Having title insurance from Title First Agency will protect you from the possibility of a claim to ownership of your home by someone. It’s hard to believe this can happen, but it is more common than people think. It’s not usually a plot to steal your home but a confusion with the deed. The laws regarding property ownership are complex and when liens come into play, someone may believe they still own a house that was technically taken over by a bank.
Title problems appear when parties want to be repaid loans and bills outstanding by the same property. There is a lender that made the first mortgage; the lender that opened the home equity line of credit; contractors whose unpaid bills resulted in liens on the property; taxing districts; and even homeowners’ associations all lining up to be repaid from the proceeds of the house, it’s easy to see how they might not agree on who gets paid what, and when.
Without a title search, the buyer buys all those problems along with the house. The problems don’t go away just because there is a new owner. There have been examples of homeowners having to sell the house just to pay the bills.
Title searches are required by all lenders to be sure that title problems are cleared up before a home is bought. It’s not for you. It’s for them. If the lender makes a mortgage with another that already has claims against it, that lender is going to lose that money.
The Bottom Line: The title is proof that a piece of property is legally owned. It’s an extremely important document. Without a clear title, you are taking a tremendous gamble in purchasing a house or other property. The experts at Title First Agency oversee and perform thousands of closings each year. When using Title First, you can sign confidently on the dotted line knowing that all the details of your title transfer and closing are in proper order. We are here to answer any questions you may have about buying or selling a home, and our team will guide you through the entire process.
Appraisal management company (AMC): An institution operated independently of a lender that, once notified by a lender, orders a home appraisal. Appraisal: An informed, impartial and well-documented opinion of the value of a home, prepared by a licensed and certifed appraiser and based on data about comparable homes in the area as well as the appraiser’s own walk-through. Approved for short sale: A term that indicates that a homeowner’s bank has approved a reduced list price on a home and the home is ready for resale. American Society of Home Inspectors (ASHI): A not-for-profit professional association that sets and promotes standards for property inspections and provides educational opportunities to its members. (i.e., Look for this accreditation or something similar when shopping for a home inspector.)
Attorney state: A state in which a real estate attorney is responsible for closing. Back-end ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares the borrower’s monthly debt payments (proposed housing expenses, plus student loan, car payment, credit card debt, maintenance or child support and installment loans) to gross income. Buyer’s market: Market conditions that exist when homes for sale outnumber buyers. Homes sit on the market a long time and prices drop. Meaning = you win. Cancellation of escrow: A situation in which a buyer backs out of a home purchase. Capacity: The amount of money a home buyer can afford to borrow. Cash-value policy: A homeowners insurance policy that pays the replacement cost of a home, minus depreciation, should damage occur. Closing: A meeting during which ownership of a home is transferred from seller to buyer. The closing is usually attended by the buyer, the seller, both real estate agents and the lender. Closing costs: Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 1 to 3 percent of the home’s purchase price. Closing Disclosure (CD): A five-page document sent to the buyer three days before closing. This document spells out all the terms of the loan: the amount, the interest rate, the monthly payment, mortgage insurance, the monthly escrow amount and all closing costs. Closing escrow: The final and official transfer of property from seller to buyer and delivery of appropriate paperwork to each party. Closing of escrow is the responsibility of the escrow agent. Comparative Market Analysis (CMA): An in-depth analysis, prepared by a real estate agent, that determines the estimated value of a home based on recently sold homes of similar condition, size, features and age that are located in the same area. Compliance agreement: A document signed by the buyer at closing, in which he or she agrees to cooperate if the lender needs to fix any mistakes in the loan documents. Comps: Or comparable sales, are homes in a given area that have sold within the past six months that a real estate agent uses to determine a home’s value. Condo insurance: Homeowners insurance that covers personal property and the interior of a condo unit should damage occur. Contingencies: Conditions written into a home purchase contract that protects the buyer should any issues arise with financing, the home inspection or other. Conventional 97: A home loan that requires a down payment equivalent to 3 percent of the home’s purchase price. Private mortgage insurance, which is required, can be canceled when the owner reaches 80 percent equity. Conventional loan: A home loan not guaranteed by a government agency, such as FHA or the VA. Days On Market (DOM): The number of days a property listing is considered active. Depository institutions: Banks, savings and loans and credit unions. These institutions underwrite as well as set home loan pricing in-house. Down payment: A certain portion of the home’s purchase price that a buyer must pay. A minimum requirement is often dictated by the loan type. Debt-to-income ratio (DTI): A ratio that compares a home buyer’s expenses to gross income. Earnest money: A “security deposit” made by the buyer to assure the seller of his or her intent to purchase. Equity: A percentage of the home’s value owned by the homeowner. Escrow account: An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes. Escrow agent: A neutral third-party officer who holds all paperwork and funding in trust until all parties in the transaction fulfill their obligations as part of the transfer of property ownership. Escrow state: A state in which an escrow agent is responsible for closing. Fannie Mae: A government-sponsored enterprise chartered in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country. Federal Reserve: The central bank of the United States, established in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system. Federal Housing Administration (FHA): A government agency created by the National Housing Act of 1934 that insures loans made by private lenders. FHA 203(k): A rehabilitation loan backed by the federal government that permits home buyers to finance money into a mortgage to repair, improve or upgrade a home. Foreclosure: A property repossessed by a bank when the owner fails to make mortgage payments. Freddie Mac: A government agency chartered by Congress in 1970 to provide a constant source of mortgage funding for the nation’s housing markets. Funding fee: A fee that protects the lender from loss and also funds the loan program itself. Examples include the VA Funding Fee and the FHA funding fee. Gentrification: The process of rehabilitation and renewal that occurs in an urban area as the demographic changes. Rents and property values increase, culture changes and lower-income residents are often displaced. Guaranteed replacement coverage: Homeowners insurance that covers what it would cost to replace property based on today’s prices, not the original purchase price, should damage occur. Homeowner Association (HOA): The governing body of a housing development, condo or townhome complex that sets rules and regulations and charges dues and special assessments that are used to maintain common areas and cover unexpected expenses respectively. Home equity line of credit (HELOC): A revolving line of credit with an adjustable interest rate. Like a credit card, this line of credit has a limit. There is a specified time during which money can be drawn; payment in full is due at the end of the draw period. Home equity loan: A lump-sum loan that allows the homeowner to use the equity in his or her home as collateral. The loan places a lien against the property and reduces home equity. Home inspection: A non-destructive visual look at the systems in a building. Inspection occurs when the home is under contract or in escrow. Homeowners insurance: A policy that protects the structure of the home, its contents, injury to others and living expenses should damage occur. Housing ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to gross income. In escrow: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised and the title searched for liens, etc. Jumbo loan: A loan amount that exceeds the Fannie Mae/Freddie Mac limit, which is generally $425,100 in most parts of the United States. List price: The price of a home, as set by the seller. Loan estimate: A three-page document that is sent to an applicant three days after he or she applies for a home loan. The document includes loan terms, monthly payment and closing costs. Loan-to-value ratio (LTV): The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios. Market value coverage: Homeowners insurance that covers the amount the home would go for on the market, not the cost to repair, should damage occur. Mechanic’s lien: A hold against a property, filed in the county recorder’s office by someone who’s done work on a home and not been paid. If the homeowner refuses to pay, the lien allows a foreclosure action. Mortgage broker: A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution. Mortgage companies: Lenders who underwrite loans in-house and fund loans from a line of credit before selling them off to a loan buyer. Mortgage interest deduction: Mortgage interest paid in a year subtracted from annual gross salary. Mortgage interest rate: The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate. Multiple Listing Service (MSL): A database where real estate agents list properties for sale. Origination fee: A fee, charged by a broker or lender, to initiate and complete the home loan application process. Piggyback loan: A combination of loans bundled so as to avoid private mortgage Insurance. One loan covers 80 percent of the home’s value, another loan covers 10 to 15 percent of the home’s value and the buyer contributes the remainder. Principal, interest, property taxes and homeowners insurance (PITI): The components of a monthly mortgage payment. Private mortgage insurance (PMI): A fee charged to borrowers who make a down payment that is less than 20 percent of the home’s value. The fee, 0.3 percent to 1.5 percent of the yearly loan amount, can be canceled, in certain circumstances, when the borrower reaches 20 percent equity. Points: Prepaid interest owed at closing, with one point representing one percent of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment. Pre-approval: A thorough assessment of a borrower’s income, assets and other data to determine a loan amount he or she would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home. Pre-qualification: A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home. Property tax exemption: A reduction in taxes based on specific criteria, such as installation of a renewable energy system or rehabilitation of a historic home. Round table closing: All parties (the buyer, the seller, the real estate agents and maybe the lender) meet at a specified time to sign paperwork, pay fees and finalize the transfer of homeownership. Seller’s market: Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common. Short sale: The sale of a home by an owner who owes more on the home than it’s worth (i.e. “under water” or “upside down”). The owner’s bank must approve a lower list price before the home can be sold. Special assessment: A fee charged by a condo complex HOA when cash on reserve is not enough to cover unexpected expenses. Tax lien: The government’s legal claim against property when the homeowner neglects or fails to pay a tax debt. Third-party review required: Verbiage included in a home listing to indicate that the lender has not yet approved the home for short sale. The seller must submit the buyer’s offer to the lender for approval. Title insurance: Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer. Transfer stamps: The form in which transfer taxes are paid by the home buyer. Stamps can also serve as proof of transfer tax payment. Transfer taxes: Fees imposed by the state, county or municipality on transfer of title. Under contract: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised and the title searched for liens, etc. Under water or upside down: A situation in which a homeowner owes more for a property than it’s worth. Underwriting: A process a lender follows to assess a home loan applicant’s income, assets, credit etc. and the risk involved in offering the applicant a mortgage. VA home loan: A home loan partially guaranteed by the United States Department of Veteran Affairs and offered by private lenders, such as banks and mortgage companies. VantageScore: A credit scoring model relied upon by lenders to make lending decisions. A borrower’s score is based on bill-paying habits, debt balances, age and variety of credit accounts and number of inquiries on credit repots. Walk-through: A buyer’s final inspection of a home before closing. Water certificate: A document that certifies that a water account has been paid in full. The seller must produce this certificate at closing.
Closing a real estate deal, signing the papers to make a home yours, can be stressful and long and it involves many steps and procedural formalities. Many things must happen before you arrive at the closing. Here are a few important guidelines that need to happen between the moment your offer is accepted to the moment you get the keys to your new home.
Open an Escrow Agreement
An escrow account can be held by a neutral third party on behalf of the two principal parties involved in the transaction. They will hold all the money and documents related to the transaction until all is settled. A contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy.
Title Search is Conducted and Title Insurance is Obtained
Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title agency will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.
There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender.
It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance before closing.
Obtain a Closing Disclosure
Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction.
If you or your lender makes significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after receipt of the new form.
If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.
Be Ready to Close
As the closing day approaches, your agent will order any updated information that may be required. Once the agent has confirmed with the lender and the seller, a final date, time and location of the closing will be set.
On the day of the closing, all the work is complete. You are clear to close. A good Realtor will have been managing and making sure all the paperwork is done and getting the closing process prepared for you.
A fire destroys only the house and improvements. The ground is left. A defective title may take away not the only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.
A deed or mortgage in the chain of title may be a forgery.
A deed or a mortgage may have been signed by a person under age.
A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
A deed or mortgage may have been procured by fraud or duress.
Title transferred by an heir may be subject to a federal estate tax lien.
An heir or other person presumed dead may appear and recover the property or an interest therein.
A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
Title insurance covers attorneys’ fees and court costs.
Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.
There may be a defect in the recording of a document upon which your title is dependent.
Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced “wives” or “husbands.”
Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
Over the last 24 years, claims have risen dramatically.
Dedicated to innovation and passionate about service, Title First Agency is your comprehensive, nationwide resource for title and real estate settlement services. Headquartered in Columbus, Ohio, Title First has branch offices throughout the Midwest and a robust virtual partner network throughout the country. Title First got its start in 1956 as an affiliate of a local law firm and has since emerged as one of the largest independent title agencies in the nation.
A real estate appraisal is an essential piece of the buying and selling of property most notably if a buyer is going to need a loan to buy the home. No legitimate financial institution will lend money without an appraisal. The appraisal value of a home can make or break a sale, leaving this part of the real estate process one if not the most important, critical steps.
A home appraisal is different from a home inspection even though both an appraiser and an inspector will walk inside, outside and around the property to check everything with a fine tooth comb. The appraiser is finding the value of the home and the inspector is looking for problems or defects with it.
During an appraisal of a home, the appraiser will look at the state of repari, the features, square footage, number of bedrooms and bathrooms. It is good to give a list of repairs and improvements made such as a new roof, water heater, air conditioning, etc. Basically, anything the owner of the home can think of that will help the appraiser decide the general market value of the home.
The home will then be compared as accurately as possible by way of recent sales, homes sold that are similar, and a search will be done for properties that are identical to yours and what’s been sold or what is on sale in the neighborhood. The appraiser will also provide whether values of home are on the rise, decreasing or stable. If there are any concerns that he feels will harm the property’ value, it will be noted as well as flagging any bigger problems he may see in the foundation, the roof or any noticeable water leaks in ceilings or floors.
Again, an appraisal can make or break a sale of the home so it’s a nerve-wracking time. If the appraisal comes back higher or lower than the sale price, there will need to be more negotiating. If the seller isn’t happy with the outcome, a good Realtor will discuss with the appraiser why certain decisions were made. With the help of a Realtor, the seller can put together a valid argument as to why the appraisal is not correct.
Appraisals are valid for six months unless the home is in certain markets where homes are selling fast and prices continually change. At which point, lenders usually like an appraisal every three months.
The Bottom Line: Any good Realtor will press on the point that pricing the home correctly is most important. If a home is overpriced it’s not going to appraise and the sale usually falls through. Pricing issues are the number one reason homes don’t sell.
It’s in a seller’s best interest to make sure their home is as ready as possible for inspection. All homes that have been lived in usually have a bit of damage from simply living in it. After your home has been on the market and someone is interested in buying it, you have to pass the inspection. Home inspection seems nerve-wracking but they are necessary before any sale. There are a few things you can do to be prepared for the day when the interior of your home is being inspected.
Heating, Cooling, Water Heater: Each should have a date of their last inspection on them. If not, they could be flagged by the inspector. If you can’t find a sticker, have your Realtor give you the name of a licensed contractor to come to have a look to see if any repairs or changes should be made and make sure all are running properly.
Bathrooms: How is the grout in the shower, around the sink and in the tub looking? This one is an easy remedy if you see any cracks – match the grout color and fill in the damaged areas. Make sure any pipe work that was performed meets legal standards and guidelines. For example: If you put in your own custom shower, note that the inspector will check below the surface to make sure that the membrane was installed properly and there isn’t water leaking below the shower that could damage the sub-floor and drywall. The inspector will flush all the toilets and listen for any leaking sounds. Often you will just need a flapper valve if you hear a sound. Cheap fix.
Electrical: Test your outlets. For as little as $10, an outlet tester can be picked up at a home improvement store. An inspector will try every single one in your home. Be sure the cover plates are not cracked – another cheap and easy fix. Every light fixture should have a working bulb and your smoke detector should work.
Plumbing: Fill all your sinks part of the way and then pull the plug to see if they drain normally. Did it take a long time to fill the sink? It might be because you have low water pressure and is often a really easy fix. Occasionally, this could be an indication of a bigger problem within your plumbing system. It’s best, at that point, to hire a professional to come to see before an inspector. Check inside cabinets under sinks for moisture or around the valves.
Kitchen Appliances: Repair any that may need to be fixed as the inspector will run the dishwasher, the stove, oven, garbage disposal, vents, and fans. If you bought a new appliance while you lived in the home and installed it yourself, mistakes may have been made during setup. Check the water and drainage lines from a new dishwasher or refridgerator.
Windows & Doors: Each window should be able to open, close and lock. If you find any hard movement, it can be easily fixed using spray silicone from the hardware store. Repair any caulking around the doors and make sure all the knobs/deadbolts are working properly.
The Bottom Line: This is just a quick checklist of some of the things that you, as a homeowner, can look for and fix before an inspection inside your home. Some of the issues may need the help of a professional. The best advice we have heard is if you want the inspection to go smoothly, have your home inspected before it even goes on the market. This way, anything you can’t fix yourself, you will have time to find a reasonably priced contractor instead of rushing and paying top dollar after the fact.
Buying a home can be chock full of complications and setbacks, or it can go remarkably smooth and fast if it is planned carefully. The Realtor needs to stay focused and be the voice of reason as they facilitate the process at closing and make sure all parties have completed all unfinished business prior to coming to the “closing table”. Here’s a quick list that Realtors can use to ensure a smooth closing.
Repairs: The Realtor should check on the status of all repairs that were to be made on the home the day before closing. If there was an agreement that something needed to be fixed by closing, make sure that it is. If there was an arrangement for repairs to be taken care of after closing, make sure all the necessary paperwork shows this as fact. A final walk-through should be done with the buyers. The sellers should make sure, with their Realtor, that the property is in the condition promised and all of their personal items are removed.
Title Insurance: All of the title work should be checked to ensure clear title and that the property can be transferred without any obstructions. Should there be any title issues that might include judgments or liens, they must be settled prior to the hour of closing. The moment of truth in a real estate transaction happens at the closing table. Title First Agency will work hard to ensure a seamless experience for you and your clients. From contract to closing, we handle all the details to help a transaction run smoothly and close on time.
Financing: The lender should be contacted the day before the closing to be certain that all the documents they need have been received. Occasionally, the closing is delayed due to one document or one final verification. The interest rate for the loan should be locked as well as the final mortgage and monthly payments. The Realtor should make sure the buyer has all the funds available and ready to close. Having everything in hand the day before gives both the buyer and the seller 24 hours to review everything and have any questions ready, errors noticed or points not understood addressed.
The Bottom Line: A thorough Realtor will make sure the buyers are ready for the closing. First-time buyers may not realize all the people that could possibly be at the closing table, and all the paperwork there will be that needs their signature. The buyer needs a cashier’s check or arrangments made to wire the closing funds to the escrow company. The seller should bring all the keys, garage door openers, alarm codes and any other controls to the settlement. The Realtor should make sure and confirm that all utilities have been disconnected by the sellers and set up ready for the buyers upon closing.
Are the walls closing in on you in your home? Are you feeling cramped? Maybe you have TOO much space and have launched all of your children and are ready to downsize. Are you ready to find your next home? Are you on the fence whether it’s a good time to sell or not? Of course, you want top dollar. So what are some of the signals that now is the time – or not?
Positive Equity: The current market value of your home, less what you owe. If you can sell your home for more than you owe, you will benefit from positive equity. This can enable you to have enough money for closing costs and putting money down on your next home. At the very least, you want to be able to sell enough to cover the current balance of your mortgage. If none of this applies to you, there are many things you can do to improve the equity of your home, including home improvements. Speak with a skilled Realtor to know what you should repair, replace or upgrade.
Strong Market: You probably have a general idea of what is going on in your neighborhood – what the trend is; who is selling; what has sold and for how much. But, call your local Realtor and get the comps and find out exactly how hot the market is. You’ll be able to learn how long a home was on the market until it sold, what the price per square foot has been and if that number been increasing or decreasing. If it’s been low average days on market, it’s a pretty positive sign the market is hot for sellers.
Remodeling Won’t Raise The Value: Sometimes it’s beneficial to make updates in your home and you know that updating your kitchen or adding another bathroom will help you sell your home for top dollar. But, making an appointment with a reputable Realtor to find out if adding money to your home will be worth it. Depending on the real estate in your neighborhood and what buyers are looking for, doing less may be more. Your Realtor will help you to understand what the market is doing – the rule of thumb is not to raise your home’s value any higher than 10 percent of the average cost of homes in your neighborhood.
The Bottom Line: Is it finally time to sell? There are many signs, we’ve just listed three. Talk to a Realtor, meet with a financial advisor or mortgage lender and make sure it makes sense financially. Being house poor is a reality, and as much as you want a larger home – or even a smaller home – it might not be the right time for you.
What is a “pocket listing” and why do you hear about it so much? Some home sellers like the benefits of a private transaction. Thus, when a Realtor and a seller sign a listing agreement that permits the seller to place their home for sale without adding the information into the Multiple Listing Service (MLS) it is called a “pocket listing”.
The biggest advantage of selling your home as a pocket listing is for the privacy. The general public doesn’t get to see pictures of it online, and they are not able to just come “take a look” out of curiosity. These sellers don’t want strangers wandering through their homes. They don’t want the hassle of the constant showings, they simply want only the pre-qualified and vetted serious buyers.
Homeowners prefer selling their home as a pocket listing for many reasons. If the seller has just gone through a life-changing event (a divorce, death, new baby, etc) and they often want their home sold as quickly & quietly as possible. Maybe, they just want to test the market, get an idea of what buyers are willing to pay for their home. Being a pocket listing means the general public does not know how long the buyer has been trying to sell it. No listing on MLS means no public eye, which can lessen the stigma that is inevitable if a home sits too long on the market publicly. Another plus? If the buyer wants to lower the price, buyers won’s see it and won’t be able to use it to negotiate.
Bypassing listing a home on the MLS provides a jump start and the home often sells for the full price due to the fact that they are listed in a defined, focused market. But, the unfortunate side to this is that it may sell, but might not be at the very best price. When the pool of potential buyers is restricted, the seller doesn’t know what the home could actually bear since it is never actually on the market.
The Bottom Line: Pocket listings can be advantageous in the real estate market, especially in specific cases where sellers require privacy and want to have control over the buyers who see their homes. But along with being a pocket listing comes potential hindrances that can warrant consideration. An experienced Realtor will be able to walk you through all the details of how your specific home would do as a pocket listing.
Thoughts of selling your home during the very busy holiday season between Halloween and New Years? In the past, people would wait until January to list their home because there were fewer buyers out looking. While that may be true – there are not as many people looking for a home, times are different now and there are plenty of compelling reasons to list your home now.
There is much less competition. Potential buyers are prepared to buy – the fact that they are even looking during this busy season is evidence enough that they are motivated and ready to buy. Fewer homes for sale makes it more likely that buyers will check out your home.
Holiday buyers are also caught up in the season. Emotions are running high and where they are thinking of the past, and more importantly, the future. When a buyer is emotional, they tend to be more excited to purchase because it makes them feel good. Case in point the retail sales at this time of year.
Seeing your home during the holiday season helps them envision their own family celebrating. Use the most experienced Realtor and he/she will be able to guide you on how to decorate – using some restraint in holiday decorating goes a long way. Keep it simple, impersonal and show off your home’s best points. Have a fire going in the fireplace, cookies baking in the oven and a Christmas Tree decorated with only the most special ornaments. Don’t forget the outside, as well. For example, a simple beautiful wreath on the front door is better than colored lights and blow up Santas on the front lawn.
Loan approval is much faster during this season. The lenders aren’t as busy since there are not a lot of home sales happening. When the loan is processed faster, you get your money faster.
The possibility of tax benefits at the end of the year can get a buyer moving. A home bought now is very beneficial. Many of the expenses used to purchase the home can be written off on their taxes. Plus, plenty of advantages including deductions for mortgage interest, private mortgage insurance premiums, tax credits for real estate taxes, etc.
The Bottom Line: Selling during the holiday season has plenty of advantages. Yes, there are fewer buyers out there, but the ones that are looking tend to be serious. They are ready to make a decision. It can be harder for you and your family to have showings, but if you commit to set boundaries with your Realtor on when the home can be seen, but yet remain flexible and patient it will be less stressful on your family and increase the chances of the right buyer walking through your front door.