Homeowners usually find themselves in a quandary when determining which must come first. Do they have to sell their current home before they can go for an upgrade? Or can they just go ahead with the purchase even if the old home has not yet been disposed?
For first time owners, the situation is simple. They can just purchase their dream home once they get their mortgage application pre-approved. If you are renting, the situation is not complicated. Once you have figured out how you can get your equity out of the rented home, you can proceed to purchase your home. Unfortunately, the situation is not as simple for homeowners, especially the first time sellers. dallas homes for sale
There are certain variables that you have to consider when making the decision. The first thing that you must consider is your personal circumstances. You must also determine how much of a risk you can afford to take. You have to look at the market conditions. Are you in a buyers market or a sellers market? Can you be able to get a bridge financing? What type of home are you planning to purchase? Is it a resale home or a brand new home? You must weigh a lot of things so that you don't end up holding an empty bag at the end of the day.
As a general rule, it is better for you to buy first when you are in a sellers market since it is easier to dispose of your current home than buy a new one. You definitely don't want to end up without a place to stay because you failed to buy a home before you vacated your old home. You must negotiate with your bank for a bridge financing for the home that you are planning to purchase. This is your safety net in case you are not able to dispose of your current home before you close the new purchase.
On the other hand, you must sell your current home first before you make the buy if you are in a buyers market since it is easier to buy a new home than to sell your old home. By then, you will be able to know your budget range and take advantage of the declining prices of real estate properties. In some cases, you may even elect to wait it out until home prices bottoms out. dallas homes for sale
The situation becomes simple if you are going to sell your current home and purchase a pre-sale. You only have to consider the delivery date of the developer and you will have to close the deal within 30 days from said date. This gives you more time to work on a good deal with your prospective buyer. In most cases, you have about three to five months to work out a deal with your buyer before you close the deal with the developer.
You can also add a clause in your agreement with the seller that will make the purchase dependent on the sale of your home. This special clause in the agreement will normally run for one to two months, depending on the prevailing conditions in the market. Under this arrangement, the seller can still offer the property to other interested buyers within the period covered by the time clause. If he receives an offer that is acceptable to him, you will then have to meet the subject clauses within 24 to 48 hours or give up your right to purchase the home. It is under this situation that bridge financing is very essential. dallas homes for sale
Tuesday, February 9, 2010
Pay Less Real Estate Commission
Yes, you can pay less real estate commission on the sale of your home. Regardless of which state you live in, all real estate commissions are negotiable. Real estate agents prefer you to pay the "standard" fee of 7%, but times are different.
This latest recession/depression has put a big hurt on real estate agents and brokers. With home sales down many agents are not selling as much as they used to. Life on easy street has changed for many of them.
How much does an agent make on a sale?
A typical listing agent will split the real estate commission 50% with the selling agent. So, on a $200,000 home the "standard" commission of 7% would be $14,000. So, your listing agent gets half, or $7,000. Now the listing agent doesn't get to keep this full amount unless they're also the broker. Often, the agent and broker will split 50/50, or each getting $3,500. Many agents will sell one house a week. That's $182,000 a year! Now, if they both list and sell your house they make double. Not bad for a little bit of work, huh? dallas homes for sale
How do you find an agent that will negotiate?
First, look for agents at smaller real estate companies, or even better yet, independent owner/brokers. They're much more likely to reduce their fees. Also, agents at the bigger real estate companies will be under more pressure from their brokers not reduce their commissions.
Start making a list from the internet or yellow pages of all the local real estate agents in the area. Then get on the phone and ask them a few questions, such as:
"How long have you been selling real estate?" "How many houses do you sell a year?" "What is the average length of time it takes you to sell a home in my neighborhood?"
By asking these questions, you're letting the agent know that you're qualifying them over the phone, and that you're in charge. dallas homes for sale
Next, ask if their real estate commission is negotiable. If they respond with a "no", thank them for their time and move on to the next call. Don't waste your time or theirs arguing.
If their response is a "yes" or a "maybe", let them know you'll be conducting face-to-face interviews in the next week. Get their cell phone number, so you'll be able to reach them easily.
When you've finished your list set up appointments with the ones you feel most comfortable with. Give them your address, so they can present a marketing plan for your property. Also, let them know you expect them to submit their best offer as far as a commission is concerned.
When you meet with the agents do not sign a contract or make a commitment on the spot. Many agents will try to "close the sale" and walk away with a listing. Tell them you haven't finished interviewing all the agents and you'll get back to them. Be honest with them if someone else is offering a lower commission rate.
It's ok to go back and forth negotiating with agents on a commission rate. They're used to negotiating, just not with their inflated commissions! dallas homes for sale
Choose the agent who you feel has a reasonable real estate commission, and one who will do the best job of selling your property for the most money. Good luck!
This latest recession/depression has put a big hurt on real estate agents and brokers. With home sales down many agents are not selling as much as they used to. Life on easy street has changed for many of them.
How much does an agent make on a sale?
A typical listing agent will split the real estate commission 50% with the selling agent. So, on a $200,000 home the "standard" commission of 7% would be $14,000. So, your listing agent gets half, or $7,000. Now the listing agent doesn't get to keep this full amount unless they're also the broker. Often, the agent and broker will split 50/50, or each getting $3,500. Many agents will sell one house a week. That's $182,000 a year! Now, if they both list and sell your house they make double. Not bad for a little bit of work, huh? dallas homes for sale
How do you find an agent that will negotiate?
First, look for agents at smaller real estate companies, or even better yet, independent owner/brokers. They're much more likely to reduce their fees. Also, agents at the bigger real estate companies will be under more pressure from their brokers not reduce their commissions.
Start making a list from the internet or yellow pages of all the local real estate agents in the area. Then get on the phone and ask them a few questions, such as:
"How long have you been selling real estate?" "How many houses do you sell a year?" "What is the average length of time it takes you to sell a home in my neighborhood?"
By asking these questions, you're letting the agent know that you're qualifying them over the phone, and that you're in charge. dallas homes for sale
Next, ask if their real estate commission is negotiable. If they respond with a "no", thank them for their time and move on to the next call. Don't waste your time or theirs arguing.
If their response is a "yes" or a "maybe", let them know you'll be conducting face-to-face interviews in the next week. Get their cell phone number, so you'll be able to reach them easily.
When you've finished your list set up appointments with the ones you feel most comfortable with. Give them your address, so they can present a marketing plan for your property. Also, let them know you expect them to submit their best offer as far as a commission is concerned.
When you meet with the agents do not sign a contract or make a commitment on the spot. Many agents will try to "close the sale" and walk away with a listing. Tell them you haven't finished interviewing all the agents and you'll get back to them. Be honest with them if someone else is offering a lower commission rate.
It's ok to go back and forth negotiating with agents on a commission rate. They're used to negotiating, just not with their inflated commissions! dallas homes for sale
Choose the agent who you feel has a reasonable real estate commission, and one who will do the best job of selling your property for the most money. Good luck!
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