What are Sellers’ Costs?

Selling a home, very much like buying a home, can be an expensive procedure.  First-time sellers often do not realize the extent of the costs that they may face.  Educated sellers who have done their research are almost always able to significantly reduce the costs that they incur while selling their home.

If you are selling your home with the intention of moving to another home or relocating to another city, the first step in the selling process is the same as the first step in the buying process: contact a mortgage lender for a loan pre-approval.  This step is important because there have been cases where sellers have sold their home before learning that they could not qualify for a mortgage to buy the home they wanted.  In these cases, the sellers come out of the transaction unhappy and end up living in a home that is less than what they had expected.

The next step is to carefully research the costs associated with the new home that you intend to purchase.  If you plan to move to an area with a higher cost of living, you will need to evaluate affordability just like you did when you purchased your first home.

In most cases, the costs associated with obtaining a mortgage pre-approval and buying a new home cannot be avoided.  Fortunately, a seller who is also a well educated buyer usually can reduce the costs that he or she incurs to purchase a new home and assume a new mortgage loan.

In addition to the costs mentioned above, here is a list of other costs commonly associated with selling a home.

 

Agent Costs
Choose to work with a certified realtor who has vast expertise and years of experience.  The realtor fee that he or she will receive from your sale will be paid in the form of a commission at the time of the closing.

 

Closing Costs
The seller often assists the potential buyer by offering to pay some percentage of the closing costs.  Depending on the mortgage program that the buyer has chosen to use, the amount that the seller can pay may be limited.  This limit may be percentage-based or it may depend on the size of the buyer’s down payment.  Some Veteran’s Administration (VA) mortgage programs allow the seller to pay all of the closing costs.

Closing costs are one of the most variable costs for sellers, and the only way to clearly know the amount ahead of time is say that you will pay none of the closing costs, or to impose a ceiling on the amount that you are willing to pay.

Keep in mind that when you offer to pay closing costs, the offered price for the home is usually raised. In effect, the buyer reimburses you for your contribution.

 

The capital gains tax does not necessarily mean that you will need to write a large check.  The laws governing capital gains taxes defer payment for sellers who are going to buy a new home with an equal or greater value within a certain amount of time following the sale of their home

Repairs
The cost of preparing your home for sale is highly variable.  If you merely clean and apply a coat of paint to the interior walls, your repair costs will be insignificant.  However, if you determine that the home will sell for more with a new roof and an enclosed patio, the cost of making these modifications could be quite high. 

Naturally, these are not the only possible repair costs.  Home inspections often reveal problems that the seller is obligated to repair or update before the sales transaction can be finalized.  Sometimes the buyer is willing to assist with these costs, but at other time the seller must bear the burden alone.  Depending on the age, location and style of your home, as well as its upkeep over time, the home inspection may be favorable or unfavorable for the seller.

You can often reduce the unexpected cash outlay by getting a home inspection of your own before placing your home on the market.

 

Advertising Costs
When you opt to sell your home with a realtor’s assistance, you avoid the expense of advertising your home for sale.  However, if you opt to sell without an agent in the hopes of avoiding the agent commission, then you are responsible for all the advertising costs. These costs can be insignificant or substantial, depending on the location, the type of advertising you select, and the number of people who pass by your home daily.

A realtor will advertise your home to other realtors in the area, who will then pass along information to their clients, potential buyers.  Their expertise is in successful advertising, and they will do everything possible to make sure that you are pleased with the results.

 

Capital Gains Tax
Capital gains taxes apply only to those sellers whose home has increased in value.  The increase in value must be significant before the tax becomes a concern.

The capital gains tax does not necessarily mean that you will need to write a large check.  The laws governing capital gains taxes defer payment for sellers who are going to buy a new home with an equal or greater value within a certain amount of time following the sale of their home.

In some cases, particularly when the owner was the home’s primary occupant while the property was owned, capital gains taxes do not apply.  A tax advisor or governmental taxing agency can provide you with the information you need to estimate and pay any capital gains taxes that will be assessed when your home sells.

 

FSBO Costs
If you opt to sell your home as “For Sale by Owner” (FSBO) without a realtor, you will face many expenses during the sales process.  These costs can vary significantly, depending on how you market the home, which professional(s) you select to handle your paperwork, and how of the sale you can handle on your own.  Contact an FSBO expert for information about sellers’ costs in FSBO transactions.

Many realtors are experienced in FSBO sales, as well as traditional sales. If you are considering selling your home FSBO, contact a realtor at any time with questions or concerns.

Hopefully this list of sellers’ costs has helped you to determine the amount of cash that you will need to have on hand in order to successfully sell your home. 

By selecting me a realtor to watch out for your interests and act as your seller’s agent throughout the sale of your home, you can greatly decrease your expenditures.  A good realtor can offer you expertise based on years of experience. He or she can also tell you where you should spend your hard-earned money and where you can save it.

You have control over many of the costs listed above, but there may be additional costs that are not included in this list.  Contact your realtor and mortgage lender for more information, and even work directly with the buyer in order to make the sale of your home work for you.

Tips for Single Homebuyers

 

There are probably few things in life that are as exciting--or as nerve- racking--as the search for a house. With an organized home buying plan, you can minimize a great deal of the emotional impact. By determining your buying power, your wants and needs, and having an organized search plan, your chances of a stress-free experience are much better.
Certain types of homes may appeal a bit more to some single homebuyers. For example, since most of the maintenance will be done by one person rather than two, many single buyers prefer homes such as townhouses and condominiums where some or all of the exterior maintenance, landscaping, snow removal, etc. is handled by the homeowner's association. In addition, some single buyers prefer the community aspect of these types of homes and the sense of safety that may be conveyed by having neighbors close at hand.
Many single homebuyers are single parent families, and a common mistake made is to tailor their purchase too closely to their current needs and not enough to future resale. For example, a one bedroom, two-bath single-family home with a huge great room and kitchen may be perfect for you, but it could be next to impossible to sell. It would be far better to have an additional bedroom or two sit empty (use as an office, exercise room, etc.) than to not have it at all.
Gertrude Singer, a real estate agent with National Realty in Palm Bay suggests that single buyers consider a few issues when preparing for and purchasing a home. According to Singer, the single homebuyer should
· Run before walking. This is easy to do once the decision to buy a home has been made. It means rushing off looking at homes, surfing the web or calling on advertisements before doing some up-front preparation.
· Don't over-buy the first time. A large and beautiful home with little or no furniture tends to be empty and cold. A life where almost every dime of your earnings goes to the support of your house wears thin very quickly and is a frequent cause of family stress. Leave yourself some breathing room!
· Compare mortgages. Don't simply accept the first plan presented to you. Spend time comparing to get the most advantageous plan for your requirements and financial situation
· Get mortgage pre-approval. Pre-qualification and pre-approvals are a necessary part of the home buying process. Not only will it give you an exact price range for your purchase, pre-approval will add a great deal of strength to your offer
· Don't wait for the "perfect" home. Many first time buyers make the mistake that they will, if they look around long enough, find a home that has a full 100% of their needs and wants. Instead, it makes sense to determine the most important of your needs and the most desired of your wants and selecting a home that meets the majority of them.
· The inspection process. This can involve skipping a whole house inspection completely in order to save the relatively small amount of money involved, or it may involve using a friend or relative with limited experience to conduct the inspection. In either case you run the risk of not exposing potentially expensive--or even hazardous--defects in the property. Protect yourself by investing the $200 to $500 for a professional inspection.
John Kuehne, a real estate agent with Pruitt Real Estate, Inc., advised that once the decision to buy a home has been made, you take the time to prepare before you go on your home search.
· Get your financial house in order first!
· Determine what your budget will comfortably allow and stick to it.
· Get pre-approved for a mortgage.
· Get familiar with the different housing types available to narrow your search.
· Determine your minimum requirements as well as any desired additional features-your needs and wants.
· Take note of any items that you don't want in a house.
· Determine the desired location (schools, work, public transportation, etc.)
· Choose an agent that you feel comfortable with and who understands your needs.
Kuehne also suggests that as you are searching, you use a scorecard to compare homes. "A scorecard is a great tool when it comes time for comparisons (and for remembering which home had which features)."

Biggest Mistakes A HomeSeller Can Make

Don't let the market scare you away from selling your home. Using the right tools can get you apart from the rest of the selling crowd putting you ahead. Here is a list of some of the mistakes sellers tend to make when listing their homes. Use this to your advantage to be sure you are not one of those sellers.
Misrepresenting Your Home
Don't lie about features your house does or does not have in the listing description or photos. Some buyers and agents may retouch the listing photos to make things appear better than they are, you will not fool anyone. Also do not include an illegal bedroom as a legal one. In a basement a room without an easily escapable window aka an egress window is not a legal bedroom. Most buyers do not even like to include a legal basement bedroom in their room count because they prefer bedrooms to be all on the same level. Just be honest and the right buyer will come your way.
Overpricing
This can be tough in the current market. You may have purchased your home at a market peak but it is important to follow your local pricing guidelines. Overpricing is an easy way to get your house overlooked by many buyers. Your Real Estate agent can help you strategize the best price for your area. Using comparables to see what they sold for is usually the best way to find that price range. To find out what your home could be worth we have a free home analysis service, visit our website today.
Procrastinating Repairs
If you know that your bathroom shower needs the drain replaced or some of your flooring needs replaced or fixing, do the work before the open house. Deducting the cost from the asking price could cost you more in the long run than simply doing the task yourself. Doing small repairs will also help your home show better, you may get a buyer coming in who is not interested in doing work on a home before moving in.
Hiring the Wrong Agent

Your Real Estate Agent is your major means to selling your home. Choosing the right one is the most important decision. You must be sure he/she knows the ins and outs of the area you are wishing to sell your home. Choosing the wrong one can result in your home sitting on the market far longer than you had hoped. You can ask for references and even for a history of their sales. Be sure to check that their list price and actual sell price ratio is desirable. If they have a record of listing a home for a certain amount and that home actually sells for much less you may want to look elsewhere. Ask your family and friends if they have dealt with or know someone who has dealt with an agent they were happy with.

Listing Too Few Photos
The internet is usually the first place a buyer or their agent will see your home for sale. You want to get as many pictures of your home out there for them to be intrigued in your property. This is your best form of advertising your house so do it the best you can, make them want to see it in person. Also be sure to remove any major clutter or obstruction to important features before taking pictures for the listing and showings. Show your home at its best!
Turning Away From Low Offers
It is still a buyer's market so they feel they can haggle that much more. Buyers like to test the waters to see just how low a seller can or will go. It is not meant to be offensive to you; it is just the way the market has taken the buyers recently. Negotiate with a realistic counter offer rather than turning your nose at a low offer. Your agent can advise you on the best negotiating strategies.
Being Unavailable
You want your home sold so be accessible when your agent needs to show your home. Not returning phone calls or allowing showings when the buyer is available is a good way to let your house stay on the market. Leaving a key in a lock box is the best way to allow a realtor to show your home when needed. No need to worry, only members of the MLS can get an electronic key to open the box, it is completely safe.

Happy Selling!

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Three Tips for Increasing Your Home’s Value

The best way to increase your home’s value before you sell it is to think like a buyer!  Think back to the time when you were shopping for a new home, or analyze your current experience if you are already looking for your next home.  As a buyer, what features did you look for?  What features attracted you to your current home and helped you to decide that it was the right one for you?

When you think about the features that attracted you, remember that others will most likely find them attractive as well.  However, if you have owned your home for several years or more, it might be time to update some things in order to meet the growing demands of today’s home buyers.

Curb Appeal Draws Potential Buyers to Your HomeAnyone who has ever purchased a home will tell you that the first thing they noticed about the home was how it looked from the outside.  And they will probably also tell you that they drove past many homes before they found a few that piqued their interest.

This is a commonly known fact among real-estate agents.  Buyers appreciate homes that sparkle on the outside and, once they’re drawn inside, they will be very excited to see what else these homes have to offer.

Most of today’s buyers research homes online before they ever make that first drive.  The very first thing buyers are presented with online is a photograph.  Only after the photo has their attention do they begin looking at the details of what the home has to offer.

Take a photograph of your home and look at it objectively, from a buyer’s perspective.  Do the lawn and gardens that are visible from the front of the home appear to be well maintained?  Is the roof in good repair? Are there any sagging gutters?  Do you see debris in the gutters?  What about the windows and exterior paint?

If any of these items look like they are in need of some TLC (tender loving care), then they probably are.  Apart from the roof, these items are generally inexpensive to address. With only a small amount of time and money, you can improve your home’s appearance significantly.

Consider hiring a professional landscaper in order to get your lawn in tip-top condition.  You may decide that your home would be more welcoming if the walkway to the front door were bordered with planters full of beautiful flowers. 

If you decide to paint the exterior of your home, look around the neighborhood first.  Try to select a neutral color that will blend in nicely with the other colors commonly used in the neighborhood.  White is almost always a good choice, along with beige, grey or brown.

 

Potential buyers can view your home more easily when it is bright inside.  Often this is quite easy to achieve.  Sometimes you can make your home brighter simply by lifting the shades, opening the curtains or cleaning your windows.

Buyers Love New Kitchens and BathroomsIf you purchased your home in the 1970s, you may have loved the orange Formica that covers your countertops.  Likewise, the blue ceramic tile in the bathroom was probably just the right shade to match the towels given to you as a wedding gift.  Unfortunately, a potential buyer might not get quite as excited about the matching pink toilet and sink in the powder room.

If you can relate to these statements, then consider updating your kitchen and bathrooms.  Although kitchen and bathroom remodeling projects are significant home improvements, buyers will be willing to pay more for your home when you advertise that it has a brand-new kitchen.

Your real-estate agent can offer some suggestions about what buyers want in a kitchen or bathroom, and you can also ask friends and family members what they think would improve your home’s attractiveness.

If your kitchen is small, look for a way to enlarge the space.  Removing a wall, or even cutting a wall in half to install an island or breakfast bar, could improve the space.

If you decide to replace your cabinets, select light-colored, solid-wood cabinetry with quality hardware.  Consider a hardwood floor or ceramic tiles.  Today’s buyers appreciate natural materials and neutral decors.

Don’t forget about the appliances.  Even if you do not plan to sell your appliances with the home, purchase new appliances when you update your kitchen.  Brand-new appliances sparkle, demonstrating your commitment to quality to potential buyers.

A quick visit to a local home-improvement store will show you the latest trends for kitchens and bathrooms.  Pursuing a modern look is alright, but you will probably attract more buyers if you maintain a classic look achieved through the use of timeless, high- quality materials.

Increase the Amount of Light, or at Least Create the IllusionReal-estate agents everywhere offer one piece of advice for improving the value of a home more than any other.  That advice is, “let in the light!”

Potential buyers can view your home more easily when it is bright inside.  Often this is quite easy to achieve.  Sometimes you can make your home brighter simply by lifting the shades, opening the curtains or cleaning your windows.  Consider selecting some inexpensive fabric to use as a flowing drape to replace your normal, heavy curtains. 
If your home is still on the dark side, consider applying a fresh coat of paint.  Clean white ceilings alone will probably improve the appearance and value of your home. Reflection provides the illusion of light, so a simple coat of white paint can help to create that illusion.

If your walls are dark or covered in wallpaper or paneling, remove the covering in favor of a neutral paint color.  Much like curb appeal, increasing the amount of light in your home is almost always a relatively inexpensive way to boost the your home’s value for potential buyers.

Improving the appearance of your home will significantly increase the amount that potential buyers are willing to pay for your home.  The three tips above are the fastest ways to increase the value of your home, and two of them require only minimal investment.

By spending a few weekends improving your home in these ways, you can increase the number of buyers who will want to see the inside of your home.  Obviously, you do not want a potential buyer to be excited when looking at the outside of your home, but disappointed when looking at the interior, so consider a fresh coat of paint throughout. 
Once the buyer has stepped inside, he or she will be pleased to discover the updated kitchen and bathrooms. A beautiful kitchen alone can sell your home. A modern, yet classy kitchen with the latest features can raise the home’s value significantly.
Your realtor is prepared to offer suggestions for improving your home’s value before it is listed for sale.  Even if your home has already been listed, your realtor can make suggestions about things you can do to get more competitive offers.

Depending on where you currently live, buyers may be attracted to specific home features.  Your realtor can point you in the right direction and help you prioritize the types of repairs and upgrades that will help you sell your home for the price you want.

Making an Offer on a New Home

It makes little difference whether you are a veteran home buyer or a first-timer.  When it comes time to make an offer on a home, how do you know that what you are offering is a fair price? And how do you know when the seller is asking too much? 

Realtors understand the frustration associated with determining the right amount for your offer.  There are many things to consider, and there really is no standard value calculation.  Consider that two identical homes on identical pieces of land, located on either end of a single city will vary significantly in value. 

 

So how do you know what the true value of a home is? And how do you how much to offer?  There is a delicate balance between offering too much and insulting the seller.  Here are some of the ways that realtors estimate the approximate value of a home. Hopefully, they can help you to craft an excellent offer!

 

Ask Your Realtor for a List of Recent Sales in Your Area

You may not realize just how much listing prices can vary from actual selling prices.  Your realtor can provide you with a detailed report of homes that have recently sold in the area where you plan to buy.  The information contained in the report will include the listing price and selling price of each home. 

This information is valuable to you because you can use it to determine the average difference between the listing price and selling price.  In some markets, buyers pay less than the seller’s listing price.  In other markets, the buyers pay significantly more than the listing price. Really, it depends on the local market trends.  By studying the realtor’s report, you will be better equipped to judge the market conditions.

 

Hire an Independent Appraiser
Depending on the anticipated price, you may opt to have an independent home appraisal completed before you make an offer to the seller.  The general rule of thumb to follow when selecting an appraiser is that he or she should not be connected with either you or the seller.  This makes the appraiser a completely independent third party and implied a more objective appraisal.

When you complete a home appraisal before making an offer, your lender probably will not use the same appraisal, and you will need to get a second one.  However, here’s an overview of what you can expect from an appraiser.

The report that you receive will contain information about the property and the surrounding area.  You will receive a list of three comparable properties in the area and a statement about the housing market at the time of the appraisal.
The appraisal report will give detailed information about items that are dangerous, or those that seriously impact the appraised value of the home. If there are any serious problems or damage, it will be noted on the report as well.  The piece of information that you are the most curious about, the appraised value, will be included in the report.

Wise realtors advise their clients to trust themselves.  If you have found the perfect home for your situation and you are willing to pay a premium in order to purchase the home, then feel comfortable offering a high price...

Unless you plan to purchase a very high-value home, you probably won’t need to hire an independent appraiser prior to making an offer.  But know that you do have this right as a buyer.

 

Know Your Realtor
Knowing your realtor well is wise for anyone involved in a real-estate transaction.  If you are working with a seller’s agent, you will get little assistance from the realtor, because the agent is working to get the best possible price for the seller.  However, if your realtor is a buyer’s agent, he or she is looking out for your interests and can be quite helpful in the process of crafting an offer to present to the seller.

Often the agent’s ability to assist you in various steps of the buying process will be governed by local and state laws.  Therefore, it is important to question your agent about whether he or she is a buyer’s or seller’s agent. Find out what laws are in place that could restrict your agent’s ability to assist you in the buying process.

Learn as Much as Possible About the Seller
The more information you have about the seller, the better your chances of making an offer that is accepted the first time.  Ask your realtor how long the home has been on the market.  Try to determine through your home visit the reason for the move.  Look for subtle clues indicating a change of employment or even a pending divorce.

 

Determine Whether the Home Is Overpriced
As mentioned earlier, real estate markets vary by location.  In some locations, sellers choose to list their home for a price that is higher than what they anticipate receiving.  Since you obviously cannot ask the seller what his or her bottom line is, you will need to try to figure out the local trends before establishing an offer price.

If you find that a home is overpriced, you need to be careful to make an offer price that will make the seller feel that you are a seriously interested buyer. 

Determine Whether the Home is Under-Priced
If you determine that the listing price is less than what comparable homes have sold for, then you know that the seller expects you to offer a price that is higher than what he or she is asking.  Consider starting with the average sale price of comparable homes in the area, or find another way to determine your offer amount.  Keep in mind that when a home is listed below its market price, an offer equal to the listing price may seem insulting to some buyers.  You need to find a balance between the listing price and your offer price that will satisfy your needs and those of the seller.

Trust Your Instincts
Wise realtors advise their clients to trust themselves.  If you have found the perfect home for your situation and you are willing to pay a premium in order to purchase the home, then feel comfortable offering a high price in order to increase your chances of having your offer accepted.

If negotiations reach a stalemate and the seller does not seem interested in your offer, then you might need to move on.

Every buyer and every situation is different, so the best thing you can do is to become educated.  An educated consumer is every realtor’s favorite client! If you take the time required to research the home and area into which you want to move, you will be far better off in the end than someone who has simply not put in the time required to make wise decisions about the offers they make to sellers.