Every Homeowner Should Get A Home Inspection

Real Estate inspector on ladder

When most homeowners and buyers think of home inspection, they think of hassle. Any experienced mortgage broker will advise you to not only get a home inspection but prepare yourself for the outcome. It is crucial that both homeowners and buyers realize that this is a critical part of the home buying process. Whether you are a home buyer looking to obtain a mortgage or you are a homeowner looking forward to selling your property a home inspection is important.

You want to have your home inspected so that you know what may or may not need to be fixed immediately after you buy it. You want to know if you are going to need to install new plumbing, new wiring or new appliances. You want to know if the chimney is swaying precariously or it is simply your overactive imagination. You want to have an inspection because you want to know what’s wrong, but that’s not the only reason.

A home inspection will tell you if you are paying too much for the house or just enough. If the inspector walks through and finds a hundred little things wrong, you will know that you need to ask for a lower asking price. You don’t need to pay an exorbitant amount of money upfront and then more after you’ve signed the papers. On the other hand, if he finds few problems, you will be assured that you’ve gotten a solid deal and do not have to worry about being ripped off by the sellers. You are paying what you should for what you are receiving.

After the purchase, it’s also beneficial to have the inspection in that it will enable you to make those follow up repairs the inspector noted. By referring to the form he gave you, you’ll be able to create a house that is ready for your family, safe and welcoming. You won’t have to wonder if you hit everything on the list because you’ll have checked it off as you went through one by one until nothing remained. You’ll know that the house is in tip-top condition, ready when you are.

And of course, a post-inspection once you have made all of the necessary changes will assure that you are not increasing the value of the house without documentation. It will show that you took steps to increase the property’s worth and should you sell it in the future, the asking price will be justifiably higher than what was asked of you, as the new owners will not have to go through the same process you did, replacing what was broken and securing what was loose.

Getting a home inspection, both before and after purchase, is a wise decision. It is how you protect yourself – not only from the woes of hidden blunders but from paying too much or asking too little when the house is on the market. It is how you ensure that the value you see on the property is real, and it is how you make that fact clear to the general public. Anytime you can have a professional document the ups and downs of your house; you are taking a step in the right direction. You are protecting yourself and thus your investment.

Be sure to keep all of the documents you receive after your inspections in a safe place, for future reference. You do not want to find that you need them only to learn that you have no idea where they are. An inspection is only worthwhile if you can prove it occurred – and that can only happen with the right papers, the right check marks, and the right diligence.

Whether the buyer does the inspection, seller, or both, keep in mind that it is impossible for an inspector to find everything that may be wrong with a home or problems that might arise in the future. However, qualified and experienced home inspectors can spot the vast majority of problems, and both buyers and sellers can rest knowing that everything possible has been done for the home to have a thorough inspection.

Real Estate Negotiation Ninja Tips

Negotiating Real Estate

There’s no greater test for a realtor than handling the negotiation process. This is the stage of the deal where he/she has to detach themselves from both the client and the potential buyer/seller. In this regard I have compiled a list of 10 rules that have guided my negotiations over the years. Hopefully it will also guide you to some of the best deals in your realty career.

1. The Guy With The Cash Usually Wins.

I’ve tackled many fish in my years and I can guarantee you that this tip always works. It doesn’t matter whether you’re trying to push of a commercial property or a luxury condo, always bring cash. Understand that the main reason people sell their property is to get some cash. With this in mind, the party with no cash will be desperate to close a deal even at a loss just to get the deal done. Make sure that either party has a sure way to finance the final deal and you’ll always know who is the winner from the onset.

2. Automate the Grunt Work.

In my earlier years I lost a large chunk of my valuable time trying to chase deals. The reason? I tried to do all the paperwork by myself. For this reason I would advise you to invest in an automated software solution. It will create more time for you to earn a decent commission while still enjoying your work hours.

3. Emotional Intelligence Is Key.

I’ve seen so many of my clients lose out on great deals because of their lack of control over their emotions. As a result I would advice you to learn how to detach your emotions from the bargaining process. Moreover you must learn how to read the emotions of others so as to gain an advantage. This is a skill that very many professionals in the realty business lack, develop it and you will soon be a master of negotiation,

4.Listen more, Talk Less.

Realtors often make the dreadful mistake of refusing to listen to the client and prospective sell/buyer. This is why we must learn to listen more and talk less. Entertain your potential sell/buyer and let the expose as much information regarding their situation. This will give you an opportunity to identify a point of entry for your final deal. Remember that information is power and the party that uses it well usually gets a better deal.

5. The first offer is all that matters.

It doesn’t matter how many you emails you send or how many calls you make, the first offer is all that ever matters. In this regard we must always let the opposing party make their offer first as It will give us a clear indication of our standing in our negotiation. It will enable us to curve a route towards a price that makes a tidy commission while still making the client happy.

6. Manage Expectations.

Ensure that you have received a target price from your client and the prospective sell/buyer. This will enable you an opportunity to manage the expectations of both parties. You can then manage expectations on both sides and therefore increase the likelihood of a successful negotiation. Set the tone for both your client and potential seller/buyer so as to avoid and disagreements and unnecessary tension that is common when money is put on the table.

7. Work With Deadlines.

You don’t want to become the realtor who takes three years to close a deal, trust me. Make sure you always set a realistic date for both your client and prospective buyer/seller. It will create a sense of urgency and inspire both parties to find a middle ground. In addition to this I have some time been forced to set penalties if I sensed that something could go terribly wrong. Not all parties that you enter a negotiation with will want to paly fair, protect yourself.

8. Delegate and then delegate some more.

Now that you’ve automated the mountains of paperwork it is time to increase your efficiency by delegating more task. For instance why should you spend useful hours filling legal documents when you could delegate that work to a clerk or assistant? This will enable you to build a team that works well together and gets deals over the line. Don’t worry about sharing your commission, there’s always enough for everybody when deals are going over the line.

9. Know when to walk away.

Develop the tenacity to use the word ‘No’. It will give you the ability to walk away from bad deals. Understand your niche and note all the red flags before letting a deal go through. Some deals will eventually turn to losses. For instance if your client quotes a very high price tag for their average home, walk away. That is an unrealistic client that will waste your time and eventually lose you potential commissions. Write down all these warning signs and develop a system to ensure that you don’t repeat the same mistakes.

10. Let The Numbers Talk.

When all is said and done we have to admit that the real estate business is all down to numbers. Stick to your data and let it inform your decisions. It will help you discern what are facts and what are assumptions. Use the numerous online resources to source your date and present it to your client to help them understand what the market deems appropriate for their property. For instance, if every property on the island costs $10,000, why should your client demand $25,000? Let numbers bring in a sense of reality to simplify the negotiation.

These 10 rules have guided me towards some the biggest commissions in my long career as a realtor. They have helped me identify good deals and following through on the sale. Moreover they have enabled me to develop discipline which has in turn created professionalism. If you read them on a regular basis and put to practice what I preach then you will sell a ton of property.

Calculating Closing Costs: Around How Much Can M Expect to Pay.

Couple calculating closing costs

Closing costs are expenses over the selling price in a real estate transaction. The buyer will be in charge of paying most of these costs. The total amount of the closing cost will vary greatly depending on the value of the property and the state in which it is located.

The closing procedure begins when you sign a purchase and sale agreement. The agreement specifies a closing date.

Closing Costs Paid by the Seller

While the majority of the costs are paid by the buyer, the seller still should expect to pay a significant amount. All the closing fees paid by the seller are clearly outlined in the closing disclosure.

Closing Fee: This fee, also called Escrow Fee is paid to the title company, attorney or escrow company for handling the closing. The title or escrow company is an independent party that oversees the sale. Some states require a real estate attorney to be at each closing.

Attorney fee: You will only have to pay this if you chose to be represented by an attorney at the settlement. This fee can be sometimes paid by the seller and other times by the buyer.

Real Estate Broker Commission: This cost is typically between 4% and 7% of the selling price. This is the highest cost for the seller. Sometimes, this commission can be negotiable and it surely varies depending on the market. This commission is often split between the listing agent and the buyer’s agent.

Outstanding Loan Payoff: When closing, you will also have to pay any outstanding amount left on your mortgage. You will also have to pay due to prorated interest. In some cases, you even have to pay a prepayment penalty for paying your loan off before the end of the term.

Recording Fees: Recording fees refer to the taxes that the state or local government imposed for the transfer of the title from the seller to the buyer.

The sellers will have to also pay other closing costs depending on the situation. Such costs are title insurance fees, prorated property taxes, and liens or judgments against the property.

Closing Costs Paid by the Buyer

Loan Origination Fee: The buyer pays this fee to the lender to cover administrative costs and is usually around 1%. However, in some cases there is no origination fee or the seller is required to pay part of it.
Loan Discount: This is the money you will have to pay upfront to have a lower interest rate.

Application Fee: Some lenders charge this application fee that usually is around $300.

Appraisal Fee: You will have to pay this fee to the appraisal company to confirm the market value of the house.

Credit Report Fee: Your credit score is crucial in determining the interest rate you’ll get. This fee is of around $25.

Lender Inspection Fee: This fee applies if you are either building a new home or are buying a partially constructed house.

Mortgage Insurance Application Fee: This fee online applies if the down payment is less than 20%.

Mortgage Insurance Premium: You will need to pay this only if your lender requires you to pay the first year’s mortgage up front.

Prepaid Interest: Your lender will most likely ask you to pay any interest that will accrue before you will pay your first mortgage payment.

Home Inspection: This inspection checks for damage, pests and other such issues.

Courier fees: You may pay up to $60 for the courier services that carry all the paperwork between you and the lender.

Flood certification: This only applies if the house is near a floodplain. FEMA issues this certification and costs around $15 to $20.

Survey fee: This fee is paid to a survey company that verifies property lines as well as other things like shared fences. Only some states require this survey.

Underwriting fee: This fee is paid to the lender and covers the cost of researching to determine if they should approve the loan or not.

Depending on the situation, other fees might show up on your Closing disclosure such as notary fees, title insurance fees, title search, hazard insurance premiums, and lender’s attorney fee.

Buyers have an option to eliminate all upfront expenses with the no-closing-cost mortgage. However, choosing this option also means that the buyer will pay more due to higher interest rates on the mortgage.

Bottom Line: How Much Do I Have to Pay?

If you are the seller, you will have to pay between 1% and 3% of the house’s price, while the buyer will have to pay between 3% and 4% of the house value. This value doesn’t include the real estate broker commission, payable by the seller.

How much you will pay depends greatly on the state you buy or sell the house in. Different states have different legal requirements and closing fees for the sale of a home. To find an amount that is close to reality, you can use a closing costs calculator online. Another option is to ask your realtor to give you a more accurate estimate.

For example, if you buy a house at a selling price of $250,000 in San Francisco, CA, you will have to pay around $6,500 closing costs. If you buy a house that has the same value in New York, NY, you will have to pay around $12,000 closing costs.

According to the new rules for the closing procedure, all paperwork, including the Closing Disclosure have to be ready three days prior to closing. The Buyer will receive from the lender this document that outlines all the closing costs. The seller will receive a similar document from the realtor.

Key Takeaways:

  • Both the buyer and the seller will have to pay closing costs
  • Closing costs vary greatly depending on the property value, the lender, and the state in which the house is situated
  • Typically, the closing costs for the buyer are between 3% and 4%
  • Closing costs for the seller are between 1% and 3% plus real estate agent’s commission and any outstanding loan payoff
  • Buyers can eliminate the upfront payment of the closing costs by opting for a no-closing-cost mortgage

What Paperwork is Needed to Sell a House By Owner

Couple FIlling out Paperwork To Sell Their House

When it comes to selling your house, you have two options. Either hire an agent to assist you in selling your house, or you can do all the work by yourself. While doing it all by yourself will definitely save you thousands in commissions, you have to ensure you fill in all the required paperwork correctly. In addition, you need to follow the rules and regulations as instructed and required by national and local laws. Here we’ll discuss which paperwork is required to sell a house by owner and suggest some tips to make the process simpler.

As an owner the first important thing to know is that the process to sell a house is the same. Both when being sold by the owner and if you were to engage an estate agent. The main differences are that primarily you will save some commission and secondly there is more work to do by the owner. Let’s dive in and see what is required.

The actions are initiated only after an offer from a seller is accepted by the owner. First and foremost an escrow account is opened with the bank of choice of the buyers. This is to confirm the commitment for the purchase of the house by the buyers. If the buyers will be taking a loan, they will initiate the required process and paperwork with their preferred bank.

On the other hand, the seller will have to provide all the required disclosure agreements. Agreements will have to comply with regulations specified by the US government. The seller will also have to report any known or probable hazards in the area.

Now let’s have a look at the seller’s process and the required forms to be filled.

Purchase Agreement – Lists the parties involved, the offer, counter offer if any and timelines and inspection periods. Details of the terms of the contract of sale. Includes the evidence of the transfer made during the contract of sale and is legally binding.

Power of Attorney – This form is only required if someone else other than the owners will be signing the deed of sale.

Promissory Notes – In the case of debt the promissory note will include the terms of payment of a debt in the case a later dispute occurs.

Deeds – A form which is used in the selling of a house by owner being a home sales contract form.
Warranty deeds, quitclaim deeds, deeds of trust – List of deeds are required for the legal purchase in local land records.

Lead Paint Disclosure – If the house you are selling was built prior 1978, you need to provide the buyer with a disclosure warning about possible presence of paint containing lead in your house. Further information about the latter can be found in the EPA website. Lead Paint disclosure forms can also be downloaded from the US Legal Forms websites for a nominal fee.

Depending on the state there might be different regulations that apply. Websites such as USLegalForms.com offer state specific forms for download forms at an affordable price.

This is not an exhaustive list. If in doubt, you should consult a real estate attorney licensed in your state.

What To Do If My House Is Not Selling

Real Estate Agent Cooking with Cash

Many sellers might be wondering why their houses don’t sell after being so long on sellers’ market. Some have never received a single call concerning the sale of the house. No customer has ever enquired about the house. Completely none! In order to attract potential buyers purchasing your house, one has to evaluate the best tips to apply in making the house more marketable.

Finding the best agent

Before hiring an agent to do the marketing for you, it is important to look for an agent with marketing skills. Finding out the strategies he/she uses to reach people who may need to buy the house. Besides all, check for how long the agent has been in the marketing industry. You should be able to see his successful sales. The experience has acquired in the field should be able to help you decide whether the agent will be able to sell the house. Don’t rely so much on the charges or commissions he may charge you but take time to make interviews. Look for agents from recognized marketing firms or get suggestions from friends and family members.

It is necessary to have the paperwork during the sale of your house by providing documents which will help the agent to market for the house. Offering these documents will help in verification of the home attracting more buyers.

Improve the condition of the house

Before selling the house, you should consider upgrading the house a bit in order to get the most from it. Ensuring its in the best condition possible will attract the buyers since each one of them is to get the best from their money. Improving the house condition may be by adding simple amenities, for example, upgrading the ceiling fan, upgrading door handles, paints, better surroundings of the house and other simple activities which will end up making a great impact on sellers’ market.

Renovating the house also may be important to ensure its worth the cost you need to sell it. Avoiding bad smells that may come out from the house due to pet urine or persistent bad odours it’s good to address the cause and address it.

Updating the appliances. Very old appliances may make the buyer start calculating how much will spend later to update them. Hence, having the most of the appliances updated will help also in selling the house for the best cost. Buyers are after sweet homes despite how little money they have. Therefore, it’s necessary you make your house the most attracting than others in the market.

Allocating a reasonable cost

It’s important to allocate a cost that is reasonable for that house. Before listing the price on the sellers’ market it is important for you and your agent discuss the best-suited price for the house. setting the price right plays a great role in determining how fast the house will be bought. Consider the location of the house, layout, the size and this will help from overpricing the house as well as avoiding losses after the sale. Chase Michels says a can make a huge mistake by pushing the pricing of the house higher.

Go for advertisement programs.You need to advertise your house in order to reach buyers. You may put signs in the yard indicating the house is on sale. Pay for advertising programs which will help to sell your house. Post it on social media to raise the chances of getting a buyer. While advertising, it’s necessary to describe the house clearly and give the correct location details.

Clear quality photographs may be needed to show the exact features of the house. if possible, it’s better hiring a professional to do the photographs for you. make sure they cover the whole house. should have captured a clear layout of the house to bring a clear picture on the buyer’s mind. During the uploading process to the seller’s website, it is important to ensure they are in a correct sequence to guide the buyer in the house. avoid any obstacles that may be in front of the house when taking photographs.