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Real Estate. Real talk.

Real Estate is hard.

It’s hard and rewarding and stressful and joyful all at the same time, for everyone. The agents, the sellers, the buyers, and even the lender. So make sure that you hire an agent that you like and trust. It can be an emotional rollercoaster for some and a financial slap in the face for others. There are credit checks, seasoned funds, earnest money, down payments, house repairs, staging, cleaning, interviewing agents, inspections, appraisals, and closing. I’ve been a licensed and active agent for more than a decade. Let’s talk a little bit about everyone and what I’ve learned.



Sellers

This market over the last few years, is the best that most have seen in their lifetime. The ability to make a serious profit on selling your home has been, and still is, a great opportunity contrary to the dire circumstances portrayed by our alarmist media. Listen, we still have more buyers than houses on the market. That is a fact. This fact is what’s caused the strong sellers market over the last few years. Millennials, who are now between 27-42 years old have reached prime home buying age. Millennials are the largest generation of adults right now, surpassing the baby boomer generation. What we have is the perfect storm of baby boomers staying in their homes and not selling while millennials are looking for their first or second homes. The lack of existing homes on the market has also created a boom in new construction (in case you haven’t noticed already). The point is, if you’re thinking of selling your home, it is still a really good time to do that. If you do, there are some things you should know.



First things first.

Clean your house. If you don’t have time, hire someone to do it. It is the first thing buyers notice and comment on. If it’s dirty or smells, some buyers won’t even walk all of the way through. I'm especially talking to those of you with pets. If it's dirty, they assume immediately that you don’t take care of the home so what maintenance items have you neglected? These are real conversations we have with your potential buyers.


There are only two reasons that houses don’t sell. Price or Condition. That’s it. Your agent will provide comps for the fair market value of your house based on recent sales on the comparable homes in your area. Listen to them. Just because you spent $50k on a kitchen remodel or finishing the basement, doesn’t mean that your house is now worth $50k more than the comps. What it does mean is that your house may now be more desirable and more marketable than the others (which is worth something, but not the full $50k). It also made it more enjoyable for you to live in. If the condition of the home doesn’t meet appraisal standards, the deal falls through or you have to make repairs. When your agent walks through the house, they will tell you if something is going to be a problem. As soon as you say “sell the house - AS IS” you eliminate a large pool of your buyers. Although it’s true that there are still a lot of cash buyers in the market, there are many buyers that require financing to purchase a home. Remember these words. Safe, Sanitary, Sound. These are the things that appraisers look for in their inspections. Is the home safe? Do the windows and doors all function properly in case of a fire? Is the electrical panel wired correctly and are there gfci’s near water fixtures? Does the roof leak? Do the drains work properly? Is the septic system in good working order and has it been serviced or pumped recently? Is the foundation sound? These are the items that tell an agent, inspector, buyer, and appraiser if the condition of your home is appropriate for the sale price. So, is it priced correctly for the market? And is the Condition appropriate for that price? If not, expect it to sit.


Your costs as a seller are more than the buyer. Which is reasonable since you’re the one that stands to make a profit from this transaction. As the seller you are responsible for paying the listing commission. That listing commission is how your agent, the agent that brings the buyer, and their respective borkerages, get paid on the deal. You have your own set of title fees and closing costs. (Buyers have their own fees, we’ll discuss that later). It’s also important that you maintain the property until the day of closing. That means keeping the utilities on, the lawn mowed, and the trash removal going until you sign off the deed to the home. The house is still yours until you hear the phrase “we have transferred”.


Buyers

If you’ve already bought a house, you can probably skip this part. It’s mostly for first time buyers or maybe a buyer that hasn’t purchased a home for more than 20 years. If you’re thinking about your first home, this info is for you. Buckle up, I have a lot to tell you.


Most importantly, once you have reached a pre-approval with your lender, DO NOT and I mean ABSOLUTELY DO NOT go out and FINANCE anything. No appliances, no vehicles, NOTHING. This could immediately impact your debt to income ratio and could potentially cost you your new home. Your lender will pull your credit report at the beginning to issue a preapproval letter, but also at the end right before closing day to make sure that the numbers are still viable. This is a fun surprise that some first time buyers don’t expect. Get your keys, THEN buy your appliances. Not before, unless you pay in cash. And don't clean out your savings to do it either. Lenders like to know that you have a few months of funds in the bank so you don't default on the loan (like the crash of 2008).


There are different types of loans and state programs for financing as well. Here’s a link so you can learn more about the programs that Ohio has, check online for other options for your state if you’re not reading this from Ohio. https://ohiohome.org/residentiallending.aspx Take the time to talk to your lender, they are good at matching your situation with the most beneficial program for you. But let’s talk a little bit about what you need to get ready. Remember, I am not a lender and I’m not pretending to be one. I just want you to go into the process of home shopping prepared and with eyes wide open. Be prepared to have a little money in the bank. You will need to include some earnest money with your offer once it’s accepted by the seller. It’s usually 1% of the purchase price of the house. So for easy numbers, let’s say you are buying a $100,000 house you will provide $1,000 of earnest money with your offer. This money gets applied to your down payment at the end of the process. Once the appraisal is ordered, your lender may require you to write a check for that as well. If you choose to get a home inspection, that comes out of your pocket too. Unless you’re using a VA no down payment loan, or a down payment assistance program from OHFA, you will need a down payment as well. FHA requires a 3.5% down payment (so using easy math like before: $100,000 house your down payment will be $3,500). Conventional loans are anywhere from 5%-20% down as well. You can put down more if you’re in the position to do so and you and your lender agree that it is the right way to handle your financial situation.


Buyers, you have your own set of closing costs. Part of this is real estate taxes, home owners insurance, title transfer fee, etc. Your title company will give you a document showing what all of the closing costs are. Be aware, in a seller's market it's tougher to get the seller to cover the buyer's closing costs than in previous years. This is a really common topic of conversation with FHA and VA buyers. Closing costs are not "included" in anything unless written into the purchase agreement. VA buyers expecially need to know this because even though you can get a 0% down VA loan, the closing costs are still money you will need to come up with at closing.


When your agent or lender needs paperwork, they need it immediately to keep the deal on track. Everything is time sensitive in a real estate deal. There are many cogs in the wheel to keep it moving smoothly. One single document must be signed by the seller, buyer (sometimes both agents) and then sent to both agents offices, the lender and the title company- so that by the time closing rolls around, everyone is on the same page.



Do NOT schedule the moving truck for the closing date on the contract. As soon as you do, mark my words, something will go wrong and cause a delay. Give yourself a handful of days past the transfer date. Get your keys, finish packing, paint or deep clean whatever you need to and THEN move. If you ever take my advice on anything, make it this.


Home inspections are not supposed to be negotiation tools or show and tell. They are one one time with a professional inspector and for you to REALLY LOOK at the place and ask questions. They are meant for you to intimately understand the home you are buying. Even brand new houses come with quirks and issues. There is no such thing as a perfect house. Home inspections are not a time for you to bring family with you to see the house either. If their name is not on the contract, they should not be in the house at all (technically). The reality is, it is up to the seller if they will allow any one that is not on the contract to come with you (like parents or contractors, etc). Your agent should get permission for them to accompany you before unlocking the door. (Tip: bring a tape measure if you want to measure for furniture and notebook while you're there).



Agents

Your agent is behind the scenes handling more than you realize. There is a general assumption that real estate is easy money, but it is not. During Covid over 3000 people decided that they wanted to be Real Estate agents in Ohio. Nationally that number exploded to 156,000 people. There are no “regular business hours” for real estate. Our phones ring and ding all day everyday. Doesn’t matter if your agent is at church, a birthday party, a winery or on a vacation for some personal time. Ding, Ding, Ding, Ding, DING! Remember a couple paragraphs ago, I told you that everything is time sensitive? Real estate deals don’t care if you’re sitting on the beach staring at the Carribean or sitting at your desk in front of your computer. Real estate does not discriminate. It’ll find you. Always. Most of us agents don’t really mind because we’re used to it, but our significant others and kids don’t feel the same way (apparently). But at the end of the day, the smiles and hugs we get when we hand over the keys to our buyer make every Ding- absolutely 100% worth it.


Your agent does not actually get paid until a couple of days after the title transfers. Did you know that? They may work with you for months, showing houses, writing offers, and attending inspections, appraisals, and creating and collecting any and all of the paperwork needed for the deal.



Showing houses is fun, it’s a lot of fun, but it is not a hobby. It is an agent’s livelihood, so make sure you know where you want to live before you start driving all over three counties trying to decide. You should narrow down to 2-3 cities with very specific parameters before jumping into the house hunting process. For your agent’s sake- AND FOR YOURS. Buying a house is a big commitment, make sure you know (and get) what you want. I showed someone 31 houses before we found the right one for them. That was a record for me, and now I know better. We do a little more homework before stepping foot into a house now. 31 houses is too many.


Interview agents if you don’t know one. Make sure they aren’t full of bullcrap and you can trust them to tell you the truth. If not, you’ll just be frustrated. Ask your friends and family if they have someone that they’ve worked with and recommend. New agents aren’t a bad thing, if they have a good support system behind them. Don’t count them out, they are usually eager to learn and ask lots of questions. Most agents have someone they can partner up with (if needed) or call on- if they are already booked or out of town so you don’t miss out. Here’s a trade secret, every single one of us learns something from each transaction we do. Even if it’s a little thing. If an agent knows everything- they’re lying and there’s a lot of ego in real estate too. Watch out for that. Not everyone knows that you catch more flies with honey, not vinegar. I like when my clients are happy, so I spend a lot of time educating and answering questions and I’m always happy to do so. I try to be equally as helpful to other agents, lenders, admins, title coordinators and anyone else on the team working on your deal. The business is hard, being a jerk isn’t helpful to anyone. Some people just have crappy personalities I guess.


Lean on your realtor for help finding resources if you need them. We all have recommendations for cleaning crews, handymen, title companies, lenders, and pretty much anything you can think of. If not, with one email to our office, we can get some. You NEVER have to use a title company, lender, home inspector, and anyone else that we recommend. Those are all your choices to make, most of the time we build good relationships with a couple of each that we trust and stick with them.


I could probably go on forever about real estate, but you might get bored. I’m happy to answer any questions you have though. Just drop me a line and we can chat about any real estate, or if there is a specific topic you want me to really get into, just ask! I’ve been doing it so long, sometimes I forget what you might not know. I just wanted to help set some realistic expectations if you’re thinking about jumping into the real estate market one way or another. It really is a joy to make a match between Seller, Buyer, and new home. And I love getting photos of updates my buyers do to their homes as they settle in… Hint, Hint to all of my previous buyer clients…


May love and comfort surround you,

Lis


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