After our previous discussion on Realtor commissions, we thought we’d take the opportunity to let real estate professionals of all stripes flex their knowledge with two questions that we asked over two weeks that should be good advice for every buyer and seller out there.
So for our Aug. 10 and 17 Friday Questions, we asked real estate professionals to tell us what they wished everyone knew about the buying and selling process.
The genesis for this question was a great post in NerdWallet earlier this summer that mentioned several common mistakes prospective buyers can make, including a big one that some might not ever think of — applying for a line of credit before you’ve closed on the house.
It seems logical — your offer has been accepted, and you’ve got a brand new house to furnish. But not so fast, the article says.
“The lender’s mortgage decision is based on your credit score and your debt-to-income ratio, which is the percentage of your income that goes toward monthly debt payments. Applying for credit can reduce your credit score a few points,” it said. “Getting a new loan, or adding to your monthly debt payments, will increase your debt-to-income ratio. Neither of those is good from the mortgage lender’s perspective.”
“Within about a week of the closing, the lender will check your credit one last time. If your credit score has fallen, or if your debt-to-income ratio has gone up, the lender might change the interest rate or fees on the mortgage,” it continued. “It could cause a delay in your closing, or even result in a canceled mortgage.”
Now, that’s a nightmare scenario.
But there are other things you should know about, too.
“They need to know what the total out of pocket costs would be for them, i.e. closing, inspection, appraisal, etc.,” said Ashley Cuniff.
And while this is a big, important purchase, the wheels of home buying can turn slowly sometimes, so several Realtors advised packing your patience (maybe even before your dishware), and making sure you feel comfortable asking questions.
“Patience,” said Grant Myers. “Communication with everyone. There are no stupid questions.”
“We can’t read the minds of the sellers,” Natalie Swanson said.
But despite needing to be patient, Realtors also said there are times when a buyer should have a little bit of hustle.
“So many buyers take their sweet time getting documents back to us and their lenders,” said April Bloodgood-Deats.
Myers agreed. “If someone needs a document or something filled out, get it to them — don’t put it off,” he said.
And when that home inspection turns up something that might need fixing, Jeff Dworkin reassured that it can be completely normal.
“Remember, homes are built by humans, not machines!” he said.
Other mistakes Nerdwallet mentioned included:
- Not knowing your budget ahead of time, so you know exactly how much you can afford each month. Just because you can qualify for a bigger loan, doesn’t mean necessarily that you should get a house that costs that much.
- Making a down payment that is too small. The bigger the down payment, the smaller the monthly payment.
- Draining your savings, leaving nothing to address an surprise repairs later down the road.
- Getting just one mortgage rate quote. You shop around for everything else to get the best price — why wouldn’t you for a purchase of this magnitude?
- Not checking your credit report and correcting any errors.
- Shopping for a house before applying for a mortgage.
For this question, we talked to three real estate industry professionals — Realtors BethAnne Buffington and Marc Burstein, and stager (and CandysDirt.com writer) Karen Eubank.
Buffington said that sellers should make sure their Realtor can explain the market conditions for their area, as well as give solid advice about pricing.
“Have your realtor give you information about current market conditions for your specific city and neighborhood,” she said. “You’d be surprised how different it can be, not to mention your friend who said they heard on the news that ‘it’s a hot market’ really has no idea what they’re talking about.”
And while you always want to get the biggest offer possible, improperly pricing your home won’t do any seller any favors.
“Price your home correctly! When you over price your home all you do is cause your house to rack up more ‘days on market’ which makes people come in and offer even less once you finally drop the price,” Buffington said. “Your agent isn’t trying to skimp you out on money. We’re trying to sell your house! It benefits us too if it sells for more money, but an overpriced home doesn’t sell.”
And who you pick as a Realtor is important, too, Eubank said.
“Hiring a friend or relative to sell your home, but even worse, hiring someone from out of the area , say a Flower Mound realtor to sell a Lake Highlands home,” she said. “They simply don’t have the network that is going to get the house sold. I see this a lot.”
“Resisting to act on information that professionals provide. Realtors and stagers prepare, market and sell every day,” she continued. “We know what sells and what is going to be difficult to sell.”
Eubank said that in her experience, sellers whose homes languish on the market almost always are regretting some advice from their Realtor that they ignored.
“In higher priced listings, assuming because they had an interior designer, that they don’t need to listen to the realtor or stager,” she said. “Preparing a home for sale is NOT interior design.”
Buffington also said that taste is uh, subjective. Just because your family loves the look, doesn’t mean buyers will.
“The Disney mural that you had hand painted for your daughter is absolutely stunning,” Buffington said. “However not everybody will agree. Your home will sell faster if it’s painted neutral colors.”
Eubank agreed, saying that it’s one of the most common mistakes sellers make. “Not doing the basics- neutralizing paint colors, putting personal items away,” she said, adding that it’s often even advice from their Realtor that they chose to ignore.
“Make sure to remove all religious items,” said Buffington. “I recently had a buyer LOVE a house, but there was a shrine in the front room and the buyer’s wife decided they couldn’t buy the house just because that made her uncomfortable.”
Also important? Knowing when to hire professionals, Eubank said.
“The main mistake is not to hire a professional stager for a simple cost effective consultation,” she said. “An occupied home, and there are a lot more of these than vacant homes, ALWAYS needs a consultation.”
“Ninety percent of my occupied property sellers that take advantage of the consultation can do most of the preparation themselves.”
And consider updates — even if the price tag is something like $5,000, it’s probably cheaper than the first price reduction.
“There are SO many homes on the market today that no one wants,” Eubank said. “They are outdated and potential buyers take one look and think ‘That’s going to cost me $100,000, so pass.’”
“When no one is looking at your home, your only other choice is to lower the price and then you get to a point where your property is only going to appeal to investors.”
Eubank also said that sellers often become desensitized to odors in their homes, especially if they have pets.
“Acknowledge your home smells. If you have a cat or a dog , it smells, I know,” she said. “I have a dog and yes, my house smells … but I’m not selling either! If I were, I’d deep clean, wash the dog bedding and the dog every week and get a crate of Febreeze!”
And speaking of pets, Buffington said to remember their “gifts” that may be outside.
“Scoop your dog’s poop,” she said.
And while you’re out there, Eubank said curb appeal is also important.
“So many people drive into their garage and never look at the front of the house,” she said. “They are EXTREMELY resistant to removing shrubs that have grown over the windows or trimming trees. I’d say with 80 percent of my consultations I’m advising trees be trimmed back and bushes removed.”
“Shrubs that were put in 15 -20 years ago get leggy and overgrow the windows,” she continued. “They have to be removed. It’s a constant issue. However, when sellers DO trim and remove, they are blown away by how great their homes look.”
And if all that sounds like a surprising amount of work and advice your Realtor can give you regarding selling your house, Burstein said it’s a huge argument for why the service from a Realtor is worth the commission.
“There is not a new-wave, cut-rate, budget, limited service, or flat fee agency that provides full-service attention like a seasoned real estate agent can,” he said. “Which of these new methods of selling a home physically/visually, dissect a home to establish the true value? Which one of them market the home with all if the best vehicles offered today?”
“Which of these agents network with other agents in the area to help sell a home?” he continued. “Which one of these agencies hold open houses to expose the home to potential buyers?”
Burstein said that while often people say open houses don’t sell houses, his experience is saying the opposite.
“Sellers today appreciate the effort and expect it,” he said, adding that a good Realtor will also compare multiple offers closely and give good advice on which offer is ultimately the best one.
“We all know those eight-plus pertinent aspects of an offer that collectively equate to the most sensible offer to accept, and 99 percent of sellers do not,” he said. “How many of those agencies are in constant communication with buyers an sellers, to guide them with what is needed to maximize the chance to get to the closing table from contract to closing?”
“Which one if these agencies are available seven days and nights a week for questions and concerns the seller may have?”
While Burstein acknowledged that some of the budget and flat-fee agencies do perform some of those functions, “none of them actually do it all.”
“A seller who pays less, gets less, and for numerous reasons takes the risk of a closing going south,” he said.
Editor’s Note: Every Friday, we’ll post a hot-button question on our Facebook page. Sometimes, they’ll be serious. Sometimes, they’ll be more light-hearted. Want to take part? Like and follow us, and comment on this Friday’s question.