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Selling a House without a realtor

12/27/2021

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Can New York homeowners and investors sell their homes without using a real estate agent? More importantly, if they can, should they? Property owners and investors make these decisions every day. While there are certainly advantages to neglecting the assistance of a real estate agent, those trying to save money will find that it could end up costing them a lot more than they anticipated.

While selling a house without a realtor can be a valuable option for some, a DIY approach can result in costly mistakes and a lot of time wasted for others. In this article, 180 Homes will explore the pros and cons of selling a house without a realtor so that homeowners can choose how they’d prefer to navigate the real estate market. 

How to Sell a House Without a Realtor

Many seriously underestimate the cost of a reliable real estate agent. The price of an agent includes marketing, showings, negotiating, paperwork, and managing the closing process. These items cost money and take up a lot of time. Sometimes real estate agents have entire teams that work underneath them to perform these tasks. Those who may own multiple properties or make a living in property investment typically prefer a realtor to expedite the real estate process as they handle other components of property management. Taking on these obligations can be pretty overwhelming for those interested in selling a house without a realtor, but isn’t impossible. 
When homeowners wish to sell a house without a realtor, they list their home as a “For Sale By Owner” listing. The seller will then prepare their home to be market-ready for touring potential buyers. Independent sellers are responsible for promoting their listing, scheduling open houses, identifying and qualifying potential buyers, and handling the real estate transaction. Perhaps you are fully capable of selling a home yourself. Those with extensive real estate education should have a solid foundation to start, but that doesn’t mean it’s best or saves money at the end of the day.

Pros and Cons of Selling a House Without a Realtor

Advantages of Selling a House Without a Realtor

While selling a house without a realtor has its fair share of challenges, the task is not impossible. If the homeowner can take the time and expend the resources needed to get the property sold legally, then it’s an option worth exploring. Let’s review some of the most obvious benefits of selling a house without a realtor. 

Pricing Control 
When selling a house without a realtor, sellers can guarantee that the final price for the property is the value they want. Realtors will always suggest a price they feel is fair, which might be different than what the homeowner feels is adequate. Sellers can negotiate a price on their terms and have direct communication with prospective buyers without a realtor.

Skip Real Estate Commissions
Every real estate investor or seller looks for ways to save money throughout the real estate experience. One of the most common areas to save on a real estate transaction is closing costs. Reducing, or eliminating, some of the fees will have a sizable impact on your bottom line if you choose to sell a house without a realtor.  

Product Awareness
When selling anything, having a firm knowledge of the product is critical for success. Who knows more about a home than the person living in it? When selling a house without a realtor, homeowners can spruce and improve the space in ways they know would help. Additionally, homeowners are the individuals best equipped for answering any questions buyers might have about the property, neighborhood, and surrounding areas. 

Disadvantages of Selling a House Without a Realtor

For every easy sale completed without a real estate agent, nine others are an issue. If you can’t generate interest or don’t know the specific language on a real estate contract, you will create larger and avoidable problems. Issues are preventable by hiring a professional. Here are five reasons you may not want to sell a house without a realtor.

Advertising
Some properties will almost sell themselves, and a real estate agent doesn’t have to do too much. However, if you can’t generate interest in your property, it is difficult to get desired selling price. One of the biggest roles a good agent performs is getting eyeballs to the home. They leverage the MLS and instantly get the word out to thousands of agents in real-time. Every good agent has a defined marketing strategy that generates interest and creates a buzz with their extensive experience in the field. 

Overselling
You can have the best pictures and descriptions of the property, but it is not enough to get it sold. At the showing, you need to find a balance between being a salesperson and being the owner. If you sell too hard, buyers become hesitant to move forward. A professional agent understands the rhythm of a showing and knows how to provide information appealingly while still helping. A good agent can attract buyers on the fence and get them eager to move forward.

Legalities
There is a lot that can go wrong in any real estate transaction. The glue that holds everything together is the contract. If you sell your property on your own, you had better be an expert in every line of it to prevent anything going wrong. Experienced real estate agents can pick the contract apart, ask for credits and addendums and finalize it cleanly. You can argue that the largest benefit of using a real estate agent is their knowledge of the contract and real estate law. 

Pricing
As much as you think you know the market, your real estate agent likely knows more. If you find a quality local agent, they understand every recent sale and current listing. They can use the MLS to find information and rationale behind every transaction and use that to price your property. As the owner, you are probably biased and think your property is superior to others on the market. This leads you to price higher than you should, decreasing buyer interest which eventually results in a price drop. You are always better off listening to a professional and price properly, right from the start.

Time
Everything from marketing to showings to negotiation is time-consuming. If you choose the wrong offer you are forced to start the process from the beginning and additional time is wasted. Whatever perceived savings you think you gain by not using an agent your time is almost always better spent on other areas. Since you are not an expert you will be forced to find answers to most questions, wasting even more time. Your time is the precious commodity you have. Spend it in areas that give you the biggest return.

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180 Homes Can Help Sell Rental Properties! 

While it’s normal to ask, “Should I sell my house without a realtor?” using a real estate agent is an important area for investment. There are other places where you can cut corners and lower your expense sheet. At the end of the day, getting your home some within the desired timeline for the right price is what matters most. 180 Homes has what you need to maximize your real estate experience with our cash as-if offers for your property. Contact 180 Homes today to learn more! ​

Cash offers can help with selling a house without a realtor!

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Understanding Closing Costs

11/1/2021

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When buying or selling a home, the topic of who pays closing costs is bound to come up eventually. Any real estate transaction will host numerous costs and fees that will be factored into the purchasing process on top of the property’s value. Understanding who is responsible for paying these fees is crucial for properly valuing the sale as the buyer or seller.  Especially for those looking to budget their real estate experience carefully, closing costs can be an important factor when determining if a home is the best investment for your needs. 
In this article, we’ll explore real estate closing costs to help homeowners and potential buyers better understand the process of finalizing a real estate transaction. We’ll also settle once and for all who usually pays closing costs: the buyer or the seller? 

What are Closing Costs?

Closing costs are fees and expenses outside of a down payment that is paid once the buyer closes on a property. Closing costs can be a substantial portion of the real estate investment and can be as high as 3 to 5 percent of the down payment. These fees are calculated from numerous sources, from attorney fees to insurance costs. Each transaction’s closing costs will vary based on the property itself as well as the nature of how the transaction was arranged. The buyer and seller need to be aware of closing costs so that the point of escrow can run efficiently and according to the original listing agreement. 
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Does the Buyer or Seller Pay Closing Costs?


Now that we understand closing costs and their role in a real estate transaction, it’s time to dive into the logistics of buyer and seller responsibility. Buying a home is a huge investment and when selling a home it’s important to optimize profits during the transaction to get the most value out of the home. Closing costs allow the transition of ownership to go smoothly and guarantee that all parties involved, from the real estate listing service to the insurance companies, are properly compensated for the transaction. Generally speaking, the buyer is the party responsible for paying closing costs. However, the closing costs can look different for each transaction and the seller may be liable for other costs unrelated to the transaction itself.

Seller Closing Costs

So do sellers usually pay closing costs? Typically not. While the buyer of a property will generally have more items that require payment than the seller, this doesn’t indicate a complete lack of responsibility on the seller’s part. Especially for sellers who choose to leverage the payment of closing costs to quicken or simplify a sale, it can’t be assumed that the seller is getting off free within a successful transaction. The majority of individuals who sell their homes will do so with the assistance of a real estate agency, and the seller is responsible for paying the sales commissions to any real estate agents that helped the deal take place. This can be a significant portion of the sales price, so those selling their property need to factor this in when listing their home. Some other potential seller closing costs that may come up include:
  • Potential Prorations: Before the buyers assume ownership, sellers might need to compensate buyers for taxes and HOA dues that are paid. 
  • Title Transfer/Insurance Fees: Sellers may need to pay regionally specific taxes or fees for the transfer of the property’s title or title insurance in the case of issues coming up. 
  • Home Warranty Premiums: Sellers will occasionally offer a home warranty for the first year to peak buyer interest. 

Buyer Closing Costs

As we briefly stated, those looking to purchase a new home or property should anticipate financial liability for the majority of the costs associated with closing the deal. This is mainly due to the many steps that are taken to secure a loan for a home’s down payment, as well as the process of properly valuing a property. It’s important to note that these closing costs are not usually paid to one party but rather a collection of individuals that played a significant role in the purchase of the home and transfer of ownership. Some closing costs that buyers can anticipate during a real estate transaction include, but are not limited to:
  • Attorney Fees: Closings that involve an attorney for the buyer, seller, or both will feature fees that typically fall on the buyer. 
  • Loan Origination Fees: Fees associated with processing and underwriting the loan, paid to the lender. This may include credit report fees that lenders will use to determine if you qualify for a mortgage. Lenders also might charge an optional fee in exchange for lower interest rates during the lifespan of the loan.
  • Appraisal Fees: Appraisals are strongly suggested to verify the sale price of the property is a fair one to pay,
  • Inspection Fees: Some lenders might require an inspection before a loan can be approved for a mortgage. This may include survey fees, which confirm the size and dimensions of the property’s land. 
  • Title Insurance: While the seller pays the title insurance costs, for a lender to be protected the buyer will usually need to assume the policy. Title search fees may also be needed for background checks conducted on the title to identify concerning liens for the property. 
  • Escrow Deposits: Lenders might ask for a pre-payment of a few months of property taxes or insurance for financial comfort within the loan’s account. 
  • Record Fees: Every real estate transaction needs to be recorded within local records. These fees are usually paid directly to the property’s city or county. 

Who Can Pay Closing Costs?

While the majority of financial items that fall under the umbrella of “closing costs” tend to lean to the buyer’s side, each real estate transaction is different and closing costs can be easily adjusted. Many sellers will assume responsibility for a portion of the closing costs as an incentive for interest or to expedite the sale of their property. Negotiation of closing costs is fairly common but should always be calculated towards the beginning of the real estate transaction to ensure no one gets blindsided down the line. 
Closing costs can be leveraged by both sides of the transaction to make the process of paying them a bit less overwhelming for the buyer. Some buyers will even make their initial offers with buyer closing costs factored within a purchase price which could lead to the seller negotiating an alternate deal. Closing costs can be an incredibly expensive stage of the real estate transaction, and buyers might be surprised by how many sellers are willing to negotiate these figures for the sake of a simple and streamlined real estate experience. 

Sell Your Home Fast with Help from 180 Homes!

Whether you’re a first-time homebuyer or you’re simply looking to maximize an investment’s value, understanding who usually pays closing costs is a major part of conducting any successful real estate transaction. By properly anticipating what costs will be incurred and delegating these as negotiated, the process of buying and selling a home can become much simpler. 180 Homes can help sellers list their property and have a care-free real estate experience. With cash offers that help sellers move on to the next great investment quickly, 180 Homes can expedite the process of selling your home. Contact 180 Homes today to learn more. 

Pay ZERO Closing Costs when selling your home! Get Cash Offer today!
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does it make sense to refinance

10/1/2021

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Mortgage interest rates have been all over the place in the past 30 days. One day they drop significantly and the next they are on the rise.  If you lock in rates at just the right time, you may be able to time the market perfectly.  Before you celebrate your interest rate reduction there are a few things to consider.  A lower interest rate may not mean a lower monthly payment.  While this sounds hard to believe it is often the case when you refinance.  Getting the lowest possible interest rate is great but there are a few other items to consider.  Before you start your refinance application here are some things you need to keep in mind.
  • Appraisal Amount. A refinance for a primary residence and investment property are not the same. With a primary residence you may be able to get away with a loan amount at 80% of the appraisal amount. With an investment property your loan amount may need to be 70% depending on the type of loan you take. Even if property values are up in your area your home may not appraise for the value you think. The appraisal takes a snapshot of what is currently happening in the market. A sale from six months ago will not have the impact you think. The most accurate values come from sales under 90 days usually within a mile from the property. Getting your property to appraise at the value you are looking for is the biggest hurdle in your refinance.
  • Closing Costs/Property Taxes. Perhaps the biggest difference with a refinance and a purchase is in how the closing costs are paid. In a purchase the closing costs are brought to the closing. With most refinances the closing costs are rolled into the new loan amount. You have the option of bringing the funds to the closing but most people do not. The closing costs are almost identical regardless of a purchase or refinance. The costliest item at the closing will be for the prepaid property taxes. The new lender will restart your escrow account and hold a significant amount of property taxes. Depending on when you close it can be as much as six months of taxes. Between your property taxes and closing costs your new loan will end up being thousands above the amount you currently owe.
  • Decreased Equity. Your new loan amount will directly impact the amount of available equity. Even though equity may not seem important it gives you different options in a pinch. If you needed to sell in a moments notice equity will allow you to walk away without worrying about your bottom line. It also allows you to possibly refinance and pull cash out down the road. With a higher loan amount and decreased equity you may be more inclined to hang onto the property if the market shifts.
  • Longer Term. The most common loan term is the 30 year fixed. As the name indicates this loan has set payments for the next 360 months. Before you refinance you should take note of how many years you have remaining on your current mortgage. In most cases you will be adding on years to your term and starting over. If you had 22 years left you essentially have nothing to show for the last eight years of payment. With the longer term you may be able to save money per month but at the expense of extra years. This isn’t to say that all 30 year terms are bad but you need to weigh the added years versus the monthly savings.
  • Monthly savings. It is possible that a lower interest rate may not equal monthly savings. When you add in the closing costs and property taxes your new loan amount will increase. It is not uncommon for your new loan to be anywhere from $8,000-$10,000 higher depending on the annual property tax amount. The higher your loan amount the less change in interest rate needed to make an impact. A quarter point difference on a $500,000 loan will produce a greater savings than a full point change on a $100,000 loan. Any savings need to justify the increased term as well as the closing costs. You also need to weigh the savings with your long term plans for the property. If you plan on selling in the next few years the savings won’t have as great of an impact.
  • Shorter term/higher payment. As popular as the 30 year fixed is there are other loan terms available. You may consider refinancing out of a 30 year into a 15 year. In doing this the first thing you will notice is how much lower the rate may be. The 15 year fixed works opposite of a 30. With a shorter term your payment will increase in spite of a reduction in rate. If you are not comfortable with the payment you will eventually run into trouble. One alternative to this is keeping the longer term but making one extra principal payment a year. This gives you the security of a more comfortable payment while still reducing your balance over time.
If you are considering a refinance there are a few initial steps you should take. The first is to find a mortgage calculator online and run the numbers.  Add your closing costs to your loan amount to find your new monthly payments.  You should use a conservative interest rate with your estimate.  The next thing you should do is to get an idea of current property values.  Keep in mind that you will need an increased value on an investment property.  If the numbers make sense and you think the value is there now may be a great time to refinance.
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