Answers to Frequently Asked Questions
What is title insurance?Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.
What is a wood-destroying organism inspection report?
A wood-destroying organism inspection report is a written opinion by a qualified state licensed structural pest control inspector based upon what was visible and evident at the time of inspection. The inspection report does not in any way represent or guarantee the structure to be free from wood-destroying organisms or their damage, nor does it represent or guarantee that the total damage or infestation is limited to that disclosed in the report. Wood-destroying organisms include subterranean termites, dampwood termites, carpenter ants, wood boring beetles and wood decay fungus.
What are the hazards of lead-based paint?
All buyers and sellers are required by law to receive and read a pamphlet outlining the hazards of lead-based paint for homes built before 1978. Be sure to ask your real estate agent for a copy.
What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For sellers, they are usually about 9.5-10% of the total sales price of a property. Some of the closing costs you might encounter are: discount points, escrow fee, documentation fee, homeowners' association fees, pest/rot inspection, real estate commission and title insurance premium.
What is the difference between "pre-qualified" and "pre-approved"?
If a buyer is "pre-qualified" it has been determined, with a loan officer, what price the buyer can afford based on the down payment, debts and the amount the mortgage company will approve for the mortgage. Being "pre-qualified" is only a determination of probable credit. If "pre-approved", credit, employment and funds have been approved by the lender.
What should a home inspection include?
Every inspection should include, but not be limited to, an evaluation of the following: 1. Foundations
2. Roof
3. Heating and air conditioning systems
4. Ventilation
5. Common areas (for condominiums)
6. Septic tanks, wells or sewer lines*
7. Insulation
8. Plumbing and electrical systems
9. Ceiling, walls and floors
10. Doors
11. Hazardous materials concerns*
* There may be an additional fee for this.
What property details are usually included by Listing Services?
Usually, properties listed will include the following details:
• Location
• Photograph
• Price
• Utilities
• Amenities
• Annual property tax
• Current financing (when assumable)
• Listing company
What pages are generally included in the Purchase and Sales Agreement?
• Agency Disclosure
• Financing Addendum/Clause
• Earnest Money Receipt
• Inspection/Clause
• Conditions/Disclosures Addendum
• Contingency
• Addendum Outlining Special Conditions
• Lead-Base Paint Notification
• Property Disclosure Form (completed by Sellers)
What is the difference between a REALTOR® & Real Estate Agent?
REALTOR® identifies real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict Code of Ethics. Not every real estate agent is a REALTOR®. A REALTOR® may be an appraiser, property manager or involved in some other aspect of the real estate business.
Showing my house is driving me nuts. How can I stay sane?
Many sellers feel pressure to keep their homes in showcase condition for prospective buyers who come calling. While it is true that an attractive home is easier to sell, it shouldn't keep you up at night with worry.
- Start by getting rid of the clutter. Perhaps a friend or neighbor will store some of these items for you while your house is on the market. This will make it easier to straighten up the house before a buyer arrives.
- Next, create a cleaning routine. Set aside a half-hour each day to straighten and clean. Put a candle and some potpourri in a convenient place so they can be located easily and set out before each visit. Another option is to hire a cleaning service while your home is on the market.
- Discuss your concerns with your real estate professional. Tell him or her what times work best for you and concentrate on having the house in its best condition during those hours.
- Finally, remember to take some time for yourself. Letting off steam, whether by exercising or having a nice dinner with friends, will reduce your anxiety levels and help you have a better perspective.
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 martial 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 sellers market, when demand outweighs supply, than in a buyers 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.
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 your agent for advice. Discuss the pros and of each and whether certain contingencies written into the contract can ease some of the pressures.
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 $500 bonus. However, some brokers who supervise agents and run real estate offices may prohibit such incentives, as do some Realtor boards. Check to find out. Other common incentives: paying for the property inspection and warranty policy and getting your home preliminarily approved for FHA and VA loans, thereby making it more attractive to a larger number of buyers. Contact a lender who writes FHA-insured and VA-guaranteed loans.
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.
- Title insurance
- Excise tax for the sale.
- Prorated costs for your share of annual expenses, such as property taxes and homeowner association fees.
- Any other fees normally paid by sellers in your area, including points,
survey, and appraisal fees.
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.
Do I need an attorney 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.
