There are those times when you'll desire to sell your property or pick up a new one. We offer full services.
Realtors® are part of a local and national association. As a Realtor®, we have access to a data base of available properties for sale known has Multiple Listing Service or MLS. When your property is listed (or put up for sale), all other Realtors® can see that your property is available. And although it would be nice to have potential buyers waiting at the door when your property is listed, most Realtors® don't. Consequently, we need help finding people that have an interest in purchasing your property. This is where Realtors® can help. Not only is part of our job to sell real estate, but we help buy or bring clients to buy (buying agents or brokers). Consequently, we may have a client that loves your home. As an incentive to the Realtor® to bring their client to your home a split of the commission is offered. The ideal for any Realtor® is to have a buyer at the time they list your property. That way they can keep the whole commission. Otherwise, the commission is split among the Realtors®. An example would be to have a listing commission (this is what you may pay to the Realtor® that lists your home) of 6 percent. The listing Realtor® would keep 3 percent, with the buying Realtor® the other 3 percent. This does not cost you any more at all. The commission is only split amongst the Realtors®.
Should you desire to list or buy a home, the following items are to be considered: your needs, financial concerns, property inspection and listing, market analysis, marketing program, offer and acceptance, and closing.
Reasons for selling or buying your home or investment may stem from a desire to move on, transfer, an obligation, or return/investment. We'll consider these highly when meeting with you. In moving from one property, what is the amount of equity (cash/profit returned to you after all expenses paid) you will need to move on? What is it that you can expect? Should a job or other transfer be in the plan, what time frame can you expect? What is the best and worst scenario? Should you be purchasing a home as an income property, your age and health may be a factor to determine the type of construction particularly if it is you who will be doing future maintenance on the home. Should the investment be for appreciation, what can one reasonable expect from the market area? Will supply exceed demand at the time your investment will be liquidated? Will another competing property be more appealing than yours and hinder your profit?
As not all of us have cash to by a home out right, financing will be necessary. Work close with your loan officer or mortgage broker. Some rules of thumb to follow when considering acquiring financing would be: loan to value and income ratios, credit report, and employment.
Loan to value. A lender is going to always be concerned with their risk when lending money. For this reason an Appraiser/Appraisal is used to determine the value of a home to see if the sale (or refinance) is supported. Their concern is that should one default and not make the payments on the loan they give, what can they get from the house should foreclosure be necessary. A typical loan to value ratio is 80 percent of the value. They would lend 80 percent of the value of the home as a loan with the remaining 20 percent being the money or equity you have put down on the home. This is the margin they see as a security to them that should one default, they can then sell the home up to 20 percent below the value to cover the loan that they gave. This is the case with "Conventional" loans. Should one not have the 20 percent as a down payment or fall with in this range when refinancing, Private Mortgage Insurance or "PMI" is required. The buyer/borrower is required to pay an extra insurance premium (PMI) offering an additional security to the lender that should payments not be made, the lending institution will then be covered that gave the money. Other programs are available such as FHA and VA. FHA loans are insured loans with VA being guaranteed loans. The "insured" and "guaranteed" offer similar security to the Lender as the "PMI" does.
Income ratios, credit report, and employment. A lender is going to consider the income of one when considering giving a loan. Income guidelines to follow would be the front end ratio and back end ratio. The front end ratio is the percent of the proposed house payment (along with interest, taxes and hazard insurance or PITI) in relation to one's monthly gross income. A typical percentage is from 26 to 28 percent. This means that one's house payment can not exceed 26 to 28 percent of what one makes in a month. The back end ratio is the combination of the front end ratio along with the remaining debt that one has: furniture, cars etc... Typical back end ratios are from 34 to 36 percent of one's gross monthly income. When considering a credit report, such things as ones debt is looked at. Such things as: on time payments, late payments; 30, 60, or 90 days, collections, judgements, and bankruptcies are considered. When considering employment, an ideal employment is one that not only provides adequate income but shows that one has been on the job or the related industry for at least 2 years.
Should any of the above items not be "typical" as mentioned, a Lender may decide to increase an interest rate, term, or have an additional fee to reduce their risk.
SHOULD I DESIRE TO SELL OR PURCHASE A HOME, WHAT DO I DO NEXT?
Property inspection and listing. Should you desire to sell a home, information must be compiled to see what improvements your home has. An inspection is desired if possible. Improvements such as: condition, size, functionality, rooms, amenities and additional items are evaluated to see the potential impact in the market. After compiling necessary data, the Realtor® will perform a market analysis (see below) to determine the market value of the home. You then are called shortly after with the results. Should you be interested in proceeding, the Realtor® then returns with the necessary documents to proceed with the listing of your home. Such documents for example are: listing agreements, seller disclosures, lead base paint addendums, and any applicable agency agreements. Should you be a "non-owner occupant", contact with the Realtor® can be done by phone, email/internet, fax, or mail.
Market analysis. To determine the market value of the home and an appropriate value to list/sell (or purchase) your home at, the Realtor® compares your home with additional "sold" comparables most similar to yours. This step is important not only to know the market, but should financing be necessary for a potential buyer, such comparables would need to be supported in an Appraisal that would be completed to make the deal work. Hopefully the deal would never get so far and then have it completely fall through. This is also significant for the potential buyer. They want to be insured that the projected equity they are investing is true. In addition to "sold" comparables, the market should be evaluated to see what existing homes are currently (or have been) on the market to see the competition. It makes no sense to list a property for an amount when the market history and competition has not moved when listed at a lower price.
Marketing. Realtors® are members of a local multiple listing service or "MLS". This means that any Realtor® who is a member of this service can bring a potential buyer to your property. The service can be accessed via the internet/computer, and shows all of the information and terms of your property. Consequently, using this resource makes selling your home much more effective. In addition, signs are placed on your property showing neighbors and drive by's that your home is available. Additional services to market included: internet advertising, flyers and brochures, open houses, newspaper, and bus tours. It will be discussed with you as to which (if not all) of these services will be offered to help market your home.
Offer and acceptance. Should one desire to purchase a property, an offer is written up using a Real Estate Purchase Contract or "REPC". This shows the those involved what is being offered and the terms of the offer. This can be accepted, rejected, or countered back.
Settlement/Closing. It is recommended that a Title Company help close a deal. They order, prepare, and help finalize the necessary documents. They bring both parties together, offer Title Insurance (providing clear Title of your home), show what is needed at Settlement by way of who and the costs involved, and record the proceedings. Being an "unbiased" partner, they also collect and disburse the necessary funds.