Real estate advice for first-time buyers
As exciting as it is to purchase your first home, you may also be nervous about all the steps in the process. While this can be a stressful time, especially in a highly competitive market, you can take steps to make the homebuying process easier.
Do your due diligence
Start by figuring out how much house you can afford, what real estate agent you want to work with, and what you’re looking for in a home.
Getting prequalified for a home is an excellent way to determine a base home price you can afford. But keep in mind, you may get prequalified for a home that’s actually out of your price range. It’s helpful to know how much a lender will prequalify you for, but remember, only you can understand how much you can afford within your monthly budget. Consider what else you need and want to spend your money on, so you’re not “house poor” with a mortgage that’s taking up too much of your income.
Also, understand that this isn’t a time for radical changes. When underwriters review your loan application, they want to see a picture of stability. With that in mind, don’t change jobs, buy a car, open more credit accounts, or make any major money moves when you’re looking to buy a house.
Remember that there’s no perfect time to buy a house
While real estate experts have plenty of data about the market, keep in mind that there’s never going to be one right time to buy a home — so don’t get discouraged by the current market. The market is fluid, and the only thing certain is change, so “timing the market” may be a futile exercise.
Target homes on the lower end of your budget
By considering properties below your price limit, you’ll have extra room in your budget to make counter offers in a competitive market. You’re also more likely to present an acceptable offer to sellers if the home fits comfortably within your budget, and you’ll prevent heartbreak when looking for a home.
What’s more, purchasing a less expensive home means your mortgage will be smaller and easier to manage than a more expensive mortgage.
Make an offer earlier in the week
You may get a better deal by making an offer on a Monday, Tuesday, or Wednesday, when there’s significantly less competition than on the weekends. Realtors typically don’t hold open houses during the week because homeowners are busy with work and their children’s schedules.
Since sellers are less likely to get showings and receive offers on a Monday, Tuesday, or Wednesday, they may be more quick to review and negotiate your offer on these days than on weekends.
Consider working with a mortgage broker
A mortgage broker is an intermediary between you and potential lenders, which can be beneficial to you as a buyer. The mortgage broker will compare lenders on your behalf and find the best interest rates for you. Since they work with many mortgage lenders, brokers can match you with suitable lenders and loan programs to address your needs.
Of course, brokers require a fee or commission for their services, typically between 1% and 2% of the loan amount. The cost can be paid upfront by you or the lender, or the fee can be rolled into your loan. Another option is to use a free online marketplace to compare interest rates from multiple lenders.
Keep a poker face when touring homes
When you find a home you think could be “the one,” it’s natural to get excited and share your enthusiasm with your agent. But if the owner or their agent is within earshot, you could lose some negotiating power.
Real estate advice for first-time sellers
If you’re selling a home, you already have some experience buying in the real estate market. That experience will come in handy, though you may be new to selling and need some tips on how to go about it. Here are several ways to make the selling process go more smoothly.
Boost your home’s appeal
Before listing your home for sale, invest some time in preparing your home for showings. That extra effort could improve your odds of receiving offers shortly after your home hits the market.
Here are a few things you can do to help ensure your home sells as quickly as possible.
Make repairs. Normal wear and tear is to be expected. But when buyers see a large number of necessary repairs, even if they’re minor fixes, they may use the problems as bargaining chips. Or they may decide your home is too much work and walk away without making an offer.
Paint where it’s needed. A fresh coat of paint can make your home pop and provide curb appeal. But if you don’t have the time to repaint your entire home, consider painting the front door and entry, where first impressions matter.
Stage your home. Staged properties sell 88% faster and for 20% more than nonstaged ones, according to Realtor.com. Consider hiring a professional to help with home staging. Your real estate agent should be able to provide references for a reputable stager. If you can’t afford to hire a professional, some quick staging tips include rearranging furniture, putting out fresh flowers, and cleaning up your lawn.
Hire the right real estate agent for you
While there are plenty of real estate agents, you must find and hire the right agent for you. After all, a good agent acts as your partner and will navigate you through the home-selling process.
Take the time to find an agent with the experience and knowledge you need. Meet with multiple agents in person to get a feel for how they’ll perform as your agent. Ask prospective agents essential questions, such as:
- How long have you been a real estate agent? You need to know if an agent has the experience to handle the inevitable curveballs that will be thrown your way.
- How many clients are you representing right now? An in-demand realtor could be a positive sign, but not if your agent is too busy to answer your calls or show your home.
- What is your marketing strategy? Marketing your home is vital to selling your home at the highest possible price point.
- Can you provide references? Online reviews are useful, but it’s helpful to talk with an agent’s past clients to get an idea of what it’s like to work with them.
Understand the importance of marketing for your home
When you list your home, your goal should not only be to sell the house, but to sell it for top dollar.
That’s where marketing comes in. Through effective marketing, you and your real estate agent can accentuate your home’s unique features to attract the best buyer for your property — not just any buyer who views your home. Ideally, proper marketing of your home will attract a pool of buyers looking for all the features your home offers. After all, having more interested buyers through persuasive marketing leads to more showings, and potentially more offers.
Consider hiring a professional to take pictures of your home and cast it in the best light. Stage your home strategically to inspire homebuyers, and make sure your real estate agent is doing their best to market your house online and in other places.
Get a pre-listing inspection
A pre-listing inspection is similar to a buyer’s inspection, except the seller is the one seeking the assessment. Sellers use a pre-listing inspection to gain insight into fixes and repairs they may need to make.
Since a potential buyer will have to conduct their own inspection, a pre-listing inspection can help owners get ahead of any problems. They can address repairs earlier and reduce the likelihood that a deal will fall through.
With a pre-listing inspection, you’ll gain a clear picture of your home’s condition, which will facilitate more accurate pricing of your property. And with a pre-listing home inspection to show buyers, you’ll have concrete evidence to back up your pricing, which could hamper the buyer’s negotiation efforts.
Resist the urge to overprice your home
Even in a highly competitive market, setting a price that’s too high for your home can be risky.
Buyers and their agents are savvy and can recognize when a home is overpriced. As a result, you may get fewer showings — or none at all. That’s not how you want to hit the market.
Remember, your negotiation leverage with potential buyers is at its highest in the first few weeks after listing your house. The longer your home stays on the market, the more buyers wonder what’s wrong with it.
Get it right by setting a competitive price from the start. Ask your real estate agent or realtor to perform a comparative market analysis of home prices for comparable properties — often referred to as “comps” — in your neighborhood. You can also hire a professional home appraiser to estimate your home’s value.
Make your home as available as possible
If your home is competitively priced, you should increase your odds of an offer with each showing. By offering more showings, even if it’s not convenient for you, you’re more likely to receive at least one offer.
It’s also important to show your home during the week, and not just on weekends. Some real estate agents like to list a home during the week so that buyers’ agents can tour the home and preview it for their clients. Then your agent can have an open house on the weekend to generate more traffic and potential buyers for your home.
While it can be annoying to drop everything when a potential buyer wants to see your home, remember that the buyer could end up putting in an offer. You won’t generate any buzz around your property if you don’t make your home available often. On the other hand, turning down showings or asking potential buyers to reschedule could put them off and ruin your chances of a sale.