FREQUENTLY ASKED QUESTIONS

 A real estate agent has an in-depth knowledge of the area and how your home compares to others on the market.

They’ll have a good idea of how much you can get for your home and ways you can improve its value.

When it’s time to list, they’ll make sure your home’s priced just right, helping to maximize your offers and sell your home faster. They’ll also take care of all the paperwork, market your home, and coordinate open houses.

Real estate agents aren’t just helpful during the listing process, though. They offer a network of professionals throughout the entire selling journey.

You’ll have connections for everyone you need, whether that’s a closing agent or quality listing photographer.

On average, a house takes between 55 and 70 days to sell. That includes 25 days on the market and 30 to 45 days for closing.

The exact time it takes to sell a home depends on a few things, including:

• The time of year you’re listing: Homes tend to sell faster in the spring and early fall.
• Conditions in your local housing market: Homes sell faster in a seller’s market, when there is low inventory and high demand.
• The condition of your home: Homes in great condition may sell faster than homes that need more work.
• How the buyer is financing: If a buyer needs to take out a mortgage, this may slow down the process. Financing deals usually take an average of 42 days to close, whereas cash deals take only one to two weeks.

The longer your home is on the market, the more money you lose. You’ll still have to pay your mortgage, taxes, and utilities until the buyer officially closes.

 Total agent fees are usually 5–6%, with 3% of that going to the seller and 3% going to the buyer.

As the seller, you’ll be responsible for paying your agent through your sale profits. You’ll also pay the commission of the buyer’s agent. You won’t need to write a bunch of big checks or bring wads of cash to the table. A closing agent will handle the distribution of funds when you close.

They’ll hold money from the buyer in escrow and use it to pay everyone, including your agent.

Escrow is a third-party account where the listing agent keeps money until it’s time to be distributed.

You can definitely negotiate your realtor’s fees. They’re typically 6%, with 3% of that going to the buyer’s agent and 3% going to your agent.  You can also try to negotiate fees on your own, though the realtor may reduce the number of services they provide. 

The absolute first step is to get approved for a mortgage. Without being approved for a mortgage it will be quite difficult, if not impossible, to purchase a new home.  

A mortgage is a type of loan to finance a property. A mortgage serves as a secure loan that comes with a fixed interest rate and gets paid off over 15 or 30 years. If need be, a person can refinance their mortgage and payments in the future. 

Before you can purchase a home, you’ll need to check your credit score. Potential buyers with credit scores of 700 or higher reassure lenders that they can be trusted to repay the loan.

High scores reflect consistent on-time payments, long-term borrowing experience, and a good mix of credit types (student loans, car loans, credit cards, etc.).

Lenders look at these factors to determine if you qualify for certain kinds of mortgages, so be sure to review your credit history and correct any errors. This will give you a better chance at qualifying for loans with lower interest rates.

Shop around for different mortgage lenders to find out what kind of loans you prequalify for before beginning your home search. With this knowledge, you can easily create a budget and start looking for homes within that range.

The first step in deciding your home’s list price is to get a comparative market analysis (CMA).

You can do this yourself, but most people get their real estate agent to do it.

Here’s how a CMA works. Your agent will find similar homes in your neighborhood that have the same square footage, number of bedrooms, and number of bathrooms.

They’ll see what these homes recently sold for or are listed for, and use this as a starting point for your own list price.

Your home's assessed value and market value are each determined by different factors.

Buyers and sellers affect the market value of a home, while professional appraisers calculate the assessed value.

• In a seller’s market, your home’s market value may be higher than its assessed value. That’s because buyers are willing to pay more than the home is technically worth because of low inventory.
• In a buyer’s market, you’ll be facing a lot of competition from other sellers, so buyers may put in an offer lower than the home’s assessed value.

Making a down payment of 20% is ideal because you can avoid paying private mortgage insurance (PMI), but more realistically, lenders usually require at least 3% for the sale to go through.

Depending on where you live and what kind of mortgage you’re eligible for, some lenders may require a minimum of 5%.

In some circumstances, you may not have to worry about a down payment at all. If you’re a first-time buyer, veteran, or rural resident, there are special programs available to help you afford a home.

Earnest money is often described as a “good-faith deposit” from an interested buyer. The amount is usually 1–3% of the home’s purchase price, and it shows the seller that the buyer is serious about closing the deal

As the sale is pending, the earnest money is placed in escrow (an account held by a third party until the sale is finalized). At closing, the funds can go towards closing costs or a down payment on the home.

If the buyer has to back out of purchasing the home due to a contingency in the escrow agreement, they will get their earnest money back. However, if the buyer chooses to back out of the deal for any other reason, the money will go to the seller instead.

Title insurance protects homeowners from claims against their home that happened before they purchased it, such as a prior owner’s failure to pay taxes or fairly compensate contractors. 

If you have title insurance, you’ll be covered for legal fees or title disputes that may come up during your time as the homeowner.

There are actually two kinds of title insurance:

1. Lender title insurance is usually required when selling a home. This type protects the lender from any claims made on the house.
2. Owner title insurance is completely optional, but paying this one-time fee will protect you from unexpected issues with the home’s title for as long as you own the house.

Purchasing both insurance policies is usually a good idea, and the combined cost is only about 0.5% of the home’s purchase price

Early spring and summer, especially June, is a great time to sell a home.

Research shows that home sales in May, June, July, and August account for 40% of total annual sales volume.

Overall, home sales are still pretty good through early fall, so it wouldn’t be a bad idea to sell a home during this period, either.

However, home sales drop once winter hits. January is the worst time to sell a home, as market activity is much lower.

Whether or not you should buy a new home before selling your existing home is a personal choice.

Having a new home lined up gives you peace of mind when selling, and you can move out on your own time. It also prevents you from lining up temporary housing (and having to move twice), which can be a pain.

That said, you may get stuck paying two mortgages at once. This can be a problem if your sale takes longer than expected. You can also feel rushed into quickly finding a house instead of waiting for a better deal.

 How much you actually get when selling your home depends on a lot of factors, but in general, expect somewhere between 90–92% of the sale price.

• That usually includes 5–6% in realtor commissions and 2–4% in taxes and fees.
• If you still owe money on your old mortgage, you will get less.
• You’ll also get less if you agreed to pay for any of the buyer’s closing costs.
• Buyer’s closing costs can add on another 2–5% of the sale price.

On closing day, your closing agent will distribute the funds to all the necessary parties. They’ll pay out your profits via a check or wire transfer.

It’s the buyer’s responsibility to get a home inspection, so as the seller, you don’t need to get one. An inspection usually ranges from $300–500, so that’s money you can keep in your pocket.

That said, a pre-listing inspection does have some benefits: 

• You’ll have the chance to discover and take care of major problems before listing, which could increase the value of your home.
• You’ll get to choose your own inspector instead of relying on the buyer’s choice.
• You may be able to set a higher list price if your home is in great shape.
• You can encourage the buyer to waive the inspection contingency, meaning there will be fewer chances for your deal to fall through.

If the buyer is just taking out a conventional loan, you’ll probably only need to fix major structural issues that put the value of the house at risk, such as foundation cracks or a deteriorating roof.

These required repairs might include things like:

• Patching up peeling paint
• Concealing any exposed wiring
• Fixing broken gutters
• Installing missing handrails on stairs

This list is more extensive because an FHA loan is provided to low-income homebuyers who may not have extra money to cover repairs on their own.

States and banks can also set their own requirements, so always check your local regulations..

Sellers generally have about 72 hours to respond to an offer, but this may vary by state. If a bank is selling a home, on the other hand, the response can take several days or weeks.

If you make an offer and the seller doesn’t respond at all, your offer was probably too low. To increase the likelihood that your offer will be accepted, a local realtor can help you strike the right balance between a reasonable cost for you and an appealing price for the seller.