So you are thinking about buying a home and you have already read my post about selecting a real estate agent, but you still have some questions. Hopefully below you will see some of those questions asked and answered.
Can you show me homes that you don’t have listed?
- Yes! I am a licensed real estate agent and a member of our local MLS. Therefore, I can show you any home listed in the MLS for sale. I am also a member of MIBOR because I work in Brown County as well as Monroe County.
If I want to see a home I just call the listing agent, correct?
- While you can call the listing agent to see the home he or she has listed, I suggest a different approach. If you know you are going to be in the market to buy, then why not ask friends and family if they know any standout real estate agents?
- See if you can come up with a few agents to consider. You can interview agents as a buyer and a phone conversation sometimes takes care of whether or not it’s a good match.
- The top reason to select one agent to be your guide is that he or she will get to know you and do their best to make sure you get into the right home. If you cold call a listing agent we’ll assume he or she does not know you, there is no trust established, and they might not take the time to get to know what you really need.
If an agent shows me a home, does that make he/she my REALTOR if I want to purchase that home?
- Unless there is an agreement to the contrary, yes.
- If a realtor in Indiana shows you a home at your request and you decide you want to purchase that home, the offer should come from the agent who showed you the home. Unfortunately, many buyers assume they can call the listing agent to see a home and then their realtor (who did not show them the home) can write up the offer as their agent. The agent who showed the home is the procuring cause.
- When I meet a new buyer, I ask if they are working with another realtor before agreeing to show them a home to try to avoid this scenario. A great agent will have your best interests at heart should an agency issue arise.
- Just remember to call the realtor you want to work with to show you any homes.
Will I have to pay your commission?
- When you are working with a realtor as a buyer’s agent, the seller pays the commission.
- The listing agent has already negotiated the rate he/she will pay the buyer’s agent before it hits the MLS.
- Buyers can direct their attention to the home search and the price they can pay for a home will not have to take into account a fee for their agent.
Can you show me your listing and sell me your listing?
- Yes to both. I can show you my listing and represent you for the purchase of my listing. This is called limited agency (or dual agency). The real estate agent is representing both the buyer and seller.
- A consent form has to be signed by all parties to allow limited agency.
- A requirement is for the limited agent to not share ANY information that could give either party an advantage. For example, the price one party is willing to pay should not be discussed with the other party. The agent has to stick to sharing information that he/she would know if they were only representing one side of a transaction.
- If you trust your agent, I find that this sometimes really is beneficial to both parties.
- If you are not comfortable with limited agency I suggest asking your agent if there is someone else in their office you could use to represent you for the purchase.
Do I have to sign a buyer agreement?
- It is not common in Bloomington to have buyers sign a buyers agreement saying you will work with one particular realtor exclusively like it is in some other markets.
- I place a lot of trust in buyers and hope that they come to me before they start their home search so we can go over the process together. Prior to working together we go over our expectations so that moving forward we are on the same page.
I could go on and on with questions and answers. In fact, most of these questions could have much longer answers, but I am trying to keep it concise. My advice to someone looking to hire a realtor varies based on their situation and I always error on the side of caution. If you have other questions, reach out to me!
I always recommend a radon test when purchasing a home. Your inspector will ask if you’d like to test for radon. Some homes have radon mitigation systems in place, but many don’t. It doesn’t hurt to test even if a system is in place in order to confirm that it’s doing its job. Homes on crawlspaces can test high for radon so it’s not just limited to homes with basements.
What is radon?
It is a colorless, odorless radioactive gas that is caused by a breakdown of uranium and moves up from the ground into the air we breathe. So it can exist anywhere and your greatest exposure is in your home where you spend most of your time. Testing is the only way to know your level of exposure.
Is it dangerous?
Yes, radon can cause cancer and it certainly impacts your indoor air quality. Radon is the number one cause of lung cancer among non-smokers. It is estimated to be responsible for 21,000 lung cancer deaths per year (2,900 of those individuals never smoked).
What level of radon is allowable by EPA standards?
If a home tests at 4 pCi/L (picocuries per liter) or higher then it is recommended that a radon mitigation system be installed. Those systems are very effective at lowering levels and several companies in the area are qualified to do that. The level of radon is an average over a period of time. Nearly 1 out of every 15 homes is estimated to have elevated radon levels.
How is it mitigated?
A vent pipe system with a fan is typically installed to pull radon from beneath the home and vent it outside. It doesn’t require any major changes to a home so it’s relatively easy to add. The cost can range between $900-$1,500 depending on how large the home is. Two systems might be required. I would consider inquiring about radon-resistant construction techniques if I were building or remodeling a home. In addition to a radon system, you can also have foundation cracks sealed or anything else sealed that might be letting the gas escape into the home. That will help make the system more effective.
As always, reach out to me with any further questions!
So you want to buy a home, but are you really ready to buy in this market? The number one thing that sellers fear is buyers walking away from the sale. Thus, sellers and their savvy realtors know that they need to see a solid letter from a lender OR proof of funds before they accept an offer. This means that once you, as a buyer, have interviewed realtors (yes, buyers can and should interview realtors) and selected one, the next step is going to be to meet with lenders if you are getting a loan.
There are a number of things that can happen when the time arrives for you to attain a pre-qualification or pre-approval letter from a lender.
1.) You call your realtor out of the blue to see a home you love and don’t have a letter yet.
2.) You saw a home with your realtor that you want to make an offer on, but don’t have a letter yet.
3.) You have your letter ready, but it’s for an amount different than what you are offering.
For scenarios, 1 and 2 your best and fastest way to get pre-qualified is to fill out an online application. That way you have a letter to submit with your offer. You are not obligated to use that lender, but it sure would’ve been easier if you met with and selected a lender prior to making an offer. It’s not uncommon for buyers to put the cart before the horse, so don’t despair. You are just making things a bit more hectic for yourself.
The third scenario means you are on top of things (gold star for you) and all we need to do is email your lender to update your letter reflecting the offer price. Why show your cards this early in the game? The point is to at least show the seller you can very likely afford what you are offering. There might be an instance where it makes sense to send a letter showing you are approved for more than the purchase price, like in a multiple offer situation. This will display your financial capacity is in excess of what will be required for that particular purchase.
Different lenders, the type of loan you are taking and your personal financial situation can all affect what is needed. These are commonly requested: Last year’s W2s, recent pay check stub, and the last two months of bank and/or investment account statements. For a credit report they will need your social security number, date of birth, and a 2 year residence history.
What if I am self-employed?
If self-employed then your lender will need personal tax returns for the last 2 years as well as business returns if you file those separately from your personal tax return.
Are you reading this and thinking that maybe you should connect with a lender? Reach out to me and I can help. Happy Borrowing!
Home inspections are a key part of the buying and selling process in real estate transactions. Every market is unique in terms of the way buyers and sellers approach inspections and then subsequently negotiate inspection items.
- In our local market, it is customary for the buyer to schedule an inspection after an offer is accepted and a typical inspection period is 14-18 days.
- The buyer pays for a general inspection and depending on any additional inspections taking place like radon, septic, termite, etc… the cost can climb to well over $500.
- The inspection period covers the time for an inspection and by the end of that period, the buyers will have to make their formal response to the sellers unless they ask for additional time to have other professionals evaluate items that came up in the report. Another blog post will be dedicated to more about selecting an inspector, the inspection process, and how to sift through the response items to make the best response.
Top 10 Inspection Issues:
1. Drainage issues due to clogged gutters and downspouts. It’s Indiana and it can be really really wet here. Cleaning gutters and downspouts as well as adding gutter extensions can do a lot to keep water away from your foundation.
2. Water or moisture in the crawlspace. The addition of a sump pump or some perimeter drainage often does the trick. The key is to keep water from getting in and when it does get it out. It might be that this is a result of clogged gutters and/or downspouts so check those first.
3. Damaged trim around doors and windows. Again, another water issue…notice the theme here. This permits water intrusion and the trim should be replaced or repaired.
4. Missing GFCI receptacle. This is a common safety/shock hazard noted in inspections. Have a licensed electrician install the proper receptacle.
5. Windows with broken seals. Oh this one, ALL the time! This is what causes the foggy glass that you can’t get clear no matter how hard you scrub. The glass needs to be replaced and local glass companies can take care of this chore. Sometimes this fix takes a while with the glass company first measuring, then ordering, and then installing.
6. Light fixture doesn’t work. If you are a seller, make sure your light bulbs are not burned out. Also, leave out any fan/light controls. Often a non-working ceiling fan or light is because they didn’t have the remote to test it.
7. Damaged siding. Moisture can penetrate and cause additional deterioration behind the siding so it should be replaced with the best match.
8. Mold. I often find mold showing up on reports in the crawlspace or attic. There are companies that will test for mold and some clients want to have the home tested after any mold remediation is done by the sellers qualified contractor. For buyers with mold allergies, this is a top concern.
9. Foundation settlement/possible structural concerns. This is something that will strike fear into the hearts of buyers, especially first-time home buyers. If the inspector recommends a structural engineer take a look, then I put my buyers in touch with our local engineer to get his professional opinion. If there are structural issues, the engineer will draw up a plan to remedy them and typically buyers will have sellers at least provide a credit for this work. One thing to keep in mind is that when you start to mess with the foundation of a home, you will find that you might have additional repairs to drywall which will lead to re-painting.
10. Roof with missing shingles, nails popping up, and damaged shingles. It’s fairly easy to have a roofing company come assess a roof based on the inspectors concerns and create an estimate for any necessary repairs. If you think your roof has storm damage, give your insurance agent a call to have it assessed in case they determine a new roof or repairs are covered.
Many sellers are surprised when they see the inspection report on their home. If you want to try to avoid some surprises, think about having a pre-listing inspection. Note that Radon is not mentioned here as that is a separate inspection and will be discussed in another post. Happy buying and selling!
While we are still just entering the fourth quarter of 2019, the Sherwin Williams color of the year for 2020 has already been announced. Drum roll, please…the color of the year for 2020 is Naval SW 6244. Otherwise known as navy through my untrained eye. They promise it is a richer navy than we have ever seen before. I do think it’s time to introduce some darker colors into home interiors that are awash in white and gray. Pair Naval with all the gold tones present in current home finishes and it will fit right in.
What about other paint manufacturer’s colors of the year?
Behr’s color of the year is Back to Nature S340-4. It’s very earthy, living up to it’s name, and is a green hue.
Benjamin Moore will be announcing their color of the year at the end of this week. Update: Benjamin Moore color of the year is First Light 2102-70.
If you are thinking about selling your home and need to paint before listing, maybe because tiny humans or pets also live in your home, what colors should you choose? It’s common for sellers to choose a neutral color assuming that is what will be most appealing or least offensive to potential buyers. While there is certainly truth in that, if you are painting solely to get rid of “color” then you might rethink your plan. Your home will photograph great with some color on the walls if, and I stress if, your furnishings look good in that space and really go well with the wall color. If you have primary colors in deep hues throughout, then yes you are due for a paint update. If you have sponge paint on your walls, then you will need to repaint or knock down the walls. I can only think of two possible options there.
So, if you have muted and/or maybe a few bright-ish colors that are tasteful then you might get by with a magic eraser to wipe away any scuffs. Ultimately, a new coat of paint does give a home a fresh look and removes some signs of having been lived in. If your home is looking well lived-in then your only choice might be to repaint. If there is one color I tell you never to choose, it’s bright white. There are a million white hues to choose from and bright, blinding white gets a big thumbs down. My go-to white alternative is Creamy by Sherwin Williams. Happy painting!
Have you noticed that realtors use a lot of abbreviations and lingo that you aren’t familiar with? Here are a few terms and their meanings to help you get the gist of what we are talking about.
CMA: Comparative Market Analysis. This is a report that shows how a home you are considering compares with similar homes that have sold, are still on the market, or that have expired.
Closing Costs: There are several different “closing costs.” There is the cost to close at the title company, the appraisal, lender fees, title insurance, and other miscellaneous fees. In our market, the cost to close at the title company is typically split and the associated costs for a buyer’s loan are often paid by the buyer unless they ask the seller for assistance. Closing costs can range from
Comps: Comparable Sales. These are the sales, typically going back six months, which are most similar to the home you are considering and are used to create the CMA.
Contingency: An agreement is not fully binding until a specified condition is met. A home inspection and financing are two common contingencies. Sometimes a contingency could be a survey or maybe the buyer wants to confirm they can add a separate garage so the purchase is contingent on that approval. Too many contingencies can spook a seller, but there might be some out of the ordinary that are important to a buyer and make sense for their intended use.
Fixture: Something permanently affixed or attached to real property. For example, blinds or curtain rods are fixtures, but drapes might not be because they can be slid off the rod. Carpet, lighting, and bathroom mirrors are fixtures. It is important to know what is and isn’t included in a sale so there isn’t a dispute over what is personal property and what is a fixture.
FSBO: For Sale By Owner. Listings that will not appear in your local MLS and are advertised solely by the owner for sale without a contract with a realtor. A very large percentage of FSBO deals never make it to the closing table after accepting an offer.
HOA: Home Owners Association. Typically if there is an HOA it is a mandatory HOA meaning that there are dues required to be paid on a pre-determined schedule (monthly, quarterly, annually…) by each homeowner. Our purchase agreements provide a section asking the seller to provide any documents related to a mandatory HOA and giving the buyer time to review those documents plus ask questions.
Lockbox: This is how real estate agents or other members of the board of local realtors, like inspectors or appraisers, will access your home. Our lockboxes are controlled by an app on our phones that only board members have access to download. The lockboxes are secure, trust me, I’ve tried everything to break into one that ate a key and was stuck! I had to mail it back to the lockbox company for them to remove the key.
LTV: Loan To Value. The amount of money you borrow divided by the price you pay for your home. If your home is $100,000 and you put down $10,000 then your LTV is $90,000/$100,000 = 90%.
MLS: Multiple Listing Service. It is a local organization that collects data and information about homes listed for sale by its members. Membership is not open to the public. Realtors pay annual dues to belong. The data in the MLS can be then picked up by external real estate sites should you choose to allow your listing to be public.
PMI: Private Mortgage Insurance. If you don’t have 20% to put down on your conventional loan, then most lenders will require PMI which provides insurance safeguarding the lender in the event you default on your loan. Typically you can drop your PMI payment once you have reached that threshold of having 20% LTV. FHA loans typically require this regardless of your downpayment or LTV.
Realtor®: A real estate professional who is a member of the NAR (National Association of Realtors).
Title Insurance: An insurance policy that either protects the owner’s or lender’s interest in a property. Typically the buyer pays for the lender policy – which is only required when there is a loan. The seller typically pays for the owner’s policy to prove that Aunt Ethel is not going to come claim ownership of the property after you move in. Details in the title policy would show that the sellers do in fact own the property, if there are any judgements or liens, all easements or encumbrances that have been recorded, etc. Read your title insurance policy!
If lingo is being thrown around that you don’t understand, ask your real estate agent or lender what it means. I find buyers and sellers sometimes don’t ask the questions because they are worried about bugging us. It is our job to help keep you informed and answer your questions, so you are not bugging us. The process will be much smoother if you fully understand what is going on. Here’s to a smooth real estate transaction!
Buying or selling a home is an exciting time and you can help the process go smoothly by selecting the right agent for you. How might you go about doing that? Here are some things to consider.
Interview realtors. Yes, you can and should interview realtors to help you with buying or selling!
- I would recommend choosing three agents to interview. Consider the knowledge of the area you are looking in or where you will be listing your home. It’s so important that they work in your area frequently.
- It’s also important to find out about their experience and results. Find out how long they’ve been in the business, whether they generally work with buyers and/or sellers or both, and why they should get your business.
- Check out their testimonials online to see if they are satisfying clients they work with or if the testimonials are nonexistent. You’d be surprised!
With buyers in mind, you’ll want to find someone who can operate on a similar schedule for showings and knows the neighborhoods well where you are looking. Many experienced agents limit their hours so they aren’t available 24/7 and some specifically limit evening work if that doesn’t suit them. If you are only available after 5 o’clock that just wouldn’t be a good fit. Be upfront about your expectations about showings. I like to plan ahead for showings so that sellers are ready and so we can try to see multiple homes at a time. I also make sure my buyers get into homes they are anxious to see in the Spring when our market is the busiest.
For sellers, I think it’s important to see how the agents listings are presented online. Are the photographs professional, is the description well written, and are there any other details that make that listing stand apart from the rest? What other marketing do they do for their listings outside of the MLS? For example, I do floorplan drawings for my listings, send out just listed postcards, post to social media, and have aerial photos as well as drone video done depending on the property.
Ultimately, you’re going to have the best experience if you choose the agent you like and you think you would be happy working with. After all, you will be communicating regularly. Look for similar core values, a passion for real estate, direct answers to your questions, and honesty.