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Buyers want to see a clean home with lots of potential and few repairs. Before you sell, consider giving your entire house a deep clean and hiring an inspector to look for possible problems.
You may have heard the term “seller’s market” before. In a seller’s market, demand for homes rises and sellers can get a lot more money for their house. The following factors may contribute to a seller’s market:
No one wants their house to sit on the market for too long. A house may take anywhere between 30-45 days to sell depending on the market. If a market is hot enough, sellers could find their home off the market within a week. If the market is slow (or the house is overpriced,) the number could reach triple digits. Exposure, negotiations, and the condition of the home will also affect its ability to sell fast.
Whether you are buying or selling, you may find yourself doing some Internet research to see the value of homes in the area. But before you accept the first number, know that not all online calculators are accurate. Everything from new appliances to construction down the street can affect your home’s value.
The best way to figure out your home’s current value is to reach out to local professionals. Real estate agents or professional appraisers can give you an estimate through a consultation or competitive market analysis.
Again, online calculators are just a rough estimate of your home’s value.
Since there are many different metrics that can predict a home’s value, you may see some differences. Homeowners pay property taxes based on their home’s assessed value. But this number is not always accurate compared to the market value. Market values fluctuate more than assessed values. When you are getting ready to buy or sell a house, pay attention to the market value. You will only need to worry about the assessed value when calculating how much you will pay in property taxes.
Absolutely! There is usually a difference between a home’s list price (how much it is on the market for) and the sale price (how much it sells for.) In a seller’s market, buyers who want to negotiate should be careful. High demands leave little wiggle room for negotiation. If you want to negotiate, talk to your real estate agent about what you should offer.
Selling a home comes with a handful of costs. Expect to give up at least 10% of your home’s sale price. These costs include:
Traditionally, sellers will pay 6% to their real estate agent. The agent will split the difference between themselves and the buyer’s agent. This number has been the standard commission rate since the mid-20th century. But sellers don’t have to pay this 6% commission; they have other options.
Discount agents may take as little as 3% to sell a home. Flat fee services can connect sellers with real estate agents who will take over the process - all for a flat fee that saves sellers thousands of dollars. Sellers can also take on the job of being a real estate agent, listing their homes online or through multiple listing services (MLS.)
Not all real estate agents offer 6%...but sellers shouldn’t jump at the first discount agent they meet. Discount agents may offer fewer services or list their clients’ houses on fewer services. When sellers have more exposure, they generally get more offers (and more competitive offers.) Talk to a range of different discount and traditional agents before you decide what is best for you.
Or, better yet, reach out to a flat fee listing service that matches buyers and sellers with high-quality agents without high commission fees.
Homeowners may have different reasons for selling their home. Maybe they are ready for something new or want to downsize. Other homeowners may just want to expand their portfolio or acquire an investment property. If you want to put up a high down payment and secure good interest rates on your next mortgage, selling is encouraged. If you can afford the down payment for your new home and want to wait until the market changes, you don’t have to sell your home. Talk to a real estate agent about your options (or a financial advisor about turning your current home into an investment property.)
Before you even start window shopping, get approved for a mortgage. Buyers may need to look at their credit scores and assess their current financial situation to make sure they qualify for a mortgage and can fit monthly payments into their overall budget.
The list price that you see online is wrapped up in one number, but the reality of buying a house comes with closing costs, a mortgage, and other considerations. Before you begin the searching process, apply for a pre-approved mortgage. This will give you an idea about how much you can afford and what you will have to pay in the next 15, 20, or 30 years. Plus, many sellers may require that buyers are already pre-approved for a mortgage. If you are fighting for the house of your dreams, you will need to do everything you can to get ahead.
The costs of buying a new house can be overwhelming and hit you all at once. But if you back out of buying a house, you’ll have to pay. Buyers with cold feet may have to forfeit around 1-2% of the home’s sale price if they want to rescind their offer.
Real estate agents have the experience, connections, and knowledge to help you sell or buy a house for the right price. If you are selling, a real estate agent can:
If you are buying a house, a real estate agent can help you:
It is possible to buy or sell a house without an agent, but you can trust that a real estate agent will get you the best deal and save you money down the line.
Have more real estate questions? (We thought you might.) Reach out to a real estate agent in the area who can answer specific questions about the local market and what you should consider before you enter this next step in your life.
To begin the mortgage process, you’ll need to meet with a lender and be prepared to provide proof of:
It’s likely your lender will approve you for more money than you should borrow. Just because you qualify for a big loan doesn't mean you can afford it!
A good lender will clearly explain your mortgage options and answer all your questions so you feel confident in your decision. If they don’t, find a new lender. A mortgage is a huge financial commitment, and you should never sign up for something you don’t understand!
The answer is, yes! If you apply for a mortgage without a credit score, you’ll need to go through a process called manual underwriting. Manual underwriting simply means you’ll be asked to provide additional paperwork—like paystubs and bank statements—for the underwriter to review. This is so they can evaluate your ability to repay a loan. Your loan process may take a little longer but buying a home without the strain of extra debt is worth it! Keep in mind, not having a credit score is different than having a low credit score. A low credit score means you have debt but having no credit score means you don’t like debt!
Not every lender offers manual underwriting. Do a little research on the front end to find the ones in your area that will.
A quick conversation with your lender about your income, assets and down payment is all it takes to get prequalified. But if you want to get preapproved, your lender will need to verify your financial information and submit your loan for preliminary underwriting. A preapproval takes a little more time and documentation, but it also carries a lot more weight when you’re ready to make an offer on a home.
Buying too much house can quickly turn your home into a liability instead of an asset. That’s why it’s important to know what you can afford before you ever start looking at homes with your real estate agent.
We recommend keeping your mortgage payment to 25% or less of your monthly take-home pay. For example, if you bring home $5,000 a month, your monthly mortgage payment should be no more than $1,250. That means you can afford a $211,000 home on a 15-year fixed-rate loan at a 4% interest rate with a 20% down payment.
We recommend putting at least 10% down on a home, but 20% is even better because you won’t have to pay private mortgage insurance (PMI). PMI is an extra cost added to your monthly payment that doesn’t go toward paying off your mortgage.
Saving a big down payment takes hard work and patience, but it's worth it. Here's why:
With so many mortgage options out there, it can be hard to know how each would impact you in the long run. Here are the most common mortgage loan types:
We recommend choosing a 15-year fixed-rate conventional loan. Why not a 30-year mortgage? Because you’ll pay thousands more in interest if you go with a 30-year mortgage. For a $250,000 loan, that could mean a difference of more than $100,000!
A 15-year loan does come with a higher monthly payment, so you may need to adjust your home-buying budget to get your mortgage payment down to 25% or less of your monthly income.
But the good news is, a 15-year mortgage is actually paid off in 15 years. Why be in debt for 30 years when you can knock out your mortgage in half the time and save six figures in interest? That’s a win-win!
Before you lock in an interest rate, it’s worth knowing that high interest rates bring higher monthly payments and increase the amount of interest you’ll pay over the life of your loan. In contrast, a low interest rate saves you money in both the short and long term.
Here’s what the typical monthly mortgage payment includes:
If you want to pay more on your mortgage, be sure to specify you want any extra money to go toward the principal only, not an advance payment that prepays interest.
Getting preapproved for a mortgage is just the beginning. Once the financial pieces are in place, it’s time to find your perfect home! While it’s one of the most exciting stages of the process, it can also be the most stressful. That’s why it’s important to partner with a buyer’s agent.
A buyer’s agent can guide you through the process of finding a home, negotiating the contract, and closing on your new place. The best part? Working with a buyer’s agent doesn’t cost you a thing! That’s because, in most cases, the seller pays the agent’s commission. Through our Endorsed Local Provider (ELP) program, our team can match you with the top real estate agents we recommend in your area.
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