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Disadvantages of Buying a For Sale by Owner Home

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If you’re looking for a new home, you’ve likely come across homes that are for sale by owner, also known as FSBO. What that means is the home owner is attempting to sell their home on their own without the help of a real estate agent. Some people will tell you that buying a FSBO home is easy and can save you money if you do it without a Realtor®. However, you need to understand why it’s best to have a real estate agent in your corner to avoid common pitfalls when dealing directly with a home owner on a FSBO property.

One reason a person may sell their property on their own is that they believe they’re going to save on the Realtor fees. However, according to Steve Farmer, a licensed independent Realtor with F.C. Tucker, “Most sellers probably don’t understand that they are going to have to pay the buyer’s agent anyway. So really at the end of the day, using a real estate agent on a FSBO property isn’t going to cost the buyer anything.”

Also, some people are under the impression that buying a FSBO property will save the buyer money. But per Farmer, that is definitely not the case. “From my experience of working with people who are selling their home on their own, they definitely tend to over-value the price of their home when compared to similar homes that are selling on the market,” he says. “Typically, it is very rare that I find a well-priced home when I’m looking at FSBO properties for my buyers. An experienced real estate agent can sit down with a buyer and explain to them what a good offer should be without overpaying for the home.”

There are three key reasons why it’s in your best interest to work through a Realtor.

1. Your real estate agent has experience in real estate transactions, can offer advice regarding the contract, and can make sure all the paperwork is completed properly. Without the use of a Realtor, you’re on your own in figuring everything out unless you hire an attorney.

“When you give the seller a purchase agreement, you are signing a legally binding contract, stating that you are going to purchase the home,” says Farmer. “The standard purchase agreement that we use is seven pages long, so there is a lot of information in that set of pages that we have to explain to our clients that your average person isn’t going to understand.”

Also, Farmer adds there are exit ramps in the contract for both buyers and sellers if you need to get out of the contract that the average person doesn’t know. So you’re not forced to buy a home you may not want if issues arise.

2. Your real estate agent is a skilled negotiator, and you may not be.

“I’ve seen some FSBO contracts that don’t cover a lot areas in which you could really get burned, if you don’t know what to ask for,” says Farmer. “A real estate agent is going to be able to help you with negotiations so you know what to ask for.”

According to Farmer, the buyer can request a lot of things when negotiating the contract that they may not be aware of. You can ask the seller to pay for some of the closing costs, like the title fee. Also, the average buyer isn’t going to understand that the seller needs to pay the property tax up to the date of the closing.

Repairs are another item you can negotiate to have the seller take care of. Farmer says, “There are certain repairs that are pretty obvious that need to be done that the seller should pay for that the buyer may not typically know. But you don’t necessarily ask for everything to be done. Typically, the real estate agent will know what the more costly repairs are.”

Additionally, the negotiation process, in general, can be very emotional for both the buyer and the seller. Therefore, a real estate agent can act as a shock absorber to absorb some of that emotion. Farmer says, “I’ve seen very reasonable offers offend sellers. So typically, it takes that professional to say, ‘Hey, this is typical of what a home sells for in this market. This is a reasonable offer.’”

3. Your real estate agent will have professional connections with people who can help you with the inspection, repairs, getting a mortgage and/or the closing process.

Farmer has recommended Grandview Lending, a family-owned and operated residential home lender, to several of his clients. “Every one of my clients who have used Grandview have come away very pleased,” he says. “They never missed a closing deadline. They are nothing but professional, and they do a great job of communicating, not only with their clients, but also with me and the title company. I don’t hesitate at all to recommend Mike Farrell and Grandview Lending.”

Regardless of whether you’re looking for a home that’s FSBO or not, Steve Farmer can help you find the home of your dreams in Hamilton County, IN or any of the surrounding counties. Contact Farmer at 317-989-1434 or via email at Steve.farmer79@yahoo.com.

 

If you’re need a mortgage for your new home, call the mortgage specialists at Grandview Lending at 866-690-4920. They will listen to your needs to help you make the best decision when it comes to financing your home.

Photo credit: iStockphoto/foxden1

9 Reasons Why You Should Use a Realtor to Purchase a New Construction Home

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Building your dream home from the ground up can be exciting. You get to choose your lot, the floor plan, the exterior design, the interior finishes and any upgrades. But it’s a common misconception when you’re buying a new constructed home that you don’t need to work with a Realtor®. However, that’s not necessarily true. Below are some good reasons why it makes sense to have a real estate agent represent you when building your new home.

1. The sales agent works for the builder. When you walk into a model home, the friendly salesperson who greets you is employed by the builder. According to Jeff Miles, a Realtor with F.C. Tucker in Indianapolis, “That is not necessarily a bad thing, but in the end, they’re trying to generate sales for their boss – the builder.” Therefore, they may not work to your advantage.

2. Your real estate agent is your advocate. Your Realtor is obligated to work toward your best interest. “Working with a Realtor, gives the client another advocate to help protect their interests,” says Miles, who has 11 years of experience as an agent. “The Realtor is going to make sure the buyer knows what their rights are, so they don’t feel like they have to be forced into something.”

And they can give you perspective on things that may affect future resale as well.”

3. Hiring a Realtor comes at no cost to you. When working with builders, there is no additional cost for working with a Realtor. The builder will pay your agent’s sales commission.

4. An agent can help you choose the right builder and neighborhood. “An experienced realtor can show you what the neighborhood values are currently for resale, which will help give you perspective when it comes to building your house, so you’re not necessarily over-building for the neighborhood – at least, not without knowing that you’re doing so,” says Miles.

5. A Realtor can help you make the right choices for your budget. “New construction can be overwhelming, because there are an endless number of choices to select,” says Miles. “It is really easy to want to buy a million dollar house, but you only have a $200,000 budget. A good Realtor can help guide some of your decisions within your budget. And they can help make sure that your budget is in line with what you’re trying to accomplish.”

6. An agent can help with lot, floor plan and upgrade selections. ARealtor can help guide you by making recommendations on items that appeal to a larger number of future buyers, if you think you may sell your property in the future, says Miles. For example, the lot you may be thinking about buying may save you some money upfront, but it may not be the best lot selection when it comes to resale value.

Also, when working within your budget, an agent can guide you on what items are better to install now versus items that are easier to improve upon later, such as a basement versus a bonus room or 2-foot bump-outs versus upgraded flooring.

Additionally, “as you’re walking through the model home, most Realtors will ask the sales agent to point what the base price of the home is, what upgrades are included in the model home, and what the current price of the model is with the upgrades,” says Miles. “It helps you put what you’re looking at into perspective and what the cost truly is.”

7. A Realtor will be aware of builder promotions and may be able to help you help negotiate a better price and terms. “Negotiating the home price depends a lot on supply and demand as to whether the builders will negotiate or not,” says Miles. “Particularly if it is a spec house versus true new construction. Currently, there is less inventory out there for buyers to choose from. And the demand is starting to increase. That usually creates a situation where there is a larger demand for new construction as well. So if the builders are busy, they are less likely to want to or be willing to negotiate.” However, realtors are aware of promotions that builders are advertising, so they can pass that information along to you.

8. An agent will guide you through the building process, if needed. “When talking to your Realtor, it is important to clarify what your expectations are concerning their presence throughout the process, says Miles. You may want your agent to attend the selection process, the walk-through and other meetings with the builder.

Also, “prior to closing, your agent will make sure you have all the information you need. Because it can sometimes be more difficult to get things accomplished after closing than prior to closing,” says Miles. “Your Realtor can be a communicator to make sure you have all the “I’s” dotted and the “T’s crossed.”

9. Your agent can help with your lender selection. “Sometimes, builders have relationships with certain lenders,” says Miles. “They will try to offer some incentives so you will work with that lender. But it’s always a good idea to talk with another preferred lender to make sure what you think you’re getting, you are in fact receiving. At the end of day, you need to compare apples to apples. And the incentive is not always the best option in all cases.”

Miles recommends Grandview Lending to the home buyers he works with. “I’ve  been working with Grandview Lending for almost 10 years,” he says. “The ownership and personnel have a high sense of integrity. They are individuals that I trust to give good, accurate information and recommendations or options that the consumer can benefit from.”

As you can see, hiring a Realtor to represent you when purchasing a brand-new home provides many benefits.

But if you decide to work with an agent, just make sure the next time you  vstop by a model home to take a look, notify the sales rep that you’re working with a Realtor. Or, ideally, have your agent visit the model home with you. “It’s always a good idea to clarify upfront with the sales rep that a Realtor is going to represent you and that the builder is ok with that,” says Miles.  

If you’re interested in purchasing a new construction home in the Indianapolis area (especially Hamilton, Hancock, Johnson and Marion Counties), contact Jeff Miles at 317-946-0601 or via email at miles@talktotucker.com. Miles provides a no cost, no obligation buyer seminar and/or marketing analysis. “I really enjoy what I do,” he says. “I have a passion to care and look out for the individuals I work with. To me, it’s a long-term working relationship – and not just for the one-time sale.”

To determine how much home you may qualify for before you build, contact the knowledgeable mortgage specialists at Grandview Lending at 317.255.0062. They can help you find the right mortgage loan for your new home dreams.

Photo credit: iStockPhoto/pixelbiz

5 Tips to Help You through the Home Buying Process

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Buying a home can be a big decision, as well as one of the biggest investments you’ll ever make. If you’re a first-time homebuyer or it’s been awhile since you last bought a home, you may not know what to expect when buying a home and likely have questions about the buying process. Here are some tips to successfully guide you through the process.

  1. Get a REALTOR®. A real estate agent, like Marigrace Bailey with F. C. Tucker, is knowledgeable about the market and what homes are available. Plus, a REALTOR can get you access to all available properties in your desired area.  Additionally, a real estate agent can walk you through the steps to buy a home and answer any questions you may have along the way, making the whole process easier for you.
  2. Foster a good relationship with your REALTOR. “I care very deeply about doing a good job,” says Bailey, who has 11 years of real estate experience. “I’m here to take care of my clients and their needs. That’s why I’m genuinely interested in them.” Good communications can go a long way in building trust levels. Therefore, Bailey listens and learns as much as she can about her clients and their families, so she can find properties that meet their requirements.
  3. Get pre-approved for a mortgage. Bailey always has her clients talk to mortgage lender or broker, like Grandview Lending, first. “I refer my clients to Grandview Lending, because they need to know how much they can afford when it comes to buying a home,” says Bailey. “Many first-time and older buyers say it makes sense that they need to talk to a lender. And Grandview Lending is competitive and very ethical.” A lender can provide you with a pre-approval letter, which states the amount they think you’ll be able to borrow based on your income and credit history. Therefore, you’ll know what price range you need to stay within when looking at homes. Also, Bailey says, when you find a house you want to buy, the pre-approval letter lets the home seller know that you’ve already talked to a lender and you can afford to buy their home.
  4. Do your homework on the areas in which you want to live. Figure out what’s important to you when it comes to a home, such as good schools, being close to work or being in a community with a swimming pool. “Most people have idea of where they want to live,” says Bailey. “They may call me and say they want to live in Carmel or Washington Township in Indianapolis. I listen to them and what their needs are.” However, while your real estate agent can do their best to meet your requirements, you also need to take some responsibility, too, in investigating the homes you’re interested in. For example, if you want your children to go to a certain school, call the school district and ask if the property’s address is within that school’s area.
  5. Work with your REALTOR when you’re ready to make an offer. Part of a real estate agent’s job is to be knowledgeable in contracts and be an effective negotiator on your behalf. They can help you when it comes to making your offer and negotiating home repairs needed following the home inspection. “Once you get into negotiation and contracts, it’s my job to make sure my clients meet all of their deadlines,” says Bailey. “I can also help them pick a home inspector. However, the home buyer must attend the home inspection. That’s when they get to learn about the house. And I can help them if there are serious things that need to be fixed, like radon, termites or a crack in the exchanger. That’s another negotiation that you need a good real estate broker for. However, don’t ask the seller for deferred maintenance on a 30-year-old home. That’s just part of becoming a homeowner. But if there are safety repairs or things that are super expensive that need to be fixed, then I can guide the buyer about getting those things fixed. Or, we move on to the next property.”

Remember: A good REALTOR ensures your home-buying process works out in your best interest. To schedule an appointment with Marigrace Bailey to talk about your home-buying needs, contact her at 317-709-6095 or via email at teambailey@talktotucker.com.

If you need a new home mortgage, contact Grandview Lending, located in Indianapolis, by calling 866.690.4920 or completing their online form. Our mortgage specialists will work with you to find the right mortgage for your needs.

Photo credit: iStockphoto/Feverpitched