FREQUENTLY ASKED QUESTIONS
Buying and selling a home comes with many questions. Over the years we found that people we work with ask similar questions. So we decided to answer all those question (and more) below.
How much needs to be done to my home before putting it on the market?
Sellers can become very anxious when it comes to coordinating the clean up and updating their home before putting it on the market. They can become so anxious that it can actually prevent them from completely putting their home on the market. Most of the time, there is much less work that needs to be done than the homeowner believes. Before you decide to spend money, time, and effort to upgrade your home, please seek advice from a Bowes team agent to see how much work is truly needed.
How much is my home worth?
The accurate value of your home depends on many things such as the square footage, neighborhood/area, and many other attributes. Many Sellers tend to compare their home to the most expensive home that recently sold in their area instead of looking at homes with similar attributes that recently sold in their area. Homes in your area with similar attributes are called "comps" and are a much better way to indicate an accurate estimate for your home. We provide a custom report that includes accurate and up-to-date information to determine your homes value.
How long will it take to sell my home?
The national average for selling your home is currently 100 days. However, this varies drastically depending on the area and price of your home. It is important to price your home competitively and make sure your home is seen by as many people as possible. The more exposure your home receives, the faster the offers will come in. We offer strategic marketing plans for our Sellers to get their home as much exposure as possible through professional photography, social media, and email marketing.
Does staging your home make a difference?
Homes that are staged sell roughly 88% faster than those that are not staged. On top of that, the homes that are staged sell for 20% more. Staging can make a huge difference because it offers the buyer a opportunity to envision themselves living in your home. If it comes down to painting your walls as part of the staging, be sure to use neutral colors!
Should I be present when buyers view my home?
The short answer is no. When the owner is present in the home during a showing, it can make the buyer feel uncomfortable. You want potential buyers to feel as relaxed and comfortable as possible. Buyers feel awkward when they ask questions or make negative comments if the homeowner is present.
What is the agent's commission?
Commission varies, however, it is typically 6% of the home's sale price and this can be shared with the Buyer's agent. Realtors are not paid by the hour or appointment and do not receive any money unless they sell a home. It is important to get to know the agent you want so they may provide you with the best service possible while representing you and your home during the selling process.
How is the real estate market now?
We receive a lot of questions on the current status of the real estate market. There are many indicators that we can share with you to help explain the current status of the local real estate market. One major statistic to determine the current status of the market conditions is the average days on the market. This will show you how fast the homes in your area are selling when they are listed. Other statistics to review include closed transactions in the area, average sales price, and list-to-sales price ratios. If you would like an up-to-date analysis of our local market, let's schedule a time to talk.
What is the best way to respond to low ball offers?
When you are selling your home, try to detach yourself emotionally from making decisions and think of each decision as a business move. It is inevitable, low ball offers will happen when listing your home on the market. No matter how low the offer is, make sure you always respond. When you let your emotions come into play when receiving low ball offers, you can push away any potential opportunity to reach an agreement and get a deal finalized on your home. Even a counter offer closer to the list price is better than ignoring a potential buyer.
How does the inspection phase work?
Inspections are a very common process that buyers will perform to get a deeper analysis of the property they are interested in purchasing. There are multiple types of inspections that buyers can have performed on your property once they are under contract. Most of the time, inspections are at the expense of the buyer, unless negotiated otherwise with the seller. The buyer will have a specific amount of time to complete the inspection and remove the inspection contingencies or request the seller makes changes to the results found from the inspections.
Can I determine how much my home is worth from an internet website?
No. If you have purchased a home, sold a home, or just hunted for homes, you have most likely used third party real estate search engines to search for homes. These sites provide estimated values of homes for nearly every home in the United States. However, these are not always accurate home values for your local market. All estimates are based on calculations and formulas that do not necessarily provide accurate information. These online guesstimates can be deceiving and lead to both upset buyers and sellers. You can receive a more accurate value of your home by speaking with a top Realtor in your local area, not a third party real estate website. If you are looking to see an accurate and up-to-date evaluation of your home's current value contact us today.
Does it cost money to use a Realtor? How does commission work?
In most states, traditionally the seller agrees to the commission that will be paid to the agent that is working for them. From there, once the listing is posted publicly on the Multiple Listing Network (MLS), the commission that agent will pay to a cooperating broker is posted there. Essentially, this means that both buyer and seller agents are working for free until the deal is closed! The buyer will almost never write a check to pay a broker, and the agent working for the seller is paid out of the proceeds of the sale. For rentals, the way the market is right now, the tenant is usually charged a fee of one month’s rent that is often split between two cooperating brokers. One thing to keep in mind is that your agent may have insight into larger buildings that are offering to pay brokers fees and offer other incentives, especially when they are first opening.
What are the upfront costs of buying a home?
Inspection – Inspection costs vary based on the area, size of the home, and the services the inspector is providing. For a standard home or condo inspection a buyer should budget $400-600. Of course, other inspections require additional fees, so if you’re thinking about a lead inspection you should budget $400-500 at a minimum, an additional pest inspection will be more, and so on.
How much do I need for a downpayment?
This is an interesting question because there are actually some loan programs out there that require 0% down! There are a number of first-time buyer programs that require between 3-5% as well. That being said, many homes end up with multiple offers and financing is a big consideration as to the strength of an offer, so oftentimes if a buyer has the ability to do so, a 10-30% downpayment will help strengthen an offer. In addition, putting more than 20% down is often advantageous as it helps borrowers avoid private mortgage insurance which can be quite costly.
What's the difference between assessed, appraised, and market value?
We often get asked the question on the difference of assessment vs. appraisal value and why they often seem to be so substantially far apart! Here’s a quick rundown.
Where do my offer check and deposit go?
Only licensed escrow agents can hold deposits for real estate transactions. When you give your offer or purchase and sale check to the agent working for the seller it will be deposited in the company’s non-interest bearing escrow account. Some companies do not act as escrow agents, so the attorney working for the seller will occasionally hold escrow for the transaction. Your deposits are usually protected by contingencies, such as an inspection and/or financing contingency. These contingency periods expire on specific dates, but should there be any issues with either prior to the contingency date put forth in your offer, the deposit would be released. The deposits are applied towards the money that the buyer is paying for the purchase, specifically the downpayment. Just prior to closing (a minimum of three days), the buyer and seller will each have a chance to review a closing disclosure, which breaks down all of the finances of the transaction.
What is a bidding war?
Our current market conditions are simply a function of supply and demand, because of this, there are often multiple buyers bidding on the same property, which creates “the auction effect” – or a bidding war. On one of our most recent listings, the scarcity of similar properties becoming available in the neighborhood lead to over a dozen offers being submitted, the majority over ask and a handful presenting as either all cash or boasting no contingencies. It’s not always the highest price that seals the deal, sometimes, other aspects of the offer add significant value to the seller. Limiting contingencies can lessen risk for sellers who are worried about their ability to buy their next place, and adding a use & occupancy for a seller after leaseback might help with the timeline on their purchase or significantly increase their buying power. Oftentimes, when there are a number of offers on a property, the agent working for the seller will work with their client to narrow the field to 3-5 of the strongest offers and circle back to those buyers for a second round or “best and final”. This represents an opportunity for the seller to communicate their most desired terms and for the top offers to improve their position before the seller makes a final decision. In our market, there is often an emotional desire to “win” that overpowers the need to make a sound investment decision. It’s very important to discuss goals with your agent after signing a Buyer Agency Agreement in order that they may be able to effectively advise you while keeping your investment goals in mind to avoid making a decision that could negatively impact your financial future.
Why shouldn't I wait to buy once the market cools down?
This is a common question given the market that we work in. With rising prices all over the area, it can be daunting to think about making such a large investment. There are a couple of variables to consider here:
Is a condo or single family more liability?
It’s not necessarily a matter of “more” liability, it’s a matter of how it’s shared. With a single-family home, your homeowner’s insurance will be more expensive than a condo policy, and general maintenance and repairs are solely the owner's responsibility, so there could be more work/additional cost associated with a single family home. A condominium spreads the liability and burden of maintenance and repair costs across all of the owners, and your condo insurance policy is generally less expensive as the association’s master insurance covers a lot of the larger ticket items (roof, etc). It’s important to work with your agent and lender to understand the implications of each when deciding which is a better fit both financially and from a maintenance standpoint longterm.
What do I need for a pre-approval?
A solid pre-approval can certainly give you the leg up on competing offers, so it’s important to be ready when it comes to working with a lender. In short, your pre-approval is the lender saying you can afford “x” after taking a quick glance at your financial situation. The majority of lenders will have very similar rates; however, a local lender on the ground in the area you’re looking in will likely be more competitive and better-known amongst agents, which surprisingly can have an impact on the pre-approvals credibility. You’ll also want to consider access to your mortgage banker throughout the process – a big question to ask is whether they are available on weekends (and whether you will be able to access them via cell phone!).