Real Estate FAQs

 

FAQs for Buyers

FAQs for Sellers

FAQs on Estimating Your Home’s Value

FAQs For Buyers

This is my first time buying; do you have any tips?

Several. First, relax – we can help make this easier for you. Set up your free 1-hour consultation with us and we can walk you through the whole process.

When should I begin looking at homes?

About two to three months before you want to close on a home. Closing takes 30-45 days; this gives us about four to six weeks to find the right home for you. We are really good at what we do (if we do say so ourselves) and can help you narrow down the choices quickly to the best available options. Typically, our buyers find the right home after viewing 5-8 houses.

I found a house online that I want to see; now what?

The first step, before you see any homes, is to speak to a lender and get preapproved for a mortgage – that way you’ll go into the process knowing exactly how much home you can afford. Fortunately, we know a few good lenders.

I want the best deal on a home. Shouldn’t I take my time and see as many houses as possible before making a decision?

We completely understand the desire to get best deal out there – but you don’t have to drive yourself crazy waiting to see what’s around every corner. That’s what we’re here for. We can quickly narrow down the 10,000+ homes on the market in the Triangle to just those homes that meet your specific needs. By working with us, you will save tons of time. Not to mention gas.

Do I need an agent if I’m buying new construction?

Absolutely. You may get a different answer from the builder’s sales reps; just keep in mind who they are working for. The fact of the matter is you’re not going to get a better deal from a builder just because you don’t have an agent – so don’t pass up the opportunity to make sure someone is looking out for your best interests.

There’s also a practical consideration: We see a lot of homes, and can make suggestions on upgrades that make sense versus things that may be overpriced. And while everyone loves the model home in new communities, they’re loaded with upgrades. We know the right questions to ask to make sure you know what’s included in the base price and what you’re really paying extra for.

And, of course, we can also look at the recent sales in the neighborhood to see how much the builder is negotiating on the prices, and help you compare what you’re looking at to other new communities nearby that you may not have explored yet.

How much of a down payment do I need to purchase a home?

The answer depends on the type of financing you qualify for.

At the lower-cost end, there are still 100% financing, no-money-down loans available for first-time and repeat buyers. In those cases, your closing costs (fees associated with purchasing the home like mortgage fees, prorated taxes, homeowners insurance, etc.) are typically around 3% of your purchase price. However, we can often negotiate to have the seller pay this, so you won’t have to pay money out of pocket to closing. You will still be responsible for an initial deposit of around 1% of the sales price as well as fees for appraisal (roughly $400) and a home inspection ($400-$600).

Everyone’s financial situation is different. The best person to discuss this with to get a more specific answer is one of our trusted lenders.

I’m interested in a foreclosure or short sale. Is there anything special I should know about purchasing one?

Emphatically yes. We’ll be happy to tell you all about it.

FAQs For Sellers

When do I have to pay the $1000 listing fee?

A nonrefundable $500 payment is due at the time of listing; the other $500 is due at closing.

Why do I have to pay half up front?

We charge half up front because half of our work is done upfront – from taking photos and measurements to putting detailed information (and those photos) onto the MLS.

What are the differences between your firm and other “traditional” firms like Coldwell Banker, Allen Tate, etc.?

We don’t do open houses and we don’t charge as much. That’s basically it.

What? You don’t do open houses?

No. We’ve found that they’re just not an effective way to sell your home anymore. Most people who go to open houses are either neighbors, or buyers who aren’t qualified or aren’t serious (“just looking!”). The fact is, most active buyers search for their next home on the Internet, making open houses a thing of the past.

Will agents from these other firms be hesitant to show our home?

No. Anyone who tells you this doesn’t understand our business model. They’re probably confusing us with other flat fee firms, which require agents to contact homeowners directly with offers; many agents don’t want to work directly with the homeowners. But, since we represent you through the whole transaction, this isn’t an issue with our listings. (Most other agents aren’t even aware we’re a flat fee company until they see our fees at closing.)

Another agent I met with mentioned spreading the word about my home to the rest of the agents in his/her office. How do you get word out to other agents about my home?

With over 10,000 homes on the market at any given time, what are the odds that the 10 agents in a single office have a buyer just perfect for your listing? Slim. So we focus on the tool that works the best: the MLS. It’s the tool all agents in every office use to look for homes for their buyers.

Can I sell my home with you and use my friend to help me purchase my next home?

No. Because we offer such a competitive listing fee, we require that our sellers work with us as their buyer’s agents to purchase their next home in the area. If you have a friend you’d like to use, why not ask them if they will list your home for $1000 too?

Will my home be advertised on all websites?

In the Internet age, no one can promise “all.” We can promise that your home will be advertised on all the websites any other agent’s homes will be advertised on. (That’s because all these website feed from the same MLS database. There’s no magic to it, no matter what anyone might imply.) We also have an additional advertising agreement with Realtor.com and Zillow.com (the top two websites for real estate) so our listings are listed at the top of their search results. This gets our listings and our company more exposure (a win/win for both of us)!

How many photos will you take of my house? Will they be any good?

We can post up to 25 photos total on the MLS. We understand that photos are one of the most important tools for selling your home, since most buyers will do their searching on the Internet. As far as quality, most clients are very pleased with the photos we take because, quite simply, we know what we’re doing. We only take photos on sunny days, for instance, when your home will look its best. If you’d prefer to take the photos yourself, you’re welcome to do so.

How often will we hear from you?

We try to touch base with our sellers via email or phone at least every 30 days while the home is on the market. (Selling your home can seem like a lengthy process – pace yourself.) This will usually be concerning a pricing adjustment or home improvement based on the number of showings and feedback we’ve received. Please keep in mind the average time on market is between three to four months in this market. Once your home is under contract there will be more frequent communication through our transaction coordinator, Jessica Hunt. If you prefer to have contact more often, please let us know at the time of listing.

Will you be there during the showings?

Most likely not. We may show our own listings once or twice, but in most cases potential buyers will be accompanied by their own agents.

How long will it take my home to sell? Can we extend our listing agreement if it doesn’t sell within 6 months?

In 2012, the average time on market in Wake County was 111 days. But remember, that’s just an average. The actual time it takes to sell can vary greatly depending on where your home is, its condition and the price. Typically, it should sell within 6 months, but in more rural areas it could take longer. If it doesn’t sell during our 6 month contract, you can extend another 6 months without any additional fees. OR if you choose to take it off the market for a while, we will relist whenever you are ready for a $50 fee (this just covers the cost of our sign going back out to the property).

Aside from the listing fee and any commission, what will it cost to sell my home?

Prorated taxes, attorney’s fees and state revenue stamps are a few of the fees all sellers are required to pay at closing.

In addition, it’s common for buyers to ask that sellers pay some of their closing costs; we can negotiate this and roll it into the sales price. Buyers will also often ask for a home warranty, which is typically around $500.

While we can’t account for everything, when you first list your home we’ll provide you with an estimate of what you can expect to net. (We don’t like for there to be surprises any more than you do.)

Do I need to have a home inspection or appraisal prior to listing my home?

No and no. The only reason we would ever recommend a home inspection prior to listing is if there’s a questionable issue with a home, such as a large foundation crack. Otherwise, buyers will have their own inspection anyway, so save your money. As far as an appraisal, it is only the opinion of one person and has no power over what a buyer thinks your home is worth. At the end of the day price is determined by what a buyer is willing to pay – and what you are willing to accept.

Why aren’t other firms doing things the way you do?

Good question. Most agents are in denial that the real estate market has changed, and that their fees have to change accordingly. They try their best to justify why they charge so much, but at the end of the day we just don’t buy it. We’ll see the real estate world change dramatically in coming years as more and more sellers look for alternate ways to sell their homes.

FAQs on Estimating Your Home’s Value

I’ve made some improvements inside my home. How does this affect the value?

First the bad news: Spending $5,000 on a new deck will not add $5000 to the value of your home. No improvement will add dollar-for-dollar value.

Now the good news: Most improvements, such as new carpet or paint, indirectly add value by helping your home sell faster and at a higher price. Bigger items like a new roof or air conditioning system add value in a similar way, except buyers tend to view them as required maintenance rather than upgrades.

Also keep in mind that the condition of neighboring homes on the market, and any improvements they may have undergone, can have an impact as well.

Should I use the average price per square foot of homes sold in my neighborhood to determine my value?

NO! (Did we say that loudly enough?) Even agents do this sometimes, and it makes us cringe. It just isn’t an accurate way to determine value; appraisers don’t use the price per square foot and neither should we. In fact, appraisers use about 1/3 of the average price per square foot in a neighborhood to adjust for size differences. For instance, at $100/sq. ft., the value of a home with 100 sq. ft. more than another home isn’t adjusted up $10,000, but rather $3000. (But don’t put too much emphasis on that formula, either.)

The best way to value your home? Compare it to similar homes that have sold recently – homes around the same age, location, size and features (2 story or 1 story, garage versus carport) as yours. We can also give you a free estimate as to what your home is worth.

What is a Zestimate? Is it a good indicator of my home’s value?

Zestimates are what Zillow.com calls its estimate of your home’s worth. These are based mainly on tax records, and therefore are often inaccurate. Think of it as one more piece of information, but certainly do not let it be a determining factor in considering your home’s worth.

Short Sales vs. Foreclosures

There’s a lot of confusion about what exactly short sales and foreclosures are – and aren’t. Here’s a handy guide to the basics.

 

Short Sales

Short sales are related to homes in pre-foreclosure status. This means that the owner likely owes more than the home is currently worth, and is behind on the payments.

 

A short sale happens when the bank agrees to take less than what it is currently owed. Therefore the bank is short the full amount.

 

The “short” in short sale has nothing to do with the amount of time it will take to sell your home. Every lender is different, but on average these sales take 4-6 months to obtain approval and close.

 

We’ve worked with several of the major lenders – Bank of America, Wells Fargo, Suntrust, Aurora – representing sellers in these transactions. And we work with attorneys to help us negotiate with the banks and speed things along.

 

Thanks to that experience, we know what to expect for our buyers. And quite honestly, most of the time we don’t like for them to get involved, unless the short sale is at a certain point in the process. If you’re considering making an offer on a short sale, it’s very important that you speak to a Realtor first. (Which could, of course, be us.)

 

Foreclosures

Foreclosures are homes that the bank owns; the previous owner is no longer involved. These transactions typically have a 30-45 day closing time frame. Most foreclosures are listed initially for owner-occupants to make offers; only after that are they opened up to investor bids.

 

Foreclosures often need cosmetic work, such as new carpet, appliances and paint. Most of the time, they will also require more extensive work: new siding, roof, windows, etc. If you’re considering buying a particular property, you’ll usually have 7-14 days to inspect the condition and make sure you are comfortable with what you’re getting into. If you’re not, you can back out of the deal without penalty.

 

One additional thought: Many people think foreclosures are the best deals in this market. While they can be some of the better deals out there, it isn’t always the case that they are the best. What’s better? The other area where we see buyers get the most bang for the buck is with homes that have been completely renovated by the current owners. The buyer reaps the rewards of all the costly repairs and upgrades, without having to pay for them.

Home Warranties

Warranties are often offered by sellers. They provide a buyer with protection on their new home in case something goes wrong in the first year of ownership. The cost can range from $400-$600, and usually covers the plumbing, water heater, electrical system, heating and air conditioner. Some warranties also cover appliances, roofs, septic systems and swimming pools.

 

Two of the home warranties that we’ve recommended are 2-10 Home Warranty and First American Home Buyer’s Protection.

 

Remember, all policies are different; it’s important to read the fine print to make sure you understand what’s covered and what’s not.