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Found a Buyer on Your Own? Here’s Why You Still Need an Agent

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

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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Do I Need Neutral Painted Walls To Sell My Home?

“If you want to sell your home, paint your rooms beige.” That could be the rallying cry of real estate agents across the country, and for good reason. Presentation and first impressions mean everything when selling a home, and the men and women who make their living selling homes know that neutral colors will generally spark more interest from buyers than bold colors.

Human beings are sensitive to color on a deep, emotional level. This makes sense: Our earliest ancestors relied on colors to tell them if a plant was ripe or safe to eat, for example. Those deeply ingrained senses of what colors mean in nature stay with us in our cities and suburbs; we may not need to make life-and-death decisions based on the color of a strange fruit, but we still carry the emotional cues that kept our ancestors safe.

This trait can complicate things when painting a house, however. A certain hue that you think looks perfect in your living room might trigger a deep sense of discomfort in a visitor. The deeper the color you choose for your walls, the stronger effect it might have on others. Conversely, the closer your home’s colors are to pure, neutral white, the less they will emotionally affect visitors — or potential buyers.

But an all-white home can be dull, not to mention extremely hard to keep clean. With a little awareness of color theory and some creative restraint, you can have the best of both worlds: a home in which color brings out each room’s best features, and a house that’s likely to sell without requiring major repainting.

Color psychology is the study of the emotional cues prompted in humans by various colors. These can be quite strong: Bold yellow, for example, can upset small children, while light yellow is commonly used as a gender-neutral color for babies’ rooms. Blue is often associated with calmness, serenity and cold temperatures. Red, on the other hand, may symbolize excitement, love, anger, warfare or energy. These are useful traits to understand as you plan how to show off your home’s best features to potential buyers.

But how do you turn an understanding of color psychology into an attractive, sellable interior design? The process is easier than you might think.

The Power of Color

The first step in applying color theory to your home is to understand what you want each room to say. Is a bedroom used for rest and relaxation for the adults in the home, or is it a bright, happy playroom for the children? Is the kitchen a family gathering place, or is it an area where high-tech styling makes meal preparation fast and efficient? Asking questions like these will help you define moods for your rooms. Compare these moods to the emotions evoked by different colors, and you’ll quickly create a list of general hues that are most appropriate for each room of your house. Narrow your color search further by looking at the paint colors in the middle or lighter ends of these ranges, since this will help you avoid painting too much wall space with a too-bold color.

Now comes the fun part: designing your rooms with color and furnishings to capture the moods you’ve identified. There are countless factors that play into making each room right, including the furniture and decorative items, the flooring, the quality of light through the windows and your desire (and budget) to change these. In general, you can often create stunning effects by choosing one or two items to showcase with bold color, offset by neutral complementary colors in the rest of the walls and furnishings.

It helps to keep a sense of restraint when choosing color and design layouts; a bold color can quickly become overwhelming if used too much, and too many complementary colors in one room can make even sparse furnishings look busy and cluttered. Try to limit each room’s color palette to no more than three colors: a bold accent, a middle-tone that can be used to frame the accent and a more neutral color for the background, like the walls. This will ensure that, while you will be able to break free of the all-beige, neutral-color blahs, you will still have a home that has a good chance of selling without major changes.

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The Luxury Market Is Attracting Buyers in 2021

As more people continue to identify their changing needs this year, some are turning to the upscale housing sector for more space or finer features. In their most recent Luxury Market Report, the Institute for Luxury Home Marketing (ILHM) shares:

“In a snapshot of 2020, despite the devasting effects of the coronavirus pandemic, the luxury real estate market has seen one of its strongest years since 2008. In comparison to experts’ predictions in early 2020, it is remarkable how significant demands for property type, location, and amenity preferences have changed amid the pandemic.”

With more opportunities to work from home and a growing interest in having extra space for things like virtual school, working out, and cooking more meals, the desire to own a home that can meet these needs continues to increase. Additionally, record-low mortgage rates are creating opportunities for homebuyers to stretch their legs into higher price points or even expand their real estate portfolios. The ILHM report continues to say:

Experts believe that the demand for exclusive residential properties outside the metropolitan areas will continue well into 2021; even with the introduction of vaccines, the pandemic is far from over.

For those who have moved to the suburbs and beyond, moving back to the city full time is unlikely while the work from home trend remains. Many of these affluent homeowners are now making their secondary properties their primary residences for the foreseeable future.”

If you’re interested in buying a home this year, it appears that some higher-priced markets may have more homes to choose from than those at lower price points. Javier Vivas, Director of Economic Research at realtor.comnotes:

“Interestingly, markets, where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets.”

Bottom Line

If you’re hoping to buy the home of your dreams, this could be the year to achieve that goal. Let’s connect today to explore your possibilities.

Call now and let The Wheaton/Wass Real Estate Team help you in the Luxury Home Market: 719.822.1444

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Is it Time to Move into a Single-Story Home?

Is it Time to Move into a Single-Story Home?

Is it Time to Move into a Single-Story Home? | MyKCM

Once the kids have left the nest, you may be wondering what to do with all of the extra space in your home. Chances are, you don’t need four bedrooms anymore, and it may be a great time to sell your house and downsize, maybe even into a single-story home. You’ve likely gained significant equity if you’ve lived in your home for a while, so making a move while demand for your current house is high could be your best step forward toward the retirement goals you set out to achieve several years ago.

The dilemma, though, is where to go next. A big concern for many homeowners who are ready to sell is finding a home to move into, given today’s lack of houses available for sale. There is, however, some good news: the number of single-family 1-story homes being built today is on the rise, improving your odds of finding the right home for your changing needs. In a recent article, The National Association of Home Builders (NAHB) explains:

“Nationwide, the share of new homes with two or more stories fell from 53% in 2018 to 52% in 2019, while the share of new homes with one story grew from 47% to 48%.”

Here’s a map showing the breakdown of newly constructed homes being built by region, and the percentage of 1-story and 2-story homes in that mix:Is it Time to Move into a Single-Story Home? | MyKCM

What are the benefits of buying a one-story home?

Still not sure about buying a single-story home? An article from Home Talk covers several advantages of switching from two floors to one:

1. Energy Efficient

“It is easier to heat and cool a single-story house [than] it would be to regulate the temperatures of a multi-story house.”

Most single-story homes only need one heating or cooling unit, and they typically stay cooler than a two-story home, both of which can lead to significant savings.

2. Easier to Maintain

“Doing a general cleaning in a single story requires less effort and you will be able to see all areas that need cleaning and the areas are easily accessible.”

Cleaning and maintenance of a single-story home can take less time and effort, and better upkeep helps improve the overall value of the home.

3. Accessible for Everyone

“A single-story house can be accessed by anyone, whether they are young children or the senior citizens.”

If you’re looking for a house that provides a safe and easily accessible environment at any age, a single-story home may be optimal.

4. Good Resell Potential

“When buying a single-story house, you should consider the resale value should you think of reselling it in case of a circumstance that can happen. Look at the growth rate of that area. Due to the high demand of these types of houses it is [easy] to resell them and depending on the growth rate of an area, it increases in value significantly.”

Single-story homes have a lot of benefits and are often in higher demand. This bodes well for future resale opportunities.

Bottom Line

There are many benefits to downsizing into a one-story home. Doing so while demand for your current house is high might make it easier than ever to make a move. Let’s connect if you’re ready to purchase the single-story home you need while homes are so affordable today.

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Why Pricing Your House Right Is Essential

Why Pricing Your House Right Is Essential

Why Pricing Your House Right Is Essential | MyKCM

In today’s real estate market, setting the right price for your house is one of the most valuable things you can do.

According to the U.S. Economic Outlook by the National Association of Realtors (NAR), existing home prices nationwide are forecasted to increase 4.7% in 2020 and 4.1% in 2021. This means experts anticipate home values will continue climbing into next year. Today, low inventory is largely keeping prices from depreciating. Danielle Hale, Chief Economist at realtor.comnotes:

“Looking at the sheer number of buyers, low mortgage rates, and limited sellers, the strength of home prices–which are now growing at the highest pace since January 2018–makes sense.”

When it comes to pricing your home, the goal is to increase visibility and drive more buyers your way. Instead of trying to win the negotiation with one buyer, you should price your house so that demand is maximized and more buyers want to take a look.

How to Price Your Home

As a seller, you might be thinking about pricing your house on the high end while so many of today’s buyers are searching harder than ever just to find a home to purchase. You’re thinking, higher price, greater profit, right? But here’s the thing – a high price tag does not mean you’re going to cash in big on the sale. It’s actually more likely to deter buyers and have them looking at the houses your neighbors are selling instead.

Even today, when the advantage tips toward sellers because there are so few houses for sale, your house is more likely to sit on the market longer or require a price drop that can send buyers running in the other direction if it isn’t priced just right.Why Pricing Your House Right Is Essential | MyKCM

A Trusted Real Estate Professional Will Help

It’s important to make sure your house is priced correctly by working in partnership with a trusted real estate professional. When you price it competitively, you won’t be negotiating with one buyer over the price. Instead, you’ll have multiple buyers competing for the home, and that’s what ultimately increases the final sale price.

The key is making sure your house is priced to sell immediately. That way, it will be seen by the most buyers. More than one of them may be interested, and your house will be more likely to sell at a competitive price.

Bottom Line

If you’re thinking about listing your house this fall, let’s discuss how to price it right so you can maximize your exposure and your return.