Home Buying & Selling FAQs

Useful information and definitions

We have put together some useful information for potential buyers and sellers. These steps give you a general idea of the processes. Additionally, many customers ask for the definitions of a Buyer's and Seller's Agent. We have also included them here. Have additional questions? Feel free to Contact Us.

The information presented below is for informational purposes only. Always consult an attorney for all legal advice.

General questions

The Buyer's Representative (also known as a Buyer’s Agent) is hired by prospective buyers to work in the buyer's best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller’s agent. (NATIONAL ASSOCIATION of REALTORS®)

Buyers should always be aware that Seller’s Agents (also known as the Listing Agent) are hired by and represent the seller. Buyers should proceed with caution whenever interacting with a Seller’s Agent unless a dual-agency exists and all parties have given their informed consent. Otherwise, any information can be shared with their sellers.

Buyers should immediately acknowledge that they are working with a Buyer’s Agent whenever visiting open houses, visiting new builder’s sales offices, or calling Seller’s Agents or Builder’s phone numbers listed on yard signs. By acknowledging your Buyer’s Agent relationship immediately, your representation agreement will be honored.

A Buyer’s Agent’s full fiduciary duties are owed to the buyer, meaning this person’s job is to get the best price and terms for the buyer. They will research available homes for sale, conduct home tours, and prepare offer paperwork.

A Disclosed Dual Agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties. (NATIONAL ASSOCIATION of REALTORS®)

The Seller's Representative (also known as a Listing Agent or Seller's Agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract. (NATIONAL ASSOCIATION of REALTORS®)

The Seller’s Agent will work with the sellers to prepare their home for sale, recommend a valuation and list price, and market the property to potential buyers and their Buyer’s Agents.

A Disclosed Dual Agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties. (NATIONAL ASSOCIATION of REALTORS®)

11 Steps to Buying a Home

Some homeowners attempt to buy their home themselves, only to be disappointed with the end result. Buying your own home requires you to educate yourself about the industry, the type of market you are hoping to live in, and negotiating and buying techniques to name a few. Of course, this does not take into account the hours of time and energy you will spend throughout the home buying process. If that is not enough, consider the paperwork and legal forms you are responsible for filling out.

REALTORS® know the required contracts, forms, and disclosure statements necessary for each sales transaction inside and out. Each legal document must be completed properly. REALTORS® also have access to forms not available to others. If you make a mistake at some point in the real estate transaction, you may find yourself unable to close the deal.

A REALTOR® will work hard to find just the right home to fit your needs. A REALTOR® will assess your dream home's actual market value as compared to the listing price and negotiate with the homeowners and selling agent on your behalf. All to ensure you get the best house for the best price possible. Ultimately choosing a REALTOR® is the most important step in guaranteeing your home buying experience is successful.

After you’ve made the decision to buy a home, it pays to prioritize your needs and wants. It goes without saying that when you do this, you’ll consider standard home features, like number of bedrooms and bathrooms, square footage, living areas, kitchens, and outdoor amenities. That covers the basics of the house itself, but what about features of the neighborhood? School quality is the major factor for many buyers—particularly those with children. Even people without children value good schools—they typically are one of the major factors in the home’s resale value. There are lots of ways to perform research, like visiting with school officials, talking with neighborhood residents, and using the Internet. Of course, you want to feel safe in your new place, so again, talk to the neighbors and surf around on the Internet to check on various crime statistics for different zip codes. Other factors that you may consider important are amount of traffic and access to major roads; proximity, condition, and available amenities of parks; emergency and city services; entertainment options and local nightlife; proximity to major retail shopping, a large grocery store, or a hospital. You get the idea—whatever’s important to you. There are so many reasons you may like or dislike a particular house or neighborhood. Having an idea of what you’re looking for is going to help you narrow your options and be a more educated consumer. After you’ve gotten all of this straight, let a REALTOR® know about your needs and wants. As an expert in the local area, your REALTOR® can help you find the right neighborhood for you.

If you are thinking about buying a home, you should take some time to familiarize yourself with the lending process and how different types of loans work. There are many kinds of loans; the one that makes the most sense for you depends on your current situation and your plans for the future. A fixed-rate mortgage offers the same interest rate for the entire life of your loan. If you think you’re going to stay in this home for a period of, say, 10 years or more, this type of loan makes sense. It’s also a good option if you like payment stability. Fixed-rate loans can have different repayment terms, with 15, 20 and 30 year being the most common—the longer the terms of your loan, the lower your monthly payments. The tradeoff for these lower monthly payments is that you’ll build equity slower and end up paying substantially more interest. An adjustable rate mortgage, or ARM, features interest rates that will change over the life of the loan, according to fluctuations in the market. An ARM will offer a lower interest rate than a fixed-rate mortgage for a stated period of time. After that, the interest rate will adjust and your payments can go up or sometimes down. This can be beneficial because you’ll qualify for a larger loan and begin with lower monthly payments. This may be an attractive option if you are planning to sell the house in a few years or if you’re sure you’re going to be making more money in the near future and will be able to handle the potential for increased monthly payments. Educate yourself and evaluate your situation, then shop around for the best deal—don’t just take the first offer that comes your way. A REALTOR® can be a valuable resource at this stage in the game. As an expert in the field, a REALTOR® can help you understand the various loan products and lending sources, ensuring you have the knowledge to find one that fits your needs. When you’ve finally found your dream home, making an offer is the next step. Make sure you’re working with a buyer’s agent, so you know you have someone looking out for your best interests. A buyer’s agent will help get the best deal possible; assisting you with negotiations, paperwork, and the myriad other details involved in buying your dream home.

When coming up with an offer amount, keep in mind that some sellers may get offended with an offer significantly lower than their asking price. Though their selling agent should counsel them not to let emotions get in the way, some people will see your low offer as a personal insult. That doesn’t mean you shouldn’t make an offer substantially lower than the asking price. Perhaps you think that’s the fair value of the property. Just know that you may not hear back from the seller. Many times a seller receives more than one offer at a time, and it’s up to you and your buyer’s agent to make your offer look as attractive as possible. After coming up with your offer price, you must also determine how much earnest money will accompany your offer. This money is used to show the seller that you are serious about purchasing the home and acts as a "good faith" deposit. There are other ways to make your offer attractive. Talk with a REALTOR® about the best game plan for making your offer look as appealing as possible.

Appraisals are an important part of your home buying transaction. A real estate appraisal helps to establish a property's market value–the likely sales price it would bring if offered in an open and competitive real estate market. Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because the lender wants to make sure that the property will sell for at least the amount of money it is lending. Don't confuse a comparative market analysis, or CMA, with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMA’s, but an appraiser's report is much more detailed--and is the only valuation report a bank will consider when deciding whether or not to lend the money.

You found the house you’ve been looking for! You’re serious about buying this house; in fact, you’ve already put down earnest money, the option fee, and even gotten an inspection. The inspection is such an important part of the buying process. A qualified inspector will evaluate the property’s condition with honestly and neutrality. The assessment may come back with all sorts of comments, especially in older homes. Don’t be intimidated—all homes, even brand new ones, have defects, and finding imperfections is what inspectors do! Your inspector should offer to explain any component of the report to you. Pay attention to anything that may have an associated health risk, like electrical faults, some types of mold, or a flawed hot-water heater. You’ll also want to closely evaluate items that may be immediate big ticket repair items—like a leaky or damaged roof, foundation issue, or a major plumbing problem. Have your REALTOR® provide a written copy of the inspection report to the seller. Get estimates to fix the reported problems and ask the seller to make the repairs or adjust the price accordingly. Be sure to confer with your REALTOR® and ask for advice—your REALTOR® has the knowledge and experience in contract negotiations to get you the best deal possible.

A “title" is the collective ownership records of a piece of real estate, including the transfer of any property rights and any loans using the property as collateral. A clear line of title makes you much less vulnerable to ownership claims from other parties and to any outstanding debts of previous property owners. Title insurance protects you against losses arising from problems with your property title that were unknown to you when you bought the property. Before writing a title insurance policy, a title company will check for defects in your title by examining public records, including deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, and maps. The company will then defend in court against claims to the property, subject to certain limitations. If the company loses, it will pay you for covered losses up to the amount of your policy. Title companies also handle the closing of a property sale and hold any earnest money in a trust account until the purchase is complete.

When buying a home, some people get overwhelmed with the down-payment alone. But there are a number of things that contribute to the overall cost of owning a home. One very important factor to consider is homeowners’ insurance. If you own a house, you need it, and most lenders require it. Think about it. If your home were destroyed in a fire, could you replace it without the help of homeowners’ insurance? When shopping for homeowners’ insurance, check with several different companies for rate quotes. You might also look into bundling your insurance policies. Some companies offer discounts if you use the same carrier for both automobile and homeowners’ policies. To save money on insurance, you can also look at increasing your deductible. The deductible is the amount of money you have to pay toward a loss before your insurance takes over. Home insurance deductibles usually start around $250. But, if you increase your deductible to $500 - you'll save up to 12% on your premiums,$1,000 - Save up to 24%, $2,500 - Save up to 30%, $5,000 - Save up to 37%. When you buy a home, understanding the total costs involved will help put your mind at ease.

If you are thinking about buying a home in a new subdivision, common interest development (CID), or planned unit development (PUD), chances are good that you will automatically become a member of the local homeowners’ association. These associations help protect property values by ensuring each home is up to neighborhood standards, but make sure the rules and regulations are compatible with your lifestyle and pocketbook. The primary purpose of an HOA is to provide maintenance, enhancements, and protection for the community’s common areas. An example might be tennis courts, a pool, a playground, or trails – all of which would be maintained by dues or special assessments that the residents of the community pay to the HOA. This pooling of money gives an individual homeowner access to facilities that they would likely not be able to afford on their own. An HOA’s dues can range from a minimal amount to many thousands of dollars per year, depending on the neighborhood and its standards and amenities. Keep in mind that even if you know you’re not going to use the pool, moving into the neighborhood obligates you to pay theses dues. When you purchase a home in an area governed by a mandatory HOA, remember that you’re also entering a legal contract with that HOA. You agree that, in addition to paying dues, you are obligated to live by the association's rule book. Make sure you know what you’re getting in to when you purchase a home that’s covered by an HOA. The benefits of the HOA may suit you, but be sure you are willing to play by the rules.

Closing is just days away! You’re about to make a huge investment and you’ve been running around town taking care of business. There are only a couple of things left to do—one of them is the final walk-through inspection of the property. You want to make sure the property is in the condition you expect it to be in when you take ownership, so don’t neglect this important process. There’s a lot that can happen to a home in the days before closing. Movers may have damaged a wall or the floor during the seller’s move, or perhaps the seller has left the garage or attic full of boxes and other clutter. If the home has been vacant for a few weeks, it may have fallen into some state of disrepair due to vandalism or the elements. You’ll also want to make sure that any items that were written into the contract are still there. This may include appliances, swing sets, ceiling fans, draperies, or other negotiated items. The point is that this is the last chance you’ve got to verify the condition of the property before signing your name on the dotted line. Ask your REALTOR® to accompany you on your walk-through—your REALTORS® expertise can help, and two sets of eyes are better than one! If you do find something unexpected, talk with your REALTOR®. They will have suggestions and can guide you through your options. You may be able to work out a simple resolution before you get to the closing table.
 

The checklist below is a basic guideline and your REALTOR® may have further suggestions.
·  Check steps, sidewalks, driveways, and patios for any noticeable change
·  Review drains and gutters for change
·  Verify the condition and operation of all doors and windows, including locks
·  Check the roof for newly missing or loosened shingles
·  Check the garage door and confirm operation of the openers
·  Check exterior lights and motion-activated lights
·  Flush all toilets
·  Check all faucets, both hot and cold, for water pressure and temperature
·  Watch all traps and drains for proper drainage
·  Verify operation of in-ground sprinkler system
·  Check swimming pool and hot tub for anything unexpected
·  Appliances
·  Washer/Dryer
·  Stove
·  Dishwasher      
·  Water Heater
·  Water Softener
·  Refrigerator
·  Garbage Disposal
·  Trash Compactor
·  Hot water heater
·  Check ceilings, walls, and floors for stains, wet areas, or other signs of new damage
·  Check all handrails
·  Turn on/off all lights, outlets, bathroom fans, and kitchen fans
·  Verify that all smoke detectors, carbon monoxide detectors, security systems, intercom, and doorbells are functioning
·  Verify operation of heater and air conditioner
·  Check that gas fireplace is operating properly
·  Ensure that all negotiated items from the contract are present and in the expected condition
·  Verify that all of the sellers personal items and debris have been removed

6 Steps to Selling Your Home

If you are selling a house, you need every advantage to set your house apart. Taking care of small projects that have lingered on your to-do list may significantly reduce the days your house is on the market and even save you a few thousand dollars when you negotiate the final price.

Every home has quirks, but sometimes taking care of a few simple repairs makes a huge difference. If you have lived in a house for several years, you may have become accustomed to that kitchen cabinet that does not quite close properly and the bathroom vanity that is slightly off-center.  If you are a do-it-yourself kind of person, find your motivation and take care of these projects. If you are not so adept with tools, hire a handyman. While none of these problems will, by themselves, cause a buyer to walk, if a buyer has a choice between two similar houses, they will most likely choose the one that requires the least amount of work.

Once you have taken care of the small stuff, consider big projects, too. If you know the house needs, say, a new roof, you should bite the bullet and get a new roof. It is going to cost several thousand dollars, but remember a new roof is a selling point. Most buyers will consider that a huge positive and it is something they know will not cause problems for many years to come.

If a potential buyer walks in and can immediately count seven or eight small projects, plus one big one, that buyer may cross your home off the list even if the house is priced fairly and the projects would not take long.

Fixing lots of little stuff may not cost you much, and knocking these projects off your list can be the difference between a house that sells and a house that sits.

A REALTOR® can discuss with you valuable advice about home repair and other tips to help your home sell faster.

Some homeowners attempt to sell their homes themselves, only to be disappointed with the end result. Selling your own home requires you to educate yourself about the industry, the type of market you’re currently in, and negotiating and selling techniques to name a few. Of course, this doesn’t take into account the hours of time and energy you will spend throughout the home selling process. If that isn’t enough, consider the paperwork and legal forms you are responsible for filling out. REALTORS® know the required contracts, forms, and disclosure statements necessary for each sales transaction inside and out. Each legal document must be completed properly. REALTORS® also have access to forms not available to others. If you make a mistake at some point of the real estate transaction, you may find yourself unable to close the deal. A REALTOR® will work hard to list, show, and sell your home. A REALTOR® will assess your home's market value, market your home to prospective buyers, wade through the volumes of paperwork, and, when an offer is made on your property, your REALTOR® will negotiate the best price possible.

Coming up with an asking price is one of the key decisions when selling your home. While there are many sources to help you derive your asking price, you should exercise some care. You can find taxable values from most appraisal districts. The numbers here could be close … or not. Checking out asking prices of other homes in the neighborhood can give you some helpful data, but you have to know if the home actually sold for that asking price, how the other property compares to yours in size and features, and even whether the other home is really located in the same neighborhood as far as real estate prices go. With so many uncertainties, how can you get a better handle on an asking price? A REALTOR® can analyze market conditions, look at your home, talk to you about your goals and time line, and give you a good idea what your property might sell for. Other sources may give you a good starting point. But if you want to maximize your profit on the sale of your home, no one understands real estate pricing like a REALTOR® with experience in your area.

When your home is on the market, a prospective buyer may come to you with an offer that you consider low. It’s hard to not get offended because you love your house, but you should keep emotion out of it. Remember that this is a business transaction and there are many reasons a buyer might present such an offer. A low offer might be used be to see how desperate you are to sell. When there’s a high amount of inventory, especially foreclosure properties, buyers feel that they have the upper hand. Counter with something that you see as reasonable and see how the buyer responds. If you’re not happy with an offer, negotiate—even in a buyer’s market. How quickly you need to sell the property will obviously affect the amount you’re willing to accept, but no matter your motivation or situation, you should make a counter-offer. If a buyer really wants the house, then it should be at a fair price. If not, you’re no worse for the wear. When you get a low offer, it benefits you to play the counteroffer game. Trust a REALTOR® to help you with the deal. Not only will your REALTOR® help you arrive at a reasonable price when you’re listing the property, they will advise you throughout, and handle the negotiations of the deal as well.

If you have a buyer and are close to closing, get a copy of the settlement® statement prior to closing day. Carefully review all of the information with your REALTOR® paying close attention to financial details. If you have questions about anything, talk to your REALTOR and get them cleared up as soon as possible so there are no surprises at the closing table. Closing is a term used for the point in time at which the title to the property is transferred to the buyer and, generally, a mortgage (or "deed of trust") is given by the buyer/borrower to the lender. A title professional will search and examine the public records for information related to your home's title. This provides warnings of title flaws that must be dealt with before the property can change hands. For instance, the previous owner may have failed to pay local or state taxes. Or there may be an outstanding mortgage or judgment on the property. Title professionals work hard to see that such obligations are dealt with and resolve any issues they find well before you go to closing, if possible. If the sales contract calls for a prior mortgage to be paid off, the settlement agent will order payoff figures from the existing lender. If the buyer is assuming the loan, the settlement agent handles that as well. Finally the settlement agent is ready to prepare the Closing Disclosure. The Closing Disclosure (CD), as it is referred to, outlines all of the costs for both the buyer and seller associated with the closing. On closing day, the property will be transferred to the buyer. You will sign a number of documents that will be explained by your settlement agent. Trust a REALTOR® to help you with the deal. Not only will your REALTOR® help you arrive at a reasonable price when you’re listing the property, they will advise you throughout, and handle the negotiations of the deal as well.

As you put your home on the market, the next step is planning the logistics of your move. There are many things to consider, but the item to tackle right away is choosing a reputable moving company. You can ask friends, relatives, and your REALTOR® about their experiences with and recommendations for moving companies. Keep in mind that many people move in the summer months when they’re children are out from school. If you can’t avoid this peak moving time, be sure to call to schedule your move far in advance. Moving day can be stressful, but thinking ahead and being prepared can make the process run more smoothly. Make sure you’re on hand to answer questions the day the movers are packing your belongings into the moving truck. As the moving company’s representative does an inventory of the home, walk through with them to verify that they are accounting for everything. It’s also imperative to sign the bill of lading, which is the contract between you and the mover, which will allow for claims to be made and will legally ensure that everything is accounted for when the truck reaches its destination. A few other helpful tips include not packing your jewelry and other valuables like family heirlooms, antiques, and silverware. It’s better to take these items with you than place them on the moving truck. Also make sure you keep important papers with you like school records, birth certificates, passports, closing papers, and mover estimates. These documents are very hard to replace if lost in your move. Finally, consider using different colors to designate which boxes go to which room. You can use a red sticker for the living room, green for the kitchen, etc. When the moving truck gets to your home, you can have these colors on the doors of the respective rooms so that the boxes can quickly and efficiently be unpacked. Trust a REALTOR® to help you with the deal.

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