The main role of a real estate agent is to help clients buy, sell, and rent real estate. This includes
residential and commercial property, along with land. Of course, this is just a very basic answer to this
question.
Real estate agents play a very important role when you need to buy, sell, or rent a property. They have licensed professionals with the necessary training and supervision to guide you through any type of real
estate transaction. Agents work under the supervision of a real estate broker.
While an agent will have different duties to perform when working with a buyer compared to a seller,
the general duties will remain pretty similar. Some of the tasks real estate agents will perform for you
include:
1) Answering phone calls and responding to emails.
2) Scheduling showings and appointments
3) Creating and updating property listings
4) Performing a real estate market analysis
5) Keeping up with the market trends, best practices, and other real estate news, especially on a local level
6) Take care of all marketing tasks for the property for sale or rent
There are many things a real estate agent will do for a client, based on the type of transaction and the needs of the client.
Benefits of Hiring a Real Estate Agent:
If it’s time for you to buy, sell, or rent a property, hiring a real estate agent offers several benefits. You will have a licensed and qualified person to guide you through the process. Plus, real estate agents have industry and community connections to help you.
One of the biggest benefits you will gain when you hire a real estate agent is their local expertise. A good agent will understand the local market and trends. They will know how to properly price your property and negotiate a fair deal for you.
Most sources will tell you the average real estate commission is about 6% of the final sales price of the property. This is a standard percentage, but the percentage you pay might be a bit lower or a bit higher. Typically, the range will go from about 4.5% to around 6.33%.
The real estate commission is often split between the buyer’s agent and the seller’s agent. This split will go even further as each agent will likely have a split they have negotiated with their broker.
When you pay a real estate commission, you’re not just paying for a licensed professional. Your agent will work very hard for you and do many things to earn their commission. From analyzing the market and conducting comparative sales analysis to handling the marketing for a property, agents will take care of all the necessary tasks to get your property sold or to help you find the right property to buy.
Hiring an Agent Means a Higher Sales Price:
While the real estate commission can be seen as an expensive fee, for most sellers, it’s well worth the cost. A good real estate agent will sell your home for more money compared to the For Sale By Owner route.
It’s also common for an agent to be able to sell your property much faster. Good agents use excellent marketing methods to ensure more potential buyers see the property. This can lead to a bidding war or a multiple-offer situation.
Hiring a real estate agent and paying the commission, as a seller, will also take a lot of tasks off your plate. There are many moving parts to a real estate transaction and a good agent will know how to navigate the entire process with ease.
If you’re a buyer, hiring a real estate agent makes perfect sense. Most buyers will not have to pay any real estate commissions. It’s usually covered by the seller.
Most real estate agents are paid by commissions. They don’t earn a salary or an hourly wage. Some real estate agents do get paid a fee for listings. This type of agent is often called a flat-fee real estate agent. Flat-fee agents are rather rare.
When a real estate transaction happens, there is a commission paid, usually by the seller. This commission will be split four ways between the buyer’s agent, the seller’s agent, and both the brokers for the agents. The actual commission split will depend on the agreements between the agents and the sponsoring brokers.
How the Commission for Real Estate Agents Works:
When a real estate agent lists a property for a seller, the seller will sign a listing agreement. This is a contract that will provide the details of the listing, including the commission, which might be called the broker’s compensation. The commission is always negotiable based on federal antitrust laws.
Most real estate transactions will include a commission between 5% and 6% of the final sale price. This can fluctuate a bit based on the market conditions and the agreement made between the broker and the seller.
While the seller will pay the commission, it’s often factored into the asking price, which means, the buyer indirectly pays the commission through a higher purchase price.
Both agents involved in a real estate transaction already have agreements with their sponsoring brokers. In some cases, the commission is a 50/50 split with the broker, but this split can vary quite a bit.
Once the real estate transaction has closed, the commission will be paid. If the final sales price was $300,000 and the commission rate was 6%, the total commission paid will be $18,000. This will be split 50% for the buyer’s agent/broker and 50% for the seller’s agent/broker, or $9,000 each.
From there, the commission will be split between the agent and the sponsoring broker. It might be a 60/40 split giving the agent a $5,400 commission and the broker a $3,600 commission.
When you’re ready to buy or sell a home, you want to hire the right real estate agent. Finding a good real estate agent isn’t always an easy thing. However, there are a few things you can do to make it easier to find the best agent for you.
One of the best ways to make sure you have a great real estate agent is to get a referral from someone you know. Many people find their real estate agent by talking to friends, family, colleagues, and neighbors that have worked with an agent recently. Of course, you can also talk to your social media connections to help.
It’s also very common to find your real estate agent online. However, you want to make sure you do plenty of research when you start looking online. There are many real estate agents to choose from and you need to make sure you get a good one.
As you do your research, you will want to look at any reviews about the agent. There are many websites that feature reviews about the many real estate agents you can choose from. Make sure you do your due diligence before you hire any agent to help you buy or sell a home.
A Few Tips to Help You Find a Good Real Estate Agent:
1. Define Good:
The word “good” when used in front of “real estate agent” can mean different things to different people. You might be looking for an agent that is the best possible negotiator and you don’t really care how nice they are during the process. Someone else might care more about how well they get along with their agent.
Take the time to figure out what “good” means to you before you start looking for a good real estate agent for you.
2. Check Their License:
It’s important to make sure the real estate agent you hire has an up-to-date license. If they don’t, you want to move on. Just go to the real estate department website for your state and you can check the status of the license.
3. Consider the Certifications
If you have a unique type of property or you’re looking for a specific type of home, the certifications of your real estate agent become rather important. Some agents have taken extra courses and have met specific parameters to become certified. You might find an agent certified in military relocation or as a buyer’s agent.
Use these tips and make sure you do your research when trying to choose a good real estate agent.
One of the best ways to know if you have a reputable real estate agent is through good research. The online world can tell you quite a bit about an agent. Of course, it’s smart to start by verifying if your agent has an up-to-date real estate license.
Once you have verified the license, it’s time to move on to further research. Just because a real estate agent keeps their license up-to-date doesn’t mean they are reputable. Most real estate agents will be reputable, but you do want to be on the lookout for a scam or just an agent with a bad reputation.
Read Online Reviews:
It can be a sign of a not-so-good real estate agent if the online reviews are not very good, or there aren’t very many. Make sure you read reviews on multiple websites to ensure you get a good sense of what others think about your agent.
A real estate agent with a solid reputation will have plenty of good online reviews. Whether you find reviews on Google, Facebook, Zillow, or another website, you can gain trust and get a sense of the agent through reading reviews.
Look at Certifications:
It can be helpful to look at the certifications of a real estate agent, too. Most agents that aren’t very reputable won’t go the extra mile to gain certifications. If an agent is certified in a specific area, it can be a good sign.
Check Their Listings:
Good real estate agents tend to have plenty of good listings. Of course, this might not be the case with an agent that works only with buyers. However, if you are looking for an agent to list your property, you can certainly check their listings to make sure they are reputable.
Meet the Agent in Person:
If an agent doesn’t want to meet in person, it’s likely not someone you want to work with. An in-person meeting can make it easier to get a better sense of whether they are a reputable agent or not. Plus, it will help you use your gut to make a better decision about whom to hire for your real estate transaction.
There are many good reasons to hire a licensed real estate agent when buying or selling a property. If you’re selling, an agent can help you sell your home faster and for a higher price, compared to trying to do it yourself. Buyers will gain a master negotiator to help them navigate the process of buying a home.
Top Reasons to Hire a Licensed Real Estate Agent:
1. Expert Negotiator:
Whether you’re buying or selling, you need an expert negotiator on your side. There are plenty of things to negotiate throughout a real estate transaction. Your agent will act as your expert negotiator.
2. Price Expertise:
A good real estate agent will know how to set the right price when you need to sell. They will also know what the fair market value is of a property when you need to sell it.
3. Understanding of the Legalese:
A licensed real estate agent has gone through education and training to understand the legalese. When an agent gets their license, they must pass specific national and state exams. You will benefit from this as you will have an expert to help you navigate the legal side of buying or selling a process.
4. A Personal House-Hunter:
Sure, you can look online for a home you want to buy, but a licensed real estate agent knows how to find the right home for you. They often have a network they can use to help find homes you might not be able to easily find online, too.
5. An Objective Party:
With a licensed real estate agent, you get an objective party that will tell you the truth. This can be very helpful when selling your home, as you might have an emotional attachment that makes it harder for you to sell your home.
There are many good reasons to hire a licensed real estate agent. With the right agent, your property can be sold faster and for a higher price. As a buyer, you’ll have an expert to guide you through finding and buying the right home.
When you hire a good real estate agent, you should expect plenty of help during the home buying or
selling process. Your agent is the expert you get to lean on throughout the process. They can offer
advice, guidance, and so much more. Let’s look at a list of some of the things you should always expect
from your real estate agent.
Top 5 Things to Expect When Hiring a Real Estate Agent
Honesty:
Very few things are as important as honesty when you’re trying to buy or sell a home. You should expect
honesty from any good real estate agent you hire.
Excellent Communication:
A good real estate agent will communicate with you the way you prefer and do it very well. They won’t
leave you hanging very long and they will respond to emails, phone calls, and text messages as soon as
they can. Frequent communication, especially when it’s time to make an offer on a home, should be
expected from your real estate agent.
Professionalism:
Any good real estate agent will be a true professional. They will dress the part, walk the walk, and talk
the talk. You will know you are in good hands because the agent will be a true professional that shows
up on time, likely a bit early, for meetings.
Local Real Estate Knowledge:
You cannot expect your real estate agent to know every market across the country, but they should
know your local market very well. The knowledge of your local real estate market that your agent has
should be extensive. Expect that your real estate agent will understand market values and what types of
homes are selling well in the current local market you’re working in.
Excellent Negotiation Skills:
One of the main reasons you hire a real estate agent is to have someone that will go to bat for you. A
good real estate agent should be a top-notch negotiator. You should expect they will work hard to get
you the best possible deal, whether you’re selling or buying.
estate agents?
When you need to buy a home, you might want to be aware of some of the common mistakes you could
make. Awareness of these mistakes can help you avoid making them. While not hiring a real estate
agent is probably the biggest mistake any buyer can make, there are some common mistakes you might
make when working with a real estate agent.
3 Common Mistakes Made by Buyers When Working with Real Estate Agents:
Not Getting Pre-Approved First:
Many agents won’t work with you unless you have already gotten pre-approved. They might meet with
you, but you might not get to schedule showing appointments until the agent knows you can obtain
financing.
Before you start shopping for a home or interviewing real estate agents, it’s smart to get pre-approved.
This makes it much easier for a real estate agent to help you find the right home and submit a strong
offer.
Not Taking the Advice of Your Agent:
Most of the time, your real estate agent knows better than you do. When you’re trying to buy a home, if
you think the offer should be for a lower amount than your real estate agent, there’s probably a reason
your agent doesn’t want to go that low.
You hired an agent to have an expert by your side to walk you through the home-buying process. Let
them do their job and take their advice into consideration throughout the process. While you don’t
always have to do as your agent advises, it’s smart to understand why they are giving you specific
advice.
Showing Up Late Consistently:
While some agents might not be as bothered as others, a real estate agent’s time is valuable. Agents
that work with buyers don’t get paid until they find you a home and the commission will likely be paid in
full by the seller. This doesn’t mean you can show up late to every appointment.
Not only can this be annoying to your agent, but it can throw off their entire schedule. It can also cause
those at the meeting to hurry through important information because they lost valuable time. Be on
time to meetings and you will have a better buying experience.
estate agents?
When you hire a real estate agent to sell your home for you, there are some things you don’t want to
do. Making specific mistakes with your real estate agent can cost you time and money. Let’s look at a
few of the common mistakes made by sellers when working with real estate agents.
3 Common Seller Mistakes Made When Working with Real Estate Agents:
Not Taking the Agent’s List Price Advice:
One of the biggest mistakes any seller can make is pricing their home too high or too low. If you take the
time to interview real estate agents and you choose the one you trust, you should trust the list price
they recommend.
When you think you can always reduce the price, if needed, you might just be setting yourself up for
disappointment. Pricing your home too high will likely make it hard to attract interested buyers.
However, a price set too low might make buyers wonder what is wrong with the property.
Not Taking Curb Appeal Advice:
Your agent can help ensure you have great curb appeal, but you have to listen to the advice they
provide. While you don’t have to do everything recommended by your agent, if they give you a short list
of things that will boost your curb appeal, listen.
Curb appeal doesn’t just show up when buyers show up to the home. It will show up in the listing
pictures, too.
Hiring an Agent Providing False Promises:
Listing your home for sale is a huge deal. It’s something you want to do right and with the right real
estate agent. If you interview three or four agents and one of them is promising to sell your home for a
much higher price than the others, it might be a false promise.
It’s important to hire a real estate agent with a proven track record. Look at the online reviews and you’ll
be able to figure out if you have an agent that will price your home correctly or one that wants to
promise you the world, but cannot deliver.
Red Flag #1 – Little or No Experience with Your Type of Property
This real estate agent red flag doesn’t make an agent bad, but they are not the right fit for you. When
you have a historical property, for example, you need an agent that understands how to deal with this
type of real estate. Make sure you choose the right agent that has plenty of experience in the type of
property you are looking to buy or sell.
Red Flag #2 – Super Salesy
You should never feel like you are being pressured by your real estate agent. If you feel pressured into
buying a specific home or doing something specific with your listing, it can be a red flag. Agents are
supposed to have your best interest in mind and not be consistently worrying about making a
commission off the deal.
Red Flag #3 – Slow or No Follow-Up
You might notice, early in the process of finding a real estate agent, that some agents simply are not
great at following up with you. When an agent is slow to follow up or simply doesn’t follow up, it’s an
agent you want to avoid. You need someone that is on it and has good communication skills.
These are three of the most common red flags to look for when searching for the right real estate agent.
It’s important to have an agent with a good reputation that also matches well with what you need.
When you list your property for sale or you need to buy a home, you want to make sure you know how
to work with your real estate agent effectively. Here are a few tips to help make it easier to work with
your real estate agent.
Top 4 Tips for Working with Your Real Estate Agent
Be Clear About Your Expectations
Real estate agents cannot read your mind, so don’t make them have to try. It’s best to be clear about
what you expect when buying or selling a house. Speak with your agent about how you prefer
communications to go, your goals, your timeframe, and everything that is important.
Go Over Your Must-Haves with Your Agent
When you’re buying a home, you want to go over your must-haves for the home you’re looking for. This
helps your agent narrow the search and find what you’re looking for much easier. It’s also smart to
speak with your agent about your neighborhood preferences.
Speak with Your Agent About Open Houses and Showings
If you are selling a home, setting expectations for open houses and showings with your agent is
important. They can give you an idea of what to expect and you can speak with them about what to
expect from an open house or showing.
Be Upfront About Your Budget
When you’re buying a home, you want to be upfront about the budget you are working with. Getting
pre-approved is important, but you should make sure your agent knows your actual budget, too.
These four tips will help you work more effectively with your real estate agent when you plan to buy or
sell a home.
When it comes to buying and selling homes, a real estate agent’s commission is pretty straightforward.
Maybe you’re wondering what the charge is when a real estate agent handles your rental property. Let’s
look at what this will cost and how pays the commission.
Real Estate Agent Commission for a Rental Property
The amount a real estate agent makes from a rental property can vary quite a bit. It depends on if they
are also the property manager or just the agent for the property. Typically, a real estate agent will
charge anywhere from 25% to 100% of one full month’s rent for leasing a home for you.
This means if the monthly rent for the home is $2,000, the agent will charge anywhere from $500 to
$2,000 to get the property leased for you. However, if the agent is also the property manager, they will
take about 8% of the monthly rent each month as a management fee.
In some cases, the agent might be splitting the commission with another agent. If they are the listing
agent and there is also a tenant agent, the commission might be split between the two agents for the
property.
Who Pays the Commission on a Rental Property?
The commission on a rental property will most likely be paid by the landlord to the listing agent. If there
is a tenant agent involved, the listing agent will be responsible for paying the tenant agent. If you are
looking for a rental home, you will not need to pay a commission to an agent for help.
While the commission is most often going to be paid by the landlord directly to the listing agent, this can
vary based on the contract. In some cases, the first month’s rent check will be made out to the listing
agent instead of the landlord or property manager. In other cases, it might be an upfront payment made
when the contract is signed.
While not every red flag means a real estate agent is a bad agent, you want to be aware of some of the red flags to look for. Some may simply mean the agent is a poor fit for you. However, other red flags can mean you are dealing with an agent you want to avoid.
Red Flag #1 – Little or No Experience with Your Type of Property
This real estate agent red flag doesn’t make an agent bad, but they are not the right fit for you. When you have a historical property, for example, you need an agent that understands how to deal with this type of real estate. Make sure you choose the right agent that has plenty of experience in the type of property you are looking to buy or sell.
Red Flag #2 – Super Salesy
You should never feel like you are being pressured by your real estate agent. If you feel pressured into buying a specific home or doing something specific with your listing, it can be a red flag. Agents are supposed to have your best interest in mind and not be consistently worrying about making a commission off the deal.
Red Flag #3 – Slow or No Follow-Up
You might notice, early in the process of finding a real estate agent, that some agents simply are not great at following up with you. When an agent is slow to follow up or simply doesn’t follow up, it’s an agent you want to avoid. You need someone that is on it and has good communication skills.
These are three of the most common red flags to look for when searching for the right real estate agent. It’s important to have an agent with a good reputation that also matches well with what you need.
When you list your property for sale or you need to buy a home, you want to make sure you know how to work with your real estate agent effectively. Here are a few tips to help make it easier to work with your real estate agent.
Top 4 Tips for Working with Your Real Estate Agent
1. Be Clear About Your Expectations
Real estate agents cannot read your mind, so don’t make them have to try. It’s best to be clear about what you expect when buying or selling a house. Speak with your agent about how you prefer communications to go, your goals, your timeframe, and everything that is important.
2. Go Over Your Must-Haves with Your Agent
When you’re buying a home, you want to go over your must-haves for the home you’re looking for. This helps your agent narrow the search and find what you’re looking for much easier. It’s also smart to speak with your agent about your neighborhood preferences.
3. Speak with Your Agent About Open Houses and Showings
If you are selling a home, setting expectations for open houses and showings with your agent is important. They can give you an idea of what to expect and you can speak with them about what to expect from an open house or showing.
4. Be Upfront About Your Budget
When you’re buying a home, you want to be upfront about the budget you are working with. Getting pre-approved is important, but you should make sure your agent knows your actual budget, too.
These four tips will help you work more effectively with your real estate agent when you plan to buy or sell a home.
When it comes to buying and selling homes, a real estate agent’s commission is pretty straightforward. Maybe you’re wondering what the charge is when a real estate agent handles your rental property. Let’s look at what this will cost and how pays the commission.
Real Estate Agent Commission for a Rental Property
The amount a real estate agent makes from a rental property can vary quite a bit. It depends on if they are also the property manager or just the agent for the property. Typically, a real estate agent will charge anywhere from 25% to 100% of one full month’s rent for leasing a home for you.
This means if the monthly rent for the home is $2,000, the agent will charge anywhere from $500 to $2,000 to get the property leased for you. However, if the agent is also the property manager, they will take about 8% of the monthly rent each month as a management fee.
In some cases, the agent might be splitting the commission with another agent. If they are the listing agent and there is also a tenant agent, the commission might be split between the two agents for the property.
Who Pays the Commission on a Rental Property?
The commission on a rental property will most likely be paid by the landlord to the listing agent. If there is a tenant agent involved, the listing agent will be responsible for paying the tenant agent. If you are looking for a rental home, you will not need to pay a commission to an agent for help.
While the commission is most often going to be paid by the landlord directly to the listing agent, this can vary based on the contract. In some cases, the first month’s rent check will be made out to the listing agent instead of the landlord or property manager. In other cases, it might be an upfront payment made when the contract is signed.
The steps to buy a home in Virginia are pretty straightforward. If you’re a first-time homebuyer, you will want to pay close attention to these steps to ensure you get the best deal, on the right home. Let’s look at what you will need to buy a house in Virginia and the step-by-step process.
The Things You Need to Buy a Home in Virginia
1. A good credit score
2. A down payment and money for closing costs
3. A pre-approval letter from a mortgage lender
4. A good real estate agent
5. All the necessary documentation to prove your income and get approved for your mortgage
6. A good understanding of what it will take to buy a home in Virginia
Steps to Follow to Buy a Home in Virginia
Step #1 – Get Prepared to Buy a Home
If you don’t have a good credit score or enough money saved for a down payment and closing costs, you want to start by getting prepared. Figure out what you need to save and how to fix your credit, if your score isn’t high enough yet.
Even if you have a good credit score and enough money saved, you want to get your finances organized. Figure out what your budget is and look into the cost of home insurance, taxes, HOA fees, and other expenses that come with homeownership.
Step #2 – Get Pre-Approved
It’s always smart to get pre-approved for a mortgage before you start shopping for a home. This will give you a better idea of what you qualify for and the price range you can shop within.
Step #3 – Start Your Home Search
It’s best to shop for a home in your price range so you don’t fall in love with a home you cannot afford. Look at what your must-haves will be in a home and where you want to live. This is also the time in the process when hiring a real estate agent is helpful.
Step #4 – Find the Right Home for You
As you search, you will likely look at many homes in your price range. Once you find the right one for you, it’s time to make an offer and negotiate the deal.
Step #5 – Close on Your New Home
The final step in the process of buying a home in Virginia is closing the deal. This is an exciting time and you will be able to move in after closing on the home, based on the agreement with the seller.
Your real estate agent will walk you through all the steps of buying a home in Virginia. This is just a snapshot of what to expect.
The cost to buy a house in Virginia depends on the final sales price of the home. Houses for sale in Virginia come at a wide range of prices from less than $100K (very rare) to well over $5 million dollars. The average home price in Virginia is currently around $396K.
When you buy a home in Virginia, you will spend money on the down payment and closing costs. This amount can vary quite a bit, depending on the home you buy and the mortgage you get. Some lenders may allow you to put less money down than others.
Some of the Costs Associated with Buying a House in Virginia
You can expect to pay many different costs when you buy a house in Virginia. Some of the costs you will pay include:
· Home Inspection Fee – $200 to $300
· Home Appraisal Fee – $200 to $300
· Earnest Money Deposit – 1% to 3% of the purchase price of the home
· Down Payment – 3.5% to 20% of the purchase price of the home
· Closing Costs – Around 1.9% of the purchase price of the home
· Moving Costs – $1,250 to $5,000
If you buy a home around the average sales price in Virginia, you can expect to pay anywhere from $29K to $105K to purchase the home. The largest amount you will pay is the down payment, followed by the earnest money deposit and the closing costs.
Your actual cost to buy a house in Virginia may fall within this range or it may be lower or higher. It depends on the sale price of the home and the amount you plan to put down. Make sure you understand all the costs associated with buying a home before you start your home search.
It can be expensive to sell a house in Virginia. The cost will vary from one house to another, as some may need repairs, while others sell for a higher price. Several of the fees you will pay are based on a percentage of the final sales price of the home.
It’s common to spend between 10% and 11% of the final sale price of your home when selling. The out-of-pocket costs will vary based on your specific situation. The average cost to sell is listed below based on the sale price of your home.
· $350K sale price – Expect to pay about $38,000 to sell your home
· $500K sale price – Expect to pay about $54,500 to sell your home
· $750K sale price – Expect to pay about $82K to sell your home
A Quick Breakdown of the Costs to Sell Your Home in Virginia
There are four main costs you will have when selling your home in Virginia:
· Prepping your home for sale – $200 to $6,000
· Realtor Commission – $17K to $22K (about 6% of the final sale price)
· Closing Costs – $3,800 to $14,000
· Relocation Fees – $500 to $4,500
These fees can vary quite a bit. If your home doesn’t need any repairs, you may not need to spend much to prep your home for sale. It’s also possible you won’t need to spend much for relocating if you’re buying a home locally or doing a lot of the work yourself. The actual Realtor commission can also vary, but the average will be around 5.22%.
Compared to other states, it’s rather cheap to sell a home in Virginia. The average seller will pay about 5.55% between the Realtor commission and closing costs. In other states, this can be well above 6%.
The process of buying a house in Virginia is pretty easy to follow. If you’re a first-time homebuyer, you will want to hire a good real estate agent to help walk you through this process. Let’s look at the steps you will likely follow when buying a house in Virginia.
Step #1 – Save for a Down Payment
You will need anywhere from about 3.5% to 20% of the final sale price of the home you buy as a down payment. This means, if you plan to buy a home for $400K, you will need $14,000 to $80,000 saved to put down.
Step #2 – Find a Good Real Estate Agent
As a buyer, you want to hire a real estate agent that can walk you through the entire process of buying a house in Virginia. Usually, the seller will pay the commission, so you can use a real estate agent without incurring any additional costs.
Step #3 – Get Pre-Approved
You need a pre-approval letter from a lender that states the amount you are pre-approved for. This will help you narrow down your home search and set your home-buying budget properly.
Step #4 – Start Your House Hunting
You should have an idea of where you want to live and you should start searching for a home that matches your must-haves and wants. If you are clear with your agent about what you want, they will be able to better match you to the right home for you.
Step #5 – Make an Offer
At this point in the process, your agent will help you make the best possible offer on the home you want.
Step #6 – Complete Contingencies
Once your offer is accepted, you will want to complete contingencies, such as getting a home inspection and appraisal.
Step #7 – Close and Move in
After all the contingencies have been cleared, you can close on the home and begin the process of moving in.
If you’re looking for the cheapest place to buy a house in Virginia, you might be surprised by some of the locations on the list. There are several affordable cities and locations throughout the state to consider. Let’s look at the cheapest places to buy a house in Virginia and the most affordable cities throughout the state.
Martinsville
Maybe the cheapest place to buy a house in Virginia, Martinsville is about 50 miles from Roanoke. The median home price here is just $79,000.
Galax
Another very cheap place to live in southwestern, VA, Galax has a median home price of $97,400.
Danville
You can enjoy a very affordable live if you choose to call Danville home. This is the biggest city on the list with a population of over 40,000. It also has a cheap median home price at just $95,500.
Pulaski
Found to the southwest of Roanoke, Virginia, this is one of the cheapest places to live. The median home price in Pulaski is $112,100.
Vinton
Known as a bedroom community of Roanoke, Vinton offers a very affordable place to live. The median home price here is $147,900.
Big Stone Gap
Known as one of the most affordable choices to call home in Virginia, Big Stone Gap offers a median home price of just $127,200. It’s found near the Kentucky border in the western area of the state.
There are several cheap places to buy a home in Virginia. However, when deciding where to live in the state, it’s also important to look at the employment opportunities and the overall economy of the area before you choose. Housing is just one expense found in a typical household budget.
When you’re ready to buy or sell a home, you will want to hire the right real estate agency. With a good agent by your side, backed up by a good broker, you will have a better experience buying or selling a home. Let’s look at a few things to consider before you hire a real estate agency.
Know Your Finances
Whether you plan to buy or sell a home, you should know your financial situation before you hire an agent.
For buyers, you want to know how much you have down, what you can afford monthly, and even have a pre-approval letter ready to go.
For sellers, it’s best to know the approximate equity you have built up in your home, how much you can spend on repairs, and the estimated amount you will need to spend for closing costs.
Make a Short List
Before you hire a real estate agent, you should make a short list of options. Do some research online and read some reviews. Choose three to five agents you like and create a list. Then, you want to reach out to each one and see how fast they respond. It’s best to interview a few agents before you hire the right one for your needs.
Prepare a List of Questions
Before you go into the interview process with real estate agencies, you want to have a list of questions prepared. Make sure you discuss your goals as a buyer or seller, what you expect, and get the information you need to make your final decision.
Finding the right real estate agency is important. Make sure you take your time and meet with a few options before you choose the right team to represent you.
If you’re ready to sell your home, there are different ways you can list your home for sale. You can hire a real estate agent to walk you through the process and take care of most of the work for you. It’s also possible to list your home for sale yourself, although this is not nearly as popular. Let’s look at how to list your house for sale with a real estate agent.
How to List Your House for Sale with a Real Estate Agent
Hiring a real estate agent is usually the best way to list your house for sale. This is what they do for a living and they will know the best way to list your home to get it sold for top dollar and fast.
The process of listing your home for sale with an agent is pretty straightforward, once you hire the right agent. Your real estate agent will make recommendations on any repairs or improvements you might want to make. Then, once your home has been prepared, they will have listing pictures taken and start marketing your home for sale.
When you choose to list your home for sale with an agent, you gain a professional level of service and a local real estate expert on your side. Your agent will also have a professional marketing plan and will make sure you only have to invest a little bit of time in the sales process.
It’s common for agents to get your home sold for a higher amount and faster compared to trying to list your house for sale on your own. The best agents will even come to the table with a proven home selling plan for you.
When you’re ready to sell your home, you want to make sure you have the right real estate agent. Without a real estate agent, it can be hard to get your home sold for the right price and quickly. If you hire the right real estate agent, you will have an expert ready to help you get your home sold.
Hiring a real estate agent isn’t always easy, however. Let’s look at some of the ways you can find the right real estate agent to sell your house.
Top 4 Tips for Hiring a Real Estate Agent to Sell Your Home
1. Speak with Friends and Family
Getting a referral from a friend or family member can be a great way to find a real estate agent. About one-third of the agents hired are hired due to referrals from others. Finding a real estate agent to sell your home through a referral is one of the best ways to find the right agent for you.
2. Research Online
Even if someone gives you referral, it’s best to do your own research online, too. You want to make sure you have the right agent for your listing and you need to feel comfortable with who you hire. Look at online reviews, find out what they specialize in, and look at some of their past listings, too.
3. Conduct Multiple Interviews
Sometimes, you do your own research, get referrals, and create a list of potential agents, but you only interview one and hire them. This is often not the best way to go. You should interview at least three agents so you can figure out which one fits best for you. All the agents you interview might be great, but one might fit best with your personality or property style.
4. Check References
It’s also a good idea to check the references of any agent you plan to hire. Sometimes, you think you have the right agent and you check some references only to find out this is not the right person for you.
There are many things you want to do when searching for the right real estate agent to sell your house. Make sure you take the time to find the right agent, as a good agent will provide you with plenty of benefits.
The home selling process can be rather overwhelming if you’ve never sold a home before. Hiring a good real estate agent can help make it less overwhelming, however. Of course, you should still have a basic understanding of the process of selling a house.
Selling a home starts with deciding you want to put your house on the market. Once you have decided to list your home for sale, it’s time to start preparing yourself and your home to be listed. Making sure your home is ready for listing pictures is the first step in the process of selling your home.
After you get your home ready, which might include decluttering, repairs, and staging, you will have listing pictures taken and your agent will get your home listed. This is the beginning of the actual process of selling your home and the steps below will take you through the entire process.
Common Steps in the Home Selling Process
Step #1 – List Your Home for Sale
Of course, the first step is getting your home listed. Once it’s listed, you will be playing a bit of a waiting game for the right buyer to come along and make an offer you will accept.
Step #2 – Hold an Open House and Showings
Getting your home sold will likely include holding an open house and showings for potential buyers. In a perfect situation, you will get a bidding war or multiple offers, but this is not always the case. One good offer can be enough to get your home sold, however.
Step #3 – Accept an Offer
The next step is accepting an offer on your home. Once you accept an offer, you will go through the contingencies, which often includes an appraisal, approved financing for the buyer, and a home inspection. Clearing all the contingencies is necessary before you close on the home.
Step #4 – Close
After an offer is accepted and all contingencies are dealt with, you will close on the home and it will be sold. There might be a short period between closing and moving out, which will be stated in the offer you accept.
The most important part of listing your home for sale is setting the asking price. If you set too high of a price, you might not get much interest. However, if you go too low, buyers might think there is something wrong with the home.
Setting the asking price just right is rather important. Of course, hiring the right real estate agent is one of the best ways to make sure you get the best asking price for your home listing. Let’s look at a few things to keep in mind when setting your asking price.
3 Things to Remember When Setting Your Asking Price
1. Trust Your Agent
If you hired a good real estate agent, they will know exactly how to set the right listing price for your home. While it will have to do with market value, your agent will also look at how people might search for your home, too. With a good agent, you will get the right listing price, as long as you trust them.
2. Use a Comparative Market Analysis
A CMA is the main way to figure out what your home should sell for in the current market. Your agent will compare your home to other homes that have sold recently and figure out the right home price based on recently sold properties. This is one of the best ways to make sure your home is listed for a price it can support.
3. Price for Online Searches
You want to make sure you put your home in the right price range to ensure you get as many eyes on your home listing as possible. When buyers search online, they will have a range they search within. It’s important to price your home accordingly. Sometimes, it’s better to price your home at $399,999 than $405,000 simply due to the way people search online for a home.
Use these tips and the advice of your agent to make sure you have the right home listing price.
There are many things to do when it’s time to prepare your home for sale. It won’t be the same for everybody, as every home is different. You might need to do some of the things on the list below, while another seller needs to do other things. Let’s look at some of the things you can do to prepare your house for sale.
Top 10 Things to do to Prepare Your House for Sale
1. Depersonalize
One of the first things you want to do is get rid of the personal things, such as pictures, collections, etc. You want to make sure your home looks like a blank canvas for potential buyers.
2. Declutter
Taking out the junk and clutter will make your home look larger. This is a common way to prepare your house for sale, too.
3. Make Repairs
Often, minor repairs can go a long way when selling your home. Make the repairs your agent recommends.
4. Have Your Home Cleaned
A clean home shows better and this is the time to hire professionals to do a deep cleaning of your home.
5. Create Excellent Curb Appeal
Curb appeal shows up in the listing pictures, during open houses, and during showings. Take a little time to make sure you have excellent curb appeal.
6. Organize Your Storage Areas
Closets and storage cabinets should not be packed full of things. Organize these areas of your home, too.
7. Paint
A fresh coat of paint can go a long way to making your home sell faster and easier.
8. Get a Home Inspection
You might want to get a home inspection done so you know which repairs are most important before you list your home for sale.
9. Arrange Care for Pets
If you have pets, you want to arrange care for them during open houses and showings.
10. Replace Light Bulbs
You want to make sure all your light bulbs are working properly, so you can show off your home with plenty of light.
One of the best ways to sell your home faster and easier is to avoid common mistakes made by sellers. Becoming aware of some of the common mistakes to avoid when selling your home will help you avoid them. Here are a few of the most common mistakes you want to avoid when selling your home.
Top 4 Mistakes Made by Home Sellers
1. Letting Emotions Take Over
You can easily get emotional when you’re selling your home. This is rather common, especially with the first one you sell. However, you want to make sure you keep your emotions in check. Selling your home will be emotional, but you don’t want to make decisions based on emotion.
2. Skipping the Real Estate Agent
You might think it’s worth saving a bit of money to skip hiring a real estate agent to sell your home, but it’s not worth it. Hiring a real estate agent helps take the emotion out of the deal and helps you get more for your home. Agents sell homes for a higher amount and they often sell your home faster.
3. Setting an Unrealistic Listing Price
If you think your home should fetch a higher amount than the market will support, you’re making a big mistake. A good real estate agent will advise you on the proper listing price and what to expect. Make sure you listen to your agent when it comes to the listing price to avoid this mistake.
4. Not Preparing Your Home
When the market is competitive, you want to make sure you have a well-prepared home for sale. Showing your home in listing pictures and in person means you should prepare it properly. This might include staging your homes, decluttering, and doing some repairs.
Avoid these four mistakes when selling your home and you’ll be better off.
When you sell a home, you want to make sure you negotiate the right sales price. It’s important to know how to go about negotiating the price properly. Here are a few tips to help you.
Top Tips for Negotiating the Sale of Your House
1. Know the Market In and Out
If you want to negotiate the deal for your home yourself, you need to know the market in and out. It’s important to make sure you know what homes like yours are selling for and what to expect.
2. Use Any Upgrades to Your Advantage
When you make upgrades to your home, these are good negotiating tools when selling. Make sure you have a list of the upgrades made handy and use them during the negotiations.
3. Hire a Good Agent
The best way to make sure you can easily negotiate the sale of your home is with a good real estate agent. Real estate professionals are master negotiators and the best ones will get you the best price possible for your home. They know the market in and out and they know how to make sure negotiations are handled properly.
4. Create a Bidding War
If possible, you want to try to create a bidding war, when selling your home. If a bidding war starts, you will have multiple offers on your home and you might just see the sale price go up multiple times. It’s not easy to create aa bidding war, but one thing you can do is refused to consider offers for a specific amount of time.
These four tips will help you when negotiating the sale of your home. It’s best to have a professional agent do the negotiating for you.
Once you have accepted an offer and gone through all the contingencies, it’s time to close on the sale of your home. There are certain steps you will need to follow, which are listed below.
Steps for Closing on the Sale of Your House
1. Get Title Insurance
You want to make sure you do a title search and get title insurance when it’s time to close on the home. This is often handled by the closing agent and it’s a common part of the process. Most lenders will require it.
2. Have a Home Inspection Done
Often, one of the contingencies in an offer on your home is a home inspection. Having the home inspection done is necessary and it might lead to some negotiations and repairs before you actually get to the closing table.
3. Have an Appraisal Done
Another common contingency is the appraisal, which is required by the lender. You want to make sure an appraisal is done and everything comes back correctly or adjustments may have to be made. This is a pretty standard part of the home selling process.
4. Do a Walk-Through
A final walk-through will take place about 24 hours before you actually get to the closing table. The buyer will do a walk-through with their agent one last time to make sure all agreed-upon repairs have been handled.
5. Finalize Everything
Closing day arrives and it’s time to sign all the paperwork. The buyer will sit down with the agent or attorney in charge of the closing and all the papers will be signed.
This is what it takes to close on the sale of your home. Your agent will walk you through the entire process and answer all the questions you might have when it comes to closing on the sale of your home.
It’s an exciting time when you sell your home, but it can also have some tax implications. How selling your home will impact your taxes depends on your specific situation. Let’s look at some of the things you should know about the tax implications of selling your home.
A Few Things to Know About the Tax Implications of Selling Your Home
1. Potential Capital Gains Taxes
You might have to pay some capital gains tax when you sell your home, if you make a profit. However, this will depend on your specific situation and you should check with a tax professional when reporting the sale of your home to the IRS.
2. Investment Property vs. Primary Residence
The tax implications are different with an investment property compared to a primary residence. If you sell your investment property, you will want to make sure you know what to do with the profits to avoid a large tax bill. Selling your primary residence will give you tax breaks you cannot get with an investment property.
3. Military Exclusions
If you sell your home because you need to relocate for the military, you will likely not need to worry about capital gains taxes. In most situations, you will get an exclusion, but you still want to speak with a tax professional about your specific situation.
4. State and Local Taxes
Along with federal capital gains taxes, you may also need to deal with state and local taxes. Make sure you understand the potential state and local taxes that you might need to pay.
5. Writing Off Moving Expenses
In some cases, you can write off the moving expenses you incur when you move after, you sell your home. This happens with military relocation quite often, but there may be other times when you can write off some or all of your moving expenses.
There are many things to do after you sell your home. Let’s look at a list of the main things you should do below.
Top 6 Things to Do After Selling Your House
1. Store the Paperwork Property
You want to make sure you have copies of all the necessary paperwork that has to do with the closing and settlement. When you sell your home, you want to keep all the paperwork in storage for tax purposes in the future.
2. Look into the Tax Implications of the Sale
When you sell your home, you might have to pay capital gains taxes. Make sure you understand the tax laws and know what to expect after you sell your home.
3. Use a Money Market Fund for the Profits
With a money market fund, you will get a reasonable rate of return and easy access to your move, when you need it. This is a good place to park your profits until you buy your next home.
4. Carefully Choose Your Next Home
Often, selling your home is something you do when life is changing. Take the time to make sure your next house meets your specific needs. Avoid buying a home because you feel pressured.
5. Reevaluate your Financial situation
After selling your home, it’s a good time to reevaluate your financial situation. Look at what you might have for a down payment and how you want to move forward.
6. Deal with Change-Of-Address Notices
You won’t have the same address anymore, so it’s time to file a change of address with the U.S. Postal Service.
There are many things to do after you sell your home. It’s important to make sure you handle all the necessary things including the things on the list above.
If you’re trying to purchase a home in the United States, you will need a down payment. It’s very rare that you will find a deal allowing you to put no money down. Usually, you will need to put a percentage of the purchase price down when buying a home.
A typical down payment might go as low as 3.5% of the purchase price, but that doesn’t mean that is the amount you will need to put down. Your down payment will depend on your qualifications and the lender you are working with. Let’s look at some of the things you should expect with a typical down payment in the United States.
Put 20% Down on Your New Home
If you can put 20% down on your new home, you can avoid paying private mortgage insurance (PMI). PMI is a monthly payment you make to lower the risk of your mortgage for your lender. When you put 20% down, you can avoid paying this monthly fee.
What is the Average Down Payment in the United States?
In the United States, most buyers will put down anywhere from 6% to 20% when they buy a home. Throughout 2021, 18% of buyers put down more than 20%, while another 20% of buyers put down 20% exactly. About 24% of buyers put down between 10% and 19%, while 13% put down 6% to 9%.
Commonly, you will need to put down at least 3.5% to even qualify for a mortgage. However, 10% of buyers in 2021 were able to buy a home with a down payment of less than 3%. Usually, this requires a special first-time buyers’ program or down payment assistance.
The best way to determine how much you need to put down when buying a home is to choose a lender and get pre-approved.
Yes, there are programs to help you with your down payment. Typically, these programs are aimed at first-time home buyers and provide down payment assistance for those that qualify.
Common Qualifications for Down Payment Assistance
Usually, you will need to meet some of the following qualifications, depending on the down payment assistance program:
· First-time home buyer
· Low- or moderate-income level
· Purchasing a primary residence
· Purchasing within the local price limits
· Working with an approved mortgage lender and program
Each program is a bit different and the qualifications will vary a bit from program to program.
Types of Down Payment Assistance Programs to Consider
There are four specific programs you will find to help you with your down payment, which include:
· Loans – You might be able to get a second mortgage that you pay on monthly to help with your down payment.
· Grants – This will be gifted money that you will never need to repay.
· Deferred Loans – Some second mortgage loans for down payment assistance can be deferred until you move, refinance, or sell your home.
· Forgivable Loans – Some second mortgages used as down payment assistance are also forgivable after so many years, as long as you don’t move, sell, or refinance.
You might find a loan for down payment assistance that is interest-free, too. It’s possible to qualify for more than one down payment assistance program when you want to buy a home.
Often, down payment assistance programs are localized. You might find a national or state program, but most of these programs are fun at the local level. Speak with your agent and they might be able to lead you to the right down payment assistance program for you.
When you buy a home, you will go through the closing process. After your offer has been accepted by the seller, you will need to have some things done before you can actually reach the closing table and sign the paperwork. Let’s look at some of the things you should expect when closing on a home in the United States.
Final Walk-Through
You will usually do a final walk-through about 24 hours before closing. This will allow you to make sure the previous owner has vacated the home and it will also allow you to check to ensure all agreed-upon repairs have been done.
Bring What You Need
When closing day comes, you want to bring all your paperwork including proof of homeowners insurance and your down payment. Of course, you will need a government-issued photo ID and a cashier’s check for any closing costs you will be paying.
Be Prepared to Sign a Lot of Documents
The closing process in the United States includes signing and initialing many documents, especially if you’re getting a mortgage. You might have a mild hand cramp when it’s all over.
Expect a Few Surprises
Any closing in the United States will likely come with a few surprises, too. Someone might be delayed due to traffic, a document might be missing, a name could be misspelled, or there could be another small issue. Often, the closing will go off without a hitch, but there might be something you need to do after closing to finalize things.
The closing process in the United States is pretty simple, once you get to the closing table. It’s all about signing documents and making sure everything is in place that you already agreed to with the seller and the lender.
When you’re ready to buy a home, you will need to pay some fees and expenses in the United States. It’s important to be aware of the fees and expenses you might need to pay before you buy a home. Let’s look at some of these fees.
Common Fees and Expenses to Pay When Buying a House
1. Down Payment
Of course, when you buy a home, you need a down payment. This is the most common fee you will pay. Often, it will range anywhere from 3.5% to 20% of the final sale price of the home.
2. Earnest Money
While this is not actually a fee, since it’s money you get back at closing, it’s still important. You will pay earnest money to proof that you are serious about buying the home. Usually, this is about 1% of the final purchase price of the home.
3. Closing Costs
The second-largest amount you will pay out-of-pocket is often closing costs. This will include many fees you pay for loan preparation, such as an appraisal fee and a home inspection fee.
4. Moving Expenses
Sometimes buyers forget about the expenses necessary to move. When you buy a new home, you will need to move. The amount you pay for moving will depend on if you do it yourself or you hire professionals. It can range anywhere from a few hundred dollars to several thousand dollars.
There are many costs involved when you buy a home. Make sure you speak with your real estate agent and your lender so you are aware of what you will need to pay for when buying a home.
When you buy a home, a home inspection will be done. This inspection will show any issues you need to know about before you close on the home. Let’s look at some of the common home inspection issues found in the United States.
7 Common Issues Found by Home Inspections in the United States
1. HVAC Problems
It’s rather common for a home inspection to show that an HVAC system needs to be serviced. Usually, it’s not a major issue, but sometimes, a major issue can be found with the HVAC system.
2. Water Damager
Another common issue found on home inspections in the United States is water damage. This might include warped floors, damp carpets, musty odors, peeling paint, or even cracks in the walls.
3. Roofing Issues
A home inspection might find an issue with the roof, which could be a leak or a major repair. Sometimes, it’s more of a minor repair that is found with the roof.
4. Poor Ventilation
It might seem odd, but home inspections often find ventilation issues when it comes to a home you want to buy.
5. Plumbing Issues
It’s common for an inspection to find plumbing issues, too. This could have to do with water flow, but it could also have to do with drainage, too.
6. Foundation Issues
A foundation issue can be a big deal and can lead to major issues. This is another common thing found by a home inspection.
7. Mold
Home inspections find mold often, too. This may be due to the humidity level in the area, but it can also be due to a leak or moisture getting into the home.
These are seven common things home inspections will find throughout the United States. Be aware of these issues when you enter the buying process.
When you decide it’s time to buy a home, you will likely need a mortgage. Shopping different lenders means you should understand the most common mortgage types you will find throughout the United States. Let’s look at some of the mortgage options you might want to consider.
Most Common Mortgage Types in the United States
1. Fixed-Rate Mortgage
One of the most common mortgage types you will find is the fixed-rate mortgage. This mortgage will give you a set interest rate that will never change. You will likely find 15-year and 30-year fixed-rate mortgages with the best rates found on the 15-year term.
2. Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage or ARM will have a starter interest rate and will adjust after the initial period. For example, you might have a 5 year/3-month ARM mortgage. This mortgage will have a fixed rate for the first five years. After the first five years, the rate will be adjusted every three months.
3. Conventional Mortgages
A mortgage that falls into this category will either be a conforming or non-conforming loan. It will not be backed by the federal government and you will generally need good credit and stable income to get this type of loan.
4. Government Insured Mortgages
There are a few different types of government insured mortgages you can get. FHA, USDA, and VA mortgages are all types of government insured mortgages. You will likely need to meet very specific requirements to get this type of loan.
5. Jumbo Mortgage Loan
This type of loan will fall outside the limits of the FHFA and are usually reserved to high-cost areas. It will likely take more documentation to qualify for this type of mortgage.
There are many mortgage types in the United States. These are just a few of the options out there for you.
There are many terms that come with a mortgage in the United States. However, the main term referred to is usually the length of time you will make payments on the mortgage. Let’s look at the typical terms of a mortgage in the United States.
30-year
A 30-year term is the most common you will find in the United States. This term will likely be a fixed-rate mortgage or an adjustable-rate mortgage (ARM). An ARM will have a term that starts with a fixed-rate and goes into an adjustable interest rate after the initial term.
15-year
The second most common term for a mortgage in the United States is a 15-year term. This term will likely give you a lower interest rate, but will come with a higher monthly payment. A 15-year term can also be a fixed-rate or adjustable-rate mortgage.
Other Mortgage Terms in the United States
While 30-year and 15-year terms are most common, you can find mortgage terms in the United States from 10 to 40 years. It’s common to find ARMs that will have a term of 3/27 or 5/25, which are 30-year mortgage with a fixed period and an adjustable period. You can find 40-year terms on mortgage, but it’s harder to find this mortgage term.
It’s best to speak with your lender to find out what type of mortgage terms they offer before you start shopping for a home. Make sure you know what to expect and get pre-approved before you find the right home for your needs.
Before you start shopping for a home, you should shop for a mortgage. If you plan to start looking for the right lender, you should know some of the main things to consider as you shop around. Here are a few things to look for when shopping for a mortgage in the United States.
Top Things to Consider When Shopping for a Mortgage
1. Compare Lenders
It’s always smart to compare a few lenders, as they are not all the same. Some might have programs that work better for you than others. Comparing a few lenders can help you find the right one for your needs.
2. Know the Fees and Closing Costs
You need to know what the fees and closing costs will be when you get a mortgage. This is rather important as these costs can add up. Plus, you don’t want to end up paying fees that are unnecessary with your lender.
3. Get Pre-Approved
When you find the right lender, you want to get pre-approved. Don’t let a lender only pre-qualify you, as this is not the same thing as getting pre-approved. Make sure your lender will get you a pre-approval letter before you start shopping for your new home.
4. Read the Online Reviews
Before you choose the right lender for your mortgage, make sure you read the online reviews. This will tell you what other people think about the lender you are considering.
There are many things to keep in mind when you start shopping for a mortgage in the United States. Make sure you use these tips to help you find the right lender and get pre-approved for your mortgage.
There are plenty of mistakes you can make when you’re a home buyer. Avoiding these mistakes is easier when you’re aware of them. Let’s look at the most common home buying mistakes you need to avoid in the United States.
5 Common Home Buying Mistakes to Avoid
1. Not Preparing Financially
When you buy a new home, it’s rather exciting. However, that excitement can go away quickly, if you’re not financially ready. Make sure you have enough cash in the bank and you’re prepared for all the fees that comes with buying a home.
2. Not Setting a Monthly Budget
Many buyers get a pre-approval letter and just go with the amount stated on the letter. This is a mistake. Instead, you want to set a clear monthly budget and consider all the new payments you will be making including insurance and taxes.
3. Not Vetting the HOA
Do you want to live in a neighborhood with a homeowner’s association? If so, you want to vet the HOA and make sure you understand the rules and the fees. This is something many buyers don’t remember to do and it can lead to living in a neighborhood you are not happy with.
4. Shopping Before Getting Pre-Approved
Home buyers will start looking for a home online and they have no idea what they can get approved for yet. Get your pre-approval letter before you start shopping for a new home. If you shop first, you might fall in love with homes you cannot get approved for.
5. Not Hiring an Agent
When you buy a home, you need a real estate agent to walk you through the process. It’s a huge financial transaction and you don’t want to go into it without professional help. Plus, the seller usually pays the entire commission, so it doesn’t cost you anything to hire a buyer’s agent.
When you plan to purchase a home, you want to make sure you know how to negotiate the best deal possible. Of course, hiring a good real estate agent will ensure you have a master negotiator to help you with the purchase of your home. Here are some tips to keep in mind, too.
5 Tips for Negotiating Your Home Purchase in the United States
1. Know the Market
When you know the real estate market in your area, you will know if you are getting a good deal or not. It’s smart to have a competitive market analysis done to help you better understand the market, too.
2. Use the Home Inspection
One of the key tools for buyers to use during negotiations is the home inspection. If repairs are needed, whether minor or major, you can negotiate a better deal with the home inspection.
3. Use Closing Costs as a Negotiating Tool
Closing costs are usually the second biggest fee a buyer pays. You can use this fee to help during negotiations by asking for a credit towards closing costs due to necessary repairs or for another reasons. This can help you pay less out-of-pocket at the closing table.
4. Look into Public Records
You can also use public recourse to help negotiate the home price and get the best deal. Make sure you look into the public records for defects and insights into the motivation of why the seller is selling.
5. Know When to Stop Negotiating
Sometimes, you go too far when you should have just stopped with the negotiating. Make sure you stop talking after you get the deal you need. If you’re too aggressive, you could scare the seller off.
There are many ways to negotiate the purchase of a home in the United States. The best thing you can do is hire the right real estate agent to take care of the negotiating for you.
The amount you can afford to spend on a home doesn’t always match with how much a lender is willing to give you. Sometimes, you can get pre-approved for a higher amount than what you can really afford. It’s important to look at your own budget and all the monthly expenses that come with owning a home.
Figuring Out What You Can Afford for a Home
Most experts will tell you to keep your home expenses at 25% or less of your monthly budget. This means if you take home $10,000 a month, your home expenses should add up to no more than $2,500 per month. Often, this monthly amount should cover your mortgage payment, taxes, and insurance. If you have an HOA fee, you might want to toss that in there, too.
Before you start shopping for a home, take the time to figure out how much you can afford on a monthly basis. Don’t just assume you can afford the same amount you are paying for rent or the monthly payment that comes with the pre-approved amount from the lender. Do your own math and figure out what you are actually comfortable with.
While your lender will look at your annual income, your monthly debts, your debt-to-income ratio, and a few other factors, this is not how you should look at how much you can afford to spend on a home. You want to look at the payments you will need to cover each month for your home, along with some savings for regular maintenance. Make sure you are comfortable with the amount you spend on a home or you might end up with buyer’s remorse.
Your credit score is one of the main factors used by lenders to qualify you for a mortgage. It’s often referred to as a FICO score and there are three credit bureaus that assign credit scores. Let’s look at the basics of what a credit score is.
Credit Score Range
When a lender pulls your credit, you will have a credit score between 300 and 850. This score represents your creditworthiness. Lenders are looking for a specific score to qualify you for a specific mortgage program.
How is a Credit Score Figured?
Your credit score is based on your credit history, which includes open accounts, amount of debt, repayment history, and a few other factors. Sometimes, lenders will pull your credit score from just one bureau, while other times they will pull it from all three. They may use the average score, the highest score, or the lowest score to qualify you for a mortgage program.
Credit Score Ranges
There is different credit score ranges that you might fall within including:
· Excellent – 800 to 850
· Very Good – 740 to 799
· Good – 670 to 739
· Fair – 580 to 669
· Poor – 300 to 579
Often, you will need at least a 580-credit score to qualify for a mortgage. However, many mortgage programs require a higher credit score than 580.
If you don’t have a high enough credit score, you might want to work on improving your credit before you purchase a home. It’s best to have as high of a credit score as possible before you start shopping for a home. This will give you the best chance to become approved for a mortgage and get the lowest interest rate.
Figuring out how much to save for your down payment and the other fees you will pay when you buy a home is important. You want to make sure you have enough cash to cover everything as you get into the home buying process. Let’s look at how to determine how much to save for your down payment and the other fees you might need to pay.
Saving for Your Down Payment
You will need a pretty nice chunk of money for your down payment. However, the actual amount depends on mortgage you are approved for. Most lenders will require between 3.5% and 20% for the down payment. It’s smart to put 20% down, but this can be difficult for homebuyers, especially first-time homebuyers.
However, if you can save 20% of the purchase price for your down payment, it will lead to lower mortgage rates and monthly payments. You will also avoid paying private mortgage insurance every single month.
The average down payment for first-time home buyers is 7% with repeat buyers putting down an average of 16%. For most lenders, the minimum amount down will be 5%, but FHA home loans go as low as 3.5% and some VA mortgages will go all the way down to 0% down.
Saving for Your Closing Costs and Fees
Typically, you will need another 2% to 5% of the purchase price for closing costs, too. When you start saving to buy a home, don’t forget about saving for closing costs. You might be able to get a seller’s concession for some of the costs, but go in with a plan to pay for the closing costs so you’re not caught off guard.
It’s best to speak with your real estate agent and your lender to figure out how much you really need. The down payment and closing costs can be obstacles to buying a home, but if you know how much to save, you’ll be in better shape.
Two of the main factors that lenders look at when approving you for a mortgage is your income and employment history. These two factors are rather important and you want to make sure you have a steady income and a good employment history. Let’s look at what both of these are before you get pre-approved for your mortgage.
What is a Steady Income?
Usually, a steady income means you have a history of making the same or a similar amount for several years. Lenders want to know that you can make the mortgage payment, so they look for a steady income or a consistent income that can be counted on.
What is a Good Employment History?
Most lenders want to see that you have at least two years of employment history. It’s preferred that you have not changes jobs in two years, but if you’re at least working in the same field, that’s usually good enough for most lenders.
The reason lenders look at a steady income and employment history is to figure out if your situation will remain the same. They want to lower your risk factor to qualify you for a mortgage program and these are two of the factors they will use to help get you qualified.
You will likely have to include your employment history on your application, but you will also have to show proof. Paycheck stubs, W-2s and other documents will help you prove your work history and steady income.
Before you apply for a mortgage, make sure you can prove your work history and show a steady income. This will help you get approved faster and you will likely get a better mortgage if you have a good work history and steady income.
Your debt-to-income ratio is another factor used by lenders to figure out if they can approve you for a mortgage. This is an important factor and will weigh heavily when you want to buy a home. Let’s look at what the debt-to-income ratio is and how it factors into your home-buying journey.
Defining the Debt-to-Income Ratio
The debt-to-income ratio or DTI is all your monthly payments on debt divided by your gross monthly income. It’s the main factor lenders will use to figure out if you can handle the monthly payments on a new loan.
Calculate Your Debt-To-Income Ratio
The first step you will need to take when calculating your DTI is to add up your monthly bills. Your lender will only use the debt payments found on your credit report. They won’t include utilities and other payments that don’t report to the credit bureaus.
Your bills will likely include:
· A monthly house payment
· Student loan payments
· Auto loan payments
· Credit card payments
· Other debt payments
Groceries, gas, utilities, and taxes are not usually included in your DTI by a lender.
Once you figure out your monthly bills, you want to divide this amount by your gross monthly income. This is the income you earn before taxes are taken out.
The result you get will be your DTI and it will be expressed in a percentage. The lower your DTI is, the lower your risk for the lender.
Most lenders won’t allow your DTI to go above 43%. However, some lenders are stricter than this and others might allow you to go as high as 50%. Ideally, you want to have a debt-to-income ratio below 36% to qualify for a mortgage. If you have a DTI of 36% or lower, you will be in good shape when buying a home.
The amount you can spend each month on your mortgage payment can be a bit difficult to calculate. If you’re a first-time homebuyer, you cannot just assume you can afford a mortgage payment equal to your rent payment. Buying a home comes with more than just a mortgage payment.
You need to calculate your payment by looking at your actual monthly budget. It’s important to factor in HOA fees, insurance, taxes, and any other new expenses you might have. Plus, your utility bills might go up with a new house.
Figuring Your Realistic Mortgage Payment
Yes, you should go get pre-approved by a lender for a mortgage. However, the amount they allow you to borrow might not fit your monthly budget. It’s important to look at your actual budget and factor everything into your life after you buy a new house.
Most financial experts believe people should only spend about 25% of their take home pay on housing expenses. It’s important to consider this and your specific financial situation when you look at how much you can afford to spend each month on your mortgage payment.
Sticking to Your Budget
New homebuyers can get caught up in the moment and might want to submit an offer on a home they simply cannot afford. This can be dangerous as some lenders will still approve you, even if the mortgage payment doesn’t fit your budget very well. You want to figure out your own budget and the monthly payment you’re comfortable with, and then stick to it.
Before you start shopping for your new home, you want to make sure you know what you can afford. Get pre-approved, but make sure you look at your budget and what size payment will fit best.
Buying a home comes with a new mortgage payment, of course. However, it also comes with quite a few other expenses you want to consider. If you’re a first-time homebuyer, make sure you consider all of the following expenses before you buy your new home.
Common Costs of Homeownership to Consider
1. Home Insurance
You will need home insurance, which has to be figured into your monthly budget. This cost of homeownership is rather important and will likely be required by your lender. Plus, your insurance will protect you if something happens to your home.
2. Property Taxes
The average amount you will pay for property taxes in the United States will range from $675 to $6,000 for a $250,000 homes per year. This amount needs to be factored into your budget, too. Often, you can have taxes and insurance added to your monthly mortgage payment, which can be helpful.
3. Home Maintenance
A big wildcard for homeowners is the home maintenance expense. You cannot easily predict when things might go bad or need to be repaired. However, a good rule of thumb is to save about 1% of the value of your home every year.
4. HOA Dues
If you move into a neighborhood with a homeowner’s association, you will need to pay HOA dues. These fees can range quite a bit, but usually you will pay less than $100 per month for your HOA dues. Make sure you know how much this will cost you and factor it into your monthly budget.
These are some of the costs you want to look at when you want to buy a home. Make sure you factor in all the potential costs you might face to ensure you can afford your new home.
Buying a home is a big deal. It’s not only financial, but also emotional. Do you see yourself in the property you’re considering long-term? If not, you might want to think twice about buying this new property.
You will put money down, pay closing costs, and pay interest on your mortgage when you buy a home. With this being the case, you might want to make sure you will stay in the home long enough to make it worth it. Let’s look at a few things to consider before you make a long-term commitment to a property.
What to Consider When Buying a House for the Long Term
1. Potential Appreciation
Your home will likely appreciate over time, but how long will it take to make it worth it to spend the money on closing costs? Look at the average appreciation rate and figure out how long you need to live in the property before selling, to get your closing costs back.
2. Family Growth
Do you have two kids now and you plan to have more? If so, will you need a larger home in just a few years? Make sure you consider how your family will grow before making a long-term commitment to a property.
3. Job Security
If you think you might need to relocate for your job in a few years, it might not be the time to make a long-term commitment to a property. Make sure you look at your employment situation before you decide to buy a home.
Make sure you take the time to consider the property and what your life might look like in the next few years. Often, you need to plan to stay in a property for at least five years to make it worth buying. Make sure you can make a long-term commitment before you purchase a home.
When you’re ready to start shopping for a new home, you want to make sure you understand your goals. Maybe you’re a first-time buyer and you want to stop renting. Maybe you need to downsize or upsize as your family changes. No matter your goals, it’s important to have well-defined goals when you start shopping for a new home.
How to Figure Out Your Property Goals
Before you shop for a home, you should figure out what you need and what you want. This will help you set your goals and find the right home for your needs. Let’s look at a few of the things to look at before you start looking for a home.
Space/Bedrooms/Bathrooms
The main factor for most buyers is the space available to them in a home. You might need a specific number of bedrooms or you might prefer a specific number of bathrooms. This is the first place to start with your goals.
Think about your family size and what you need. Then, think about what you want and make sure you list both out as you figure out your goals.
Location/Neighborhood
Your location or neighborhood will also be an important thing to factor into your goals. Make sure you consider the commute you will have to work, for school for your children, and to other areas you frequent. Of course, you also might have certain amenities you want in your neighborhood. Consider what you want and set your property goals based on the neighborhoods you prefer.
Space for Pets
If you have pets, they will factor into your property goals, too. For example, if you have dogs, you might need a fenced back yard, but your goal might be to have enough space to create a specific type of area for your pets. Make sure you consider your pets when figuring out your property goals.
If you’re ready to start the home buying process, you want to start with figuring out which real estate agent and mortgage lender you will work with. This is a very important part of the process, as your agent and lender will set you up for success.
Before you start searching online for the right home for you, search for the right agent and lender for your needs. It’s important to have your financial ducks in a row, and then have your agent help you find the right home.
Getting the Right Real Estate Agent
Your agent will likely be able to refer you to a lender or two to check out before you start your home search. This means finding the right agent is very important. Make sure you interview a few agents and do your research to make sure you have an agent that will fit best with your needs.
When you have the right real estate agent, you will be able to find the right home for you faster and easier. Plus, your agent will walk you through the entire home-buying process and keep you informed throughout.
Finding the Right Mortgage Lender
Your lender is one of the first people you should work with after finding the right real estate agent. It’s important to become pre-approved before you start the home search process. Without a pre-approval letter, you might fall in love with a home you cannot afford or simply are not ready to submit an offer on. Make sure you have a good lender and a pre-approval letter before you start looking for the right home for you.
If you’re considering buying a home, it’s time to find the right real estate agent and mortgage lender.
