What is the
difference between list price, sales price and appraised value?
The list price is a seller’s advertised price, a figure that usually
is only a rough estimate of what the seller wants to receive. Sellers
can price high, low or close to what they hope to receive. To judge
whether the list price is a fair one, be sure to consult comparable
sales prices in the area. The sales price is the amount of money you
as a buyer would pay for a property. The appraised value is a
certified appraiser’s estimate of the worth of a property and is
based on comparable sales, the condition of the property and
numerous other factors.
What’s a Home
A home inspection is when a paid professional inspector inspects the
home, searching for defects or other problems that might plague the
owner later on. They usually represent the buyer and/or are paid by
the buyer. The inspection usually takes place after a purchase
contract between the buyer and seller has been signed.
Do I need a home
Yes. Buying a home “as is” is a risky proposition. Major repairs on
homes can amount to thousands of dollars. Plumbing, electrical and
roof repairs represent significant and complex systems that are
expensive to fix.
What are closing
Closing costs are the fees for services, taxes or special interest
charges that surround the purchase of a home. They may include costs such as lawyer's fees, real estate commissions, fuel adjustments, deed transfer taxes, etc.
should be put in an offer?
Most offers include three standard conditions: a financing
contingency, which makes the sale dependent on the buyers’ ability
to obtain a loan commitment from a lender, an inspection clause,
which allows buyers to have professionals inspect the property to
their satisfaction and an insurance clause, which allows the buyer
to have the property inspected by their own insurance company. A
buyer could forfeit his or her deposit under certain circumstances,
such as backing out of the deal for a reason not stipulated in the
contract. The purchase contract must include the seller’s
responsibilities, such things as passing clear title, maintaining
the property in its present condition until closing and making any
agreed-upon repairs to the property.
When is the best
time to buy?
Because many buyers prefer to move in the spring or summer, the
market starts to heat up as early as February. Families with
children are anxious to buy so they can move during summer vacation,
before the new school year begins. The market slows down in late
summer before picking up again briefly in the fall. November and
December have traditionally been slow months, although some astute
buyers look for bargains during this period.
What kind of home
insurance should I get?
A standard homeowner’s policy should protect against fire, lighting,
wind, storms, hail, explosions, riots, aircraft wrecks, vehicle
crashes, smoke, vandalism, theft, breaking glass, falling objects,
weight of snow or sleet, collapsing buildings, freezing of plumbing
fixtures, electrical damage and water damage from plumbing, heating
or air conditioning systems. Such policies are “all-risk” policies,
which cover everything except earthquakes, floods, war and nuclear
accidents. A basic policy can be expanded to include additional
coverage, such as floods and earthquakes and even workers
compensation for servants or contractors. Home-based business
coverage, an increasingly popular rider, does not cover liability
associated with business. Insurance experts recommend that
homeowners obtain insurance equal to the full replacement of the
home. On a 2,000 square foot home, for example, if the replacement
cost is $80 per square feet, the house should be insured for at
least $160,000. For personal items, homeowners can increase their
coverage beyond the depreciated value of items such as televisions
or furniture by purchasing a “replacement-cost endorsement” on
personal property. Some experts recommend an inflation rider, which
increases coverage as the home increases in value.
What’s a house
A home is worth what someone will pay for it. Everything else is an
estimate of value. To determine a property’s value, most people turn
to either an appraisal or a comparative market analysis. An
appraisal is a certified appraiser’s estimate of value of the
property at a given point of time. To make their determination,
appraisers consider square footage, construction quality, design,
floor plan, neighbourhood, availability of transportation, shopping
and schools amenities, energy efficiency. Appraisers also take lot
size, topography, view and landscaping into account. A comparative
market analysis is an informal estimate of market value, based on
comparative sales in the neighbourhood, preformed by a real estate
agent or broker.
Who gets the
furnishings when a home is sold?
Fixtures, any kind of personal property that is permanently attached
to a house (such as drapery rods, built-in bookcases, tacked down
carpeting or a furnace) automatically stay with the house unless
specified otherwise in the sales contract. But you can consider
anything that is not nailed down negotiable. This most often
involves appliances that are not built-in (washer, dryer,
refrigerator, for example), although some sellers will be interested
in negotiating for other items, such as a piano.
How do I prepare a
house for sale?
Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden
and clean debris from the yard. Clean the windows and make sure the
paint is not chipped or flaking. Be sure that the doorbell works.
Clean and make attractive all rooms, furnishings, floors, walls and
ceilings. It’s especially important that the bathroom and kitchen
are spotless. Organize closets, make sure the basic appliances and
fixtures work. Get rid of leaky faucets and frayed cords. Ensure
that the house smells good: from an apple pie or cookies baking, for
example. Hide the kitty litter. Put vases of fresh flowers
throughout the house. Pleasant background music is a nice touch.
How is the price
It’s very important to price your home appropriately relative to
current market conditions. Because the real estate market is
continually changing, and market fluctuations have an effect on
property values, it’s imperative to select your list price based on
the most recent comparable sales in your neighbourhood. A
comparative market analysis provides the background data on which to
base your list-price decision.
How is a home’s
You have several ways to determine the value of a home. An appraisal
is a professional estimate of a property’s market value, based on
recent sales of comparable properties, location, square footage and
construction quality. This service varies in cost depending on the
price of the home. A comparative market analysis is an informal
estimate of market value performed by a real estate agent based on
similar sales and property attributes.
Are fixers a good
idea in bad areas?
Distressed properties or fixer-uppers are everywhere, even in
wealthier neighbourhoods. Such properties are poorly maintained and
have a lower market value than other houses in the neighbourhood.
Many experts recommend that buyers find the least desirable house in
the best neighbourhood and then decide if the expenses needed to
bring the value of that property up to its full potential market
value within one’s budget. Most experts say inexperienced buyers
should avoid run-down houses that need major structural repairs and
instead look for properties that only require cosmetic fixes.
What can I afford?
Knowing what you can afford is the first rule of home buying, and
that depends on how much income and how much debt you have. It pays
to check with several lenders before you start searching for home.
Most will be happy to roughly calculate what you can afford and
prequalify for you a loan. The price you can afford to pay for a
home will depend on six factors:
Amount of cash you have available for the down payment, closing
costs and cash reserves required by the lender
Type of mortgage you select
Current interest rates