Frequently Asked Questions
Question about home selling
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:
- Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
- Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
- A short-term spike in interest rates – may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
- Low inventory – fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
When preparing to sell your home, the first thing to do is make it presentable. This means giving the entire house a thorough cleaning and making small repairs.
Mop the floors, scrub the bathrooms, and get rid of all the grime in the kitchen.
Little things like patching holes in the wall, changing burned-out lightbulbs, and repairing broken appliances can make your place stand out in a crowded market.
And don’t forget about paint — returning the walls to a neutral color can help your house sell quicker. White, creams, and grays can make rooms seem bigger and help potential buyers see themselves living there.
If you’re not moving out before listing your home, you’ll also need to depersonalize and declutter.
Put away your family photos, knick-knacks, and other personal items. You may need to rent a storage unit if you don’t have a place to put them all.
» READ: 18 Essential Tips Get Your House Ready to Sell in 2021
» LEARN: Best Paint Colors to Sell a House
On average, a house takes between 55 and 70 days to sell. That includes 25 days on the market and 30 to 45 days for closing.
The exact time it takes to sell a home depends on a few things, including:
- The time of year you’re listing: Homes tend to sell faster in the spring and early fall.
- Conditions in your local housing market: Homes sell faster in a seller’s market, when there is low inventory and high demand.
- The condition of your home: Homes in great condition may sell faster than homes that need more work.
- How the buyer is financing: If a buyer needs to take out a mortgage, this may slow down the process. Financing deals usually take an average of 42 days to close, whereas cash deals take only one to two weeks.
The longer your home is on the market, the more money you lose. You’ll still have to pay your mortgage, taxes, and utilities until the buyer officially closes.
To avoid this, there are some things you can do to help your home sell faster.
You can make impactful repairs, like adding new carpet or painting the interior. However, if it’s a seller’s market and homes are selling quickly, you might not need to make these repairs.
You can also set a competitive price with the help of a top real estate agent.
Clever Real Estate’s partner agents sell homes faster than the national average with lower commission fees.
» READ: How Long Does it Take to Sell a House? (An In-Depth Guide)
» LEARN: How to Sell Your House Fast (A Comprehensive Guide)
The first step in deciding your home’s list price is to get a comparative market analysis (CMA).
You can do this yourself, but most people get their real estate agent to do it.
Here’s how a CMA works. Your agent will find similar homes in your neighborhood that have the same square footage, a number of bedrooms, and a number of bathrooms.
They’ll see what these homes recently sold for or are listed for, and use this as a starting point for your own list price.
Some agents are willing to perform a CMA without you committing to selling your house through them. However, be prepared for a hard sell.
A great agent will be an expert in their local neighborhoods, so they’ll be able to price your home in the sweet spot.
If you’re just curious and don’t want to spark up a conversation with an agent, you can also use an online valuation calculator.
This might give you a ballpark figure based on cumulative data. Keep in mind, these aren’t always 100% accurate.
An appraiser is an expert at pricing homes and can use their extensive knowledge to pinpoint an accurate list price.
On average, you’ll pay between $200 and $500 for this service.
Whether or not you should buy a new home before selling your existing home is a personal choice.
Having a new home lined up gives you peace of mind when selling, and you can move out on your own time.
It also prevents you from lining up temporary housing (and having to move twice), which can be a pain.
That said, you may get stuck paying two mortgages at once. This can be a problem if your sale takes longer than expected.
You can also feel rushed into quickly finding a house instead of waiting for a better deal.
» LEARN: How to Buy a New House Contingent on Selling Your Current One
» CONSIDER: How to Build a House While Selling Yours: 5 Things to Know
A real estate agent has an in-depth knowledge of the area and how your home compares to others on the market.
They’ll have a good idea of how much you can get for your home and ways you can improve its value.
When it’s time to list, they’ll make sure your home’s priced just right, helping to maximize your offers and sell your home faster. They’ll also take care of all the paperwork, market your home, and coordinate open houses.
Real estate agents aren’t just helpful during the listing process, though. They offer a network of professionals throughout the entire selling journey.
You’ll have connections for everyone you need, whether that’s a closing agent or a quality listing photographer.
» LEARN: Top 3 Reasons You Need a Real Estate Agent
» READ: What Is a Listing Agent?
Your home’s assessed value and market value are each determined by different factors.
Buyers and sellers affect the market value of a home, while professional appraisers calculate the assessed value.
In a seller’s market, your home’s market value may be higher than its assessed value.
That’s because buyers are willing to pay more than the home is technically worth because of low inventory.
In a buyer’s market, you’ll be facing a lot of competition from other sellers, so buyers may put in an offer lower than the home’s assessed value.
» LEARN: Appraisal Value vs Market Value: What’s the Difference?
Question about home buying
Before you can purchase a home, you’ll need to check your credit score. Potential buyers with credit scores of 700 or higher reassure lenders that they can be trusted to repay the loan.
High scores reflect consistent on-time payments, long-term borrowing experience, and a good mix of credit types (student loans, car loans, credit cards, etc.).
Lenders look at these factors to determine if you qualify for certain kinds of mortgages, so be sure to review your credit history and correct any errors. This will give you a better chance at qualifying for loans with lower interest rates.
Shop around for different mortgage lenders to find out what kind of loans you prequalify for before beginning your home search. With this knowledge, you can easily create a budget and start looking for homes within that range.
» READ: What Credit Score is Needed to Buy a House?
» LEARN: 6 Easy Credit Building Tips for First-Time Home Buyers
In 2019, it took buyers an average of 4.5 months to choose a home and make an offer. The buying process itself, which begins when an offer is accepted, takes about 30-45 days to finalize.
However, several factors can affect the buying process, including the property’s location, buyer demand, economic trends, and other variables. Before closing, you’ll also need to::
Order a home inspection
Get an appraisal
Conduct a title search
Finalize mortgage details
Review closing documents
To speed up the home buying process, connect with a top real estate agent in your area. A knowledgeable agent can help you narrow down your options and negotiate with sellers on your behalf.
Yes! You just need a good understanding of the current market and the seller’s needs and motivations.
When the real estate market is a seller’s market, for instance, homes are in high demand and will likely receive multiple offers. Lowballing an offer, in this case, might cause you to lose your chance at your dream home.
During the first three months of 2021, the average cost of a home in the U.S. was $403,600. If this number discourages you, learning how to negotiate is key. Tactful negotiation with a seller can help you afford a home you love instead of settling for an option under budget.
Consulting a real estate agent is your best bet if you want to make sure your offer won’t be rejected or ignored. Their knowledge of the local market and buyer demand will help you and the seller negotiate a fairer price.
Whether or not you use an agent, wait until after the home inspection before you try to negotiate a lower price. If the inspector finds any issues, you can ask either for a reduced price or for the problems to be fixed prior to closing.
You can check if you’re eligible for financial programs or loans available through the FHA (Federal Housing Administration) or the VA (U.S. Department of Veteran’s Affairs). If you’re a first-time buyer, for instance, you may qualify for an FHA loan or a home buying program.
If you meet the criteria for a VA-backed loan, you might not have to make a down payment on a home. You’ll also receive better terms and interest rates compared to most traditional bank loans.
For additional ways to save, financial experts recommend saving up for a 20% down payment on a home. Doing this will ensure that you won’t have to pay for private mortgage insurance, which can cost anywhere from .3% to 1.2% of a loan’s principal balance every month.
Lastly, home buyer rebates (also known as commission rebates) are currently available in 42 states and could potentially save buyers thousands. With a home buyer rebate, the real estate agent or broker shares a percentage of the payment they receive at closing with you, so you get some of your money back.
Making a down payment of 20% is ideal because you can avoid paying private mortgage insurance (PMI), but more realistically, lenders usually require at least 3% for the sale to go through.
Depending on where you live and what kind of mortgage you’re eligible for, some lenders may require a minimum of 5%.
In some circumstances, you may not have to worry about a down payment at all. If you’re a first-time buyer, veteran, or rural resident, there are special programs available to help you afford a home.
» READ: Everything You Need to Know About Low-Income Home Loans
» UNDERSTAND: Popular Loan Options for First-Time Home Buyers
Sellers generally have about 72 hours to respond to an offer, but this may vary by state. If a bank is selling a home, on the other hand, the response can take several days or weeks.
If you make an offer and the seller doesn’t respond at all, your offer was probably too low. To increase the likelihood that your offer will be accepted, a local realtor can help you strike the right balance between a reasonable cost for you and an appealing price for the seller.
If you can get pre-approved for a loan, it can help speed up the underwriting and buying processes, getting you into your new home sooner.
During the underwriting process, loan underwriters will review the “3 Cs:”
Your credit history
Your capability to repay the loan
Collateral
If you have a positive history of making payments on time, a good credit score, and a consistent income, the turnaround time can take just a few days.
Once a lender approves your loan application, you will be “clear to close.” After this, your agent will have you sign closing documents, pay the down payment, and transfer the home’s title to you!
» READ: The Mortgage Underwriting Process: A Complete Guide
» UNDERSTAND: How Long Does It Take to Get Pre-Approved for a Mortgage?
A buyer’s agent can help you find homes within your budget, schedule visits to houses you like, and negotiate with sellers. Top real estate agents have in-depth knowledge about your area and can save you time and money by narrowing down your best possible options.
As Real estate agents, we have access to the multiple listing service (MLS) database, which can help you find homes in popular locations before other buyers. Since realtors are plugged into the local market, they might even hear about potential properties before they’re officially listed!
Buying a home can seem overwhelming and confusing, but an experienced real estate agent can put your mind at ease. Clever can connect you with some of the best local agents at reduced rates to help you find the perfect home without breaking the bank.
» READ: What Does a Real Estate Agent Do for a Buyer?
» LEARN: How to Interview a Realtor When Buying a Home: 6 Tips