- Erin Reynolds
Being a Savvy Seller and Buyer: What to Do Before Hiring a Real Estate Agent
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Buying or selling a home is a team effort between you and your real estate agent. Your agent does the legwork and acts as your advocate and advisor throughout the process, but you also have a “to-do” list. You’re about to get involved in a major transaction, one that can leave you in a better financial position if you do things right. That means gathering information, and having your financing set up before enlisting your agent. The more you can do to help your agent from the beginning, the easier their job will be.
Check for Encumbrances
Endpoint Closing notes that things will go more smoothly if your agent knows about any financial encumbrances against your property, such as liens or disputes. It’s easier to sell a house that’s free of these types of complications, but it can still be done if you have them. Being completely honest and forthcoming with an agent will save time because they’ll need to approach selling your property differently. The preferable scenario is for an agent to settle any disputes before listing your house.
Check Out Other Home Values
You probably have at least a ballpark idea of your asking price, but it’s smart to gauge the value of comparable homes (known as “comps”) in your area to avoid coming in too high or too low. Knowing what you can realistically ask for will be a big help to your agent and increase the chances you’ll get what you’re asking for.
It’s also important to know the precise figures related to your mortgage, including equity and how much you still owe. For example, if you owe more than the home’s value, your agent will need to prepare for a short sale, which is significantly different than if you’re on the plus side.
Be Smart About Upgrades
As a homeowner, it’s tempting to invest in a substantial home upgrade to make your property look as appealing as possible. From a financial standpoint, it’s best to hold off and consult with your agent before making such a decision. You could end up making a renovation that’s not popular with buyers in your area, and not getting return on your investment.
Consult With Lenders
If you’re in the market to buy, it’s best to know how much house you can afford beforehand. Meet with lenders to find the best mortgage rates possible, and so your agent will know where and what kind of house to look for. It’s another way of being as focused as possible in your search. Get a pre-approval letter from your lender, which certifies you as a serious buyer with the financial backing to see the deal through when it’s time to make an offer.
When it’s time to get a mortgage, know that there are several steps, the first of which is getting a handle on your monthly debt-to-income ratio. Lenders look at this number to determine how much you can afford to borrow. Typically, your total debt including a new home payment should not exceed 43 percent of your income.
Sellers should clean and declutter before bringing their agent into the home. It’s important for an agent to see the possibilities in your home, just as you’d do as a potential buyer. Pick up all loose items and get rid of any extra furniture to create adequate flow. One of the most important things to clean is any evidence of pet ownership, which can be a major turn-off for potential buyers. Shampoo the carpet to get rid of any urine stains, vacuum thoroughly so there’s no residual pet hair laying around, and cover any pet-damaged furniture.
Have a Plan B Right now, the market is hot for sellers. Working with your agent will give you every advantage in finding a new home, but if your house sells before you find the right place, you don't want to settle. Instead of jumping into an offer you're unsure about, find a short-term rental instead. This gives you some breathing room as you and your agent search for the perfect home.
Real estate is a high-stakes game involving large sums of money, bargaining and finger-crossing. Being prepared as much as you can before hiring an agent to get the ball rolling is always a good idea. Helping your agent is the same as helping yourself.
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