By Dana Dratch, Bankrate Real estate agents see it all -- from the unmade beds to the What were they thinking? decor. Over the years, they learn a thing or two: why some houses sell while others linger on the market. Why some promising buyers never make it to the closing table. How to get a better deal on the mortgage. Even just how much the other agents stand to make on your home. And the good news is, they want to share. Whether youre a buyer, seller or both, here are six things real estate agents wish you already knew. Post continues below 1. Want to sell quickly? Price it just under the market In todays market, sellers are again optimistic on the value and price of their homes -- But buyers arent, says Ron Phipps, principal with Warwick, R.I.-based Phipps Realty and past president of the National Association of Realtors. Your challenge as a seller is to price the house so that it is compelling, he says. What that means in dollar signs: Set a price slightly below market value, he says, just a fraction. What are homes worth near you? For example: If similar homes in your neighborhood are clustered around $210,000, you might price yours at $200,000 or $198,000, he says. What the agent wishes you knew: The longer a house is on the market, the less likely you are to get fair value, Phipps says. So you really want to position yourself to be the one that sells, not the one that languishes. And that adage of not wanting to leave any money on the table? Still valid. 10 tips to help you price your home right If youre turning around and buying a home, and you already have cash in hand, thanks to a fast sale, that puts you in a very powerful position, Phipps says. 2. The preapproval letter is just the beginning For many potential buyers, frugality ends the minute they get preapproved for a mortgage, Phipps says. Thats when they start running up the cards and opening new lines of credit to buy things for their home-to-be. Why you need a preapproval But that preapproval letter is just one of the first refreshment stations of the homebuying marathon, not the finish line. Just before closing, a lender will re-examine a prospective buyers financial situation -- complete with a recent copy of the credit history and other updated information. If those numbers have changed for the worse (salary decrease, higher card balances, new lines of credit), then the applicant could get clocked with a higher interest rate or even lose the loan. The number of buyers who get denied is significant, Phipps says. What the agent wishes you knew: Never get new loans or start using credit cards more heavily until after youve actually closed on the home. Can you get a low interest rate? Even better, retain your frugality until youve been in the home for a few months and have a good sense of how homeownership affects your finances, Phipps says. 3. Selling a house probably takes longer than you think If youre selling a home, its important to understand the timeline, says Jeffry Wiren, principal broker with Re/Max Equity Group and past president of the Portland, Ore., Metropolitan Association of Realtors. And thats something most people dont understand, he says. Underestimating the time it takes -- and building a schedule around those unrealistic expectations -- adds stress, Wiren says. Find brand-new homes for sale Instead, realize how long the process takes in the real world (not just your head) and plan accordingly. Another important factor: Different markets (and prices) move at different speeds, he says. Wirens sales schedule breakdown: Getting your home in shape: two weeks Average time on the market (varies widely with location and price): 2.5 to three months Negotiating after an offer: one week Preparing to close (assuming a traditional transaction): 30 to 45 days What the agent wishes you knew: A smart seller allows a minimum of four to six months to sell, Wiren says. And thats if you have a home thats priced right in a good market with one solid offer that makes it to the closing table. 4. Not all buyers are able to buy To prove their worthiness, sometimes prospective buyers will show a prequalification letter, Wiren says. And that means nothing. Bing: First-time-homebuyer checklist Thats because in a prequalification, lenders usually dont verify buyers information. A preapproval, on the other hand, involves third-party verification. Prequalified, that means theyve talked with a lender and said, I have good credit and I make X number of dollars a year, Wiren says. Based on that, the lender responds that the buyer can reasonably expect to borrow a certain amount -- if those self-supplied facts are accurate and there arent any negatives, he says. Most lenders dont research those details until the buyer applies for a loan, he says. What the agent wishes you knew: Serious and smart buyers are preapproved. That means theyve already applied for the loan, the bank has verified their financial information and (if the numbers remain the same until closing) it promises to loan a specific amount at a specific interest rate. Still, after an offer, smart agents will call the lender and verify that the prospective buyer is preapproved for the necessary amount, Wiren says. At the same time, that agent will verify that the lender would have no problem closing in the expected time period -- usually 30 to 45 days. 5. Yes, it really does have to smell good Sellers sometimes drag their feet on little details that make a big difference, Wiren says. He cant count the number of clients who asked, Does it really matter if we have the carpets cleaned or take the family photos off the wall? Home odors that will scare off buyers The answer is yes, Wiren says. A buyer needs to walk in and have it look good, feel good and smell good. Sellers should put themselves in the shoes of prospective buyers -- and try to see the house for the first time, he says. The home should be kept showroom-ready. Its a regular occurrence that I walk into a home with a buyer and find beds unmade and underwear on the floor, Wiren says. In spite of an appointment, I dont see a home thats ready. What the agent wishes you knew: A mess leaves an impression thats hard for a buyer to overcome, Wiren says. His checklist for a showing: Home: Clean and smelling good Temperature: Heated (or cooled) for comfort. Lights: Left on to welcome guests. Snacks or soft drinks: A nice touch. The impression you want: Warm, inviting and comfortable, Wiren says. 6. We dont make as much as you think Chances are the agent you hire to sell your house -- or find a new one -- isnt getting as big a cut of the deal as you might think, says Graham Stiles, senior vice president with Alexander Chandler Realty and HighRises. How to sell your house without an agent Six percent isnt anywhere near what were taking home, he says. In fact, its more like 1 percent to 1.5 percent, on average, he says. While the two sides will split that commission, those agents split their shares with their broker, Stiles says. What the agent wishes you knew: Unless your agent is handling both sides of the transaction, the agent is getting roughly one-quarter of the commission, Stiles says. 5 steps to picking the right sellers agent And that 6 percent commission is by no means a given in this day and age, Phipps says. Theres always a range of fees in the marketplace. Each broker sets his or her own fees independently. I spend a lot of time on the topic of commissions, Stiles says. And still, the idea that agents are getting all or even half the commission, he says, is still one of the biggest misconceptions. More from Bankrate Winter homebuyers driven by deals Compare mortgage rates in your area 5 ways to make your offer stand out
Posted on: Fri, 04 Apr 2014 01:26:52 +0000
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