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Category: <span>Home Buying</span>
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Found a Buyer on Your Own? Here’s Why You Still Need an Agent

Author:Lori Pitcher
Categories:Home & Garden,Home Buying,Home Selling,Information,Listings,news,Real Estate General Information,Real Estate Market Trends

Let’s say you’re selling your house. And before you even get a chance to snap listing photos and put it on the market, a buyer comes along. Perhaps the buyer makes you an offer you just can’t refuse. Congratulations, you just cut out many steps of the home-selling process—showings, open houses, and haggling over price.

With an offer in hand, you might be asking what commission an agent would receive if the agent were to get involved at this stage of the home-selling process. But keep in mind what may seem like a straightforward transaction between a seller and buyer once an offer is accepted is usually not all that simple. You still have a marathon to finish before getting to the closing table. We’ve broken down the home-selling process into steps to see what an agent could help you with.

Commissions explained

Neither federal nor state laws govern commission rates, which means commissions are fully negotiable. And negotiating the commission is between you and your agent.

To crunch some general numbers, if a home sells for $250,000 at a 6% commission, the seller’s agent would get $15,000. However, keep in mind commission rates usually vary depending on the state you live in and among brokerages. Always talk with several agents about your particular home-selling needs. Find out if and how they would want to handle the sale to a buyer found by the seller.

The offer

In this scenario, a buyer made you an offer and you accepted. However, it’s time to take a step back: Keep in mind verbal offers are not legally binding in real estate transactions. Agents usually supply a variety of forms such as Residential Purchase Agreements to get offers in writing. These forms vary to conform to state and local laws, and eventually become a binding sales contract. The forms are also known as a purchase agreement, an earnest money agreement, or a deposit receipt. It’s also essential that an offer contains every element needed to serve as a blueprint for the final sale.

An agent can also handle a buyer’s earnest money—usually 1% to 2% of the home’s purchase price—by depositing it in an escrow account held by a third party such as a real estate closing company, an attorney, or a title company agent. Remember, escrow protects sellers. You get to keep that money if a buyer bails on a transaction that’s underway.

The terms of the sale and contingencies

While it may seem the hard part is over if a seller found a buyer on their own, many obstacles can occur during the contract period that will require an agent’s skill to keep the deal together. For instance, an agent will ask if you and your buyer agree on not just the sales price but also the terms of the sale. Terms within a purchase agreement include basic information such as the names of the parties involved, the legal description of the property to be transferred, and the agreed-upon price. But terms also list crucial details such as what personal property will be included in the sale (e.g., appliances or fixtures). Leaving any terms of sale out of the purchase agreement can come back to haunt the buyer, the seller, or both.

An agent will also ensure contingencies are added to your contract. Standard contingencies include a buyer securing financing, a home inspection, repairs, and an appraisal—which is crucial to the mortgage process.

The closing

Remember, you need multiple legal documents for the closing, including a clean title. This step is usually done by an attorney, who collects a fee at the closing. But a real estate agent usually handles getting to the actual closing table by setting a date, coordinating everyone’s schedule, and ensuring all the needed paperwork (which is usually a mound of documents) is ready and correctly signed.

The bottom line

If a real estate professional can assist you, their compensation is a matter of negotiation between you and the agent. Hiring an agent to write the offer and guide it toward the closing table is a smart move.

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7 Questions to Ask at an Open House That Uncover the Truth

Author:Lori Pitcher
Categories:Home Buying,Information,Listings,Real Estate General Information,Resources

Open houses are undeniably a fun way to fantasize over property that could be yours. Still, once you’re done staring up at those high ceilings and peeking into walk-in closets, you should also try to get beyond the surface appearance of the place and take the golden opportunity to gather some valuable information.

In case you’re stumped on what to say, here’s a list of smart questions to ask at an open house. Whether you’re querying the listing agent or the home seller who happens to be on site, these topics will help you deduce whether the place is truly right for you.

Can you tell me more about the house?

This is a great way to break the ice and get the conversation going with owners or agents on site. This may seem like a vague question, but that is the point. Pay attention to what is mentioned first, and more importantly, what is not said, which could be a weakness.

What shape is this place in? Have there been any recent improvements?

It’s good to find out what improvements have been made so that you know they won’t need to be done after you purchase the place. If you find out that something like the boiler or roof was repaired or replaced recently, then the chances of it being required again soon are small.

While there really isn’t a way of anticipating when something would break or need to be redone, it’s helpful to rule out what won’t need to be fixed immediately based on what’s been done already. More information about the condition of the building or anticipated repairs should be disclosed during the due diligence process.

Has there been a lot of interest in the property?

This is a nice way of asking how much competition you could face if you make an offer. Just keep in mind that listing agents will typically try to paint a positive picture, so it’s up to you to read between the lines.

If the listing agent says things have been slow at the property and the listing has been on the market for an extended time, this may be your opportunity to negotiate a better price. On the other hand, if the agent informs you of high interest, this may be your cue to act more quickly than you might have planned.

When are the sellers looking to close?

The two main points that are negotiated during the purchase of a property are the price and the timing of the closing. You can use this information to tailor your offer to the seller’s needs. In other words: Some sellers may need to move out ASAP if they’ve bought a new home. Or if they’re waiting for new construction to be complete, they might need to cool their heels instead. If you’re flexible on your move-in date, you can highlight this in your offer to make it stand out—and maybe even snag a better deal as a result.

How much do utilities usually run?

This question can be an important part of monthly budgeting. All buyers are anxious to know what their monthly costs will be with utilities included. Principal, interest, maintenance, and taxes are easily available, but utility estimates may only be available from the owner. This is also a good question if you’re apartment hunting, as utilities could include different things at different places.

Some buildings include things like electric and gas in the monthly common or maintenance charges, while others require owners to set up accounts with the respective providers to be billed directly through them. Sometimes buyers assume that the monthly charges listed for the unit are all-inclusive and are surprised after living in the unit for a month to receive a $300 electric bill on top of the monthly charges from the building.

How much traffic can one expect in this area?

If an open house is on a weekend, which is usually the case, a buyer cannot readily know if there is traffic during the week for commuters going to and from work. Ask if this is a street that people use to avoid traffic lights or to get to school and work. It will give you an idea of the expected noise level and safety.

What is the neighborhood like?

Buyers want a neighborhood that fits their current or perceived lifestyle. Buyers almost always ask this question at open houses. However, it’s a tricky one for agents to answer because of the Fair Housing Act, which prohibits housing discrimination based on race, religion, sex, or family/economic status. That being said, this is where it pays to listen to the subtext. If an agent says, “Well, there is a great community playground in this cul-de-sac,” then you can probably deduce that the area is more family-friendly than upscale yuppy. This one will require a little sleuthing, but ultimately, it’s worth doing some digging at an open house to make sure what you see is what you get!

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How Sellers Win When Housing Inventory Is Low

Author:Lori Pitcher
Categories:Home Buying,Home Selling,Information,Local News and Events,Real Estate Market Trends,Resources

How Sellers Win When Housing Inventory Is Low | MyKCM

In today’s housing market, the number of homes for sale is much lower than the strong buyer demand. As a result, homeowners ready to sell have a significant advantage. Here are three ways today’s low inventory will set you up for a win when you sell this season.

1. Higher Prices

With so many more buyers in the market than homes available for sale, homebuyers are frequently getting into bidding wars for the houses they want to purchase. According to the latest data from the National Association of Realtors (NAR), homes are receiving an average of 3.7 offers in today’s market. This buyer competition drives home prices up. As a seller, this certainly works to your advantage, potentially netting you more for your house when you close the deal.

2. Greater Return on Your Investment

Rising prices mean homes are also gaining value, which increases the equity you have in your home. In the latest Homeowner Equity Insights Report, CoreLogic explains:

“In the second quarter of 2021, the average homeowner gained approximately $51,500 in equity during the past year.”

This year-over-year growth in equity gives you the ability to sell your house and then put that money toward a down payment on your next home, or to keep it as extra savings.

3. Better Terms

In a sellers’ market like we have today, you’re in the driver’s seat if you make a move. You have the power to sell on your terms, and buyers are more likely to work with you if it means they can finally land their dream home.

So, is low housing inventory a big deal?

Yes, especially if you want to sell on your terms. Moving now while inventory is so low is key to maximizing your opportunities.

Bottom Line

If you’re interested in taking advantage of the current sellers’ market, let’s connect today to determine your best move.

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There Are More Homes Available Now than There Were This Spring

Author:Lori Pitcher
Categories:Home Buying,Home Selling,Information,Real Estate General Information,Real Estate Market Trends

There’s a lot of talk lately about how challenging it can be to find a home to buy. While housing inventory is still low, there are a few important things to understand about the supply of homes for sale as we move into the end of the year.

The Number of Homes for Sale Usually Peaks in the Fall

In the residential real estate market, trends generally follow a predictable and seasonal pattern. Typically, the number of homes available for sale (or active monthly listings) peaks in the fall. But in a chapter where so little feels normal, the question becomes: should we expect a fall peak this year?

If we look at the active monthly listings for 2021 (shown in the chart below), we’ll see that the number of homes on the market has increased fairly steadily since spring this year. The realtor.com data shows we’re still seeing an increase in active inventory month-over-month. While that gain is a bit smaller month-to-month (see August to September in the chart), September numbers are still up from the month prior.There Are More Homes Available Now than There Were This Spring | MyKCM.The important takeaway here is the latest monthly numbers show growth. At the end of September, buyers had more options to pick from than they did this spring. That’s encouraging for buyers who may have paused their search months ago because they had trouble finding a home. Danielle Hale, Chief Economist at realtor.com, sums this up nicely:

“Put simply, this September buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020. Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.” 

As Hale says, a fall peak in inventory is in line with typical seasonal trends. While it’s impossible to say for certain what the future holds for housing inventory, we do know both buyers and sellers have opportunities this season based on the latest data.

What Does That Mean for You?

If you’re thinking of buying a home, rest assured you do have more options now than you did earlier this year – and that’s a welcome relief. That said, today’s market is still highly competitive. This isn’t the time to slow your search. It’s actually the season when the number of homes available for sale tends to peak. Focus on the additional options with renewed energy this season and be prepared for ongoing competition from other buyers.

If you’re considering selling your house, realize that while growing, inventory is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line. Eager buyers will likely be motivated to act before the holidays, giving you the benefit of a fast sale.

Bottom Line

Whether you’re buying or selling, there’s still a chance to make your goals a reality this season. Let’s connect so we can discuss what’s going on with the local market and current trends and what they mean for you.

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As Home Equity Rises, So Does Your Wealth

Author:Lori Pitcher
Categories:Home Buying,Home Selling,Information,news
Tree growing on coins, money growing, business success concept.

Homeownership is still a crucial part of the American dream. For those people who own a home (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both emotionally and financially. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost to your wealth comes in the form of equity.

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

The best thing about equity is that it often grows without you even realizing it, especially in a sellers’ market like we’re in now. In today’s real estate market, the combination of low housing supply and high buyer demand is driving home values up. This is giving homeowners a significant equity boost.

According to the latest data from CoreLogic, the amount of equity homeowners have has continued to grow as home values appreciate. Here are some key takeaways from the Homeowner Equity Insights Report:

  • The average homeowner gained $51,500 in equity over the past year
  • There was a 29.3% increase in national homeowner equity year over year

To give you an idea of what that looks like in your area, the map below shows the average equity gains by state.As Home Equity Rises, So Does Your Wealth | MyKCM

What does all of that mean for you?

If you’re already a homeowner, you likely have more equity in your house than you realize. The numbers in the map above reflect year-over-year growth. If you’ve been in your home for longer than a year, you’ll likely have even more equity than that. That equity can take you places. You can use the equity you’ve gained to fuel your next move, achieve other life goals, and more.

On the other hand, if you haven’t purchased a home yet, understanding equity can help you realize why homeownership is a worthwhile goal. Homeowners across the nation gained an average of over $50,000 in equity this year. Don’t miss out on this chance to grow your net worth.

Bottom Line

If you want to learn more, let’s connect. A trusted advisor can help you understand where home prices are today, how they contribute to a homeowner’s net worth, and the impact equity can have when you own a home.

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Don’t Forget to Budget for Closing Costs

Author:Lori Pitcher
Categories:Building A Home,Home Buying,Lending / Financial

What are closing costs? According to Trulia, “When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price. 

Trulia gives more great advice, explaining: “There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.”

As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Work with your lender and a local real estate professional to be sure you have everything you need to land your dream home.

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Perks Of Selling Your Home This Summer

Author:Lori Pitcher
Categories:Home Buying,Home Selling,Real Estate Market Trends,Resources

The housing market forecast for the second part of this year remains positive, but there may not be a better time to sell than now. If you’re wondering what to consider when deciding if now is the time, here are some things to think about:

1. Your House Is Probably Going To Sell Quickly

Homes from the beginning of the year through this summer are selling fast according to the National Association of Realtors. With an average of just 17 days on the market, this indicates buyer competition. Homes going fast is a great sign for sellers. This is a major indicator that buyers are motivated to do (and pay) what it takes to purchase the home of their dreams.

2. Buyers Are Competing For Homes

In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview: “The frequency of buyers being willing to pay more than the market data supports is increasing.” This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.

3. Low Supply, High Demand

One of the most significant challenges for motivated buyers is the current inventory of homes for sale, which while improving, remains at near-record lows. Total housing inventory at the end of May was down 20.6% from one year ago. There are signs, however, that more homes are coming to market. If you’re looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.

4. If You’re Thinking of Moving Up, Now May Be the Time

Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn’t meet their needs. If you’re not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.

But these near-historic low rates won’t last forever. Experts forecast interest rates will increase in the coming months. As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you’ve been waiting for the best time to sell to fuel your move up, you likely won’t find more favorable conditions than those we’re seeing today.

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4 Big Incentives for Homeowners to Sell Now

Author:Lori Pitcher
Categories:Home Buying,Home Selling,Information,news,Real Estate General Information,Real Estate Market Trends,Resources

The housing market keeps sailing along. The only headwind that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.

Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.

1. Homeowners don’t know if they’ll be able to secure their next home before selling.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.

In today’s market, buyers have compelling reasons to purchase a home now:

  • To own a home of their own
  • To buy before prices continue to appreciate
  • To secure a mortgage at a historically low rate, while they last

These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.

This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.

2. Homeowners don’t know if their current home will sell for the asking price or top market price.

This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.

Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:

“For the first time ever, the average U.S. home is selling for above its list price.”

If a seller is looking for a top-dollar sale, there’s no better time to sell than right now.

3. Homeowners don’t know if they will get an offer without their home requiring work or updates.

Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.

A recent post on whether or not to renovate before selling notes:

“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”

If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.

4. Homeowners don’t know if they can have a quick closing process.

When speed is important, there are two points sellers should look at:

  • The time it takes to find a buyer for the home
  • The time it takes to close the transaction

In the latest Existing Home Sales Report, NAR explains:

“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”

Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state:4 Big Incentives for Homeowners to Sell Now | MyKCMRegarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days.

If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows:

“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”

If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.

Bottom Line

Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Let’s connect today so you can learn more about the opportunities for homeowners who are ready to sell.

Here at The Wheaton/Wass Real Estate Team we are tough negotiators and we know the market!

Call today and let us negotiate your next deal. 719.822.1444

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Potential Neighborhood With An HOA? Here’s What You Should Know

Author:Lori Pitcher
Categories:Home Buying,Information,Resources

Let’s say you have your heart set on buying a home in a community with a swimming pool, a clubhouse, and maybe even a playground or trails. Having access to these amenities often means living in a community with a homeowners association, or HOA.

Generally, an HOA is responsible for keeping the neighborhood looking beautiful — and as a result, keeping property values high. But since no two neighborhoods are the same, no two HOAs will be the same, either.

What You Should Know About the Homeowners Association

Doing your research on homes and communities means finding the answers to dozens of questions. As a savvy home buyer, you’ve probably already considered some of the most important topics early on in your home search, such as the local property taxes and whether the neighborhood is appreciating in value.

But if you’re considering a neighborhood with an HOA, there are a few additional things that you should know about the community and the association before you buy a home. Here are the essential questions you should ask.

1. What Does the Homeowners Association Do?

Each community varies, but in general, a homeowners association assists residents with property maintenance (by providing services like lawn care, trash removal, or Internet), regularly beautifies the neighborhood common areas, and upkeeps any shared amenities. In return for these services, residents pay an association fee, which we’ll talk about later.

Since the HOA is also concerned with keeping property values high, the homeowners association may also dictate what residents can and can’t do with their properties. These rules keep residents from worrying about a neighbor painting their house a funky color or letting their lawn go wild.

2. Are You Required to Join the HOA?

Before you decide to buy a home in an HOA neighborhood, first check to see whether the community has a voluntary or mandatory HOA. A voluntary HOA doesn’t require that you join the association or pay dues, but a mandatory HOA does.

3. How Much Are the HOA Fees?

As we mentioned before, HOA fees cover the services that the association provides. HOA fee costs (and the frequency with which they’re paid) can vary from community to community, so ask your real estate agent about how much the fees are before you buy a home in the neighborhood.

4. What Are the HOA’s Expectations for Residents?

Typically, a homeowners association will have a list of rules and regulations that residents are expected to follow when they live in the community. (These are known as Covenants, Conditions, and Restrictions, or CC&Rs.)

These regulations can dictate everything from what colors you can use to paint your home to how many vehicles you can park in the driveway. Again, each homeowners association varies, so it’s best to read the Bylaws of communities you’re considering to learn what’s expected of residents.

5. When (And How Often) Does the HOA Meet?

If you’re interested in joining your neighborhood’s HOA to get involved in your community, you might also want to consider when the association meets. The HOA may meet annually, bimonthly, or monthly, depending on the association’s size, so check to see if the regular meetings will fit within your schedule.

6. Does the HOA Host Any Activities?

Finally, when considering a neighborhood with an HOA, you should learn whether the HOA provides other ways for you to get involved and meet your neighbors. Ask your real estate agent about whether the neighborhood association hosts annual block parties, pool parties, holiday celebrations, Yard of the Month competitions, or any other neighborhood activities.

For more information on area HOA’s visit our website: https://www.thewheatonteam.com/communities/

 

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Still Saving Your Tax Refund Or Stimulus Checks? Here’s How To Use Them!

Author:Lori Pitcher
Categories:Home Buying,Lending / Financial,Real Estate General Information

If you’ve started researching the home buying process, or you’ve already purchased a home in the past, you probably know one of the first things you need to consider is the size of the downpayment you are going to need to cover on the home you discover. While that down payment can vary depending on what type of financing you qualify for, it is never a bad idea to start saving as much possible, as soon as possible.

If you qualified for any of the stimulus payments and have been keeping that money, or tax refund money, tucked away into savings – this would be the perfect opportunity to use that cash. With the average refund for this year around $3000, there is a good chance your tax refund, potentially paired with a stimulus, can put a major dent in your down payment.

With a competitive market that doesn’t seem to be cooling off anytime soon, now is the time to buy. Ensuring you have the proper funds to cover that downpayment once you find ‘the one’ can save you heartache in the future. Give me a call today and we can get you set up with a lender so you can get pre-approved and find out just how much you need to have saved!

As always The Wheaton/Wass Team is here to help!

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