Common First-Time Home Buyer Mistakes

1. They don’t ask enough questions of their lender and end up missing out on the best deal.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right agent who’s willing to help them through the homebuying process.

4. They don’t do enough to make their offer look appealing to a seller.

5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.

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Source: Real Estate Checklists and Systems, http://www.realestatechecklists.com/.

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Common Closing Costs for Buyers

You’ll likely be responsible for a variety of fees and expenses that you and the seller will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs. Your' agent® and mortgage broker or lawyer conducting the closing will tell you the required amount for:

  • Down payment
  • Loan origination
  • Points, or loan discount fees, which you pay to receive a lower interest rate
  • Home inspection
  • Appraisal
  • Credit report
  • Private mortgage insurance premium
  • Insurance escrow for homeowner’s insurance, if being paid as part of the mortgage
  • Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they…

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FMV but is your price actually realistic FMV

Most people are reasonable and unreasonable at the same time. They are willing to sell for fair market value, the real problem comes with agreeing on what that amount actually is. It's not that they fully expect their agent to sell it for tens of thousands of dollars above fair market value. However, both sides tend to agree on this (agent and seller) – The other side is wrong on what they think the fair market value is. Both sides, want to see the highest sale price possible. One side has been in the property for a long time, knows it inside out and appreciates all the little things about it. They also know a little bit about the market and what is happening out there. The other side (the agent) has…

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List High – Sell Low

The natural tendency in order to get the highest sale price for most sellers is to ask for the highest list price that the realtor will list for and not have to fight too much. There are 2 issues with this, 1. The agent will list for a much higher price than a buyer will purchase for. We have less to lose, and our immediate goal is to get the listing, not to sell it. The term for an agent giving an inflated FMV is "buying the listing" because they are giving a high initial price to get the paperwork signed then following it with a systematic approach of price reductions to get the listing sold. It's a true bait and switch.  2. The highest price is almost invariably a byproduct of demand, and the best way to increase demand is to…

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Methods of Assessment

Out of thin air, gut feel

This is frankly by far the most common method that people use to assess their home value at first, They have heard whisperings of home sale prices in the past. Their friends or family have recently sold, and they know prices in their community are a bit higher or lower. The place down the block was listed at $X and the signs gone, so it is worth $X. On paper, all of these sound reasonable, but unfortunately, they throw things off from the beginning and people tend to LOOK FOR FACTS that will validate these things and disregard other facts that contradict it. Getting the Fair market value range right off the bat is critically important to netting the highest price. So, don’t disregard the facts to…

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Sellers tend to think this equates to fair market value and sale price (wrong)

First off, let's talk about the first critical error sellers (and even their agents) commonly make. It boils down to people associating the Fair Market Value, Ask Price and Sale Price all being directly tied together. They affect each other but are not tied, and they affect each other stronger in the reverse way of what people tend to think. You see people tend to believe that to get more for their home, they should simply ask for more. They tend to think that the way to increase the fair market value, is to ask for more. The fair market value range is the first determiner of what the home will reasonably fetch, but that amount is directly affected in an often INVERSE…

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THE MARKET, nothing has an effect on your home sale and sale price like everything going on around you that is OUT OF YOUR CONTROL.

Real estate pricing is a function of supply and demand. And supply is a function of how many people are interested in, and capable of, buying a home. This, in turn, is a function of employment rate (and within which category i.e. full-time, part-time, minimum wage, higher wages), population migration (population increasing, stagnant or decreasing), mortgage rates and ease of securing financing, and government incentives. In short, growth vs decline.

Biggest home on the block (regression/progression)

When it's your home, it's great to have the biggest, nicest home on the block, but not when your selling. The smaller…

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OK, so how do you get more money for your home? How do you increase the actual value of the perceived value if the fair market value range is the fair market value range?

Well, for one thing, talk to your agent well in advance about smart renovations. For example, 1 seller might be best to update their kitchen vs reno’ing it, by changing the countertop to a nice (but neutral) stone countertop with a current tile backsplash that melds the oak cabinets into a more modern style. Maybe the walls just need a refresh coat of paint in a more modern and warmer palette? Maybe the flooring needs to be professionally replaced so the wear and tear of the house are much less apparent. None of these items are necessarily that huge of an expense, but maybe they are…

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Myths of Getting More

  • Improvements ROI
  • Example NEW Kitchen….. OLD kitchen, NO kitchen
  • $20k for 100ft well, $40k for deeper well

The way many people think real estate sales works is not really very accurate, I have had many people say to me things like - "Our agent had someone on the hooks but they let them slip by" or, "that realtor is known for underpricing homes" and even 'that realtor is my area specialist".

First off let's look at the truths.

  1. You don’t need an “area specialist” to sell your home, although knowledge of the area is good, it is much more important when selling to have a “Listing/Marketing specialist” You see an “Area specialist” is more important for purchase than for sale.
  2. The Listing agent is highly…

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