Below is a collection of frequently asked questions that we have put together to help you in your understanding of selling a home. If you have any other questions, not listed here, feel free to email us at email@example.com. We will be happy to answer your questions and add them to our list of FAQs.
A real estate agent is more than just a salesperson. A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.
You don't need to use a commissioned real estate agent to sell your home, but you may want to consider the benefits of having a real estate agent versus not using a real estate agent.
In addition, many people would rather use an Agent due to the complexities of modern Real Estate transactions since they usually incorporate legal and financial attributes, which takes them well beyond more simple transactions, such as the sale of an automobile.
There are several advantages when using a real estate agent to sell your home, such as - your listing will be added to the Multiple Listing Service (MLS) so that large numbers of buyers will have access to the seller's property. In addition, your real estate agent absorbs all of the cost of advertising and marketing, and the screening that will be done of potential buyers by Agents. The Agent will also handle the details of negotiation.
Deciding whether to use an Agent or not depends on if you feel fully confident that you can handle all of the details, then you may well want to attempt selling your house on your own. If not, you most likely will want to use a real estate agent and leave the details to them.
It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him/her and with the brokerage company.
1. Seller’s representative (also known as a listing agent or seller’s agent). A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
2. Sub-agent. A sub-agent owes the same fiduciary duties to the agent’s principal as the agent does. Sub-agency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer’s representative or operating in a non-agency relationship, shows property to a buyer. In such a case, the sub-agent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a sub-agent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the sub-agent. It is important that sub-agents fully explain their duties to buyers.
3. Buyer’s representative (also known as a buyer’s agent). A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or by a commission split with the listing broker.
4. Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual-agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them is legal in most states.
5. Designated agent (also called, among other things, appointed agency). This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
A report made by a qualified person setting forth an opinion or estimate of value. The term also refers to the process by which this estimate is obtained.
In conventional mortgages and in the HUD-FHA Direct Endorsement Program, the lender receives a copy of the complete report, showing the basis for the appraiser's estimate.
In VA cases and in HUD applications processed by HUD, the lender receives only a statement of the estimate of value, without any detailed supporting data.
Along with economic factors such as supply and demand, the time of year you choose to sell can impact both the length of time it takes to sell your home and its ultimate selling price.
Typically, the real estate market picks up around February, continues strong through late May and June, and tapers off during July and August. The summer is usually the busiest time for moving since school is out and buyers may be looking to get their children in school before the new school year. September through November generally marks a rally not as strong as late winter and spring, followed by a slowdown from Thanksgiving through and beyond the Christmas and New Year holiday period.
These are referred to as recently sold properties that are similar in size, location, and amenities to the home for sale. These properties help an appraiser determine the fair market value of a property.
A counteroffer is an offer made by one party that makes changes to the original or latest offer of the other party.
Well, several factors may come into play:
- You might help sell similar homes that are priced lower.
- Your home may be on the market longer.
- You could lose market interest and qualified buyers.
- You might create a negative impression of the property.
- You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.
- You may have to accept less money.
- A potential buyer may face appraisal and financing problems resulting from the inflated price.
It is not recommended to sell your home any higher than the appraised value unless demand is high in your area. Ask you real estate agent which price would be right for your home. Also make sure you get a Home Value Request to assist in determining the best sales price for your home.
An Exclusive Agency listing allows your agent to market your home and enter it into the MLS. The agent will receive a commission if your home sells through any real estate company or by another agent. He will NOT receive a commission if you, the seller, find a buyer on your own. Because a commission is not guaranteed, your agent may not be highly motivated to market your property. Thus, this type of listing is not common and should be avoided.
This type of listing is the most commonly used and is the most effective. With this type of listing the agent does the most work to sell your home they will usually advertise your home, place it into the MLS, market your home to other agents and even hold open houses for your home. Only with this type of listing does an agent expect to earn money back on their investments on selling your home.
When you have equity in your home, you can tap into that and, if you’re strategic, use it as a way to build long-term wealth.
There are a lot of ways you can capture equity to build wealth. For example, you can pay off higher-interest debt or make home improvements that ultimately increase the value of your house. You can start a business or you can even invest in the stock market where returns might be significantly more than the interest you pay on your loan.
Another question people commonly have is whether or not they can use their home’s equity to purchase another property, which we discuss below.
Can You Use a Home Equity Loan to Buy a House?
In short, yes. You can use a home equity loan to buy a house, but that doesn’t mean it’s always the right decision in every situation. Using home equity can be a way to buy a second home or an investment property with caveats.
A home equity loan is a second mortgage, giving you a way to access the equity you’ve built in your home. Home equity refers to the difference between what you owe and what your home is worth.
If you’re thinking about using your home’s equity to buy another house, there’s a distinction you need to first make. Are you buying a second home or an investment?
If you’re planning to buy an investment property, using a home equity loan can give you more liquidity and make it less expensive. Benefits of using equity to buy an investment property include:
• You can put more toward your down payment. A home equity loan is something you receive as a lump sum payment so that cash can go directly toward a down payment. You’ll be a more competitive buyer, which is essential in the current market, and you’ll get lower interest rates and monthly payments.
• It can be harder to finance a second property because there are more stringent down payment requirements, so a home equity loan can be a more affordable solution and also one that’s more convenient.
• A home equity loan is secured with collateral, which is your current home. As a result, you get the benefit of lower interest rates.
If you’re buying an investment property, using your home equity can be a good wealth-building strategy. If you’re buying a second home, you have to consider that it’s not going to bring in income like an investment. That means that you’re going to be tying your home up in a loan and then taking on another loan, so you need to be in a solid financial position to make this work.
The downsides of using equity to buy an investment property do exist. These include:
• You’re swapping an asset for a debt. You’re taking the part of your home that you own, and then you’re putting it into a loan. Ultimately, no matter the specifics, you will have higher debt, so is that what you want?
• You’re vulnerable to housing market shifts, even more so when you own two properties instead of one. You’re doubling your risk if something happens in the housing market. For example, if the value of either of your properties goes down, you might owe more on your home equity loan and your mortgage, overextending you.
• If you were to default on your loan, you could lose both properties.
• You might end up having three mortgages but only two homes. Most home equity loans are second mortgages, so you have to combine this with the loan you’ll need for your second home, meaning three mortgages.
• Another downside you’ll have to weigh is the fact that interest payments on your home equity loan will probably not be tax-deductible because of 2018 changes in tax codes.
The big takeaway here is that, yes, using home equity to buy a second home is an option and sometimes a very good one. At the same time, there are risks and it’s not always the right decision, so you need to go over the details in your specific situation carefully.
The MLS is a database owned by Realtors which is used to find homes for their buyers. For most Realtors and buyers, it is the only tool they need to find the right home. The MLS's across the country belong to members of the National Association of Realtors (NAR) and are computerized lists of homes currently for sale. This is an exclusive tool, only available to the 700,000 members of the NAR. Realtors search the MLS daily to find potential matches for their buyers, thus when new listings are entered, they are immediately evaluated by thousands of Realtors with prospective buyers, making your house quickly and easily found. Only a Realtor can list your property in the MLS. Realtors own the MLS. Listing your home on the MLS is crucial if you are serious about selling! MLS provides the biggest marketing advantage in selling homes. This kind of exposure to buyers is not available anywhere else. You maximize your chances of selling your property more quickly and at a better price when it is listed in the MLS. When your property is in the MLS it receives the broad coverage of all the member real estate offices via computer to your home's availability, price and features. Being listed on the Realtor's MLS enables you to take advantage of the power of thousands of Realtors in your area. That means more exposure for you!
It would be very unwise to try to back out of the contract because a purchase offer that's accepted is a legal contract that the buyer can seek legal remedies to enforce.
You must take into account the prevailing state of the real estate market and especially local market conditions. The real estate market continually changes, and market fluctuations affect property values. So, it is critical to determine your listing price based on the most recent comparable sales in your neighborhood.
It would be a good idea to get a Home Value Request, or CMA, also known as Comparable Market Analysis.
Because the buyer orders one or more home inspections doesn't obligate the seller to make repairs or modifications as a result of those inspections. Typically, however, inspection reports are used to negotiate repairs of major problems, or environmental or safety hazards that may be noted. The purchase contract should provide guidance for these negotiations.
No. If you prefer a lower-priced offer, perhaps with a better-qualified buyer and/or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers.
Beware, however, that if you turn down a full-priced offer, you may owe your agent a full commission even if you decide not to sell your home.