Home sales hit a 15-year high of 6.12 million in 2001, according to the National Association of Realtors. We asked pros who worked with some of those buyers and sellers for their key takeaways to save future clients money and make the process as stress-free as possible.
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There’s more to it than a mortgage rate, says Katie Wethman, a Certified Public Accountant (CPA) and Realtor with The Wethman Group at Keller Williams in McLean, VA.
A seller’s agent often calls the buyer’s lender to ensure they’ve been well-vetted before advising the seller. An offer submitted with an automated pre-approval form spit out by an online lender, relying on the borrower’s word and not a thorough review of their financial documents, is a red flag. It may result in the seller going with another offer.
What’s more, a super-low rate is useless if the lender can’t close on time. That would put you in default on your purchase agreement and may lead to cancellation. It could even leave you between homes waiting for financing to come through. Financing issues were the most common reason for delayed closings in April 2022, according to the National Association of Realtors.
Prevent this by evaluating several potential lenders. Consider your agent’s recommendations for reputable local lenders, and ask friends and family which lenders they’ve had good or bad experiences with.
Look into working with an experienced mortgage broker. You won’t pay anything for their services, but they may guide you to a lender who can meet your closing timeline while offering competitive pricing.
Working with an online lender can be fine as long as their customer service is responsive and they can pre-underwrite your loan. That involves an analysis of your credit history, income and debts, resulting in a firm commitment to lend, contingent on the property you choose.
Staging your home in a way that lets buyers picture themselves living there can help it sell faster and for more money. It could be more affordable than you think.
“You can pay someone a few hundred dollars to move a few things, put some items in storage, clean and hang fresh towels,” Larson says. “Or, you can pay a few thousand to have them clear out everything, clean and stage two or three rooms.”
Her agency offers the RealVitalize program, which provides cash up front for improvements, then recoups that money from the proceeds of the home after closing. Curbio and Compass Concierge offer similar services.
Staging the living room, master bedroom and kitchen have the biggest impact, according to a survey of buyers agents by the National Association of Realtors, possibly increasing the sale price one to five percent. On a $400,000 home, that could mean an additional $4,000 to $20,000.
Put Price Jumps in Perspective
A few thousand dollars doesn’t make that much difference in the long run, says Trina Larson, a CPA and Realtor with Coldwell Banker Realty in Bethesda, MD.
Let’s say you’re deciding between two homes, both within your budget. One costs $300,000 with a home office where you can shut the door. The other costs $10,000 less but would require you to work at the kitchen table. Yes, $10,000 sounds like a lot of money just for some extra privacy and quiet. But on a 30-year mortgage at five percent interest, it’s only $53 more per month.
“Buy it because you’re going to live in it, not to get a deal,” Larson says. “You want to be happy where you live.”
Additional Costs Add Up
Sellers often know they’ll pay their agent a commission when their home sells. But they may be unprepared for other expenses, says Beatrice De Jong, a broker and consumer trends expert at Opendoor. These include a professional deep clean, home staging and marketing, professional gardening or landscaping services, paint touch-ups and minor repairs.
And buyers, especially first-timers, may not realize closing costs can total two percent to five percent of the loan amount, adding thousands of dollars to the purchase price. Moving costs add up, too — $1,250 on average for a local move, and nearly $5,000 for long distance (1,000 miles or more), according to Moving.com.
Do thorough research to calculate the true cost of buying or selling before you dive in. Don’t forget to estimate how much you plan to spend on improvements and furnishings for your new place, and which of those costs you’re comfortable spreading out over time.
Also consider working with a financially savvy agent who can help you plan for these costs and stick to your budget. Both Wethman and Larson are also CPAs.
There’s Always Another One
You might think you’ve found your ideal home. Then the seller rejects your offer, or the home inspection reveals major problems. Don’t despair. It happens all the time.
“I wish buyers knew that there’s always another house,” says Wethman. “It doesn’t feel like it because every house is one of a kind. Even if it’s a condo in the same building, it’s still going to be a little different — different view, different layout.”
Believe it or not, you find another that meets 90 percent of what you’re looking for — even if it’s a different 90 percent, Wethman says. Like plenty of homebuyers before you, keep at it until you get that feeling again, that you’ve found The One.
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