Whether you’re a buyer or a seller, the current real estate market presents exciting opportunities. For buyers, financing a home purchase is far less costly than it was even five or six years ago. In fact, the average interest rate for a 30-year loan is still hovering in the neighborhood of 4%. Likewise, sellers are moving their homes faster than in recent years. According to a December report from the National Association of Realtors, the median time on market for all homes was 56 days in November 2013, well below the 70 days on market in November 2012. Still, even when operating in such advantageous conditions, buying and selling a home can be an intimidating venture. To ease our reader’s fears, we sought the advice of a professional, and are happy to share what we learned.
Buying a new home is usually a more exciting prospect, but since it’s difficult to pull the trigger on a new purchase until you’ve sold your current home, we’ll start with the equally-important steps of marketing and selling your house.
First, it’s important to make a good impression. Since so many buyers are utilizing the Internet in the search for their next home, sellers should make an effort to create an appealing online listing. This can be as simple as using a decent camera to take listing photos, instead of your cell phone. Nobody gets excited about blurry pictures.
In addition to the photos accompanying your listing, it pays to take the time to draft a proper property description. According to forsalebyowner.com, “An ad should tell the buyer the necessary information they need, without giving reason to eliminate the home from consideration. The idea is to appeal to serious buyers who will be interested in finding out more about your house.” In other words, provide enough information so that potential buyers will be intrigued, but not so little that they’re not even sure what it is you’re selling. Websites like Craigslist and Zillow offer sellers the opportunity to list their house with photos and a detailed description, free of charge.
Ryan Rutman, Realtor with Remax Professional Realty Group, provides a few other helpful tips for drawing attention to your listing. “There are two types of curb appeal in real estate today. Online curb appeal and drive-by curb appeal. The internet is where over 90% of home buyers most frequently shop for homes, so the online curb appeal, which includes photos that show off the home’s best features and layout, is extremely important. Sellers literally have a few seconds to grab the attention of an online shopper and get them to click on ‘more details.’ Then, as it has always been in real estate, the exterior curb appeal of a home is very important. A well-manicured yard and maintained landscaping will speak volumes as to how the seller may or may not take care of the inside of their home. If it looks good on the outside, you dramatically increase the chances of a buyer scheduling a showing with their Realtor to see the inside.”
For sellers, it’s also important to maintain realistic expectations. According to Rutman, “It is very important to understand the process of selling, and to try their best to remove the emotion from the equation. Too often, sellers start out saying they’re not budging off their price, and they let good, qualified buyers come and go because they were unwilling to negotiate. It’s very rare for a buyer to make a full price offer. It’s human nature to want to get the best possible deal when buying anything. So sellers need to understand this, realize that it’s not personal, and be willing to keep the negotiations alive. By understanding the process and by not taking it personal, a seller will greatly increase their chances of working out a great deal with a good, qualified buyer!”
Once you’ve sold your current residence, you can shift your focus to purchasing your new home. One of the most valuable pieces of advice to consider when buying a house is to know what you can afford, and then spend less. Too often, with the lure of low interest rates and small down payments, buyers get caught in the trap of spending too much on their new home. And once you’re locked in to a 30-year loan, there’s no easy way out, even if you find that the monthly payment is stretching you thin. By following the simple rule of spending less than what you otherwise think you can afford, the rest of the home-buying process can prove to be an enjoyable and exciting experience.
On the importance of knowing how much house you can afford, Rutman adds, “There a lot of factors that go into getting approved for a mortgage, and most buyers don’t have a true handle on that part of the process until they actually sit down with a loan officer and get the facts about their situation. Knowledge is power! With a pre-approval for a mortgage, a buyer is confident in the process, laser focused on what they want. This makes it much more enjoyable for them right out of the gate!”
For buyers, it’s also important not to let your heart lead your head. Even those committed to following the financing rule above can find themselves compromising their budget when they think they’ve found “the house.” Additionally, even if the house is within your budget, make sure to thoroughly inspect the property. Many sellers, as suggested above, may do a great job of creating an appealing listing or an impressive staging, but there are always issues that sellers (either intentionally or unintentionally) fail to disclose. The best way to avoid unforeseen complications after your purchase is to employ a qualified home inspector. While many lenders require a property inspection prior to closing on a home loan, the money spent on a professional inspection can pay dividends, even when such a service is not required.
Once you’ve been preapproved, found the home you want, and are ready to make an offer, Rutman suggests “you should be prepared to make an offer, because you never know, it could sell to someone else overnight…I’ve seen it happen too often. When deciding what the opening offer should be, it’s important to have your Realtor gather as much information as possible, such as how long the house has been on the market, any previous price reductions, location of the home, condition of the home, etc. Recent sales of comparable homes are a great indicator of what a home’s estimated value will be.” Still, at the end of the day, Rutman says “sometimes you just have to go with a gut feeling that this is the perfect house and make a great effort to get the house. Don’t get too caught up in the data and just trust your instinct.”
While buying and selling a home can be stressful, and there will certainly be some bumps along the way, following these simple tips will help make the process go much smoother.