Buying and selling at the same time begins with understanding your needs and your financial situation. Most clients who are buying and selling at the same time are “move-up” buyers or are downsizing. Typically, they fall into one of the following categories:
Talk to a Lender
The discussion with your lender should give you an understanding of what you qualify for, the monthly payments, closing costs and how interest rates will affect the monthly payment. The lender can help you determine if you must sell before buying, if you can buy non-contingent on the sale of your home (selling your home at a later date), or if you can buy non-contingent and just need to rent your home. Exploring each of these options is very important.
The Selling Process & Current Market
The best market analysis of your home is what a buyer in an open market will agree to pay within a given timeframe.
Since that cannot be achieved without actually putting your home on the market, you will want an agent who knows your market well enough to review your home’s condition. The agent will then evaluate it against other homes nearby that have sold as well as against what is currently on the market. With that estimated sales price, you can determine the “equity” you will take from the property after fees and taxes are paid. It is best to review a range of prices from “worst case” to “best case” selling prices. Further, an agent can assess what your home may rent for if you decide to keep it.
The Scenarios for Buying and Selling at The Same Time
The Bottom Line
If you're thinking about a move-up (or down), we are happy to meet with you and discuss the right plan of action for your current situation. We're here to help so contact us and let's talk.
Credit Sue Goodhart
Selling Your Home in the Fall: What You Need to Know
Most homeowners who are planning to sell their homes in the not-too-distant future think it is best to wait until the spring market to list their homes. Conventional wisdom is that more buyers are looking in the spring months and so the odds of selling your home in the fall at your desired price are better.
Not so fast. Allow us to break down why selling your home in the fall, especially THIS fall, may be the wiser move.
1. SERIOUS BUYERS
People need to move at all times of the year, due to such transitions as a job relocation or life change. The people looking in the Fall are not lookie-loos, but serious house hunters. While yes, there may be fewer buyers in the fall market than in the lightning fast spring market, there are more SERIOUS buyers looking in the fall than in any other time of the year.
2. INTEREST RATES ARE ON THE RISE IN 2018 & 2019.
Interest rates usually go up in the spring so financially savvy buyers are out there looking NOW. Furthermore, The Fed has said recently that they intend to raise rates twice more in 2018 and perhaps three more times in 2019. It’s certainly possible to see mortgage rates above 5 percent before the year is over should the Fed follow through with these plans. This will affect the overall market, but it will especially affect move-up buyers, many of which have mortgage rates around 3% if they purchased 6-8 years ago. A change to a mortgage of 3% to 5% will be a huge jump for many.
3. LESS INVENTORY
The best of all reasons for selling now is that fewer houses are listed in the fall months so buyers have fewer homes from which to choose. A smaller housing inventory means that odds of a buyer wanting YOUR home increase (and could even turn into a multiple offer situation). The inventory of available homes is very low in our area and has been for well over a year now. Since few sellers like to put their homes on in August there is pent-up demand.
If you are looking to buy or sell, a first time homebuyer, or looking to move up, reach out to us. Our team is here and ready to help!
By Sue Goodhart
WHAT IS THE BUYER BROKER AGREEMENT?
If you are looking to buy a home, your chosen Realtor will ask you to sign a “Buyer Broker Agreement” or as it is more formally known, the “Buyer Agency Agreement” in Collier County and “Exclusive Right To Represent Buyer Agreement” is used. Potential clients often ask us several excellent questions about this agreement, so we thought we’d break them all down for you.
In Florida, until a buyer signs a buyer broker agreement, the agent they are working with is legally committed to representing the seller of a home. Buyers and agents who have agreed to work together must outline the terms of their agreement in a formal written document.
Enter the Buyer Broker Agreement
Signing this agreement ensures that you have a Realtor legally committed to representing you. With this representation, an agent looking out for YOUR best interests, not the sellers. Additionally, with the buyer broker agreement in place, your agent cannot share any of your information with the seller, it binds them to confidentiality. For example, your agent could never divulge that while you offered $450,000 for a property, you really are willing and able to go up to $500,000. Real estate agents must always disclose which party they represent in any transaction. This document clarifies for all involved parties who is representing whom in a deal.
KEY TERMS OF THE BUYER BROKER AGREEMENT
Here is the breakdown on the key sections of the agreement:
Length of Term - The buyer broker agreement is most often drawn up for six months or a year. If your agent is committed to you and your househunt, he or she will want you to be committed in return.
Early Termination / Advanced Notice - This section outlines how the early termination of the agreement is handled. It outlines the number of days’ notice needed to end the agreement early. It will also include a dollar amount that a buyer will owe the agent if the required notice is not given.
Compensation - There are two main components of the compensation section: the retainer fee and payment.
Retainer Fee - While common in other parts of the country, retainer fees are not usually part of the agreement in our area. We do not charge a retainer fee for our time. The retainer fee is used to compensate Realtors for their time and related expenses (fun fact: in addition to all of the time spent searching for and showing homes and getting a buyer to closing, each offer a Realtor makes for a buyer takes many hours to write, submit, negotiate, etc.). The retainer fee also serves as a way for agents to differentiate casual “lookers” and serious homebuyers.
Payment - Perhaps the most misunderstood section of the buyer broker agreement, the payment section, often gives buyers pause. In most cases, 3% commission, plus a few hundred dollars (the amount varies depending on the company and situation), are listed as payment. If the home is entered into the MLS database, the listing agent and brokerage are offering to pay the commission to the buyer agent and brokerage. In other words, the seller pays all commission costs to the listing brokerage, who then pays the buyer brokerage their share. You, as the buyer, are only responsible for the additional fee at settlement. This fee covers the brokerage’s back-end expenses related to the processing of the contract, paperwork, etc. There could be a rare occurrence when you might need to pay the buyer agent commission but that would be fully disclosed to you up front — long before seeing a home in which this would be the case. Rarely have we ever seen this happen.
Dual and Designated Representation - Designated representation means that you approve being shown properties listed by the brokerage. In other words, if you sign with an agent of a specific brokerage, your agent is allowed to show you other properties from that brokerage. Dual representation means that you agree to see properties that your agent has listed. In Florida, a Dual Agency is illegal, although we are able to facilitate both the sale and purchase of a home as a Transaction Agency. You, as the buyer, choose to accept or decline these options. You can also agree to see the properties in the buyer broker agreement and decide later if you will agree to that form of representation when you are ready to put an offer in on a property. It will require a separate agreement at the time of the contract.
WHAT DOES A BUYER’S AGENT DO ANYWAY
Of course, a buyer’s agent will help you search for and tour homes and neighborhoods. However, they do far more than most people realize! They will work hard to find properties before they hit the market and will walk you through the process step by step. Your agent will also connect you with experienced lenders (if need be). A side note: be sure to use a lender your agent recommends. These lenders have proven themselves over the years and have a vested interest in keeping buyers’ agents happy. It’s important to note here that our recommended lenders do not offer us any special perks or kickbacks! Unfortunately, we’ve seen our share of troubles in deals with an unproven lender. Our agency uses only tried and true lenders with stellar reputations.
When you find “the home,” your agent will research the comparable sales (or “comps”) and recommend an offer price and strategy on the other terms of the contract. Your agent will also do any needed negotiating on your behalf. Negotiations include the price as well as all of the other terms of the contract such as the home inspection, appraisal, rent backs, closing costs, etc.
Once you are officially under contract on your new home, your agent will help you through all of the necessary steps to ensure a successful settlement. This is a critical period in which a buyer’s agent is invaluable. Your agent will ensure you understand and comply with all terms of the contract such as contingencies (home inspection, financing, appraisal, and more). The agent will stay on top of the details and deadlines to ensure you (and the seller) do not inadvertently default on the contract. The agent will likely recommend a home inspector, movers, and more. Your buyer’s agent will attend the final walk through and settlement with you to ensure that everything goes smoothly and that there are no last-minute surprises.
The Bottom Line
Buyers sign the buyer broker agreement in order to establish a working relationship with their Realtor. It’s not intended to scare anyone. In fact, it protects buyers and ensures their Realtor is working in their best interests, not those of the seller. Talk with your Realtor if you have concerns or questions, be sure to discuss any concerns with the agent.
Our guarantee to you, is “beyond care and competence”.
Allow us the opportunity to prove ourselves and earn your business. Contact us and let us show you how we can help.
Agents can save sellers time, money, liability and hassle
Frank, a smart and tech-savvy Denver homeowner, thought he’d skip the agent commission and sell his house himself. He researched his home’s property value, found a buyer and got the house under contract. It seemed like a done deal. Until he realized in a panic that he had seriously undervalued the property — by more than $100,000. Frank had misunderstood the report he’d pulled and incorrectly valued the house. The error cost him $30,000 to get out of the contract. In your dealings with potential sellers, you’re going to run into people who will question the worth of an agent. Or you’ll come across a smug homeowner who’s got it figured out and listed his or her home for sale by owner (FSBO).
How do you turn these sellers into a client? Let them know that you’re saving them time, money, liability and downright hassle.
Let sellers know that you’re saving them time, money, liability and downright hassle.
1. Scams happen
Judy (not her real name) in Raleigh, North Carolina, fell in love with a FSBO home. She agreed not to use an agent and paid the homeowner $3,000 in earnest money.
Then the homeowner changed his mind. With no contract signed and no receipt, Judy lost all her earnest money. She trusted the homeowner when she should have trusted an agent.
FSBO scams happen to both buyers and sellers with little recourse besides hiring an attorney.
Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information.
2. Liability is all on the seller
Everyone makes mistakes. A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes. Attorneys can close a real estate transaction, but they don’t carry errors and omissions (E&O) insurance. So if homeowner Sandy lists “hardwood floors” as a feature and the buyer discovers it’s just a wood veneer, chances are Sandy is going to pay for that mistake. An agent would have either caught the mistake or covered it with E&O insurance. Let’s face it: this is a litigious society, so what homeowner wants to be a target for lawsuits?
3. Paperwork is daunting
The 2015 National Association of Realtors’ Profile of Home Buyers and Sellers showed that understanding paperwork was one of the most difficult tasks for FSBOs. Depending on the state, there are a variety of legal forms that are needed, including but not limited to a sales contract, property disclosures, occupancy agreements and lead paint records.
Sure, ready-made contracts can be downloaded easily enough. But does an untrained seller understand what all that means? Would the seller know how to customize that one-size-fits-all contract?
4. Sellers can get stuck in a bad deal
Like Frank, FSBOs who sign on the dotted line and then realize an error are stuck. They have to pay the buyer (if they’re willing) to get out of or just take the deal. Let potential clients know you can save them from that headache.
5. FSBOs sell for less
In 2015, FSBOs lost about 16 percent of the sales price with a median selling price of $210,000 (agent-assisted homes sold for $249,000). Homeowners selling by themselves simply don’t have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property. If the FSBO seller sold to someone he or she knew, the median dropped to $151,900 (because cousin Sue is doing them a favor and expects a deal).
6. FSBOs spend more time on the market
Unless the seller knows someone who wants to buy the home, FSBOs take longer to sell than homes listed with an agent. For the same reasons, they can’t get the right selling price. No one is “behind the curtain” running the marketing show. On average, 18 percent of FSBOs were unable to sell within their chosen time frame last year.
7. FSBOs lack representation
There’s no one looking out for the homeowners who sell on their own. They have no one to call if they have a problem or a question.
Dave found this out when he sold his Morrison, Colorado, home himself. Studying for his real estate license, Dave felt confident he could handle the contracts. Then the unexpected happened. When his house was under contract, a state patrol car pursuing a speeding motorist crashed into a downstairs bedroom. Repairs threatened to push back closing, and suddenly, the buyer was asking for a storage unit, the cost of temporary housing and more. He was lucky enough to have an agent friend who could step in, but a homeowner with no representation could have been out thousands of dollars unnecessarily.
8. Inspections are problematic
Sellers who don’t know the rules can get stuck with unnecessary and costly repairs. When Sue sold her 10-year-old Highlands Ranch, Colorado, home, after the inspection, the inspector said she needed to change the stairs from the garage to the house because the code had changed. He listed other code changes, and the buyer began to demand these be done. Surprisingly, the inspector didn’t know that because these items were to code when the house was built, the seller wasn’t responsible for these changes.
9. Marketing is limited
FSBOs have limited resources to market their home. The 2015 NAR Profile of Home Buyers and Sellers showed 42 percent rely on a yard sign, 32 percent rely on friends and family, and about 15 percent use social media. Relying on the neighbors and Uncle Bob’s second cousin has its limitations. Even paying for the MLS listing won’t be enough because there’s no incentive for an agent to bring a buyer to a FSBO.
10. Hidden costs add up
The mindset for most FSBOs is saving money. Chances are, these sellers are being nickeled and dimed into a pretty big chunk of change. They’re paying for a lot of extras: signage, flyers, photography, MLS listing, attorney (required in multiple states for FSBOs), home warranty (optional but hard to sell without one), home inspection, a wood destroying pest inspection, credit report for buyers (if applicable), contracts and the list goes on.
11. Time costs the seller money
The biggest cost to a homeowner is their time. You might hear the argument that it doesn’t take an agent that much time to sell a house. And honestly, given the technology at our disposal, that’s true — to an extent. But it will take a homeowner a whole lot longer. They don’t have the expertise or the access to the resources agents have. What is their own time worth to them? How much time will the seller spend researching the market and contracts? Is the seller going to leave work to unlock the house each time there’s a showing?
If you’ve been in real estate for a while, you probably have some FSBO nightmare stories of your own. Share them with facts backed with real statistics to help FSBOs make an informed decision to use an agent instead.
Article by: CHRIS REDIGER Inman News
Big news! A recent study by the National Association of Realtors shows that Millennials make up the highest percentage of home buyers nationwide. Younger buyers have specific taste so it’s critical if you’re selling your home to prepare your home to appeal to millennial home buyers. Even though it may not be the way you currently live in your home, or even the way you will decorate your next home, this approach can net you more money at the end of the day. So, how does one prepare their home to appeal to millennial home buyers? We have a comprehensive plan we reserve specifically for our listings, but here is a sampling of our insider secrets!
6 Steps Approach to Millennial Home Buyers
All of these are great ways to help your home appeal to millennial home buyers. If you have any questions, please don’t hesitate to reach out. Our goal is to help you minimize your expenses and maximize your profit. That’s why we will look at each home with a different eye to determine who the most likely buyer is and what they are looking for in their next home. We’ll create a custom plan so you’ll know you’re in good hands.
Home staging versus interior design: What's the difference? And which one do you need? While both share the goal of making your home look its best (and many pros offer both services), each serves a very distinct purpose. Here are some questions to ask to help you decide which one is right for you.
Are you selling your home soon, or staying put?To begin, consider whether you're planning a move in the near future. If a sale is on your mind, a home staging company is the right choice.
"Home staging is all about prepping your house so it will appeal to as many buyers as possible," explains Dessie Sliekers of Slick Designs.
Home staging can include changing out paint colors, adding new pictures and artwork, and bringing in furniture and accessories. This service is generally viewed as a temporary one that's done in order to garner bids and result in a sale.
But if you're settled into your home for the foreseeable future, an interior designer would be more suitable. "An interior designer is knowledgeable about building construction, remodeling, and structural details," says Sara Chiarilli, a designer with Artful Conceptions in Tampa, FL. While a designer may also offer home staging services, this professional offers a much broader range of services, from complete overhauls (ripping out walls, installing new flooring) to simple color updates (paint, carpet, drapes, upholstery). "A designer will create a beautiful, functional space for her client that will last," Chiarilli says.
Do you want to express your personal style, or fetch top dollar when you sell?
Home staging often has pretty rigid sales tactics (e.g., rolling three towels just so in the powder room, or displaying shiny green apples on the dining table nearly every time). This isn't to say there aren't different approaches to home staging, but the majority of a stager's tweaks will be impersonal and on the generic side. "A home staging company is concerned with placing furniture to best sell the property and won't necessarily take into account what the client really likes," says Chiarilli. Sliekers agrees: "With home staging, you'll receive firm suggestions."
The upside, however, is that on average, a staged property sells 88% faster and for 20% more than a non-staged one. Hire an interior designer, on the other hand, and you get a lot more creative control. Do you want a bright-green laundry room and a tricked-out master bath? A designer will work to meet your needs. "This professional operates as your partner to handle paint consultation, light fixtures, improved plumbing, new furniture, finishes, artwork, and rugs—all of which is approved by the client," says Sliekers.
Are you on a tight budget, or want to spend big?
You can spend up to $500 per room if your budget allows. However steep that may seem, an interior designer will charge more—anywhere from $100 to $500 per hour, depending on her expertise. "Staging tends to be cheaper because it's usually a one-time consultation, sometimes paired with the selection of rental furnishings or artwork," says Sliekers. Interior design, on the other hand, is a much more expansive service, so that's reflected in the price.
By Jennifer Geddes Realtor Magazine
Steve Wadlington, president of WIN Home Inspection, explains how sellers can avoid potential conflict with buyers and gain an edge in negotiations.
In the typical real estate transaction, the buyer is the one to order a home inspection. But sellers, too, can request a professional assessment of their home before putting it on the market. A pre-listing inspection provides sellers with upfront information about the condition of their property, which gives them more control over repairs and potentially strengthens their negotiating position.
Few sellers take advantage of this opportunity, according to Steve Wadlington, president of national home inspection services company WIN Home Inspection. “I don’t expect pre-listing inspections to become mainstream in my lifetime,” he says. Lack of awareness contributes to the underutilization, Wadlington adds, but he also acknowledges that sellers may be reluctant to spend the money for such services.
Additionally, sellers and their agents have a legal duty to disclose to buyers any property issues that are revealed in a pre-inspection report. REALTOR® Magazine spoke with Wadlington about how pre-listing inspections can boost home sales and help sellers defend their asking price.
Are there any differences between a pre-listing inspection and a buyer’s inspection?
The only differences are the customer for whom the inspection is being conducted—in this case it’s the seller, not the buyer—and the point when the inspection occurs. The scope of the inspection is the same. A pre-listing inspection focuses on proper functionality of all major systems and components of the house: heating and cooling; electrical; plumbing; roof and structure; siding; and doors and windows. It’s a full inspection for the seller to better understand the condition of their home prior to the buyer’s inspection. This gives the seller important information to consider so they’re not caught off-guard in the midst of a transaction.
How much does a typical pre-listing inspection cost?
The fee is usually the same as a buyer’s inspection, generally ranging from $350 to $500 for a qualified inspector who carries E&O insurance. Of course, the price varies based on location, square footage, age of the home, and any special conditions, such as whether the home is built on a steep incline.
Why should a seller do an inspection, particularly if the buyer is going to do one anyway?
The value to the seller is that a pre-listing inspection makes them aware of issues in advance of negotiating a purchase agreement, allowing them the chance to resolve the issues or have them accounted for upfront in the asking price. This gives the seller better control in marketing their home and helps minimize stress from heat-of-the-moment negotiations once a purchase agreement is tendered. Homes that have a pre-listing inspection generally sell faster and have fewer inspection-related issues to negotiate, enabling a smoother transaction.
What should a seller do if a pre-listing inspection uncovers significant problems in the home?It’s always better for everyone to know about major inspection issues as soon as possible. Once they’re identified, they can be carefully assessed for proper resolution. Depending on the nature of the issue, a seller shouldn’t automatically assume that everything needs to be fixed before putting the home on the market. Their real estate professional should advise whether the repairs are necessary to the viability of the sale. Regardless of who owns the property, issues of concern to the buyer will need to be dealt with somehow, and the associated cost of the resolution is a consideration for both the buyer and seller.
If the seller doesn’t want to pay for repairs, what solace does a pre-listing inspection give to the buyer?
For many buyers, being provided forthcoming inspection information has both tangible and emotional value. They’re made aware of issues identified in the inspection report, which gives them more facts to work with, and then they’re provided subsequent clarity on which issues have been or will be resolved as part of the transaction. Sellers who proactively disclose pre-listing issues give buyers proper awareness to factor them into their offers.
Can pre-listing inspections help real estate professionals when marketing a home?
The more information agents can provide to give buyers peace of mind, the better it is for the sale. A pre-listing inspection can also reinforce the seller’s asking price. It enables agents to explain how the inspection report—plus any repairs that were made before listing—helped the sellers arrive at the home’s value. At WIN, we also provide a “Ready for Purchase” sign rider to identify the house as one that has pre-listing inspection information available. It’s similar to what the auto industry has done with marketing certified used cars.
What about sellers who don’t see the sense in paying for an inspection?Actually, a pre-listing inspection can ultimately save money for sellers in two ways. First, by being aware of and disclosing known property issues upfront, the seller can make it known that consideration for those items has already been factored into the sales price. That effectively takes these issues off the negotiation table. Second, the seller can choose to repair the issues prior to listing, which gives them more control over repair costs.
Should a seller offer the entire pre-listing inspection report to a buyer or just a summary? How much detail is necessary?
I think this is a situational consideration, where sellers should consult with their real estate professional. The industry has evolved such that it is reasonable to view the inspection summary as containing all of the important need-to-know items found in the full report. Since the real goal here is to ensure transparency and awareness, the summary should be adequate to achieve that. Depending on the length and complexity of the full report, as well as the technical complexity of the issues presented in the summary, I can see where a good faith effort to offer more detail could actually cause undue alarm if the buyer can’t put the information in proper perspective. But bear in mind that much of the longer report will also confirm positive functionality of the major systems and components of the home, so it can offer added positive value as well.
Wouldn’t buyers still want to do their own inspection?
Yes, absolutely. If a seller claims to have resolved issues that were uncovered in a pre-listing inspection, the buyer will want a subsequent inspection to confirm those repairs. Whether the buyer uses the same inspector that the seller used is a matter of personal preference, and there are pros and cons either way. Using the same inspector can be beneficial because their prior experience and familiarity with the home allows them to better detect changes based on a point in time. But a properly trained and certified home inspector will inspect the home for the seller or the buyer in the same manner. This person’s view of the home is objective and won’t change based on who hired them.
Credit: Graham Wood - Realtor Magazine
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