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Homes for Sale:
The Basics of
Buying and Selling

Buying or selling a home is complicated and can be quite stressful. The number of homes for sale in the local area has a major impact on how the process will unfold. By understanding the basics of the home buying and selling process and being aware of the challenges, buyers and sellers alike can lay a foundation for the smoothest possible real estate experience.

Selling a Home

Ideally, a home should never be sold under duress. It's far better to have plenty of time to plan things out than to feel under pressure to sell as quickly as possible. Even if the pressure is off, however, sellers can expect to encounter challenges throughout the process.

The Challenges of Selling a Home

Some of the most common challenges that people encounter when selling their homes include:

  • Finding an Agent: The agent that's hired to assist with the home-selling process can make things a lot easier or be of no help at all. Therefore, it's critical to take plenty of time to find an experienced, reputable agent.
  • Dealing with a Saturated Market: In a perfect world, people would only sell their homes during sellers' markets. That's not always how things work out, though. When the market is choked with available inventory, sellers face a lot more competition and may receive very few viable offers. Prices are often driven down as well.
  • Setting an Asking Price: If the asking price of real estate for sale is set too low, prospective buyers will assume something is wrong with the property. If it's set too high, they'll pass right over it
  • Completing Maintenance and Repairs: Important maintenance and repairs should be done before a home is listed for sale. The home should be as close to move-in condition as possible to attract the best buyers and offers
  • Selling at a Loss: No one wants to sell their home for a loss. The plus side is that tax deductions are often available for doing so.

What to Expect when Selling a Home

Although the process of selling a home varies, home sellers can expect the process to unfold in approximately the following way:

  • Receive Offer: After the house is ready and listed on the market, offers will come in. The seller can accept the offer, reject the offer or make a counter-offer
  • Escrow: If the offer is accepted, the buyer deposits his earnest money, and escrow is set up.
  • Documentation: The seller submits all documentation to the escrow holder, including tax receipts and warranties.
  • Inspection: The buyer chooses an inspector, and the seller pays for the inspection. It's also the seller's responsibility to get the necessary clearances and to complete repairs as required by the purchase agreement.
  • Closing: As long as the terms of the escrow and purchase agreement are met and the buyer obtains the necessary financing, closing is scheduled and completed.

Buying a Home

There's more to buying a home than browsing real-estate listings and picking out the best option. Home buyers should be prepared to face numerous challenges along the way.

The Challenges of Buying a Home

Some of the top challenges of buying a home include:

  • Familiarity with Local Market: Buyers who are relocating may be completely unfamiliar with the local real estate market, so the help of a reputable real estate agent is all the more important.
  • Unpredictability of the Market: Just because the real estate market is trending upward now doesn't mean it will stay like that. There may be few homes for sale now and dozens in just a week or two.
  • Inspections Aren't Foolproof: Just because a home makes it through the inspection okay doesn't mean there aren't any major issues. Home warranties and additional inspections can mitigate these risks.
  • Finances: Buyers must be prepared and able to make a substantial down payment, make an earnest money deposit, and cover various closing costs and fees.
  • Choosing an Agent: The right agent will know the local real estate market well and will have a proven track record of success.
  • Documentation: Home buyers should stay organized right from the start. Before looking at any real estate for sale, invest in file folders and keep everything in order.
  • Negotiations: Negotiations sometimes drag on for days or weeks.
  • Underwriting: Obtaining a pre-approval is one thing; making it through the underwriting process is another.

What to Expect when Buying a Home

Home buyers spend a lot of time perusing real estate listings, but that's just one tiny piece of the puzzle. The home-buying process generally unfolds as follows:

  • Pre-Approval: Buyers can get a feel for what they can afford by obtaining a pre-approval from a lender. Sellers will take them more seriously too.
  • Finding a Home: For best results, buyers should check out lots of different real estate for sale and attend numerous open houses.
  • Negotiating: Making an offer is just the first step. Negotiations are generally necessary, and they don't always end up with an agreement.
  • Inspection: Before making an earnest money deposit, a buyer should have an inspection performed by a reputable, qualified inspector.
  • Sales Contract: Once the buyers are confident about the condition of the home, they need to sign a sales contract. From this point forward, they could lose the deposit if they are unable to buy the home due to a lack of financing or other issues.
  • Financing: For best results, a buyer should use a mortgage broker to find the best home-loan option. The ensuing underwriting process can take several days or even a week or two.
  • Appraisal: This is the make-or-break part of the process. If the home appraises too low, the lender won't be able to extend the amount that is needed to complete the transaction, and it will be back to the drawing board.
  • Closing: After performing a final walkthrough, the buyer will sit down at the closing table and, with any luck, walk away with the keys.

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