Are you thinking about buying your first home this summer? Here are 10 steps you should follow courtesy of our friends at industry resource KCM.
- Save your down payment. You don’t necessarily need 20% down to buy a home. There are financing options that allow you to put down as little as 3%. So be aware of your options when you start to put money aside.
- Know your credit score. Your credit score is a major factor in determining the types of loans you can qualify for and what your interest rate will be.
- Find a real estate professional. Once you have your down payment and know your credit score, engage a qualified real estate professional — like Mari Sennott and Associates — who can guide you through the home buying process.
- Get pre-qualified. As real estate professionals, we can provide you with a list of reputable lenders, who can work with you to secure a pre-approval for your mortgage. This will help you stay on budget when you…
- Start home shopping. Make a list of what you want versus what you need in your home. With our 20 years of experience in the Cape Cod market, we can compile a list of houses that match your interests.
- Make an offer. When you find the home that fits your requirements and your budget, we will help you determine what is the best price to offer. Remember, this will probably start a negotiation process where the seller will attempt to determine how far you’re willing to go in terms of price. Don’t be offended, the seller is trying to maximize his/her profit. As experienced real estate professional, we know how to negotiate and can give you the best advice. (Not your Uncle Harry.)
- Schedule a home inspection. Once your offer is accepted, we can provide you with a list of qualified inspectors, who will go through your home and identify any hidden issues. Their primary job is to look for structural and safety issues, not to offer advice on the color of the kitchen cabinets.
- Get a home appraisal. Your lender will send out an appraiser to be sure your new home is worth the value that you are paying.
- Close the sale. When all the paperwork is completed, you can make the purchase official.
- Congratulations! You’re a homeowner!
Why It’s Probably Not a Good Idea to Sell Your Home Yourself
Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.
1. Online Strategy for Prospective Purchasers
Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
- 50% on the Internet
- 28% from a Real Estate Agent
- 7% from a yard sign
- 1% from newspapers
The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy, as we do, is crucial.
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
- The buyer who wants the best deal possible
- The buyer’s agent, who solely represents the best interest of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser, if there is a question of value
4. FSBOing Has Become Increasingly Difficult
The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.
5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.
Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?
Whether you’re a first time home buyer or someone thinking about selling your home yourself, we’d be happy to sit down with you to review your options and provide you with an up-to-date assessment of the market.
Please contact us via the comment section or by calling 508-568-8191 or emailing us at [email protected] We look forward to teaming with you.
Enjoy your week…
Mari and Hank