or cash flow has changed significantly. If you have less money coming in for one reason or another, what was once a reasonable mortgage payment can now be out of reach. Alternately, with increased cash flow, you may find yourself wanting to upgrade your home and willing and able to handle the increased payments.

Even if your cash flow remains consistent, you may see economic uncertainty as a sign that you should sell your home. Reducing your monthly mortgage payments while you’re still able to make your current payment is a surefire way to increase your financial security.

Few things in life are more personal than a home, so deciding it’s time to sell is highly personal and something only you can determine. But by being aware of these common signs and working with a real estate expert, you can ensure you’re in the right home for you.

– Ryan Poppe, Owner/Team Lead at Colorado Property Group and RE/Max Pinnacle.

 

How can you financially know you’re ready to buy a home?

Probably the most commonly asked question by first time home buyers relates to knowing when they are ready financially to purchase a home. As a realtor on Maui, I always direct my clients to speak with one of my preferred lenders to help them answer this question. A lot of times we spend more time searching the internet for an answer when a qualified professional can provide clarsity much quicker.

A lender will be able to tell you which type of loans you qualify for based on your income and debt. This will determine how much you will need to put down and what your maximum monthly home expenses will be, including the principal of the loan, interest, taxes, and insurance also known as PITI. Sometimes lenders can qualify you for as little as 3% down or if you qualify for a VA loan, 0% down.

On Maui, the average home price is in the $700,000’s and with median income, it’s still possible to purchase a home and obtain monthly payments that are less than the cost of renting. Granted, it will be a higher percentage of that income than will be required in most of the United States.

Often, new home buyers discover that after a small down payment, their monthly costs of homeownership are actually less than what they were previously paying in rent. With interest rates at an all-time low, now is certainly the time to talk to a lender, especially if you are in a dual-income household.

The ability to leverage a low-interest loan to build equity while reducing your monthly expenses is one of the best financial tools out there. It truly can be the best financial move to make. Speak with a local lender today to determine how to best take advantage of the current climate of real estate in the US.

-Evan Harlow at Maui Elite Property

 

How to estimate your home’s value before selling it?

Unless you’re a real estate agent or a trained home appraiser, never, ever try to estimate your home’s value before selling it. It’s a sure-fire way to build up unrealistic expectations.

In talking to hundreds of realtors over the years, one common theme I’ve found is that most homeowners over-value their properties. Their emotions, quite reasonably, will almost always amplify their home’s value in their minds. They don’t see their homes as walls and a roof; they see them as where their lives took place, where their kids took their first steps. That’s going to make anybody’s house seem more valuable than the one next door.

But that kind of thinking quickly becomes disruptive if you stubbornly cling to the notion that you’ve priced your home correctly.

Let’s say you’ve determined that your home is worth $500,000, but the first realtor you speak to tells you that you’re off by about $100,000. Unsatisfied, you call another. She tells you the same thing. You keep calling and calling until you find a realtor who agrees with you and is willing to list it at $500K. Then what happens? It sits on the market for three months and doesn’t get a single offer because it is way overpriced. This happens all the time (but mostly with realtors who are so desperate for business that they avoid telling their clients uncomfortable truths).

Just because you have lived in your home does not mean you know what it’s worth to another buyer, so pony up the dough for an appraisal. If you’re serious about selling your home, find out what it’s really worth.

-Clayton Jarvis at Mortgage Broker News

 

Three important things to check before buying a home

A lot of people will talk about the condition of the home and major repairs to look out for before buying. I want to take a different angle that will help people not only buy a good home but buy a good investment.

  • Before purchasing a home, study the local real estate market. Do not blindly buy whatever your real estate agent shows you or what you find that looks nice. Study properties sold in the last 6 months to figure out what the market trends are and what the ballpark for prices are. An excellent real estate agent should be able to provide you with recently sold properties. After looking at enough sold comps, you should get an idea of what prices are. When you find a house, you like you will tell if it is priced right, too high, or is a smoking deal. I prefer smoking deals, and a regular home buyer can drastically change their life for the better but being patient and proactive when buying a home.
  • Before purchasing a home, study your finances. Again, do not blindly accept whatever the lender says you can afford as the amount you should pay for a house. The lender will tell you the absolute maximum you can pay for a house when that may not make financial sense to you. It may make much more sense to spend much less on a home so you can save and invest money.
  • Before buying a home, make sure you have the right people working for you. There are good and bad real estate agents and lenders. They can help you find that great deal with the right loan, or they can steer you in the wrong direction and cost you a lot of money. Do not pick the first agent you talk to or a part-time agent who happens to be your cousin because you feel obligated to use them. Pick the best agent you can find who has the time and knowledge to help you.

-Mark Ferguson at Invest Four More

 

How much is a down payment on a house?

Down payments vary by lender and lending program, and by your credit score and other qualifications as a borrower. Traditionally, borrowers put down 20% of the purchase price, plus closing costs. Today, more loan programs exist to help borrowers – especially first-time homebuyers – put down less to buy a home.

Most famous among these is the FHA loan, which allows borrowers to put down only 3.5% of the purchase price, with a credit score of 580 or above. Borrowers with a credit score between 500-579 may still qualify for an FHA loan, but must make a 10% down payment.

In the last few years, however, Fannie Mae and Freddie Mac both released low down payment loan programs designed to compete with FHA loans. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible loan programs both allow a down payment as low as 3% – again depending on credit score.

If homebuyers put down less than 20%, however, they must buy mortgage insurance. Among conforming loans (that follow Fannie Mae or Freddie Mac loan programs), homebuyers can apply to remove their mortgage insurance once their loan balance falls below 80% of the property value. But FHA loans now require borrowers to pay mortgage insurance for the entire life of the loan, regardless of the balance.

Real estate investors must typically put down between 20-30% when they finance their purchase with a rental property mortgage. Because virtually no lenders offer rental property mortgages over 80% LTV (loan-to-value ratio), landlords don’t pay mortgage insurance.

As a general rule, home buyers can’t borrow the down payment from someone else. Real estate investors usually can, however, since lenders base their loans more on the equity in the property – their collateral – than on the borrower’s personal finances. However, homebuyers can receive money gifted from family members toward their down payment.

-Brian Davis at SparkRental

 

Top 3 things to consider while house hunting

The 3 most important things to consider while house hunting will really be different for everyone, depending on their goals. If you are looking to own a primary residence for investment purposes, then you would want to:

  • Buy in an area that is growing in population near jobs, good schools, and hospitals.
  • Don’t buy the best house on the street. Instead, buy the worst house on a very good street for a discount and fix it up over time.
  • Get a duplex, 4-plex, or a property with an ADU so that you can have renters help you pay down your mortgage, and you can deduct the expenses on certain shared amenities like the yard.

 

If you are looking to buy a residence for purely personal reasons, you would want to:

  • Define what is most important to you, so you can narrow the search. Do you want a big yard, room for the home office, proximity to specific amenities, or good schools for your children? Look for those items first in your search.
  • Don’t get caught off guard with unexpected repairs. Once you find your dream house, get as many inspections as you can (roof, HVAC, foundation,  pest, etc.). This may seem costly, but it will save you money in the long run. If repairs are needed, you can always request a discount on the price, even if you are already in contract.
  • If you plan to live in the home for a long time, the value will most likely go up over the years if it’s well located and in good condition. What matters most is your ability to afford the monthly payment, even if you had to pay a bit more for the home due to a bidding war. If you are not sure if you plan to stay for the long-term, do not overpay. If anything, get the property for at least 10% undervalue as that will cover future costs when you sell.

Always have plenty of reserves set aside for homeownership. At RealWealth, we recommend 6 months of mortgage payments set aside in an emergency account for the possibility of job losses or illness. We also recommend you keep funds set aside for future repairs for roofs, HAVAC, and plumbing. And don’t forget to get excellent homeowners insurance! It’s worth it to get coverage for the unexpected.

-Kathy Fettke at RealWealth

 

Top 3 things to consider when choosing a mortgage loan

I have found that it’s beneficial to speak with a local lender when beginning the mortgage approval process. I would avoid online banks for three reasons:

  • They don’t know the local taxes and practices,
  • The time zone differences could become an issue.
  • It’s good to know they are local and accessible if needed. 

When speaking with your lender let them know what’s important to you in terms of monthly payment commitment or total out-of-pocket dollar amount. You can often pay down interest rates or pay upfront PMI to lower your monthly payment or decide that a 10% down instead of 20% enables you to use the funds towards home improvements while still being a comfortable monthly payment.  

Lastly, when speaking to local lenders, make sure you feel comfortable and confident in your loan officer. Ask about their fees, turn around time, and communication style. You are making a very big investment, so you want to ensure your lender is knowledgeable and working in your best interest. If you don’t know where to begin, ask your realtor for recommendations. 

-Kelly Steyn at PhillyLiving

 

Home selling: DIY or hire a real estate agent?

While hiring a real estate agent might be expensive, the opportunity cost of making a mistake while selling your home FSBO can be catastrophic. In addition to dealing with the hassle of listing the home, conducting showings, and negotiating with buyers, failing to disclose a problem with your home may result in a lawsuit. Brokerages carry special insurance to protect you, the agent, and the firm if something is missed. If nothing else, hiring an agent to represent you shifts the risk from you to them.

A good agent earns their commission by pricing the home according to market conditions, which expedites the sale and puts the most money in your pocket. FSBO sellers often overprice their homes, and the carrying costs continue to add up while the house sits on the market. In the end, those costs could easily end up costing more than paying an agent’s commission.

The good news is that in hot markets (when rates are low and housing inventory is low), agents have fewer opportunities, so they’re more likely to get competitive with their commission rates. Commission rates for a listing agent average 6%-7% in a normal market, but I’d expect a good agent to drop their rates to 4%-5% to get a listing in a hot market.

Another somewhat new option available to sellers is to utilize an iBuyer. These companies have large technology platforms that allow them to list homes directly, essentially cutting out the agent. Because they are the home buyer, the transaction costs are significantly lower. In fact, most iBuyers charge a transaction fee of just under 2%. If the home is in good shape and in a desirable area of town, you can expect to get a near-full-price offer.

-Andrew Helling at Rethority

 

How can home buyers get their mortgages approved at lower rates?

Purchasing a home is one of the biggest investments a person will make in their life. While some will be able to pay cash, others will have to obtain a mortgage. If you are one of the many who needs a mortgage, you’ll want to follow these steps to obtain the lowest interest rate. By doing so, you can not only lower your mortgage payment, but you can increase your buying power too.

Improve Credit

The higher the credit score, the easier it is to qualify for a mortgage and obtain the lowest interest rate. Improving your credit score takes time, so make sure to pay bills on time, lower your balances, and stop taking on new debt. Don’t assume that your credit score will drastically increase because you paid bills on time for a few months because odds are it won’t. It takes time and, in some cases, strategic professional planning to increase your score.

Work on Debt to Income

In addition to your credit score, lenders will examine your debt to income ratio (DTI). In order to determine your DTI, lenders will take your monthly debt payments, such as a car loan, student loan, credit card debt, and divide it into your gross monthly income. This number shows your ability to manage money and pay bills, which will, in turn determine your loan eligibility and interest rate. Improving your credit score and lowering your DTI work hand in hand.

Buying Mortgage Points

Another way to lower your interest rate is to buy mortgage points, aka buying down the rate. This is when you pay an upfront fee to lower the interest rate. However, buying mortgage points doesn’t always make financial sense. A great lender will be able to help you determine if this is the right move for you.

Shop Around

In order to obtain the best mortgage, you may have to shop around and contact multiple lenders. Now, keep in mind, to receive accurate fees and rates from each lender they will need to pre-qualify you. Part of the pre-qualification process is to pull and review your credit, so you should only contact 2-3 lenders. Each lender will then provide you their fees and rate; just make sure when you’re comparing, you do it apples to apples. Some lenders will include third party fees, like title fees, which will vary.

Obtaining the lowest interest rate isn’t difficult or complicated; it just takes time and knowledge.

-Michelle Gibson at Wellington Home Team

 

Five things to expect from a realtor when buying a home

Honesty: When buying a home, it is a large purchase; for most people, it will be the most money they will ever spend on anything, so having trust in your realtor is essential. Realtors that have been in business for many years know that bad deals can haunt you like a ghost, and if you are in it for the long run, you should operate by the golden rule. Hiring an expert realtor can help you locate the right home for your needs and protect you from buying a money pit.

Great Communication: Realtors are in the people business, and communication is one of the most important skills to have as a realtor. A great communicator is first a great listener, so beware if your realtor is not listening to the features and what kind of a home you want to buy. There is a silly saying that sometimes as a realtor, you are a therapist because buying a home can be very stressful at times! Lean on your realtor when needed to give you emotional support when the road gets bumpy – they will help you make it through the finish line!

Professionalism: It’s great to work with people you like, but make sure there is professional decorum. Realtors should be on time and prepared with relevant comps and a schedule book. If your home search is going to be efficient, you will want to have the showings lined up in the fastest route. Even though you can go casual- your realtor is working and needs to present a professional image when representing you.

Hustle: When you are a buyer, you need to see 10 to 20 properties to get a good idea of the market; in fast markets, you may be up against multiple offers. Having an agent who hustles can make the difference between getting your offer accepted or not. Listing agents like to work with agents who possess a strong work ethic. You can expect your realtor to be on the lookout for the next great buy for you.

Referrals: Who doesn’t love a great referral? Now that you own a new home, you might need all kinds of referrals, from home inspectors to house painters. A real estate agent service goes on well after the closing. They should be a wealth of local neighborhood resources for any home service need. Think of your realtor as your very own Yelp or Angie’s List. Don’t be afraid to ask. The highest compliment you can give them would be a referral to your friends and family if they provided excellent service.

-James Colin at James Colin Campbell Real Estate

 

Three reasons your home won’t sell

If your home is currently listed for sale and it’s not selling, there is a reason. First, let’s take a look at the key factors of selling a house:

Price of Home: It is one of the main determining factors of why anything doesn’t sell, and this includes your home. Overpricing a home will lead to disappointment, fewer showings, and a waste of everyone’s time and energy.

Good agents will tell you honestly what your home may be worth to a potential buyer. Overpricing a home is part of how they get your house listed.

One of the first questions a buyer will ask their realtor is, “How long has this home been on the market?” If your home has been sitting on the market for an unusually long time, buyers will think something is wrong with your home!

Your home is priced right; now what? Once you’ve concluded that price is not the problem, then you can move on to the next step in the process of elimination.

Condition of Home: What is the condition of your home?  For the most part, today’s homebuyers simply don’t want to buy your “project” — they’ll just go down the street and buy a home that is “move-in ready.” So, don’t leave questions in the buyer’s mind about how much money it will take for them to move in. Replace carpet, paint, touch up, and clean! If you want top dollar for your house, then take any possible questions out of a buyer’s mind about the home’s condition. For everything a buyer has to do to make your home move-in ready, they will take thousands off an offer amount, and if you are lucky, you’ll get a low-ball offer.

Mistakes in Marketing Your House: How you market your home is huge! One of the biggest mistakes realtors make when selling homes is that they don’t consider each home’s unique qualities. Our job is to develop a strategic marketing plan that will set your house apart from the competition and get qualified buyers in the door.

-Rae Anna Conforti at Tampa Real Estate Insider

 

Things to take into consideration when making an offer

There are many things to consider when making an offer:

  • Are you ready, willing, and able to purchase the property?
  • Do you have a pre-approval letter from a lender or available funds, and can you show proof of funds?
  • How long has the property been on the market? Are there any other offers?
  • Can you be flexible with the terms, contingencies?  Price is important, but so are the terms. Find out what the seller wants.
  • Research the market. Is it a buyer’s or seller’s market? Do you have comparative sales data (comps)? If possible, research the seller and try to find out their motivation for selling.

The best time to buy is when you need to buy and can afford to because of your current life situation regardless of market conditions.

A large portion of available homes for sale in Manhattan and Brooklyn are in coops or condos. Co-op ownership requires submitting a comprehensive Board application (called a Board Package), being interviewed by the Board, and is approved. Co-op ownership means that you must decide not only whether you like the apartment, but also the building must determine if they will be willing to accept you. Passing a co-op board adds at least 6 – 8 weeks to the purchase process. A condo may have the same application process, but condos have “first right of refusal”   You should consider if you and the coop or condo will be a good fit.

Hire a knowledgeable buyer’s agent to guide you through the process.

-Mitchell Hall at NYC Blog Estate

 

Three reasons to buy a new home

The onset of shelter in place orders caused by the global pandemic encouraged the working class to explore the changes needed to flexibly work from home. Buyers now take into consideration the ideal “quarantine-friendly” house and renters consider whether it’s worth purchasing their own home.

All-time low-interest rates

Due to the Federal Reserve’s maximum liquidity policy, mortgage interest rates are at a historic low and are expected to stay that way. These low rates open up doors to more options on the market and allow buyers the opportunity to afford more house.

Equal or cheaper monthly payments

The age-old debate about buying vs renting boils down to this point: it is often more beneficial in the long run to purchase a home. It varies from city to city, but Las Vegas rent is really high, and rental rates increase significantly every year. With good credit, savings, and stable income, renters can buy their own home with more flexibility and control of their monthly payments. Instead of renting, their monthly payments contribute to building home equity.

Down payment assistance programs available

A common misconception is that a 20% down payment is needed to get into a home. There are multiple financing options, incentives, and government programs available specifically geared toward first-time homebuyers that offer down payment assistance. It varies from time to time, so consult with a local lender to find out what programs are available.

-Dan Mortimer at Las Vegas Homes by The Brooks Team

 

Buyer tips to negotiate repairs after a home inspection

It’s always exciting when you get under contract to buy your next home. One of the first things you should do when buying a pre-owned home is to hire a third-party home inspector that can perform a thorough inspection of the property for you. If the inspection report reveals that repairs are needed, you will want to work with your real estate broker or agent to assist you in negotiating with the home seller to have those repairs made prior to closing.

If your home inspector recommends that you have an item repaired, your real estate broker may have a recommendation on a contractor to contact for an estimate. You may want to ask friends and family for contractor recommendations too. After you decide on a contractor to give you an estimate, you can better negotiate with the seller for the repairs. The seller may be willing to make the repair for you before closing on the sale, or the seller may be willing to offer a credit to you in lieu of making the repair. Depending on your specific situation, you will want to weigh all of the facts before deciding what is best for you.

One important thing to be aware of when negotiating repairs is that you should rely on your real estate broker or agent to guide you regarding accepting a credit instead of the repair being made. This is very important because some repairs, if not complete before closing, could cause the mortgage lender to deny your mortgage loan. Since the mortgage lender is using the property as collateral for the loan, they will want the property to be in good shape. Some problems that could cause a mortgage loan to be denied would be needing a roof replacement or other structural repair. It is best for a home buyer to hire a professional real estate agent and rely on their experience and expertise when negotiating repairs.

-Melissa Hailey at North Texas Top Team Realtors

 

Are home inspections really necessary?

Home Inspections are a huge benefit to home buyers. They allow buyers a few days to hire a home inspector of their choice while maintaining site control, and with the results of that inspection, they can renegotiate.

The home inspection form, or form 35 for our MLS, was designed to help protect home buyers, allowing them to move forward with a purchase knowing most of the home’s facts.

Are home inspections really necessary?  No, not necessary. The Madrona Group always recommends that you have a home inspection done. And there will be listings that a buyer will fall in love with that are competitive.

Often when a listing has multiple bidders, one of the ways that competing buyers will make their offer more desirable is to waive the inspection contingency.  In that case, if other buyers want to be competitive, they would have to consider waiving the home inspection contingency as well.

The safest way for buyers to address this concern is to perform what is called a pre-inspection. This is a service that is performed by a home inspector before the buyer puts an offer on a home. The inspector will perform a home inspection and give the potential buyers a verbal report instead of the full written report that they would typically provide. The potential buyer can then use that information to decide if they would like to move forward and make an offer.

Ultimately it is the buyers’ decision on how we should write up an offer.  We are here to give them all the facts and alert them to competitive advantages and possible concerns.

-Jason Fox at The Madrona Group

 

What are your top 3 tips for finding the perfect home?

  • Focus on your ideal neighborhood first: Even the home of your dreams, if not in your ideal location, typically will not work out in the long run. Focus on the area or areas that you like the most and find a home that suits your needs within those neighborhoods. Homes can always be improved!
  • Stay within your budget or at least close: It can be very tempting to stretch your budget when home shopping. While stretching a little bit for the right property is fine, reaching well beyond your means for that “perfect home” is typically more stressful than it’s worth and can lead to another move within a few years. Make a plan, and stick to it. Getting pre-qualified with a local lender is a great first step for any Buyer.
  • Trust your real estate advisor: Hiring a great real estate advisor can mean the difference between finding the home of your dreams or searching aimlessly through an endless stream of properties. Find an advisor who understands your wants and needs, and allow them to guide you through the process. Skilled advisors often have an inside track on new listings and can help you write winning offers that give you a leg up on the competition. Buying a home is a bigger process than many people realize, and it is easy to make mistakes. Rely on your advisor for helpful contacts and guidance as you prepare to make your move.

-Patrick Barrett at The Stockton Group with LIV Sotheby’s International Realty

 

Whether you’ve done it before or not, the challenge of buying a home can be incredibly daunting. A real estate professional will take the weight off your shoulders by helping you to find a home, negotiate a deal, and see the process through until closing. If you decide to sell your home, incorporating these tips will boost your home feedback scores from buyers and their real estate agents. We hope this guide provides you with all the help you need to make the process a little bit soothing and get you ready for your next move.