Navigating the Fixer-Upper Market: A Guide to What to Do First When Buying
While buying a fixer upper can be a great investment, they also come with their own set of challenges.
Katrina Lofton
The Ultimate Checklist on How to Prep Your House for Sale
As a homeowner, you may have a lot of emotions tied up in your home. However, when it comes time to sell, you must prep your house for sale to maximize your home’s value.
What to do when moving into a new house
Buying a home is a major accomplishment that should be celebrated. Whether it is a first home or a second, the thrill of closing on a home never gets old. However, many fall into the trap of overpricing their home. Homeowners come into the process pricing their home on what they believe it’s worth instead of looking at market indicators. If a home sits on the market for over three weeks, the homes appeal with buyers and demand will lower.
What is Market Value?
Market value is the amount a home will sell for in a competitive market place. Many factors will affect the price of a home. A higher volume of home inventory with little demand will affect the market price for homes in that area. Conversely, a limited amount of homes for sale with many buyers will increase the home’s value. The location of a home can also increase demand and affect market value. Some buyers will value the amenities in a community more than the actual characteristics of a home. Amenities like parks, schools, freeway access, closeness to work, and shopping can supply more value to the home buyer.
Some homes are not as desirable to the average buyer, and value for these homes are lower, so they sell at a discount. The value could be affected because it is near trains, power lines, or a cemetery. A home can also sell for less for expensive repairs and features that might be less valued.
Why Get a Comparative Market Analysis (CMA)?
A Comparable Market Analysis (CMA) will supply an estimate on the market value of a home in the current market. The goal of the CMA is to make an apples-to-apples comparison on homes that have similar features of the home you’re selling. For example, if you are selling a home with 3-bedrooms and 2-bathrooms with 2800 square feet, you want to use comparable properties with these same characteristics. You also want to make sure that these properties are in a range no farther than a 1/4-mile distance from your property. The closer the comparable is to your property, the better the estimate. Recent home sales 6-months or fewer are more reliable comps to capture the current market conditions.
The home should ideally have the same number of bedrooms, bathrooms, square footage, lot size, condition, and age. However, not all properties will be the same. Therefore, you want to find comparables that have the most characteristics and adjust the home price based on the comparables gathered. When the analysis is complete, you will have a better understanding of your home value. As a result, this will allow you to price your home correctly and put you on track of achieving your home selling objectives.
The Average Real Estate Agent Commission
When homeowners put their house on the market, they want to get the highest price in the shortest amount of time. Although this might be everyone’s goal, not all sellers manage to achieve this objective. Some homeowners sell their home for less than they expected, and their home sits on the market for much longer than they anticipated. The question then is, why are some sellers attaining their goals, and why some are not? Pricing your home right is one of the integral steps to achieving this goal. However, many fall into the trap of overpricing their home. Homeowners come into the process pricing their home on what they believe it’s worth instead of looking at market indicators. If a home sits on the market for over three weeks, the homes appeal with buyers and demand will lower.
What is Market Value?
Market value is the amount a home will sell for in a competitive market place. Many factors will affect the price of a home. A higher volume of home inventory with little demand will affect the market price for homes in that area. Conversely, a limited amount of homes for sale with many buyers will increase the home’s value. The location of a home can also increase demand and affect market value. Some buyers will value the amenities in a community more than the actual characteristics of a home. Amenities like parks, schools, freeway access, closeness to work, and shopping can supply more value to the home buyer.
Some homes are not as desirable to the average buyer, and value for these homes are lower, so they sell at a discount. The value could be affected because it is near trains, power lines, or a cemetery. A home can also sell for less for expensive repairs and features that might be less valued.
Why Get a Comparative Market Analysis (CMA)?
A Comparable Market Analysis (CMA) will supply an estimate on the market value of a home in the current market. The goal of the CMA is to make an apples-to-apples comparison on homes that have similar features of the home you’re selling. For example, if you are selling a home with 3-bedrooms and 2-bathrooms with 2800 square feet, you want to use comparable properties with these same characteristics. You also want to make sure that these properties are in a range no farther than a 1/4-mile distance from your property. The closer the comparable is to your property, the better the estimate. Recent home sales 6-months or fewer are more reliable comps to capture the current market conditions.
The home should ideally have the same number of bedrooms, bathrooms, square footage, lot size, condition, and age. However, not all properties will be the same. Therefore, you want to find comparables that have the most characteristics and adjust the home price based on the comparables gathered. When the analysis is complete, you will have a better understanding of your home value. As a result, this will allow you to price your home correctly and put you on track of achieving your home selling objectives.
How to Price Your Home Correctly
When homeowners put their house on the market, they want to get the highest price in the shortest amount of time. Although this might be everyone’s goal, not all sellers manage to achieve this objective. Some homeowners sell their home for less than they expected, and their home sits on the market for much longer than they anticipated. The question then is, why are some sellers attaining their goals, and why some are not? Pricing your home right is one of the integral steps to achieving this goal. However, many fall into the trap of overpricing their home. Homeowners come into the process pricing their home on what they believe it’s worth instead of looking at market indicators. If a home sits on the market for over three weeks, the homes appeal with buyers and demand will lower.
What is Market Value?
Market value is the amount a home will sell for in a competitive market place. Many factors will affect the price of a home. A higher volume of home inventory with little demand will affect the market price for homes in that area. Conversely, a limited amount of homes for sale with many buyers will increase the home’s value. The location of a home can also increase demand and affect market value. Some buyers will value the amenities in a community more than the actual characteristics of a home. Amenities like parks, schools, freeway access, closeness to work, and shopping can supply more value to the home buyer.
Some homes are not as desirable to the average buyer, and value for these homes are lower, so they sell at a discount. The value could be affected because it is near trains, power lines, or a cemetery. A home can also sell for less for expensive repairs and features that might be less valued.
Why Get a Comparative Market Analysis (CMA)?
A Comparable Market Analysis (CMA) will supply an estimate on the market value of a home in the current market. The goal of the CMA is to make an apples-to-apples comparison on homes that have similar features of the home you’re selling. For example, if you are selling a home with 3-bedrooms and 2-bathrooms with 2800 square feet, you want to use comparable properties with these same characteristics. You also want to make sure that these properties are in a range no farther than a 1/4-mile distance from your property. The closer the comparable is to your property, the better the estimate. Recent home sales 6-months or fewer are more reliable comps to capture the current market conditions.
The home should ideally have the same number of bedrooms, bathrooms, square footage, lot size, condition, and age. However, not all properties will be the same. Therefore, you want to find comparables that have the most characteristics and adjust the home price based on the comparables gathered. When the analysis is complete, you will have a better understanding of your home value. As a result, this will allow you to price your home correctly and put you on track of achieving your home selling objectives.
Working With Real Estate Agents
It is necessary to understand how your real estate agent will work for you to make sure that they help you fulfill your selling goals. There is a debate on what type of agent will represent your interest best. Either an agent that is paid based on a commission or salary based. A traditional real estate agent is paid a commission based on the sale price of your home. Conversely, other agents work on a negotiated salary from their real estate brokerage. There are misconceptions to which one of these agents work best for their clients. However, it will always depend on what the goals and ambitions are of the agent and the real estate broker that represent you.
The perception that commissioned real estate agents will represent their clients better is not necessarily true. The idea is that real estate agents will be more motivated because they won’t get paid unless they close the sale. However, the very reason why some people don’t trust their real estate agent is that they believe they are focused on getting paid. Some sellers believe that their agent does not listen to their goals but seem to rush them into decisions to secure their commission. However, every agent that works based on a commission is not motivated solely to get paid. There are real estate agents that will work for their customers to make sure that they meet their customer’s real estate goals.
Real estate brokerages that pay their agents salaries can have the same issue that traditional real estate agents present. Depending on the agency, some agents might feel more secure and comfortable because they are guaranteed a paycheck. Conversely, other brokerages can create an atmosphere that can hold their agents to a high standard of service. Also, like any sells profession, there are typically quotas along with a very competitive atmosphere that weed out real estate agents that can’t meet up with the standards of the brokerage. Therefore, customers reap the benefits of ideally higher levels of customer service.
When working with a real estate agent, it is crucial that you do your due diligence to make sure you select someone who represents you. Therefore, whether your agent is paid on commission or salary, make sure to check your agent’s credentials and knowledge of your area. Make sure your agent understands the home values in your area and can market your home effectively. Also, an agent should make sure that they look for ways to maximize the best features of your home to obtain the highest price.
What First Time Home Buyers Must Do
Once you have decided to buy a home, there are some things you should be aware of before you start your home journey. Most buyers understand the need to save for their down payment for a loan. However, other steps in the process should be considered to make sure you put yourself in the best position. Whether you decide the Conventional or FHA route, it is imperative to consider the following:
Know Your Credit Score
Your credit score is the driving factor in the type of interest rate that could be available to you. Lenders will look at your credit score along with items on your credit report to determine how likely you are to repay your obligations. A credit score can range from anywhere from 300-850. The loan originator will review items on your credit report that will include things like your payment history, how often you apply for credit, how you use credit, the total debt owed, and the type of credit used. It is vital to understand what is on your credit report to allow an ample amount of time to fix any discrepancies.
Gather Financial Documents
There are financial documents that your lender will require when applying for your home loan. It will save you a lot of headache and time if you are prepared and have these items ready for the loan process. The documents will vary depending on your situation. However, most lenders will require pay stubs/w2’s, tax returns, bank statements, proof of assets, social security numbers, and ID. These documents will be a great tool for yourself to have an understanding of your financial condition. This will be useful as you navigate how much you can afford monthly on your mortgage.
Work with Lenders to Get Pre-Approved
When you have an understanding of your financial condition, it puts you in the driver seat when you work with lenders. If your credit score is high enough, you will be in a great position to negotiate. When you work with an agent, getting a pre-approval is an important step when searching for a home. Therefore, the lender that you choose to work with will assist you in getting pre-approved. You are not obligated to use the maximum amount of your pre-approval. You’ll want to stick to the financial plan that you set up at the beginning of your home journey to make sure you stick to your goals.
Your real estate agent can assist you through this process if you have any additional questions or concerns about the home buying experience.
