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QUESTIONS

  • When is the best time to sell a home ?

    The best time to sell is when you are ready, or when you must. That is, when you have outgrown the space in your current home, or you prefer to trade down to something smaller. Perhaps your marital status has changed, which necessitates a move, or you need to relocate for a job.

    Market conditions also play a role, as do seasonal conditions. For example, your chances of getting top dollar for your home are more likely in a seller?s market, when demand outweighs supply, than in a buyer?s market.

    Local and national economic factors also may dictate when to sell. If a major employer in your area is laying off workers, it may not be a good time to put your home up for sale. People will be cautious about buying when the future seems so unpredictable or bleak.

    Most agents agree the best time to sell is in the spring. This is when the largest number of potential buyers hit the market. Your home is likely to sell faster and at a higher price, although sales begin to pick up as early as February and start to slack off in July, the slowest month for real estate transactions.

  • What should I do to prepare my home for sale?

    Next, get busy working on the home's appearance. Ramesh can help you with tips. You want to make sure it is in the best condition possible for showing to prospective buyers so that you can get top dollar. This means fixing or sprucing up any trouble spots that could deter a buyer, such as squeaky doors, a leaky roof, dirty carpet and walls, and broken windows.

    The 'curb appeal' of your home is extremely important. In fact, it is the first impression that buyers form of your property as they drive or walk up. So make sure the lawn is pristine, the grass cut, debris removed, garden beds free of weeds, and hedges trimmed.

    The trick is not to overspend on pre-sale repairs and fix-ups, especially if there are few homes on the market but many buyers competing for them. On the other hand, making such repairs may be the only way to sell your home in a down market. Again, Ramesh has tips for you.

  • What else should I know?

    Once your home is available to be shown strive to keep it in tip-top shape. This will require a lot of effort on your part, but you want buyers to feel welcomed and not turned off by unmade beds, cluttered floors, and grungy bathrooms.

    Realize, too, that your life will be temporarily inconvenienced. When Ramesh, as well as others, calls wishing to bring a buyer to see the home at the last minute or on the same day, respond favorably. Remember your goal is to get the home sold, and that can only be accomplished if people get to see it. Flexibility is the key to a quick sale.

    Plan not to be present when buyers pass through. It is awkward and unsettling for them to have the owners present. If you cannot leave, sit in the backyard. But do not attempt to have conversations with the buyer. Speak only when spoken to; be brief and polite.

    Finally, pay special attention to pets, particularly dogs. They can be intimidating. Put them on a leash and in the backyard. Better yet, when possible, take them with you. And be keen to pet odors. They can turn buyers away. Have your pets washed weekly. Have your pets help you "earn" you more money on the sale of your property by having them stay with someone else while your property is for sale.

  • Should I sell my home first or wait until I have bought another home?

    This is a tough decision, but the answer will depend on your personal situation, as well as the condition of the local housing market.

    If you put your home on the market first, you may have to scramble to find another one before settlement, which could cause you to buy a home that does not meet all your requirements. If you cannot find another home, you may need to move twice, temporarily staying with relatives or in a hotel.

    On the other hand, if you make an offer to buy first, you may be tempted to sell your existing home quickly, even at a lower price.

    The advantage of buying first is you can shop carefully for the right home and feel comfortable with your decision before putting the existing home on the market.

    On the flip side, the advantage of selling your existing home first is that it maximizes your negotiating position because you are under no pressure to sell quickly. It also eliminates the need to carry two mortgages at once.

    Talk with Ramesh for advice. Discuss the pros and of each and whether certain contingencies written into the contract can ease some of the pressures.

  • Are there tips for selling a vacant home?

    Yes. Once furniture is removed from the home, you will notice all kinds of imperfections you never paid attention to before - rips in the carpet, holes in the walls, and dinginess. In an empty house, everything stands out. What you see is what potential buyers will also see. So you may need to paint, tear up old carpet, and replace the kitchen floor.

    To get rid of the empty house feeling, leave a few pieces of furniture behind ? simple things like a lamp, chairs, and a table will do.

    Pay special attention to maintenance. Someone will need to dust and vacuum, leaves will need to be raked, and the grass cut.

    In the winter, consider having the heating system shut down and drained to save money. But keep the electricity running because lights will be needed to show the house. However, Ramesh personal experience with buyers has found that many buyers find that it's a "turn off" to step into a home that's cold.

    Watch out for that musty smell, particularly during the summer months, that settles in from having the windows sealed and locked. And beware of pests such as mice, squirrels, ants and bats.

  • How can I get a quick sale, particularly in a slow market?

    One of the most important things to consider is price. You may want to reduce the price of your home or, at the very beginning, set it at a low price that will generate more buyer interest.

    Cash is often an incentive, both for the buyer as well as the agent. You could offer the buyer a $1,000 to $2,000 decorating rebate upon closing the deal. It is also not uncommon to offer the selling agent a 1/2 %- 1%bonus.

    Other common incentives: paying for the property inspection and warranty policy and getting your home pre-appraised for lenders, thereby making it more attractive to a larger number of buyers.

  • What are some costs associated with selling my home?

    Besides the costs related to making repairs and improving the overall appearance of the home, as the seller you will also need to pay the following:

    • A real estate commission, if you use an agency to sell.
    • Advertising costs, marketing materials, and other fees if you sell the home yourself.
    • Attorney, closing, or other professional fees. These are often higher when selling the home yourself.
    • Title insurance
    • Prorated costs for your share of annual expenses, such as property taxes, utility taxes.
    To get a better handle on all costs, ask a real estate agent. Agents deal with this information daily and can give you a pretty good estimate of the closing costs you can expect to pay.

  • What are some costs associated with buying a new home?

    Basically, the costs are no different from when you purchased your existing home. They include moving expenses, loan costs, the down payment, a home inspection, and paying for home or contents insurance. New homes purchases are subject to GST. Your lender or our mortgage specialists can give you a disclosure of estimated costs when you apply to be pre-approved for a home loan.

  • Do I need a lawyer to sell a home?

    Although most sellers can handle routine real estate purchase contracts, some experts say it is a good idea to be represented by an attorney, particularly if you are selling on your own. You should choose one with expertise in real estate transactions. Before hiring someone discuss all the details of the transaction, including all legal costs you will incur. A good attorney will assist you in completing the deal swiftly and with confidence.


APPRAISALS & MARKET VALUE

  • How do you determine how much a home is worth?

    The short answer: a home is ultimately worth what is paid for it. Change answer line to: The short answer: a home is ultimately worth what an informed buyer is willing to pay.

  • Are there standard ways to determine how much a home is worth?

    Yes. A comparative market analysis and an appraisal are the two most common and reliable ways to determine a home's value.

    Your real estate agent can provide a comparative market analysis, an informal estimate of value based on the recent selling price of similar neighborhood properties. Reviewing comparable homes that have sold within the past year along with the listing, or asking, price on current homes for sale should prevent you from overpricing your home or underestimating its value.

    A certified appraiser can provide an appraisal of a home. After visiting the home to check such things as the number of rooms, improvements, size and square footage, construction quality, and the condition of the neighborhood, the appraiser then reviews recent comparable sales to determine the estimated value of the home.

    You also can check recent sales in public records, through private firms, and on the Internet to help you determine a home's potential worth. Caution: Be sure you are using relevant and timely sales comparables. A sale that took place even two months ago in a rapidly changing market can be very costly.

  • What is the difference between list price and sales price?

    The list price is your advertised price, or asking price, for a home. It is a rough estimate of what you want to complete a home sale. A good way to determine if the list price is a fair one is to look at the sales prices of similar homes that have recently sold in the area.

    The sales price is the actual amount the home sells for.

  • What about appraised value and market value?

    A certified appraiser who is trained to provide the estimated value of a home determines its appraised value. The appraised value is based on comparable sales, the condition of the property, and several other factors.

    Market value is the price the house will bring at a given point in time, once you and the buyer establish a "meeting of the minds" on price.

DISCLOSURE

  • Do I have to disclose information about my home?

    Disclosure could protect you from a lawsuit. Today, home sellers in most states must now fill out a form disclosing material facts about their homes. Material facts are details about the home's condition or legal status, as well as the age of various components.
  • What kinds of things are considered material facts?

    The following examples include details that would qualify as material facts that must be revealed by sellers about their homes:

    Damage from wood boring insects
    Mold or mildew in the home
    Leaks in the roof or foundation walls
    Amount of property taxes paid annually
    Problems with sewer or septic systems
    Age of shingles and other roof components
    A buried oil tank
    Details about any individual who claims to have an interest in the property
    Information about a structure on the property that overlaps an adjacent property
    Some things are not material facts and do not have to be disclosed. They include personal information about the seller and the seller's reason for moving.

    Among those things that may or may not be material facts: whether a death took place in the home or whether a home is considered haunted. When in doubt, it is always 'safest' to disclose and let the buyer determine if it's material or not.

  • Are agents responsible for disclosing material facts?

    They can certainly be held accountable, particularly if they had prior knowledge of a material fact or should have known about it.

    For example, if the seller has to use pans to collect water after a heavy rain, it is the agent's responsibility to question the seller about the integrity of the roof, and then relay this information to potential buyers. However, if the seller duly hides a defect from the agent for which the agent had no prior knowledge, then the agent is not accountable. Experts say agents are not home inspectors, but they are expected to use their best judgement when something appears suspicious.

NEGOTIATING

  • Any advice on negotiating?

    Be patient, know your home's worth, adopt a positive attitude, and do not let emotions, anger, pride, greed, or prejudice get in the way of negotiating the best deal.

    Your home obviously means a lot to you, but you have already made the decision to move on, so begin to think of your home as "the house" or "the condo", instead of "my home."

    When reasonable offers come along, take them seriously. You can always counter any offer made by the buyer that comes near your asking price. Do not spoil a good deal over a few hundred dollars.

  • How do I respond to a low-ball offer?

    Let Ramesh know it is too low to warrant a counteroffer and that you are willing to negotiate but only once a more reasonable offer is made. Ask Ramesh if the buyer was shown comparable market values of similar homes that have recently sold in your area; and ask if the buyer was ever properly qualified. You do not have to settle for less if you are realistic about your chances of getting more.

  • Do I have to consider contingencies made by the buyer?

    You can reject, accept, or counter any offer that is presented to you. Most offers include contingencies, which protect the buyer in case something goes wrong.

    The two most common contingencies deal with financing, which makes the sale dependent on the buyer?s ability to obtain a loan commitment from a lender within a stated time period, and an inspection, which allows the buyer to have a professional inspect the property to their satisfaction.

    There really is no reason not to consider these contingencies because they are quite reasonable and standard.

    However, think twice about a contingency that is predicated on you making expensive home repairs, such as a kitchen renovation. Now, if the roof is caving in, that is an entirely different story. You may need to spend money to replace it or lower the asking price of the home.

  • Can the seller also include contingencies in a contract?

    Yes. For example, if you decide to sell your existing home first before buying another one, you can make the sale of your home contingent on finding a replacement home. Some sellers opt for this contingency to avoid a double move, such as moving to a hotel or rental until a new home is found and made available.

    However, there is one problem with this type of contingency: it can inconvenience the buyer, particularly if his own home is in escrow. He may not be willing to wait for you to move.

    This strategy has a better chance of working when the market is relatively strong, your home is a rare find, the price and terms of the transaction are very favorable for the buyer, or the buyer is in no hurry to move.

FINANCING

  • What is a bridge loan?

    It is a short-term bank loan of the equity in the home you are selling. You may take out a bridge loan, or interim financing, to help with a knotty situation: closing on the home you are buying before you close on the property you are selling. This loan basically enables you to have a place to live after the closing on the old home.

    The key to a bridge loan is having a qualified buyer and a signed contract. Usually, the lender issuing the mortgage loan on the new home will write the interim financing as a personal note due at settlement on the property being sold.

    If, however, there is no buyer for the property you have up for sale, most lenders will place a lien on the property, thereby making that bridge loan a kind of second mortgage.

    If you have stocks or bonds or an insurance policy, you can borrow against them as well.

  • What is seller financing?

    Also known as a purchase money mortgage, it is when the seller agrees to ?lend? money to the buyer to purchase and close on the seller?s home. Usually sellers do this when money is tight, interest rates are high or when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price.

    Seller financing differs from a traditional loan because the seller does not actually give the buyer cash to complete the purchase, as does the lender. Instead, it involves issuing a credit against the purchase price of the home. The buyer executes a promissory note or trust deed in the seller's favor.

    The seller may take back a second note or finance the entire purchase if he owns the home free and clear.

    The buyer makes a sizeable down payment and agrees to pay the seller directly every month.

  • What are the benefits of seller financing?

    Seller financing is a viable option when the seller does not immediately need the entire cash equity they have accumulated in the home.

    In return for providing financial assistance to the buyer, the seller receives tax benefits, attracts a larger pool of potential buyers, generally completes the sale sooner, and gets good interest earnings.

    As for the buyer, seller financing offers less rigid qualification requirements and cost savings by eliminating nearly all loan fees.

    Fear of default often makes many sellers reluctant to take back a second note or finance the entire purchase. A thorough credit check should help to dispel many of these fears, although the mortgage also allows the seller to foreclose on the property in case of default.

    A seller may also require the buyer to carry hazard insurance on the property and include a due-on-sale clause, a provision in the mortgage note that allows the seller to demand full repayment if the borrower sells the property. Other financing, disclosure and repayment-term requirements also will need to be met.

    It is a good idea to consult an attorney when putting together this kind of transaction.

  • How does the seller determine what rate to provide?

    The interest rate on a purchase money note is negotiable, as are the other terms in a seller-financed transaction. To get an idea about what to charge, sellers can check with a lender or mortgage broker to determine current rates on mortgage loans, including second mortgages.

    Because sellers, unlike conventional lenders, do not charge loan fees or points, seller-financed costs are generally less than those associated with conventional home loans. Interest rates are generally influenced by current Treasury bill and certificate of deposit rates.

    Understandably, most sellers are not open to making a loan for a lower return than could be invested at a more profitable rate of return elsewhere. So the interest rates they charge may be higher than those on conventional loans, and the length of the loan shorter, anywhere from five to 15 years.

LEASE OPTIONS

  • What is a lease option?

    It is an agreement between a renter and a landlord in which the renter signs a lease with an option to purchase the property. The option only binds the seller; the tenant has a choice to make a purchase or not.

    Lease options are common among buyers who would like to own a home but do not have enough money for the down payment and closing costs. A lease option may also be attractive to tenants who are working to improve bad credit before approaching a lender for a home loan.

    A lease option also may be a way for the seller to move property in a slow market. Seller advantages include earning above-market rent, retaining all the property income tax deductions during the lease-option period, and attracting tenants who will care for the property as though they owed it.

  • How does a lease option work?

    A landlord agrees to give a renter an exclusive option to purchase the property. The option price is usually determined at the outset, but not always, and the agreement states when the purchase should take place ? whether, say, six months, or a year or two down the road.

    A portion of the rent is used to make the future down payment. Most lenders will accept the down payment if the rental payments exceed the market rent and a valid lease-purchase agreement is in effect.
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