Common Questions
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Is there a best time to sell my house?
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Are there important factors to consider when
selling a home?
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How much is my home worth?
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What should I do to get my house ready?
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Should I make repairs?
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What are my obligations to disclose?
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Must I disclose the terms of other offers?
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Are there standard contingencies in an offer?
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Should I be flexible in granting
contingencies?
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What do I do if my house isn't getting
activity?
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Is it possible to sell for less than my
mortgage?
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How will a foreclosure affect my credit?
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How long will a bankruptcy or foreclosure
stay on my credit report?
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Is it possible to refinance after bankruptcy?
Question 1: Is there a best time to sell
my house?
Property sells year round. It is mostly a
function of supply and demand, as well as other economic factors.
The time of year you choose to sell can make a difference in the
amount of time it takes and the final selling price. Weather
conditions are often a consideration in some states than in other
parts of the country. Generally the real estate market picks up in
the early spring.
During the summer, the market usually slows.
The end of July and August are often the slowest months for real
estate sales. The strong spring market often places upward pressure
on interest rates, many prospective home buyers and REALTORs take
vacations during mid-summer.
After the summer slowdown, sales activity
tends to pick up for a second, although less vigorous, season which
usually lasts into November. The market then slows again as buyers,
sellers and REALTORS turn their attention to the holidays.
The supply of homes on the market diminish
because sellers often wonder whether or not they should take their
homes off the market for the holidays. There are still buyers in the
market place, but now those buyers have fewer homes to choose from.
Those homes on the market at that time have considerably less
competition. Generally speaking, you'll have the best results if
your house is available to show to prospective buyers continuously
until it sells.
The two most important factors are price
and condition in selling a home. The first step is to price it
properly. Then, go through the house to see if there are any
cosmetic defects that can be repaired.
A third factor is exposure. It is also
important that the home gets the exposure it deserves through open
houses, broker open houses, advertising, good signage and listing on
the local multiple listing service, as well as the internet.
Choose the real estate REALTOR that you
believe will get the job done, not the one that quotes you the
highest price - sometimes just to buy your listing.
Question 3: How much is my
home worth?
There are two methods many people use to
determine their homes value, an appraisal and comparative market
analysis.
Appraisals vary in cost and are defendable
in court. They average about $300 for a single family home and more
on multi-family dwellings. Appraisers review numerous factors and
base information on recent sales of similar properties, their
location, square footage, construction quality, excess land, views,
water frontage and amenities such as garages, number of baths, etc.
A comparative market analysis on the other
hand is an informal estimate of market value performed by a real
estate REALTOR or broker. It is based on sales and listings that
will compete with your property that are similar in size, style and
location. A range of values will be determined thus arriving at a
probable market value. Many REALTORs offer a free analysis
anticipating they will have a new client.
The analysis or opinion should be in
writing and should involve professionally accepted appraisal
techniques.
Some individuals do their own cost
comparison. It may take several hours of research at the county
recorders office, where there will be indexes to match street
addresses and parcel numbers. Once matches have been chosen a tax
card can be used to find the assessed value, size, style, number of
rooms, baths, etc.
The way you live in a home and the way you
sell a house are two different things. First and foremost, "declutter"
counter tops, walls and rooms. Too many "things" make it difficult
for the buyer to see their possessions in your rooms or on your
walls, however don't strip everything completely or it will appear
stark and inhospitable. Then clean and make attractive all rooms,
furnishings, floors, walls and ceilings. It's especially important
that the bathroom and kitchen are spotless. Organize closets. Make
sure the basic appliances and fixtures work and get rid of leaky
faucets and frayed cords. Make sure the house smells good: from an
apple pie, cookies baking or spaghetti sauce simmering on the stove.
Hide the kitty litter, and possibly put vases of fresh flowers
throughout the house. Pleasant background music is also a nice touch.
The second important thing to consider is "curb
appeal." People driving by a property will judge it from outside
appearances and make a decision then as to whether or not they want
to see the inside. Sweep the sidewalk, mow the lawn, prune the
bushes, weed the garden and clean debris from the yard. Clean the
windows (both inside and out) and make sure the paint is not chipped
or flaking. Also make sure that the doorbell works.
Minor repairs before putting the house on
the market may lead to a better sales price. Buyers often include a
contingency "inspection clause" in the purchase contract which
allows then to back out if numerous defects are found. Once the
problems are noted, buyers can attempt to negotiate repairs or
lowering the price with the seller. Any known problems that are not
repaired must be revealed as a material defect. You do not have to
repair the problem, only reveal it and the house should be
appropriately priced for that defect.
Items sellers often disclose include:
homeowners association dues: whether or not work done on the house
meets local building codes and permits requirements; the presence of
any neighborhood nuisances or noises which a prospective buyer might
not notice, such as any restrictions on the use of property,
including but not limited to zoning ordinances or association rules.
It is wise to review the seller's written
disclosure prior to a home purchase and ask questions if it does not
satisfy you entirely.
No, according to experts, sellers do not
have to disclose the terms of other offers. You may disclose the
existence of other offers, so that all parties are aware that they
should be submitting their best offer.
Yes, the two basic contingencies in a
purchase contract are financing and inspections.
That often depends on if you are in a
buyer's or a seller's market, the condition of your home, the price
you hope to get, how motivated you are to sell, as well as the
quality and quantity of the offers you are getting.
Any contingencies that are negotiated are
written into your contract. Both the buyer and seller can place
requirements on the table during the negotiation phase.
A frequently seen contingency is regarding
the sale and closing of the buyers home before they can purchase
yours. Whether this requirement is reasonable, or even achievable,
depends on the individuals involved. Financial capabilities usually
play a major role in negotiations. Few people can afford to own two
homes simultaneously, except for some all-cash buyers.
Even in a slow market, price and condition
are the two most important factors in selling a home.
If a home is not getting the activity it
needs in order to sell it is probably because it is overpriced for
the market. The first step is to lower the price. Then go through
the house and see if there are cosmetic defects that you missed that
can be repaired.
The second step is to make sure that the
home is getting the exposure it deserves through open houses, broker
open houses, advertising, good signage and a listing on the multiple
listing service and internet.
A third option is to remove the home from
the market and wait for overall housing conditions to improve and
catch up to the price your asking.
Finally, frustrated sellers who have no
equity and are forced to sell because of a long term illness,
divorce or financial considerations should discuss a short sale or a
deed in lieu of a foreclosure with their mortgage lender and their
REALTOR.
A short sale is when the seller finds a
buyer for a price that is below the mortgage amount and negotiates
the difference with the lender.
In a deed-in-lieu-of-foreclosure, the
lender agrees to take the house back without instituting foreclosure
proceedings. These are considered more radical options than lowering
the price.
A "short sale" is for home sellers who are
upside down on their mortgage. The home's value is less than the
amount of the mortgage. A hardship must exist, then sometimes home
owners can negotiate with lenders and split the difference between
the sale price and loan amount, which still must be paid. A short
sale is often complicated. If the loan has been sold into the
secondary market, the lender will have to get permission from Fannie
Mae or Freddie Mac to negotiate a short sale. Fannie Mae, the
secondary market giant, has a policy of looking at each loan
individually. If the loan was a low-down-payment mortgage with
private mortgage insurance (or PMI), the lender needs to involve the
mortgage insurance company that insured the low-down loan. Once all
these issues are resolved or negotiated, the house may be sold.
Without a doubt a property foreclosure is
one of the most damaging events in terms of the borrower's credit
history.
Talking to the lender who holds the
mortgage note on the property might provide specific answers as the
possible courses of action available to the borrower, as well as to
the effects those actions might have on that person's credit report.
In terms of the effect on credit history, a
deed in lieu of foreclosure or a short sale are not as adverse an
event as is the forced foreclosure.
However, even often a foreclosure or
bankruptcy, there are lenders who are providing loans after 7-10
years have lapsed. The borrower will have many obstacles to overcome
and will need to provide a good paper trail to the lender proving
they are once again credit worthy.
Bankruptcies and foreclosures can remain on
your credit report for 7 to 10 years. However, there are lenders who
will consider an applicant who went through a bankruptcy as recently
as two years ago, as long as good credit has been reestablished.
Much will depend on when the bankruptcy was discharged and what kind
of credit a borrower has reestablished since then. The longer ago
the discharge occurred, the better off a loan applicant will be.
Another factor considered will be the circumstances surrounding the
bankruptcy. If a borrower went through a bankruptcy because his or
her company had financial difficulties due to downsizing or merger
resulting in job loss, that means one thing to a lender. If, however,
a borrower went through bankruptcy because of overextended personal
credit lines from living beyond their means, that means quite a
different thing. If you have additional questions consult "Rebuild
Your Credit: Law Form Kit," Nolo Press, Berkeley, Calif.
Although a good idea, it is
usually difficult to refinance after a bankruptcy. If you have been
struggling but keeping current on your payments the lender may be
accommodating. You first need to contact them and explain your
situation. They may suggest or perhaps you can suggest a way to work
out alternative payments until you recover.
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