Frequently
Asked Questions
Below are catagories of some our most
asked questions based on topic. If you have any other questions
you would like to ask, feel free to contact us via email
or call us toll free at (800) 490-0771.
Sellers
Questions
Q: How is a home's value
determined?
A: You have several ways
to determine the value of a home. An appraisal is a professional
estimate of a property's market value, based on recent
sales of comparable properties, location, square footage
and construction quality. This service varies in cost depending
on the price of the home. On average, an appraisal costs
about $300 to $400 for a $500,000 home.
A comparative market analysis is an informal
estimate of market value performed by a real estate agent based
on similar sales and property attributes. Most agents offer
free analyses in the hopes of winning your business.
You also can get a comparable sales report for
a fee from private companies that specialize in real estate
data. You also can find comparable sales information available
on various real estate Internet sites.
Q: What is the best time
to sell your house?
A: In addition to supply
and demand, and other economic factors, the time of year
you choose to sell can make a difference both in the amount
of time it takes to sell your home and in the ultimate
selling price. Weather conditions are less of a consideration
in more temperate climates, but most of the time, the real
estate market picks up as early as February, with the strongest
selling season usually lasting through May and June.
With the onset of summer, the market slows. July
is often the slowest month for real estate sales due to a strong
spring market putting possible upward pressure on interest
rates. Also, many prospective home buyers and their agents
take vacations during mid-summer.
Following the summer slowdown, real estate sales
activity tends to pick up for a second, although less vigorous,
fall market, which usually lasts into November when the market
slows again as buyers and sellers turn their attention to the
holidays.
Sellers often wonder whether or not they should
take their homes off the market for the holidays. Generally
speaking, you'll have the best results if your house is available
to show to prospective buyers continuously until it sells.
Q: Do I have to consider
contingencies?
A: If you are a seller in
a seller's market, in which there is more demand than supply,
you probably won't have to entertain too many contingencies.
But if you are selling in a buyer's market, when buyers
are few, prepare to be very flexible. Granting contingencies
also depends upon what kind of price you want to get and
on the condition of your property, most experts agree.
Remember, contingencies are written into the contract and
are negotiable during the negotiation phase only.
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Buyers
Questions
Q: What is the difference
between market value and appraised value?
A: Appraised
value is a certified appraiser's opinion of the worth of
a home at a given point in time. Lenders require appraisals
as part of the loan application process; fees range from
$200 to $300.
Market value is what price the house will bring at a given
point in time. A comparative market analysis is an informal
estimate of market value, based on sales of comparable
properties, performed by a real estate agent or broker.
Q: What is the difference
between list price, sales price and appraised value?
A: The list price
is a seller's advertised price, a figure that usually
is only a rough estimate of what the seller wants
to get. Sellers can price high, low or close to
what they hope to get. To judge whether the list
price is a fair one, be sure to consult comparable
sales prices in the area.
The sales price is the amount of money you as
a buyer would pay for a property.
The appraisal value is a certified appraiser's
estimate of the worth of a property, and is based on comparable
sales, the condition of the property and numerous other factors.
Q: What are some tips
on negotiation?
A: The more you know about
a seller's motivation, the stronger a negotiating position
you are in. For example, seller who must move quickly due
to a job transfer may be amenable to a lower price with
a speedy escrow. Other so-called "motivated sellers" include
people going through a divorce or who have already purchased
another home.
Remember, that the listing price is what the seller would like
to receive but is not necessarily what they will settle for.
Before making an offer, check the recent sales prices of comparable
homes in the neighborhood to see how the seller's asking price
stacks up.
Some experts discourage making deliberate low-ball offers.
While such an offer can be presented, it can also sour the
sale and discourage the seller from negotiating at all.
Q: Whose obligation is
it to disclose pertinent information about a property?
A: Obligations to
disclose information about a property vary from
state to state.
Under the strictest laws, the seller and the seller?s broker,
if there is one, are required to disclose all facts materially
affecting the value or desirability of the property which are
known or accessible only to him.
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 a dog that barks every night
or poor TV reception; any death within three years on the property
and any restrictions on the use of the property, such as zoning
ordinances or association rules.
It is wise to check your state's disclosure rules
prior to a home purchase.
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Investment
Property Questions
Q: What do you think of
a vacation home as an investment?
A: You can buy a
vacation home today for investment purposes as
well as enjoyment. And yes, there are tax benefits.
Some people buy a vacation home to use as a permanent
retirement home later, which allows them to get
ahead on their payments. Another benefit is that
the interest and property taxes on a vacation home
are tax-deductible.
Some real estate experts predict that vacation
homes will appreciate in value due to rising demand from the
aging Baby Boom generation. You also can depreciate the property
if you live in the house less than 14 days a year.
You also need to consider whether you can afford
to carry two mortgages, pay for the extra utilities and maintenance
costs, and how this investment fits into your total personal
finance picture.
Q: How do I project
rents on a rental?
A: If
you are buying a rental income property and applying for
a loan to do so, the lender will require an area rent survey
by a certified appraiser. The amount a landlord can expect
to receive in monthly rent largely depends on what the property
has rented for in the past, the condition of the building,
its location and the current housing market.
Lenders also look at other cash-flow considerations. They
want to know if you have enough reserves on hand to cover
predictable and unforeseen expenses, such as property insurance,
taxes, regular maintenance and repairs.
Q: Where do I get information
about being a landlord?
A: If you are a landlord
and have questions, contact:
* National Multi-Housing Council, 1850 M Street, N.W., Washington,
DC 20036; call (202) 659-3381
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