Angie's LIST Guide to
Buying and selling a house

Selling a home can be a daunting task. Working with a realtor, setting up your house to sell and finishing the transaction can all be grueling parts of the process. Yet, a successful execution of the selling process can earn an exceptional return on your investment in the property. Learn how to sell in the quickest, most convenient ways.
 

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There are things homeowners can do to help their homes sell quickly. Setting the right price, staging rooms and hiring professionals can help.  (Photo courtesy of Angie's List member Joe H.)
There are things homeowners can do to help their homes sell quickly. Setting the right price, staging rooms and hiring professionals can help. (Photo courtesy of Angie's List member Joe H.)
 
 
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Setting your price

In a tough housing market, everyone is looking for a deal. Whether you’re looking to sell or buy, the experts agree that pricing is everything.

If you’re looking to sell your home quickly, it is important to think objectively and set a realistic price. It’s often difficult for sellers to detach themselves from the process when it’s their own home.

Once you have your price set, think about cosmetic improvements that increase curb appeal and fix little things, such as leaky faucets. When people are thinking about buying a house they are looking for reasons to rule it out — and little things might make them start thinking about big things that could be wrong.

If you’re thinking about larger remodeling projects to help improve your home's resale value or appeal, first assess your home and your neighborhood. Find out the typical resale price of homes in your area because you don’t want to have the most expensive house on the block. In this market, many buyers won’t pay more for updates because there are often other homes with comparable improvements and at a lower cost.

With a little research, you can see what the average sale price is for homes in your area and determine what your ceiling is for investment. If you’re in the market to buy a home, low prices and interest rates will likely hold through this year. When evaluating potential purchases, don’t underestimate the value of a quality inspection. Even multiple inspections are becoming more common.

If you're looking to buy, comparative shopping is key. In order to get the price you want, you have to arm yourself with information. Check out similar homes. Also ask yourself the following questions:

What can you afford? You may qualify for a higher amount that you actually want to pay. It’s important to not only check with a mortgage agent to get pre-approved, but to know what the payments will be at that amount. Remember to factor in homeowner’s insurance, property taxes, utility bills, moving costs, maintenance and any upgrades that you’ll need to make.

What do you want? Make a list of what you want and don’t want. Search for homes online to get some ideas. Are you looking for a small home or a home where your family can grow?

Buying or selling a house quickly

The changes in the real estate market makes it increasingly important to have your home looks its best during a showing if you are wanting to sell. Here are five ideas to help you sell more quickly:

1. Hire a home stager. Staging a home for sale used to be considered a luxury. Now, many real estate agents consider it a necessity. The best home stagers research the types of people who buy houses in your neighborhood and adjust the house to suit that demographic. If most buyers are families with kids, keep all the bedrooms as bedrooms. If more singles are looking to move in, consider staging one of the bedrooms as an office or home gym.

2. Look outside in. A buyer first sees what’s outside your house, not the inside. Freshly cut grass, manicured shrubs, swept sidewalks and a power-washed driveway look inviting; sick or dead potted plants don’t.

3. Clutter kills. Go through every room in your house and decide which belongings you’ll need in the next six months and which you won’t. Get rid of the second pile — in the trash or in storage. If you need extra help, hire a home organizer.

4. Remove personal items. Buyers want to imagine themselves living there and too many reminders of your family can make them almost feel like they’re invading someone’s home. And that’s a sales turn-off.

5. Take great photos. Nearly 90 percent of homebuyers research homes online, according to realty industry research. If you're hiring a home stager, take the photos after their work is done.

For those looking to buy, consumers now enjoy more control over the buying process. Technology had added new possibilities for consumers and it’s making the process tremendously efficient. Most of the approximately 4 million homes for sale in the country can be found online, either on national advertising sites such as Realtor.com or individual broker sites – or, most likely, as many sites as possible.

Independent websites popping up over the past few years such as Zillow and Trulia, which compile nationwide data about homes – whether they’re for sale or not – have also revised the playing field. Both sites combine public records with sales information and community tools to connect buyers, sellers and agents. Each claims to list about 75 percent of homes for sale at any given time.

Home buyers should make sure they can secure a loan in order to move on a home quickly.

There’s a lot of information involved with buying a home. If you're a first-time homebuyer, don't despair. By doing a little research of the market and your finances, you'll set the foundation for a positive experience. We consulted highly-rated real estate agents for these tips to help you out:

Check your credit. Pull your credit report and double check that the information is accurate and up-to-date. If there are any discrepancies, work with the credit reporting agency to have those cleared up before you inquire about a loan.

Are you approved? Get pre-approved for you loan before you start looking for a house. Among the items you should have: Good credit, stable employment history, a positive debt-to-income ratio and document of your assets.

Location. Know the area where the property is located. If you see a lot of foreclosure signs in yards, it could be a sign that the area is declining in value. Take a look at the home’s surroundings.

Inspect before buying. In most cases you will be able to inspect the entire property before buying. Hire a professional home inspector to inspect the entire house so you know exactly what you are getting into. Most foreclosed properties come “as is."

Do your homework. Make sure you find out if the property has any unpaid liens. If you don’t, unpaid lenders could come after you to try and collect what they are owed. Call your local building department. They can tell you if there any building permits that were never closed out.

Professions in the home buying and selling process

Property Appraiser

The purpose of an appraiser is to determine the fair market value of the home in question. While the lender will order the appraisal, it is the appraiser’s job to create an unbiased, professional opinion of the house, based on several factors. The general condition of the home will be assessed, although this is not the same as a home inspection, which will be more detailed. Some other factors that will be considered are the locale of the home, that is, the neighborhood and surrounding area, and the market value of comparable homes in the immediate area.

The resulting appraisal will help the lender determine how much they are willing to lend against the home, what type of a loan they will offer, how much of a down payment will be required, and, in many instances, what the interest rate on the home will be. You should get a copy of the appraisal; this will help you to ensure that you are not paying too much for the home. Understand that while the lender orders the appraisal, the buyer is responsible for payment, often included in the closing costs.

Most states have regulations concerning the licensing and certification of appraisers, although the requirements may vary from state to state. Most will include, however, are required amount of classroom and real experience, as well as a continuing education requirement.

Hiring a home inspector is a crucial part of the home selling and buying process. (Photo courtesy of Angie's List member Milldred E.)

Home Inspectors

On the surface, the home inspector may seem similar the appraiser, as they will also be looking at the condition of the house. However, the inspector is concerned with determining the actual physical condition of the building, including the mechanical and electrical systems and the structural integrity of the home and surrounding outbuildings.

For the mechanical inspection, the home inspector will be checking the condition and operation of the heating and air conditioning equipment. An inspection of the plumbing, both supply and drain systems, will also be performed. Structural inspections will include the condition of the roof, integrity of the framework and foundation, and may include a check for termite and water damage.

Other items the inspector will check are the condition of the electrical system, including code compliance, the condition of the interior walls, floors, windows and doors, as well as the insulation of the attic.

The inspection is initiated by the buyer and is not necessarily mandated. However, the home inspection can be a vital tool for the buyer when negotiating the final price. On pre-owned homes, the inspection may reveal defects, which can be required to be repaired before the new owner takes possession or the cost of which can often be subtracted from the asking price. Some states do not require licensing or certification for home inspectors. However, states that do will require classroom and on the job training, as well as continuing education. Many reputable inspectors belong to a professional association as well.

Real Estate Agents

Real estate agent, also called Realtors when the agent is a member of the National Association of Realtors, are licensed in their state to list properties for sellers and to help buyers find and negotiate on properties they wish to buy. A home can be bought or sold without a real estate agent; however, the agent will help the buyer to navigate the rules, regulations and laws involved in the process.

When working for the seller, a real estate agent may offer homes listed by his or her company, or may research homes offered by other real estate companies. Working with the buyers, the agent can help them find the house that best suits their needs and desires, at the price they can afford. The real estate agent representing the seller has a vested interest in the sale of the house as he or she is usually working on commission and does not get paid until the sale is made.

A real estate agent will help you prepare an initial offer on the property, based on a general assessment. Should your initial offer not be accepted, the real estate agent could continue to negotiate a price through counter offers. The agent may ask you to meet with a lender or mortgage broker to determine the amount of loan you can afford and the type or types of loans for which you qualify. Armed with this information, the real estate agent can more efficiently assist you in your home search, bypassing offers that are not feasible.

Real estate agents may work by themselves or with an agency. Many real estate agents will specialize in a particular field, such as residential properties or commercial properties. Some agents also work as property managers, usually working for clients that hold investment or rental properties.

Read more about real estate agents

Title Companies

Title companies are the legal representation in the process. They will generate an abstract of the property in question, including a title search, which will determine if the seller has the legal right to sell. They will check for any outstanding judgments or liens against the property. This includes any taxes or other charges that were unpaid by previous owners. If not discovered and resolved, the new buyer could become responsible for these charges.

They will also check what is called the chain of title. This search will reveal if there are any unknown parties with legal interest in the home. For example, if a person was party to a deed and yet never signed over their share when it was sold, they would still have a legal claim to the property. The title company will discover this and advise on how to resolve the issue.

Generating the abstract can be complicated and will involve a lot of legal work; therefore, most title companies, also called abstract companies, are associated with or a part of a legal firm. Title companies are vital to ensuring that the new homeowner is protected from legal trouble that may arise later on, after the sale.

Read more about title companies

Mortgage Companies

Finally, we come to the mortgage company. In reality, there are three types of mortgage companies: the mortgage broker, the mortgage banker and the direct lender. While they may look the same to the buyer, there are distinct differences in how they operate and handle the loan. A major difference is where the mortgage funds actually generated. Let’s look at the mortgage broker first.

The mortgage broker does not actually have any money for loan funding. Rather, when they take the application for the loan from the buyer, they “shop around” to find a mortgage banker or direct lender, acting as an intermediary. Guidelines are made by the banker or lender, setting requirements for the loan. When a suitable banker or lender is found, the broker makes an offer to them.

Because the broker is not involved with the loan funding, they make their money on commissions in the form of points and origination fees. Once the deal is closed, the mortgage broker is no longer involved. All payments are sent to the actual lender, who will service the loan.

The mortgage banker operates in a different manner. The banker provides the loan funding, usually through a line of credit provided by a direct lender. The direct lender has certain guidelines set forth for the banker to use in determining applicant qualification. The mortgage loan is closed under the mortgage bankers name; however, the loan is then transferred to the direct lender, usually before the first payment is made.

Their profit comes from points charged to the consumer. Points, sometimes called “discount points,” are upfront monies paid by the borrower to lower the interest rate and/or monthly payments. Points can be a bit of a gamble, with the greatest benefit to the borrower occurring if they intend to stay in the home for a long term or for the life of the loan. Bankers may also profit from origination fees on the loan.

Finally, we come to the direct lender. The direct lender has its own money and creates the guidelines for borrower acceptance. The direct lender is usually a large institution with billions of dollars in assets. They may specialize in a particular type of loan, such as commercial or consumer loans. While they often deal through brokers and bankers, they can deal directly with the consumer as well.

Once closed, the terms of a loan cannot be changed, regardless of who ends up owning the loan, except through refinancing. However, it is quite common for a loan to be sold or transferred to another lender several times during the life of the loan.

Read more about mortgage lenders

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