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June 17, 2021

Who Pays for the Closing Costs? Buyer or Seller?

Your world will be consumed with new lingo, previously unimaginable expense, and weighty decisions on matters you've never considered before from the moment you decide to buy a house until closing – all while you reimagine your life as a homeowner. Having a comprehensive understanding of the entire process can assist you in negotiating the best possible deal.

 

Crop payroll clerk counting money while sitting at table

 

Closing costs are paid following the terms of the buyer-seller purchase contract. Typically, the buyer pays the majority of the closing costs, but in some cases, the seller may be required to pay some fees at closing as well.

 

Here's what you need to know about the closing costs:

 

What are Closing Costs?

 

Buyer and seller closing costs are monies due at closing, typically ranging from 3% to 5% of the total purchase price and consisting of fees and taxes. Although closing costs differ between buyers and sellers, they are usually predictable. 

 

When it comes to who usually pays closing costs, either the buyer or the seller can be held liable. Before signing on the dotted line, both the buyer and seller must agree on how these expenses will be paid.

 

Buyer's Closing Costs

 

Closing costs for homebuyers are not cheap, typically ranging from 2% to 5% of the sale price. In general, the buyer is responsible for all costs associated with the loan, the property, and the required insurance policies.

 

As a buyer, your closing costs may include, but are not limited to:

 

Mortgage Costs

Buyers will receive a Closing Disclosure, which will provide a final breakdown of all costs associated with the mortgage loan.

Property Costs

Buyers are responsible for the appraisal and home inspection, which are both required by the lender. Property taxes are a major factor in closing costs.

Insurance Fees

Buyers will be required to pay for title insurance for both the lender and themselves to protect themselves against title claims. Buyers will also be required to purchase a homeowner's insurance policy to protect themselves and the lender in the event of property damage.

Escrow Deposits

To form a "cushion" in your loan's escrow account, your lender will most likely require you to pre-pay a few months of taxes and insurance.

Attorney Fees

Real estate closings usually involve an attorney for the buyer, seller, or both.

 

It's important to note that these fees, as well as the buyer's obligation to pay them, can vary greatly depending on where you live. Be sure to ask your real estate agent regarding these.

 

Seller's Closing Costs

 

Sellers have fewer items to pay than buyers, but that doesn't mean they get off lightly.

 

Sellers incur fewer expenses, but they pay more at closing. Sellers typically pay real estate commissions to both the buyers' and sellers' agents. This usually amounts to 6% of the total purchase price or 3% for each agent.

 

In addition, sellers frequently pay for the buyers' title insurance policy, which is a low-cost supplement to the lender's policy. They may also be required to pay the buyer's property taxes if they have not already paid them for the year.

 

 

 

 

While closing costs can be costly, they should not be the deciding factor in whether or not you buy a home. In fact, it is quite common for sellers to pay both sides of the closing costs in order to achieve a quick and easy sale.

June 3, 2021

Just Due It: A Guide to Due Diligence for Homebuyers

Buying a home is thrilling, but remember that this is a legal transaction before you get carried away daydreaming about how you'll arrange your furnishings. As a buyer, you must conduct due diligence from both a practical and contractual standpoint.

 

woman in red blazer holding white paper

 

The real estate due diligence procedure is difficult for many home buyers and investors. Knowing where to start, what information to study, and how to obtain the necessary information to assist you to decide whether or not the property you're looking at is a good investment can be frightening and stressful (especially if you've never done it before).

 

In the context of residential real estate, what does due diligence imply?

 

What is Due Diligence in real estate?

Before the house being transferred ownership, the buyer must conduct due diligence on the property and understand what they are purchasing. Each acquisition offer contract specifies a period during which the buyer will be permitted to complete specific due diligence tasks.

 

Research the area

Location, location, location! Request assistance from your real estate agent in determining the current situation of the real estate market in your desired location. Some things to keep in mind:

 

 

Discuss domestic home issues

Every home requires upkeep, but some areas are more prone to additional costs owing to weather, flora, or fauna.

 

  • Nearby animals that might be destructive to foundations or landscaping
  • Flood-prone areas, or areas that have poor drainage
  • Certain bugs or vermin that have the potential to destroy wood
  • Tall trees that could pose threats in storms

 

Understand any zoning laws

Inquire with your real estate agent about any zoning rules that apply to the property.

 

Certain types or numbers of structures, such as mobile homes or sheds, may be prohibited by zoning. Zoning rules may limit your rental options or the kind of animals you can have on your property. Certain trucks or trailers are sometimes prohibited from being parked due to zoning rules. Check to see if the zoning standards fit your lifestyle.

 

Check the property's flood zone status

Check to see if the house is in a flood zone according to FEMA. You can do this by searching up the address on the FEMA maps that have been reported. A FEMA flood zone is usually determined by elevation above sea level.

 

You'll need flood insurance if your home is in a FEMA flood zone.

 

Get a Title Insurance

When conducting due diligence, title insurance should be a top priority. Before you buy the property, the title company will do a title review to see whether there are any heirs or outstanding liens.

 

However, a title review is not always thorough. If the title firm misses something, title insurance shields you against the legal battle that follows.

 

 

Due diligence in real estate is the process of gathering adequate information on a property to make the best possible purchasing decision. Due diligence is designed to keep sellers accountable while also protecting buyers from making poor decisions. This is also where your real estate agent comes in handy - let say they will be your tutor, there to guide you every step of the way. 

 

 

So get out there and do your homework!

May 16, 2021

6 Selling Mistakes You Might Be Making and How to Correct Them

Anticipating issues before they arise is half the battle of selling a house. Selling a house is a significant life event, and it can be complicated when you consider all of the steps involved: planning and listing the property, making renovations, finding a buyer, negotiating the closing process, and eventually moving into your new home. And if you make mistakes during the home selling process, you could lose a lot of money.

Crop person with smartphone and notebook using touchpad on laptop

There is a lot of work to be done before you can make a list. During the home selling process, there are several ways to make a mistake. The following are some of the most common mistakes to avoid while selling a house:

 

Set more realistic pricing

The price you want and the price the consumer is willing to pay may be very different. Overpricing a home occurs more often than you would expect. It's never easy to resist the temptation to overprice your house. The longer your home is on the market, the more likely you are to have to lower the asking price. If you can't find the sweet spot, you risk losing money or letting your home in the market for longer than necessary, all of which can have negative effects.

 

Study your house's real value

You may have a rough estimate of how much your home is worth based on homes that have sold nearby with similar sizes and amenities. But this is the part where your real estate agent can be of help. Look at what similar homes in your area are listed for, do some research on what homes in your neighborhood have recently sold for, and use an online calculator to get a home value estimate. Your agent will also be able to collaborate with you. Your agent will also be able to work with you to price your home competitively.

 

Use professional photos on your listing

The first thing a prospective home buyer sees is the images, which may influence buyers' interest. Poorly lit images taken with just your mobile phone may no longer attract potential buyers, and studies show that professional photos will help you sell your home faster and for more money. Buyers want high-quality photographs that highlight your home's best features and real estate photographers know the best ways to show your home as appealing as possible. Professional pictures will help your home stand out from the crowd. 

 

Choose the right agent for you

If all goes well, the real estate agent can help you make the most money on your home sale, but they can also cost you thousands if things go wrong. Determine the best path for your home sale, as well as the best resources and/or people to assist you. 

 

Take the time to interview prospective real estate agents to ensure you're getting the best bang for your buck. Check their qualifications and licenses, speak to previous customers, and make sure they have a lot of experience selling in your market and price range. Learn more about the agent you'll be recruiting to make sure they understand your needs.

 

Have your home staged

The ability to display your taste through furniture, paint colors, photos, and decorations is one of the best aspects of owning a house, however, buyers want to be able to see themselves living in the house. When it comes to selling your home, having a well-kept home and making a good first impression are crucial. A staging professional's role is to plan your home in such a way that the property's strengths are highlighted while its flaws are minimized. This will allow your home to be displayed to its full potential.

 

Be knowledgeable on ALL the closing costs

The overall cost of selling a home can be much higher than the 5-6 percent in agent commissions that most people expect. When closing costs, repairs, and other concessions to the buyer are factored in, the selling costs can be closer to 10% of the sale price. If you move into your new home before selling your old one, for example, you may need to rent a temporary place or pay for both mortgages as well as other carrying costs like electricity, HOA dues, taxes, and storage. Knowing this information before you list your home will help you select the best method of selling and estimate how much you'll have to spend on your next home.

 

Finally, you want the home sale process to be as easy and painless as possible. It's easy to become overwhelmed when you consider all the things that can go wrong, but remember that awareness is strength. The longer your home remains on the market, the less desirable it becomes to potential buyers. Identify the problems that are stopping prospective buyers from making offers and address them as soon as possible. You will be able to sell your home easily this way.

May 15, 2021

How To Prepare For A Smooth Closing Process

You have been looking forward to buying your first house for so long, and it was quite a process but you survived. The home seller has therefore accepted your offer and you are excited but admittedly tired. During the next couple of weeks, you will communicate frequently with your lender and make certain you get a lot of insurance, take a final sweep at your soon-to-be home and prepare for closing day. To start you off, here are things you need to prepare from the day you accept your offer and the day you get your key to your dream house!

 

Man in Blue and White Plaid Dress Shirt Carrying Girl in White Dress

 

Plan ahead for the big picture

 

Closing a home usually takes 30-60 days with other several steps that must be taken to ensure that the closing process is quick and smooth. Many steps are taken simultaneously, so make a plan to track where you are, with every closing requirement. In this way, you can quickly move to the next step more efficiently. 

 

Also, note that there are online platforms that can help you close the deal faster than the average length of time. Make sure to ask your real estate agent if they know any of these sites. 

 

Send the documents and respond to the lender's requests

Average Time: Ongoing throughout the process

 

From this point on you are practically committed to your lender. Once the seller accepts your offer, please ask the lender before closing for a list of all you want. You might still ask for more, but you have at least an overall idea.

 

According to the law, the lender must give you an appraisal of your loan within three working days after you apply for it. This includes the completion of the property you choose to buy. The estimate tells you the total cost and closing cost of your loan. Review it closely when you receive your estimate.

 

It is time for you to consider having a rate lock. Talk with your lender or agent about the closing times of your housing market before you decide what kind of rate locks will meet your needs.

 

It's also important to maintain a stable situation with credit and income. Your lender can check your loan and income before you close a house. You don't want any other disruptions so close to getting your new house!

 

Shop for title insurance and other closing services 

Average time: 7-14 days

 

The title insurance of your lender protects your loan from property title issues. In general, your lender will require you to buy this in the process of closing.

 

Usually, your lender or real estate agent will advise their preferred escrow officers or you can request the use of one with which you worked before. 

 

 

Shop for homeowner's insurance

Average time: 3-14 days

 

Most lenders require buyers to be insured until the loan is paid in its entirety. Probably before closing, your lender will request that you provide proof of insurance. Check-in with the lender to find out what coverages they need, and then shop for quotes – or work to tailor a policy to meet your needs with your existing insurance agency.

 

 

Take a final walkthrough 

Average time: 3 days

 

Last-minute problems may arise before closing. It's a good time to walk through the house and see what was negotiated following the inspection.

 

Also, if the seller moved out after the inspection, but before your final walkthrough, did they damage anything on the way out? Are the agreed appliances still in the house?

 

If the final step reveals an important issue, let your agent talk to the seller's agent. Ideally, instead of delaying closure, you can receive a concession.

 

More often, minor problems are noticed, like hole holes behind the artwork, bathrooms or kitchens that need deep cleaning, etc. This is a good time to ask your agent for a few good contractors so that after closing and before you move in there you can plan someone to deal with this issue.

 

 

Review Documents 

Average time: 3 days

 

The closing agent has to provide you with a final loan disclosure at least three working days before your paperwork will be signed. Check with your escrow company to make sure that every document you need to sign is on track to send.

 

There are several crucial things to check when you settle to sign the closing documents, even though you have examined them carefully:

 

  • Are the loan type, interest rate, monthly payment, and other key terms what I expected? 
  • Do all the documents contain my personal information correct?
  • Are there fees that I do not understand or have substantially changed?
  • What if my mortgage payments fall behind?

 

If the documents you reviewed before closing have significant differences from the documents they give you upon closing, keep your signature until you fully comprehend the reason.

May 15, 2021

Making A Winning Offer For Your Dream Home

Homebuyers are now facing a strong sellers' market - many active buyers compete for a relatively small inventory of homes for sale. There are also several benefits for the buyer in the current market, especially with its historically low mortgage rate. It is therefore important to have advantages about how you can offer your dream home with trust and competition. 

woman celebrating besides man looking at tablet

In this critical phase of home buying, you must understand how the market moves and current market trend updates. Here are 4 tips so you could win the bidding war for your dream home!

 

Listen to Your Real Estate Advisor

Trusted professionals can help you focus on the main things, especially at times when buyers feel emotional. They are there to make you remember that they can guide you on your journey with your home-buying, and will make you think more rationally than sentimental. You will not compromise on your must-haves and future financial stability through your support and expertise. They also have experience in this whole grueling process, and you should take advantage of them being in your team. 

If you are ready to make an offer, a real estate professional should be the expert guide to you.

 

Get Your Loan Pre-Approved

It's important to understand your budget completely and how much you can afford, even before you scout for neighborhoods and properties. This can best be known if a loan early in the housing procurement process is pre-approved. Just under half the prospective home buyers today plan to apply for pre-approval, so be sure to do this so that you are out of the crowd. This shows sellers that you are a serious and qualified buyer and that in a war of bidding, you have a competitive edge.

 

Prepare to move in immediately

The average number of properties in the market today is for only 21 days, according to the Realtors confidence index, which was lately released by the National Association of Realtors (NAR). These are both results of the current competitive market and this demonstrates how much it is important to keep your search agile and alert. Once your needs are met, be prepared to submit an offer as soon as possible.

Based on your negotiations with the seller, some might need more time to move from their homes and this can be a good opportunity for you to prepare as well. It is best to meet halfway with the seller regarding your time frame, and include this in your offer. 

 

Make a Fair Offer

Who doesn't want to get the best deal for your dream home? However, you should also understand the seller's side to be able to make a good offer that they want. If an offer is too low, sellers can be doubtful of how serious you are as a buyer. Your agent will collaborate with you to make an informed offer based on the home's market value, home status, and the latest local sales prices. Your agent's expertise will help you remain competitive in this part of the process. Do not make an offer that is thrown out once it has been received. Remember, the market is competitive and that is your dream house! 

 

It is more important than ever to make a strong offer on a home in today's competitive market. Reach out to your real estate agent to make sure you rise to the top along the way.

May 14, 2021

Why Selling Your Vacation Home is Wise in Today's Market

 

Wooden balcony with wicker armchair and potted plant on exotic resort in sunlight

There has been an increase in demand for vacation homes and selling yours can earn you more in today's market. Many of us start planning for the long-awaited holidays that we missed last year. Meanwhile, some households focus on purchasing a holiday home instead of staying in a hotel. It is not surprising that the demand for holiday homes is growing. Social distance teaches consumers new ways of socializing.

 

Not only do holiday homes look like a potentially pandemic way of traveling and getting in touch, but they can also be seen as a long-distance home. With more Americans able to work remotely or withdraw beforehand as expected, holiday homes are available throughout the year.

 

The NAHB explains:

 

“Remote work arrangements have made it possible for some wealthier Americans to move to alternate locations that are not just small, suburban shifts from within their current metro area. More fundamentally, second home demand may also be benefitting by an acceleration of retirement plans, as well as stock market gains.”

 

Demand for holiday homes has grown and is growing as we go into the summer. Now it's a great time to take advantage of today's high buyer interest to own a home in a destination area and think about selling. Contact your real estate agent to discuss local market opportunities and assess your vacation house's worth

May 7, 2021

Secret and easy tips when buying for first home

When buying a home, you must take extra care and pay close attention to every detail; otherwise, your dream of owning the perfect home could be shattered in an instant! It is also best to prepare your finances - your credit, limits, etc. - before meeting with a realtor or go house hunting. 

 

beige and white concrete building

 

The home-buying process can be intimidating, particularly if it's your first time. It can also be challenging for regular homebuyers because the real estate market is always changing. Here are some home-buying tips that will ensure you get your dream home and that your hard-earned money is well spent.

 

Keep your money in one place

 

It is important to have a good credit profile if you're planning on applying for a mortgage- especially if it's your first. Lenders want to see that you're trustworthy, and they want to see a paper trail of your financial documents so that they can give you the best loan possible. It might be unwise to show any big purchases for the last three to six months, so better keep your money where it is. 

 

Get your home loan pre-approved 

 

Anyone can get pre-qualified for a loan, but a pre-approved mortgage is different. Pre-approval ensures that a lender has gone over all of the financial documents and determined how much you can afford and how much they can lend you. Being pre-approved would save you a lot of time and effort because you won't be wasting your time searching for homes you can't afford. It also allows you to browse around for the best deal and the lowest interest rates. You can also check the market updates properly once you know your financial capacity. 

 

Set aside a budget for other costs

 

The sleeper costs are the difference between renting and owning a house. Most people just think about their mortgage payment, but they should also consider other costs including property taxes, electricity, and homeowner's association dues. In addition, new homeowners must budget for renovations, maintenance, and future property tax increases. It is wise to make sure you account for these kinds of expenses.

 

Stalk the Neighborhood

 

Many homebuyers have been devastated after believing they had found the ideal home only to discover the area was not right for them. Go for a walk around the neighborhood at different times during the day and on different days of the week. You can also try to commute to get the feel of accessibility around the area. A quick expert tip - the value of a home purchased in a good school district versus a bad school district can vary by as much as 20%. So better check those too, even if you have no kids. 

Posted in Buying a Home
May 3, 2021

Home-selling mistakes you have to avoid

Selling your home can be quite daunting and emotions can get the best of you. Even if you have experience in selling a property, you're still not prone to several errors along the way. 

 Silver Cross Pendant on Persons Hand

 

With no prior experience and a complicated, emotional transaction on their hands, first-time home sellers are prone to making several errors. Many of these mistakes can be avoided with little knowledge. Continue reading to learn how to sell your home for the best possible price in a fair amount of time without losing your mind.

Here are some of the mistakes that you should keep in mind and avoid.

 

Allowing your emotions to get in the way

 

When it comes to saying goodbyes, most people struggle to hold their feelings in check. However, it is important to remain focused on the business side of selling your house. Instead of thinking of yourself as a homeowner, start thinking of yourself as a businessperson and a salesperson. You'll be able to separate yourself from the emotional implications of selling the property if you approach the deal solely from a financial standpoint. Having an agent for this purpose will prevent you from having any emotional breakdowns. 

 

Not getting an agent

 

A good real estate agent is usually looking out for your best interests. They'll assist you in determining a fair and affordable selling price for your house, improving your chances of a fast sale. By engaging with prospective buyers and weeding out tire kickers who just want to look at your property but have no intention of making a bid, an agent will also help to de-emotionalize the process.

 

Your agent would also have more negotiating experience than you, allowing you to get more money than you could on your own. And if any issues arise during the process—which they almost always do—an qualified specialist will be on hand to assist you. Finally, real estate brokers are well-versed in many of the paperwork and pitfalls associated with real estate transactions. 

 

Another important decision that your agent can help you with is pricing. It takes experience and skill for this decision. It's crucial to choose the correct asking price. Remember when you or your agent did a comparative market study to assess a reasonable asking price for your home? Buyers would do the same for your house, so you should be one step ahead of them as a seller.

 

Though agents come with a cost - those extra savings from not hiring one might not be worth the emotional distraught and stress you'll surely encounter in the process if you decided to go the route of FSBO or selling your own house. You might even lose a few dollars in the end. 

 

Not Investing in Listing Photos

 

Too many buyers search for homes online these days, and they get their first impressions of those homes for their visuals. You'll be doing yourself a disservice if you don't have any good photos of your home. The best pictures are taken during the day when there is plenty of natural light. It could just be simple wide-angled shots. Just make sure it highlights the best features of your home. If at all possible, use a wide-angle lens to give prospective customers a clearer understanding of what the entire space looks like. To improve your listing, consider including a virtual tour or a 360-degree view. Any smartphone can be used to do this. You will persuade more prospective customers to visit your home for a viewing. 

Posted in Selling Your Home
April 30, 2021

Buyer and Seller's Perks in the Current Housing Market

The housing market is already brimming with fantastic prospects. The current real estate market is a hive of activity. Both the buyer and the seller have exciting opportunities. Today's economy offers certain benefits that we don't often see.

 

If you're planning to purchase or sell a home this year, there are perks today that are rarely available and are well worth looking into.

 

aerial view of green trees and white buildings during daytime

 

The Biggest Perk for Buyers: Low Mortgage Rates

 

Low mortgage interest rates are the most convincing buyer lure today.

 

This is a significant benefit for buyers and aims to make homeownership more accessible to more families – and there are many reasons to aspire for homeownership. According to CoreLogic's new Homeowner Equity Study, homeowners saw significant increases in their net worth last year as a result of owning a house. 

 

Low mortgage rates are a benefit to buyers right now, but analysts predict that they will rise as the year progresses. If you're ready to buy a house, you can start the process as soon as possible to take advantage of today's low-interest rates. If the time is right for you to buy a house, don't miss out on this once-in-a-lifetime chance.

 

 

The Biggest Perk for Sellers: Low Inventory

 

There are not enough houses on the market today to accommodate the number of people looking to buy them. Houses are selling faster than they are being listed these days, resulting in an even tighter supply.

 

Lack of inventory has been a problem for a long time, and with low mortgage rates driving buyer demand, inventory is much more difficult to come by today. Buyers are willing to buy, and due to the scarcity of affordable properties, more bidding wars are erupting. This is one of the reasons that is holding home prices high, which is good for sellers.

 

Homeowners who are in a position to sell can make their move as soon as possible. Listing soon rather than later will put your home on the market while the market is at its best. Because of the low inventory and strong buyer demand in the spring market, homeowners will be able to make a higher profit on their homes and sell them more quickly.

 

There are significant benefits available in today's housing market, whether you're thinking about buying or selling a house. Contact a reputable real estate agent today to learn more about how these favorable conditions will benefit you in your area.

April 27, 2021

Is It Worth Staging in a Seller's Market?

Given that having buyers through the door is half the fight of selling a house, it's no surprise that staging will be beneficial. And, while you can't predict what everyone's taste will be, you can stage a home to appeal to a wider range of people and make it more appealing to potential buyers.

 

 

With so many people looking at your house, not everyone can share your enthusiasm for your decor. When it comes to selling your house, you want your room to be the ideal mix of empty and welcoming. This is where home staging will help. Home staging can be very costly, which is why many people forego it. It will, however, pay off handsomely.

 

 

Your Home Would Stand Out With Staging

 

Many home buyers begin their quest for a home online, which means the first impression they have of your home is based on the photos you have posted online. An image is worth a thousand words, but in this situation, it might be worth thousands of dollars if it entices people to come to see your house and make a bid. If people don't like what they see online, chances are they won't want to see it in person. If your neighborhood has more than one home for sale, staging will make your home stand out from the rest.

 

The target of staging is on the potential. Staging a house, according to 83 percent of buyer's agents, makes it easier for a buyer to envision the property as a potential home. Meanwhile, 38% of buyer's agents claim staging encouraged buyers to schedule a viewing at a home they saw advertised online.

 

Staging Prioritizes Keyspaces

Professional stagers understand how to make the most of any room. If your home is on the small side, staging will help prospective buyers concentrate on the openness of your home rather than the lack of square footage. Staging will offer each room a distinct function, removing the guesswork for potential buyers. If buyers can see how the room is used, this will increases their chances of purchasing.

 

 

Staging Can Increase the Value of A Home

 

If you're still not persuaded that staging a home is important, this may be the final straw. As compared to homes that were not staged, one-quarter of buyers' agents told the NAR that staging increased the offering price by 1% to 5%. 22 percent of sellers' agents agree, and 17 percent say it raised the sale price by 6% to 10%.

 

The purpose of staging your home is to pique people's interest in it, and if that happens, a bidding war will ensue. If a buyer falls in love with your house, they'll almost certainly be willing to pay more than the asking price to secure it. While there isn't a direct link between staging and final sale price, staged homes do generate more buyer interest, which is more likely to result in higher offers than homes with little interest.

 

 

Staging Helps Homes Sell Faster

 

 

Although there is some doubt over whether staging leads to higher offers, several studies have shown that staging can help homes sell faster. Even so, the quicker your home sells, the earlier you receive your money and the less money you spend on your mortgage and/or utilities. No seller wants to be stuck with an outdated listing. The longer a property is on the market, the more difficult it is to sell. Why do staged homes sell faster? It all boils down to the points mentioned above: staging allows buyers to assess whether they can see themselves in a home and what your home's worth potential is.