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BUYING TIPS
Buying Real Estate
The process of buying a home or investment generally starts with determining your buying power; that is, your financial reserves plus your borrowing capacity. If you give a real estate agent some basic information about your available savings, income and current debt, they can refer you to lenders best qualified to help you. Most lenders, banks, and mortgage companies offer limited choices.
The Right Agent Makes All The Difference
Once you know how much you can and want to invest, the next step is to find the properties that most nearly fit your needs. This is the time to choose a real estate licensee. When picking a real estate agent look for one who is also a REALTOR®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS®, a real estate trade association, and all members agree to abide by a 17 article Code of Ethics. A REALTOR® has many resources to assist you in that search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
Selecting The Perfect Property
Your job is to make the final selection of the right property for you. This is when excitement and emotion run high. Your real estate agent can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
Negotiating
There are a myriad of negotiating factors, including, but not limited to price, financing, terms, date of possession, and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should also provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
Due Diligence
With a negotiated agreement in hand, it is time to complete the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your agent can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your agent, title company or attorney can help you resolve issues that might cause problems at a later date.
Financing
As soon as you are reasonably sure the property is right for you, the process of obtaining financing begins. Your agent can help you in understanding different financing options and in identifying qualified lenders.
Closing or Settlement
Finally, there is the closing, or settlement, as it is known in different parts of the country. Every area has its own unique customs. In some areas, the title or escrow company will handle this process. In other parts of the country, an attorney does it all. Again, your real estate agent can guide you through this process and make sure everything flows together smoothly.
SELLING TIPS
Getting the House Ready to Sell
Disconnect Your Emotions
When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.
You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.
Exclusive Right to Sell
Giving a real estate agent the "exclusive right to sell" your property does not mean that there will not be other agents involved. Your agent is the listing agent and the most important part of his or her job is to market your home to other agents who work with buyers. Those agents will show your home to their clients. Regardless of who sells the home, even if you sell it yourself to a friend at work, your listing agent will earn a commission.
If you want full service from an an agent and his or her company, this is probably the only type of listing they will accept. Full service means an agent will advertise your home, place it in the Multiple Listing Service, market the home to other agents, and perhaps even hold open houses. This requires an expenditure of both time and money.
Only with an "exclusive right to sell" does an agent have a realistic expectation of earning anything on their investment in selling your home. That is why it is the most common type of listing.
Of course, the agent and their company still have to perform in order to get paid -- your home has to sell.
copyright 2000 by Terry Light and RealEstate ABC, revised 2002
The Listing Agent - Preliminary Marketing of Your Home
The "Real" Role of a Listing Agent
When you bought your home, you probably used the services of a real estate agent. You found that agent through a referral from a friend or family member, or through some sort of advertising or marketing. The agent helped you in many ways and eventually you found the house of your dreams, made an offer, closed the deal, and moved in.
For whatever reason, now it is time to sell your home and you need a real estate agent again. Many home sellers, especially those selling their first home, tend to think all agents are similar to the one that helped them buy their home.
Although real estate agents can (and do) work with both buyers and sellers, most tend to concentrate more on one than the other. They specialize. When you bought your home, you probably worked with a "selling agent" – an agent that works mostly with buyers. Because of the nature of real estate advertising and marketing, the public’s main image of the real estate profession is that of the selling agent (buyer's agent).
As a result, many homeowners expect their listing agent to do the same things that a selling agent does – find someone to buy their home. After all, they do the things you would expect if they were searching for buyers. A sign goes up in the front yard. Ads are placed in the local newspaper and real estate magazines. Your agent holds an open house on the weekend. Your house is proudly displayed on the Internet.
But this is only "surface" marketing. More important activity occurs behind the scenes. After the "for sale" sign goes up and flyers are printed, your agent’s main job is to market your home to agents not homebuyers.
The Listing Agent - Marketing Your Home to Other Agents
The Multiple Listing Service
Even before the sign is up and the brochures are ready, your agent should list your property with the local MLS (Multiple Listing Service). The MLS is a database of all the homes listed by local real estate agents who are members of the service, which is practically all of the local agents.
Important information about your property is listed here, from general data such as square footage and number of rooms, to such details as whether you have central air conditioning or hard wood flooring. There should also be a photo, and a short verbal description of what makes your house "special."
Agents search the database for homes that fit the price range and needs of their clients. They pay special attention to homes that have been recently placed on the market, which is one reason you get a lot of attention when your house is first listed. Many agents will want to preview the home before they show it to their clients.
The main point about having your house listed in the MLS is that you expand your sales force by the number of local MLS members. Instead of having just one agent working for you, now you may have hundreds or more, depending on the size of your community.
The listing agent’s main job to make sure that the other MLS members know about your house. This is accomplished through listing your house in the Multiple Listing Service, broker previews and advertising targeted toward other agents, not homebuyers.
copyright 2000 by Terry Light and RealEstate ABC, revised 2002
TOP NOTCH HOMES
Buyers pay a premium for a home that is in top-notch, move-in condition, so once you decided to sell, make sure the home is ready to be sold.. First, you have to figure out what needs to be done to your home. A thorough property inspection up front will help to identify problem areas. Having the property inspection done and all the corrections taken care of before you get offers also shows the buyers that you are conscientious homeowners. This will relieve some of their anxiety about buying a home.
Also, any buyer will have a property inspection done before closing the sale. Often, this is when they will re-negotiate the price because of any problems that may turn up in the inspection. Having your own inspection done and making all necessary repairs first removes this opportunity for the buyer to try and re-negotiate.
Properties in prime condition are a pleasure for real estate agents to show, so they get shown more often. The more exposure a property gets, the better the chance of selling it quicker and for a higher price.
Use the following checklist as your guide to preparing your home for sale.
Spruce Up the Outside
Paint: Few things you will enhance the salability of your house quite as much as painting the outside. Before painting, scrape or water-blast any blistered or peeling paint: repair gutters and down spouts; and replace wood showing dry rot. Pay special attention to wood, trim, gutters, and wrought iron.
Front Entry: Give special care to this area. First impressions do make a difference! All woodwork should be freshly and neatly painted, including the door if necessary. Replace badly worn or broken doorbells. Polish any door brass. Paint or replace an unsightly mailbox. Put out a new or clean doormat.
Yard: Mow and trim the lawn. Weed flower beds; remove or replace dead plants or trees. Water regularly during the growing season. With desert landscaping, make sure that no underlying plastic is exposed, that rocks and sand are tidy, and that weeds and unwanted grass are removed.
Driveway, Garage/Carport: Clean up grease or oil spots; remove the soil at least, if not the stains. See that the garage door opens freely, and if you have an automatic door opener, make sure it's in good working order.
Air Conditioners: Paint or replace any rusted exposed metal. Correct improper draining.
Patio: A nice spread of outdoor furniture looks very appealing. If necessary, borrow some from a friend to enhance the "showability" of your property.
Swimming pool: Adjust chemicals until the pool sparkles. Hose dust and cobwebs from filtration equipment. Store chemicals and tools neatly. Keep pool area tidy and secure.
Look at the Basics
Windows: Repair or replace torn or bent screens. As a last resort, remove them entirely; it's better to have no screens than to have unsightly ones. Replace any cracked or broken panes. Also, notice unsightly foliage near windows. A window framed in ivy can give a warm, homey feeling, but cut it back if the foliage is restricting the light coming into the rooms. Drapery rods should be affixed firmly to walls and work smoothly; draperies should be clean and hang properly.
Doors: Check to see that all doors open and close freely, including closet doors and patio or sliding glass doors. Oil any squeaky doors. Tighten the hardware, particularly doorknobs. And while you're at it, tighten hardware on kitchen and bathroom cabinets, too.
Walls: As with the exterior, painting indoors will pay dividends out of all proportion to the time and effort spent. Wallpaper should be clean and adhere smoothly to walls.
Floors: Repair or replace missing or damaged pieces of tile; polish if needed. Repair of a loose stair tread plate or loose carpeting on a stairway is a top priority.
Carpet: Steam cleaning is the best answer for soiled carpets, especially when shampooing isn't enough. If pet odors are present, clean the carpet some time before your home is placed on the market to be sure the odors have been eliminated.
Check the Mechanicals
Lights: Every light socket in and around the house should have a good bulb of adequate wattage. Don't overlook those outside and in the garage. Also remember the utility room, halls, closets, over the kitchen sink, and in the oven and exhaust hood.
Switches and Fixtures: Repair or replace wall switches, outlets, and light fixtures that don't work. Replace any broken switch plates.
Appliances: Those that will be sold with the home should be in good working condition. If specific equipment doesn't work and you don't intend to repair it, point this out.
Plumbing: Badly chipped or irreversibly stained sinks and tubs should be re-enameled, patched, or replaced. Leaky or noisy toilets should be fixed, as well as any dripping faucets.
Sprinkler Systems: These should be working properly with no defective heads.
Go for the Spacious Look
One of the best and least expensive ways to improve the "showability" of your home is to open up as much space as possible. Openness stimulates positive feelings in buyers. Overstuffed rooms or closets give the impression of being smaller than they really are. You can't change the size of what you have, but you can try to present it in a pleasing way.
Closets and Storage Areas: One of the most frequently voiced requirements of buyers is for more closet and storage space. Open up your storage areas by removing items you aren't using.
Counters and Cabinets: The same principle used for closets applies here: overcrowding gives the impression of inadequacy. This applies to bathrooms and kitchens with the kitchen being most important. Store infrequently used appliances.
Garage: Buyers will pay a premium for a garage if they can visualize it being of value to them, but it's hard to sell when the garage is filled to overflowing. If your garage has become a two-car attic, move the excess to a mini-warehouse.
Housekeeping Hints
Bathrooms: Few places in the home can get so dirty so fast, and yet few things will "unsell" a house as fast as dirty bathrooms. Vanity, sink, faucet hardware, and mirror are the focal points. But don't forget other potential problems: soap residue in a shower, a moldy shower curtain, accumulated dirt in the track of a sliding shower door, soiled or missing grout, soiled toilet bowls, and dirty or battered bath mats.
Kitchen: Most buyers will inspect the kitchen carefully, so time invested here is well spent. Clean the stove inside and out. Replace badly stained or corroded reflector plates under the heating elements on electronic range tops. Don't neglect the kitchen exhaust hood; buyers frequently check this area as a clue to general housekeeping.
Windows: Clean windows are an absolute necessity if a house is to look its best. Weather permitting, open windows to let in fresh air.
Water Heater and Softener: Perhaps because it's so unusual, a sparkling clean water heater or water softener really impresses buyers: and it takes so little time and effort.
All this may seem like a lot of work, and it is, but it means a quicker sale with less hassle and more money in your pocket. Not to mention the pleasure you and your family will receive from living in a well-kept home.
Why A Realtor?
Can a real estate agent really help me in buying and selling property? The answer is YES!
When you're ready to think about buying or selling your property, you need to ask yourself the following questions:
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Do you have the time, energy, sources of information, and contacts to do the job yourself?
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If you were one of the 'do-it-yourself' people, would the results be as good or better than they would be if you had professional assistance?
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Would it have gone smoother?
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Would it have given you more personal time?
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Would you have purchased for less, or sold for more, if a real estate agent was involved?
Read the following information and learn how a real estate agent can help you understand everything you need to know about a real estate transaction.
Pricing
This process generally begins with a determination of a reasonable asking price. Your real estate agent can give you up-to-date information on what is happening in the marketplace and the price, financing, terms, and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
Marketing
The next step is a marketing plan. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your agent acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
Advertising is part of marketing. The choice of media and frequency of advertising depends a lot on the property and specific market. For example, in some areas, newspaper advertising generates phone calls to the real estate office but statistically has minimum effectiveness in selling a specific property. Overexposure of a property in any media may give a buyer the impression the property is distressed or the seller is desperate. Your real estate agent will know when, where and how to advertise your property.
There is a misconception that advertising sells real estate. The National Association of REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends and family, and personal contacts.
Security
When the property is marketed with the agent help, you do not have to allow strangers into your home. Agents will generally pre-screen and accompany qualified prospects through your property.
Negotiating
The negotiation process deals with much the same issues for both buyers and sellers, as noted above under the buying process. Your agent can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections, and financing -- a lot of possible pitfalls. Your agent can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
Monitoring, Renegotiating, & Closing
Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your agent is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
How Do Real Estate Agents Get Paid?
Real estate agents or brokers are generally paid through the sales commission paid by the seller when a transaction closes. Agents have expenses and financial obligations just like you, so it will be to your mutual benefit if you choose a real estate agent and stick with that person. The agent will respect your loyalty and respond with a sincere commitment to you.
Why a Realtor®?
All real estate licensees are not the same. Only real estate licensees who are members of the National Association of REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Ron Schmeadick, CRB Co-Owner and Associate Broker, Realty Executives, Eugene, Oregon
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