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How Long Does It Take to Buy a House?

August 14, 2020

how long does it take to buy a house

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Table of contents: 

How long does it take to buy a house? While estimating a timeline for home buying will depend on many variables, real estate experts estimate that the average time required is around four months.

This timeline is important for buyers to keep in mind for a variety of reasons. Many buyers might hope to time their home purchase with when their rental lease is up. Other buyers might want to pace their house hunt so that they are settled in their new home before the start of school. Still other buyers might also be home sellers who first need to close on the sale of their old house before they can buy their next house.

In short, home buyers might need to fit their home search into any number of time-sensitive situations, so knowing how long the buying process typically takes can help them plan accordingly.  Plus, buyers should know that four months is how long it might take if everything goes smoothly. If problems crop up—with the home inspection, appraisal, mortgage, or other things—then the real estate buying process could take even longer.

Buying a house may take time, but there are good reasons why it’s no impulse purchase. To help illuminate what’s going on, here’s a rundown of the various stages you’ll encounter while home shopping to help you plan your buying timeline just right.

Step 1: Get pre-approved for a mortgage

Your first step shouldn’t be to check out homes; it should be to get mortgage pre-approval from a mortgage lender or broker. This is presuming you aren’t planning to make an all-cash offer to a seller, but rather need a loan to make your goal of home buying happen.

“Home buyers will want to speak to a mortgage lender or  broker to start the loan process early so there are no surprises,” says real estate agent Beverley Hourlier with Hilltop Chateau Realty, in San Diego.

There are a couple of reasons for this: One, unless you’re really organized, it will take you a while to gather all the documents you need to show your lender for your loan, including pay stubs and tax forms. Two, if the mortgage lender finds out that your finances are less than ideal for homeownership—because of, for instance, a poor credit score—it can take months to clean up your finances so you’re in better standing. Oh, and you’ll need to make sure you’ve got enough cash so you can afford to make a decent down payment on your mortgage, too.

If your finances are in good shape, you can get mortgage pre-approval, which is a contract that the lender will lend you a certain amount of money. Being pre-approved for a mortgage and having this paperwork in hand is a major asset, because it shows sellers that you can afford their house and mean business, and it’s a prime way to negotiate with a home seller. (Keep in mind that mortgage pre-approval is different than mortgage pre-qualification).

If your financial circumstances don’t change much by the time you close this real estate deal, you can ask a lender to extend that loan promise for an additional 90 to 120 days or longer; you can also lock in a great interest rate so it doesn’t rise by the time you’re actually buying a house.

Step 2: Find your dream home

While looking at real estate listings online is fun and easy, things slow down once you get to the point where you’re visiting houses in person. After all, buyers can’t just pop in whenever they want. Instead, you’ll have to schedule an appointment for a home tour that work for the home sellers, too.

So in the same way buyers have to kiss a lot of frogs before finding a prince, you’ll likely need to spend some time house hunting, and see a lot of homes before you find one you love. On average, buyers see 10 houses before they make an offer, but that number can be much higher.

But any good real estate agent will tell you that it’s time well spent. According to  agent Melanie Atkinson with Coldwell Banker Residential Real Estate, in Tampa, FL, when buying a house, “The last thing you want is to feel rushed or make a decision in haste that you will later regret.”

Step 3: Prepare for closing day

Once you’ve found a house you love, made an offer that’s been accepted, and are under contract to purchase the property (which can typically happen in a few days), the waiting game really begins.

On average, it takes around 50 days to close on a loan for buying a house, from the time lenders pre-approve your mortgage to underwriting the loan to the day you sign all the documents and move into your new home.

Can you see now why getting pre-approval early is so important for the buying process? In fact, securing a loan is the most common holdup in buying a house.

Even with a pre-approval, it can still take 30 days for the lender to do its due diligence by conducting a home appraisal to make sure it’s a good investment (since after all, the lender’s money is on the line) and underwriting your mortgage.

Meanwhile, if you’re under contract to buy a particular piece of real estate, it will also take time for you and your real estate agent to do your own due diligence to make sure the house isn’t hiding some glaring flaw you’ll regret inheriting. You can do this by checking the home sellers’  disclosure statements for any problems in the house that they’re aware of, and also hiring a home inspector to check out the house from top to bottom for any problems. All of this takes time. Closing is a not a time to rush; you and your agent will want to make sure to do everything right.

Bottom line: As much as people complain about how long it takes to buy a house, it’s all in the interests of making sure you’re happy once you’re a homeowner and this piece of real estate is finally yours. So when in doubt, there is no better time to start than now! If you’re worried you’ll find your dream house too soon, there are ways to negotiate with a seller and their agent so that it all works out.

The post How Long Does It Take to Buy a House? appeared first on Real Estate News & Insights | realtor.com®.

What Is a Buyer’s Agent? A Trusted Guide Who’ll Help You Find a Home

November 14, 2019

real estate agent shaking hands; what is a buyer's agent?

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Ready to house hunt? It’s a jungle out there: Prepare for a flurry of paperwork, stampedes of buyers competing for the same digs, and other challenges, before you get your hands on those house keys.

We won’t lie: The process can be complex and stressful—especially if you are a first-time buyer. Having a real estate pro by your side can make all the difference.

You might have heard of buyer’s agents, selling agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent?

True to their name, buyer’s agents help real estate buyers navigate the real estate market; they can also save you tons of time and money on the road to your new home.

Read on to learn how a real estate buyer’s agent can help, and how to find the right one for you.

Benefits of using a buyer’s agent when buying real estate

“A buyer’s agent will guide you through the home-buying transaction and be at your disposal for any questions or concerns,” says Shane Wilcox, a Realtor® with Partners Trust. Here are some of the things a buyer’s agent can do:

  • Find the right property. After determining what the clients are looking for and what they can afford, the agent will schedule appointments to tour homes that fit the bill. The agent can also explain the ins and outs of various properties and neighborhoods, to help buyers decide which home is right for them, by explaining the pros and cons of various options.
  • Negotiate the offer. The buyer’s agent will advise clients on an appropriate price to offer and present it to the seller’s agent. “Then they will negotiate on your behalf and write up the contracts for you,” says Matt Laricy, a Realtor with Americorp Real Estate in Chicago. This is where the agent’s experience in negotiating deals can save you money and help you avoid pitfalls like a fixer-upper that’s more trouble than it’s worth.
  • Recommend other professionals. A buyer’s agent should also be able to refer you to reliable mortgage brokers, real estate attorneys, home inspectors, movers, and other real estate professionals. This can also help expedite each step of the process and move you to a successful real estate sale all the faster.
  • Help overcome setbacks. If the home inspector’s report or appraisal brings new issues to light, a buyer’s agent can advise you on how to proceed with the transaction, and then act as a buffer between you and the sellers or their broker. If negotiations become heated or hostile, it’s extremely helpful to have an experienced professional keeping calm and offering productive solutions.

Buyer’s agent vs. listing agent: What’s the difference?

Buyer’s agents are legally bound to help buyers, whereas listing agents—the real estate agent representing the home listing—have a fiduciary duty to the home seller.

“That’s why it’s in your best interest as a buyer to get an agent who is there to represent you,” explains Alex Cortez, a Realtor with Wailea Village Properties in Kihei, HI.

“Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently fight for your interests and rights.”

Let’s say, for instance, you walked up to the listing agent at an open house. You might gush about how you love the home and want to buy it, but add that you will need to move soon—because you’re expecting your second child and need to decorate the nursery, pronto, or because the lease on your rental is up in a couple of months.

A seller’s agent could then use this information against you by informing the sellers that your clock is ticking, so they shouldn’t budge too much on their asking price—if at all.

Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this info private from sellers (and their agents), so it can’t be used against you.

Some states, recognizing this problem, required a disclosure of dual agency when a broker represents both sides of a real estate transaction.

However, you may still not be comfortable after signing an agreement saying you know someone is a double agent. You might want to hire an agent who is not representing the owner, and who is looking out for your best interests.

How to find a buyer’s agent

A good buyer’s agent can ease your way to homeownership—and a bad one can result in a bumpy ride.

You should not just take the first buyer’s agent you meet (as two-thirds of home buyers do), or blindly accept the recommendation of a friend (more than half do this). Instead, it’s best to interview at least three agents and ask them a few questions, including the following:

  • What neighborhoods do you specialize in? Real estate requires local expertise, so you should find an agent who’s extremely familiar with the areas you’re interested in.
  • What’s your schedule and availability? Part-time real estate agents who are committed can do a fine job, but if the house of your dreams pops up or you encounter last-minute closing snafus, you want an agent who will be readily reachable.
  • How long have you been a real estate agent? You ideally want someone with a couple of years of experience, and a proven track record of selling homes.

To find real estate agents in your area, head to realtor.com/realestateagents, where you can also read online reviews provided by past clients and learn more.

The agent/buyer contract

Once you agree to work with someone, you will have to sign a contract called an “exclusive buyer agency agreement,” outlining the agent’s services and compensation (more on that next).

This contract also means that this person will be your sole representative and that you won’t work with other buyer’s agents.

How much do buyer’s agents cost?

Home buyers don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller pays the commission for both the seller’s and buyer’s agents.

Typically, the commission is the equivalent of about 6% of the home’s sales price, which is split evenly between both agents (on a $200,000 home, that would be $6,000 apiece).

The post What Is a Buyer’s Agent? A Trusted Guide Who’ll Help You Find a Home appeared first on Real Estate News & Insights | realtor.com®.

The One Thing Home Sellers Forget to Hide Before an Open House

November 5, 2019

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When getting ready to sell your house, there’s a lot to worry about—home staging, repairs, keeping rooms tidy for home tours, and more. But there’s also one important thing that many sellers forget to do: hide their prescription drugs.

Sorry to break it to you, but some “buyers” touring your home might just be rooting around for valuables, and you might be surprised by which medications fit the bill.

Here’s what sellers need to know about the risks of prescription drugs at open houses, and how to keep all of their belongings safe.

Which drugs to hide during an open house

When preparing for an open house, plenty of homeowners put away their expensive jewelry, electronics, and checkbooks. But prescription drugs often get overlooked since they’re generally tucked away in medicine cabinets and drawers.

Although the painkiller OxyContin may be the most commonly abused prescription drug (and at highest risk for theft), also high on the list are attention deficit disorder medications like Concerta and Adderall, depression and anxiety medications like Zoloft and Xanax, and sleep aids like Ambien.

Plus, prescriptions aren’t the only drugs that could get swiped for recreational use. For example, over-the-counter cough suppressants (e.g., NyQuil) can be abused by being mixed with alcohol or other drugs. And sinus medications containing pseudoephedrine, like Sudafed, can be used to make meth. Even the heartburn medication Prilosec has been known to be abused due to the euphoric effect it has when taken with methadone.

Make sure these, and all other medications, are removed from your medicine cabinet. Even if a medication seems innocuous, it’s better to be safe than sorry.

How to keep your belongings safe

If you’re getting ready to show your home, walk around the house thinking like a stranger. What’s easy to pick up? What might be easy to sell? This is a great guideline for medications, but also for hiding any valuables in your home. Think about wine, perfume bottles, expensive lotions, even your designer tie collection.

Since it can be hard to know what thieves are looking for, try walking around the house with a real estate agent to make sure you’ve noticed everything. Make sure you don’t leave your checkbook in an unlocked drawer; and hide your laptop, tablet, and cellphone.

The safe way to discard old pills

After a good sweep of your medicine cabinet, you might find yourself with a few bottles of pills you don’t need anymore. While your instinct might be to simply trash them before an open house, there’s a better way to dispose of them.

Many homeowners are making use of Deterra bags, and other drug-deactivation systems, to safely dispose of medications. Deterra bags work by using an activated carbon pod, which, when mixed with warm water, absorbs the active ingredients in pills, patches, and liquids, rendering the drugs inactive.

“We’re giving them to agents to give to homeowners when they’re buying or selling homes,” says former Nevada Realtors president Heidi Kasama, a supporter of RALI, the Rx Abuse Leadership Initiative.

According to Nevada Business, RALI partners are distributing 500,000 pouches to residents of Nevada. Many other supporters of the initiative have had the opportunity to pass them out as well.

If you don’t have access to a drug-deactivation bag, there are other ways to dispose of your unused medications. Drugs can be flushed down the toilet, but only if they are on the FDA’s flush list. If they are not on the list, the FDA recommends mixing the drugs with an unappealing substance like cat litter or dirt, putting the mixture in a sealed plastic bag, and throwing it away in the trash.

The FDA also states that it’s important to make sure you scratch out the information (like your name and what drug you were prescribed) on the prescription bottle.

If flushing and throwing medications away are not possible, you can always turn unused drugs into your nearest drug take-back location.

Why ‘hidden’ isn’t always ‘safe’

Once you’ve found everything of value, you may be wondering what to do with it. Your first instinct might be to hide valuables in a closet or in a drawer, but buyers often look in closets (to see how much storage space there is) and they can easily open drawers.

“When I tell owners to put valuables away, I recommend to not hide them in some obvious place, but put some thought into it, or put items in a safe,” Kasama says.

But if you don’t have a safe, you might consider locking valuables in a desk drawer, buying a large (and heavy) trunk with a lock to store your valuables, or even putting them in the trunk of your car. If you have friends or family you trust living nearby, you might even ask if you can store a few boxes of your most precious items there.

Ask your real estate agent to keep an eye on buyers

Even if you think you’ve cleared out all your valuables, it’s still important to watch potential buyers in your house.

Of course, most of the time, the homeowner will be away when the house is being shown, so make sure your real estate agent is keeping an eye out for you.

Allison Jung, a real estate agent in Las Vegas, says she finds power in numbers when it comes to preventing theft in open houses.

“I have another agent, escrow or lender partner attend the open house with me,” Jung explains. “That way we can station ourselves in different parts of the house to keep an eye on things.”

Kasama says she’s always on the lookout for suspicious activity.

“We had a showing once, and four people came in,” she recalls. “They immediately split up and took off in two directions and didn’t seem to want to listen to anything about the house. A big red flag. We called after them and said they had to all stay together and we would tour them through the house. They left very shortly after that, which tells me they were not there to look at the house.”

The post The One Thing Home Sellers Forget to Hide Before an Open House appeared first on Real Estate News & Insights | realtor.com®.

You’d Better Ask These 5 Crucial Questions Before You Buy a House

October 21, 2019

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No matter how many episodes of “House Hunters” or “Love It or List It” you’ve watched, buying a home inevitably comes with surprises. Though a sharp real estate agent will help you navigate these hidden challenges, before you start shopping for a house, you should take account of some important things that you probably haven’t considered.

Curious what you might be missing? Here are five questions you’d never think to ask yourself but totally should before buying a home.

1. Have I checked my credit report?

When you apply for a mortgage to buy a home, lenders want some reassurance that you’ll repay them later. Of course they do! One way they assess this is to check your creditworthiness, by scrutinizing your credit report and score. Having a high credit rating or FICO score (named after the company that created it, the Fair Isaac Corporation) proves that you have reliably paid off past debts, whether they’re from a credit card, college loan, or other forms of debt.

Credit scores can range from 300 to 850; in general, what’s considered an excellent credit score is in the range of 750 to 850. A good credit score is from 700 to 749; a fair credit score, 650 to 699. A credit score lower than 650 is deemed poor, meaning that your credit history has had some rough patches.

The three nationwide consumer credit-reporting companies—Equifax, Experian, and TransUnion—are each required to provide you with a free copy of your credit report annually if you request it. You can order all three at once, or stagger them throughout the year, from one central source: AnnualCreditReport.com.

You should closely examine each report before you meet with a mortgage lender. Why? Because even if you’re fairly sure you’ve never made a late payment, 1 in 4 Americans find errors on their credit file, according to a 2013 Federal Trade Commission survey. The simple truth is that creditors make mistakes reporting customer slip-ups.

If you discover errors, you can remove them from your credit report by contacting Equifax, Experian, or TransUnion with proof that the information was incorrect. From there, they will remove these flaws from your report, which will later be reflected in your FICO score.

2. Who’s the best real estate agent for me?

Finding the right real estate agent to partner with can be a daunting task. A lot’s at stake, and there’s certainly no shortage of options. Should you go for a savvy veteran agent or eager newbie?

Veteran real estate agents can provide sage advice, based on the breadth of knowledge they’ve built up over the years. Having dealt with just about every issue that can affect a sale, they can help you navigate any complicated problems that may arise.

However, experienced agents are usually in high demand, working with several clients at once. Because their time is limited, they may not be available to show you as many homes in person, meet you for last-minute showings, or handle other pressing issues.

Rookie agents, meanwhile, bring fresh energy and enthusiasm to their job. And, because beginners usually have fewer clients than more seasoned agents, they may be able to spend more time with you than an experienced agent who’s juggling multiple clients.

In short, choosing the right agent boils down to what kind of customer service you’re looking for. Need help finding one? You can search for agents in your area at realtor.com/realestateagents, where you’ll find such details as their years of experience, number of homes sold, clients’ reviews, and more.

3. If I get a new job, am I likely to have to relocate?

Your career plans play a pivotal role in determining whether it makes sense for you to buy a house.

“Previous generations planned to get one job, keep it forever, and ultimately retire. Buying into a house because they were looking for a permanent living situation made a lot more sense,” says Chandler Crouch, broker at Chandler Crouch Realtors in Fort Worth, TX. “Now, job-hopping is prevalent.”

Indeed, according to a recent report from the Bureau of Labor Statistics, the median tenure of workers of ages 55 to 64 is a whopping 10.1 years, more than three times that of workers ages 25 to 34, who stay at a job for 2.8 years on average.

Changing jobs won’t be a big deal if your new gig is in your current city, but if there aren’t a ton of job opportunities in your industry in your area, you may find yourself having to relocate a year or two after you bought your home—in which case you may not be able to recoup the amount of money it cost you to purchase the house.

“It honestly isn’t a good idea to buy a house unless you plan on staying there for at least five years,” Crouch says. If you’re considering buying a house but already know you are likely to move in that time frame, remaining a renter may be your best choice.

4. Can I afford to pay closing costs?

Getting a mortgage comes with a number of closing fees, which borrowers have to pay when they reach the settlement table. These are out-of-pocket expenses that you need to budget for.

Although buyers and sellers both typically pitch in to cover closing costs, buyers shoulder the lion’s share of the load (3% to 4% of the home’s price) compared with sellers. So, on a $250,000 home, your closing costs could come to about $7,500 to $10,000.

Typical closing fees include the following:

  • Closing fee ($300 to $600): A representative from the title company will come to your closing to supervise the transfer of title, and you’ll have to pay for the service.
  • Lender’s title insurance (usually 0.5% of the purchase price): This protects your lender if something was missed in the title search. The cost depends on the size of the policy and is set by the state.
  • Title search ($300 to $600): Your lender will do a search to ensure there are no liens on the property or anything that could prevent you from purchasing it. Sometimes this will be bundled with other title fees in your closing document.
  • Wire or courier fees ($30 to $100): If documents need to be sent overnight or money needs to be wired, you’ll pay these fees at closing.
  • Document recording fees for the deed and mortgage ($125 on average): Every time a home is sold, the government must record the change of ownership; this fee is typically paid by the home buyer.

Under federal law, borrowers must receive what’s called a “loan estimate” form (previously called a “good-faith estimate”) that outlines their approximate closing costs from their mortgage lender. When you obtain this information, you’ll be able to gauge whether you can pay for closing costs and truly afford to purchase a home.

5. Am I dead set on finding my ‘dream home’?

People throw around the words “dream home” a lot. (Heck, we’re guilty of it.) However, the honest truth is this: “There’s no such thing as a perfect house,” says Daniel Gyomory, a real estate agent in Northville, MI.

Some home buyers, though, have a hard time accepting this, Gyomory says, and make the mistake of holding out for their ultimate forever home.

If your list of “must-haves” is immensely long (you’re looking for great schools, affordable home prices, easy access to public transportation, good walkability, and lots of shops and restaurants) but you’re not willing to budge on anything, shopping for a house may wind up being a waste of your time.

This is why it’s important to sit down and identify your housing criteria in order to get a better picture of what it is you’re looking for—and whether that kind of home exists.

The post You’d Better Ask These 5 Crucial Questions Before You Buy a House appeared first on Real Estate News & Insights | realtor.com®.

What Is a Broker’s Open House? A Smart Way to Market Your Home

September 24, 2019

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If you’re trying to sell your home, it’s likely your real estate agent has suggested hosting a broker’s open house. But, what is that, exactly? Long story short, it’s an open house not for home buyers, but for their real estate agents so they can determine whether your property is right for any of their clients. Here’s how to decide how to make the most of this marketing opportunity—and maybe snag a great buyer for your home.

How a broker’s open house is different

The biggest difference between a broker’s open house and a standard open house is who ends up on the invite list. While standard open houses are quite flexible about who can stop by—and might include anyone from potential buyers to curious neighbors—the guest list for a broker’s open house is strictly limited to other real estate agents and industry professionals.

Time is another differing factor for this real estate open house. Usually, standard real estate open houses are hosted on Sunday afternoons, because the vast majority of potential buyers have weekends free for house hunting. On the other hand, because a broker’s open house caters to real estate agents—whose weekend schedules are often packed with home showings for clients—it is often held midweek, when agents are more likely to be available.

What happens at a broker’s open house?

At its core, this open house home-selling tactic is another tool that real estate agents use to help market and sell a property. In addition to internet marketing systems like the multiple listing service, it’s a method of debuting your listing to real estate professionals in your community. Once your agent schedules a broker’s open house, he will advertise it to his network of real estate industry contacts. Usually a free lunch is also offered as an incentive to show up.

On the day of this real estate event, the other real estate agents will be given a chance to tour your home, enjoy the free lunch while catching up with colleagues, and offer your agent their opinions on the property.

Typically, broker’s open houses are held within the first few days of a home being put on the real estate market in order to capitalize on the initial burst of interest that often accompanies new listings. But if there is ever a dramatic adjustment to how your home is being marketed—such as a significant drop in price—your agent may suggest hosting another broker’s open house to spread the news to potential buyers and clients.

The benefits of a broker’s open house for sellers

If you’re the type of seller who doesn’t relish the idea of opening your home to crowds of looky-loos who’ll tramp through your outdoor property, the garage, and all of your rooms—plus open every closet and medicine cabinet—then a professionally targeted broker’s open house may be appealing.

If all goes according to plan, the real estate agents who tour the house will go through their mental Rolodex to see if your property would be a good fit for any of their current buyers. If so, they’ll likely bring those possible buyers back for a private showing in the near future, especially if the broker’s open house was well-attended.

“It creates a sense of urgency”, says Stephen Marchese of Re/Max Central in Blue Bell, PA, “and, a higher-perceived value of the house.”

However, even if an offer doesn’t come directly from the broker’s open house, it can offer a valuable critique of how your home looks in comparison with other properties currently on the market in your area. Since real estate agents regularly have the chance to view a variety of homes, they have the ability to give your agent feedback on how your home is being perceived by other agents and homeowners—and how to better attract buyers and help it sell.

The post What Is a Broker’s Open House? A Smart Way to Market Your Home appeared first on Real Estate News & Insights | realtor.com®.

Selling a Home Out of State: 5 Secrets for Streamlining a Sticky Situation

June 26, 2019

Selling a Home Out of State: 5 Secrets for Streamlining a Sticky Situation

iStock; realtor.com

In a perfect world, buying a new home and selling the old one would happen at the same time. But in the real world (especially when job and school schedules are involved), you might be in your new dream home and still have a house several states over that needs to be sold. Take it from us: Selling a home from out of state can be tough, especially as you’re trying to unpack your new place, get the feel of a new job, and settle into a new routine.

In order to get through it and make a successful sale, you’re going to need an all-star team back at the old homefront. Here, we’ll cover how to guarantee they can get the job done. We’ll also walk you through some things you can do to minimize the back-and-forth—so that your local team can wrap up your old life while you focus on building a new one.

1. Hire a real estate agent who can handle the distance

Your former city probably has a lot of qualified real estate agents to choose from, but you should be especially particular when hiring someone to handle an out-of-state sale. Your listing agent should be experienced in coordinating with clients remotely, and able to make a fast sale on your home so that it doesn’t just sit on the market.

“My best advice for this is to choose the Realtor® who has done the most sales in the past year,” says Avery Carl, a Realtor® in Nashville, TN.

And you should get into the semantics here: “A lot of sellers look for the agent who’s listed the most properties,” she says, “but finding the agent who has done the most buyer-side sales is a hidden gem—they’ll have a ton of buyer contacts and can get your listing sold the fastest.”

You should also make sure your listing agent is someone you can trust to be responsive—who will keep you up to date on what’s happening and will respond to your emails and voicemails at lightning speed. After all, that’s the only way you’ll know what’s happening with your property.

“Since most of the communication will be over the phone and through text or email, you want to get a feel for their personality,” explains Nadia Anac, a real estate agent in Tampa, FL. “A real estate agent should be able to keep you up to date with any changes in the market, recommend contractors, and communicate with you frequently.”

2. Work with a stager to get the home sold faster

DIY staging is going to be hard to pull off from a distance, especially when all of your furniture is already in the new house.

“A little face-lift from a hired interior designer or the broker can really make a huge difference on selling this home while you’re out of state and unable to do it yourself,” says Lior Rachmany, founder and CEO of New York City–based Dumbo Moving & Storage.

By working with a stager (ideally one your agent recommends), your home won’t look like it was recently abandoned—a vibe that could turn off buyers.

3. Make sure you can close on the sale from out of state

Amid the chaos of buying a new home and selling another, you probably didn’t take the time to consider how closing on your former house would affect you. Since a lot of attorneys require you to be present at the table during closing, this is a good piece of logistics to work out in advance.

If you live close enough to go in person, that’s fine. But if you’re looking at a $600 plane ticket and a boatload of inconvenience, it’s a good idea to find someone more flexible to work with.

“When you sell a house out of state, pick a flexible closing attorney or title company,” says Shawn Breyer, owner of Georgia’s Breyer Home Buyers. “When you’re vetting the companies you are going to close with, ask them if you can sign the closing documents with a local notary present. If the buyer’s lender or your Realtor is choosing, have them make sure that you can close from out of state.”

To learn more about remote closings, check out our handy guide.

4. Make sure your team has what it needs—and members know one another

Avoid unnecessary back-and-forth during the sale by making sure your team has all the paperwork and documents it’ll need throughout the process. And make sure team members are aware of one another, so that they know how to communicate without going through you.

“Be sure to hire a broker and a real estate lawyer while you’re in town so you can walk them through your property, give them your deed, etc., and make sure all involved parties have each other’s contact information,” advises New York City–based real estate agent Daniele Kurzweil. “When you’re selling from out of state, you should have your game plan set from the beginning.”

5. Relinquish control

Once you’ve hired an all-star team, it’s time to sit back and let it handle the sale. Easier said than done, we know. But being as far away as you are, it’s going to be fairly difficult for you to do much else.

“Surround yourself with a team you trust and let them do the heavy lifting,” Kurzweil says. “Listen to their advice. They’re on the front lines every day with your property.”

The post Selling a Home Out of State: 5 Secrets for Streamlining a Sticky Situation appeared first on Real Estate News & Insights | realtor.com®.

Can Home Buyers Contact a Listing Agent for a Home Showing?

June 7, 2019

Can Home Buyers Contact a Listing Agent for a Home Showing?
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It’s bound to happen: You’re browsing real estate listings and one day spot a house you’d love to see in person. Should you contact the listing agent directly for a home showing?

After all, most real estate listings (unless they’re for sale by owner) mention a listing agent, along with an invitation to contact the agent if you’re interested in the property.

If you’re already working with a buyer’s agent, your first move should be to contact this pro—after all, she’s representing you and won’t appreciate your doing an end run around her. But if you haven’t yet partnered with a buyer’s agent, what then?

Here’s how to navigate this stage of the home-buying process.

Can buyers contact a listing agent directly?

Technically—yes. The only people who may frown upon contacting a listing agent are buyer’s agents, who make their commissions based on representing buyers. But there is no law or rule saying a buyer cannot contact a listing agent.

If you’re not actively looking to buy and are just curious about the house, simply be clear about that with the listing agent. Say you’re in the early stages of the home-buying process and haven’t yet employed the services of a buyer’s agent. Ask when the listing agent will be in the neighborhood and would be able to show you the property, says Jane Jensen with Century 21 New Millennium in McLean, VA.

Do buyers need to sign an agreement to see a property?

Touring a property doesn’t require signing any documentation. If a listing agent does ask you to sign something, make sure you thoroughly read it. Most likely it is a disclosure about agency, which is required by some local laws. Agency refers to whom the agent represents—in this case the seller—and expectations you should have of the agent’s professional responsibilities in regard to showing a property.

However, some agents may be asking you to sign an exclusivity agreement saying they represent you—for this particular property, or all properties you might see in the future. This is rare but possible, so you should make sure you’re clear on what you’re signing before you move forward.

Do buyers need to find their own agent to see a property?

Checking out a home doesn’t require representation, says Shawn Breyer, owner of Breyer Home Buyers, in Atlanta. The listing agent is usually present at the property simply for the security of the homeowner. Think of it this way: Viewing the property individually is the same as attending an open house. And you don’t need a buyer’s agent to attend open houses.

When do buyers need their own agent?

As a buyer, the option to be represented by an agent is yours. However, if you are actively looking for a home, consider getting a buyer’s agent. The listing agent represents the best interest of the seller, says Michael Chadwick, a real estate agent with Citi Habitats in NYC. While a buyer’s agent represents the best interest of, yep, the buyer.

In most markets, the seller pays the entire commission fee (usually about 5% or 6% of the sale price of the home)—which includes both the seller’s and buyer’s agents’ fees. So by retaining an agent, you’ll have a seasoned professional in your corner who won’t cost you a dime.

“But not having an agent could leave you without invaluable help about negotiating, say, inspections that uncover issues,” says Larry Simons, a real estate professional with Century 21 Maselle & Associates in Brandon, MS.

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Real Estate Agent, Broker, Realtor: What’s the Difference?

May 8, 2019

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Whether you want to buy or sell a home, you’ll want some help. So who should you hire? Real estate professionals go by various names, including real estate agent, real estate broker, or Realtor®. So what’s the difference?

Sometimes consumers use these titles interchangeably, but rest assured, there are some important differences, as well as varying requirements for using particular titles.

Here’s a rundown of the real estate professional titles you’ll come across, and what they mean.

Real estate agent

A real estate agent is someone who has a professional license to help people buy, sell, or rent all sorts of housing and real estate.

To get that license, states require that individuals take prelicensing training. The required number of training hours can vary significantly by jurisdiction. In Virginia, for example, real estate agents must take 60 hours of prelicensing training, but in California they need to take 135 hours.

Once that training is done, aspiring agents take a written licensing exam. These exams are typically divided into two portions: one on federal real estate laws and general real estate principles, the second on state-specific laws.

Once they pass their exams, they’ve earned the title of a “real estate agent” and can begin working with home buyers, sellers, and renters.

Real estate broker

A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.

Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent prelicensing course.

Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.

As a result, “brokers have in-depth knowledge of the real estate business,” says Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA.

To sit for the broker’s exam and obtain licensure, real estate agents must already have a certain level of experience under their belt—typically, three years as a licensed real estate agent.

There are three types of real estate brokers, each with subtle differences in the role they perform:

  • Principal/designated broker: Each real estate office has a principal/designated broker. This person oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary).
  • Managing broker: This person oversees the day-to-day operation of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. (Some principal/designated brokers also serve as managing brokers.)
  • Associate broker: This real estate professional—sometimes called a broker associate, broker-salesperson, or affiliate broker—has a broker’s license but is working under a managing broker. This person typically is not responsible for supervising other agents.

 

Realtor

In order to become a Realtor—a licensed agent with the ability to use that widely respected title—an agent needs to be a member of the National Association of Realtors®.

As a member, a person subscribes to the standards of the association and its code of ethics.

“Essentially, the NAR hold us to a higher standard,” says Peggy Yee, a Realtor in Falls Church, VA. Membership in the NAR also comes with access to real estate market data and transaction management services, among other benefits.

Listing agent

A listing agent is a real estate agent who represents a home seller. Listing agents help home sellers with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.

Generally, listing agents don’t receive a dime unless your home gets sold. If it does, the typical agent commission is 5% to 6% of the price of your home (which is typically split between the listing agent and the buyer’s agent), but a listing agent’s fee can vary depending on the scope of their services and their housing market.

Buyer’s agent

True to their name, buyer’s agents represent home buyers and assist them through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

Fortunately for home buyers, they don’t need to worry about the expense of hiring a buyer’s agent. Why? Because the seller usually pays the commission for both the seller’s agent and the buyer’s agent from the listing agent’s fee.

Rental agent

In addition to helping people buy and sell homes, many real estate professionals help consumers find properties to rent. But what these agents do depends on the location—whether it’s a large city or a small town—and the agent.

Sometimes a rental agent will guide your search from the very start, helping you find the right neighborhood, apartment size, and price range, then go with you to open houses. More likely though, you’ll already have a lot of that information decided, and the agent will send you listings that might be of interest to you.

Once you’ve decided on a rental and have been approved by the landlord or management company, your agent should help you read and understand your lease.

“Most tenants can find a place without a real estate agent, but they forget to seek out someone who can help them understand what they’re signing when they sign a lease,” says Dillar Schwartz, a real estate agent in Austin, TX.

Rental agents will also represent landlords to help them find tenants—but the fee an agent will charge a landlord depends on what market they work in. In many places, the landlord pays the real estate agent to help find a desirable tenant. In more competitive rental markets, however, the tenant may be responsible for the real estate agent fee, sometimes called a “broker fee.” These fees can be as low as $50 to $75 for a credit check or application, but more common rates are one month’s rent or 15% of the annual rent on the apartment.

How to find a real estate agent, broker, or Realtor who’s right for you

Many people find an agent to help them through word of mouth or online. You can search for a variety of real estate professionals in your area at realtor.com’s Find a Realtor database, which includes their sales performance, specialties, reviews, and other helpful information. It’s a good idea to talk to at least three agents in person, and ask the agents some key questions to find out if they’re a good fit for you.

Michele Lerner contributed to this article.

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The Real Estate Commission: A Guide to Who Pays, How Much, and More

April 15, 2019

real estate commission

iStock/Juanmonino

If you hire a real estate agent to help you buy, sell, or rent a house, this professional gets paid through a real estate commission. So how much do you pay, and what for? Is there any wiggle room to negotiate this fee?

As a real estate agent myself, allow me to tell you firsthand everything you need to know about real estate commissions, from who pays to how much to where that money goes.

How much is a real estate commission?

Rather than getting paid hourly or weekly fees, most real estate agents earn money only when a real estate deal goes through.

While there are some real estate agents who will charge a flat fee for their services, most charge a percentage of the sales price of the home once the deal is done. That exact percentage varies, but the commission is typically 5% to 6% of a home’s final sales price. On a $200,000 home, a 6% commission would amount to $12,000.

Granted, this may seem like a serious chunk of change, but keep in mind that no one makes off with the whole amount! Plus, real estate agents don’t see a dime until a buyer finds a home she loves, the seller accepts the offer, and all parties meet at the closing table. That process can mean weeks or months of work.

Who pays the commission?

Generally, the home seller pays the full commission for the services of both their own listing agent and the buyer’s agent (assuming the buyer has one).

Buyer’s and seller’s agents typically split the commission. So if a home sells for $200,000 at a 6% commission, the seller’s agent and buyer’s agent might split that $12,000, and each receive $6,000.

However, the commission split varies from one agent to another, with new agents sometimes earning a smaller percentage of the commission than experienced agents who sell more homes or more expensive properties.

What is dual agency?

So what happens if an agent represents the buyer and the seller? In that case, the agent becomes a “dual agent” and gets paid both commissions. (Talk about a big payday!)

However, because it puts them in a sticky position of having to work for both the seller and the buyer, many agents don’t practice dual agency—and some states don’t even allow it. I believe it creates a conflict of interest. After all, clients hire me to represent their best interests. How can I do that when I’m sitting on both sides of the table?

What does a real estate agent commission cover?

Though people certainly have the option of selling (or buying) their house without a real estate agent, agents provide clients a wide range of services, including helping you price your home, marketing it (on the multiple listing service, social media, and other venues), negotiating with home buyers, and ushering the home sale through closing.

As trained experts, real estate agents can help you fetch top dollar for your house and put out fires—while also alleviating some of the stress that comes with selling a home. (It’s no picnic!) I might be biased, since I’m an agent myself, but great ones earn their keep.

Want proof? Just look at the numbers: A recent survey found that the typical “for sale by owner” home sold for $190,000, compared with $249,000 for agent-assisted home sales, according to the National Association of Realtors®. That’s in line with a recent survey from Keeping Current Matters that found that homes listed for sale with a real estate agent sell for $46,000 more on average than FSBO houses. Perhaps that explains why 92% of home sellers use an agent to sell their house.

Is a real estate agent commission negotiable?

Though 5% to 6% tends to be the norm, commission standards can vary from state to state and among brokerages. Still, there are no federal or state laws that set commission rates—meaning commission is negotiable.

In other words, if you’re a home seller, you can certainly ask your agent to reduce their commission, but be aware that he is not obligated to do so.

A factor to consider: Because the marketing dollars for a property generally come from the agent’s commission, a lower commission could mean less advertising for your house.

That being said, it doesn’t hurt to ask for a lower commission. Most agents won’t take offense, and the worst case is they say no. Or, if you’re truly tight on cash—say, because you’ve maxed out your budget buying your next home—you could opt for a transactional agreement, in which the listing agent will help you set an asking price, facilitate communication between you and the buyer, write the contract, and move the process along to closing for a flat fee or lower commission, but you won’t receive the agent’s full services. It’s not ideal, but it’s the right route for some people. However, not all agents offer transactional agreements, so you may have to shop around to find one.

Bottom line: It is likely that buying and selling a home will be the biggest financial transactions of your life, so be sure you find an agent that you trust will do a great job. This is not the time to shop solely on price.

What else do I need to know about commissions?

All of the details about a real estate agent’s commission (and any transaction fees the agent charges) should be outlined in the contract that you sign when you hire an agent. This is typically referred to as a listing agreement, and it also specifies how long the agent will represent you. (Generally, listing agreements last 90 to 120 days.)

Also keep in mind that there are some exceptions. For instance, rental agents work differently from purchase agents. It’s usually the landlord’s job to pay the rental agent’s fee, but that’s not set in stone. In New York City, for example, tenants often pay the rental agent’s commission. It’s up to the landlord and the tenant to decide who pays the rental agent’s fee.

Furthermore, commission is usually higher when selling a vacant lot (anywhere from 10% to 20%), since selling land often takes longer and requires more marketing dollars. Some auctions charge home buyers a 5% “premium,” or commission.

As a seller, you want a real estate agent who can broker the best sales price and terms for you, but good agents aren’t cheap. As with most things in life, you get what you pay for.

Michele Lerner contributed to this report.

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5 Unwritten Etiquette Rules Home Buyers Might Not Even Realize Are a Big Deal

March 13, 2019

5 Unwritten Etiquette Rules Home Buyers Might Not Even Realize Are A Big Deal

Rawpixel/iStock; realtor.com

If you’re looking to buy a house, you’re probably eager and excited. That’s fine, but just keep in mind that in this heightened emotional state, it’s easy to get swept up in the moment and behave, well, not perfectly.

This can lead to trouble since, just like anything else, buying a home comes with its own set of rules. Some may be fairly obvious, since they’re outlined in all that real estate paperwork you’ll soon be signing. But some of these rules are the unwritten, etiquette-based kind. And if you break ’em, it could still stop a real estate deal in its tracks.

Worried you might not be aware of all the things you might do that could inadvertently rub home sellers or real estate agents the wrong way? Then heed these five etiquette rules that many home buyers might all too easily overlook.

Rule 1: See a house online you love? Don’t call the listing agent

When you’re looking for a house and find a place that looks like it could be The One, it can be tempting to jump the gun and call the listing agent immediately. But stop right there.

The reason? The proper channels of communication dictate that you should ask your own buyer’s agent to reach out to the listing agent, who will, in turn, let the home sellers know of your interest. We know it sounds like a long game of telephone, but it’s necessary for a number of reasons. Namely, it means both buyer and seller have an agent looking out for their distinct interests, facilitating the deal.

“You’re not going to get a better deal by going directly to the listing agent,” explains Matt Van Winkle, owner of Re/Max Northwest Realtors, in Seattle. “They represent the seller and are just trying to get the seller the best price.”

There is a caveat to this rule, says Kerron Stokes, a real estate agent with Re/Max Leaders, in Colorado: “If you are not represented and if you do not have an agent, then feel free to call the seller’s agent,” Stokes says. “But if you are a buyer, you should get an agent, as they can best represent your interests.”

Rule 2: Don’t ask your agent to show you homes until you sign a buyer-broker agreement

We get it, signing legal documents is scary. But here’s the thing: If you’re not ready to commit to your real estate agent, you’re not ready to get serious about buying a home.

“Be prepared to sign a buyer’s agreement so that your buyer’s agent knows you are serious and ready to go,” Stokes says. “From a consumer protection standpoint, it’s a very good thing for all involved.”

A buyer-broker agreement is a legal contract that defines the relationship between the buyer (that’s you) and your real estate agent. The agreement is good for both parties, since it outlines exactly what services the broker is going to provide. A buyer-broker agreement is also a way to let your real estate agent know that you’re committed to working with this pro to find your home.

And, if the relationship doesn’t end up working out, you can always end the agreement and find another agent to work with. It’s poor etiquette to work with more than one real estate agent at a time, and the buyer-broker agreement shows your agent that you’re not doing that.

“Remember that buyer’s agents are only paid if they close a deal—they aren’t paid for their time,” Van Winkle says. As such, “it’s wrong to call another agent just because yours is unavailable or on vacation.”

Rule 3: Don’t make an offer without mortgage pre-approval

mortgage pre-approval is a letter from a lender saying it will provide you with financing to buy a home up to a certain loan amount. It makes everyone’s lives easier since it provides proof of how much home you can afford to buyers and agents—and that you can put your money where your mouth is with an offer. Without it, your offer is an empty promise.

“If you want to compete against other buyers for a home, you won’t be able to do that without that pre-approval letter,” says Bill Golden, a longtime real estate agent with Re/Max Metro Atlanta Cityside.

Rule 4: Don’t be late to home showings—or bail entirely

If you have an appointment with your agent to view a home, treat it like a priority. If you’re going to be late or can’t make it, call your agent and let him know.

“If you don’t respect my time, then we don’t have a good working relationship,” Golden says. “Usually, I will have set up appointments to see several homes, and if you’re late or don’t show, I have to try to rearrange all of the showings, which may not be possible on short notice.”

Rule 5: Don’t pretend you’re ready to buy if you know you’re really not

This one might sound like a no-brainer, but it’s such a big part of real estate etiquette it’s worth driving home: Don’t pretend that you’re ready to buy if you aren’t. Don’t enlist the services of a buyer’s agent if you know you’re still in the fact-finding and “just looking” phase of your home search.

So go to open houses. Window-shop. Just be upfront with everyone about where you are in the process. Don’t pretend you’re ready to buy just because you want to be taken seriously. Real estate agents work on commission, so don’t wantonly take their attention away from actual, paying clients and potentially costing them sales, which is a serious thing. Got it?

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