Easy Agent Blogs

You have questions and we have the answers. If you’re considering selling your home, read on.

Is one season better than another to sell a home?

I know – it seems like summer only just started and here we are on the cusp of autumn (it starts September 23). And, while we’re all trying to wring out every last drop of this glorious summer, I am starting to get what I call the “seasonal selling” questions from homeowners.

Long ago, “Spring is the best time to sell a home” became the media’s mantra. And, to be fair, they’re partially correct. The media are also fond of telling us that winter is a terrible time to sell. There, they are wrong.

Home sales in November do tend to fall around 8 percent, nationwide. By January, the number of homes sold tumbles further, to 27 percent. But what the media gets wrong is the fact that so many homeowners choose not to sell their homes in the winter. With fewer homes on the market, naturally, fewer homes will sell.

For my friends who love statistics, the official tally is that 40 percent of any year’s home sales will occur in May, June, July and August, according to research from the National Association of REALTORS.

These same numbers tell us, however, that homes put up for sale in the winter actually sell one week faster, bring in more money and there is a 9 percent better chance that the home will sell than at any other time of year.

And, lest you think this isn’t true for regions with frigid winters, think again. The numbers held, whether the home was located in Fairbanks, Alaska or in Hilo, Hawai’i.

According to the NAR, fall is the second-best home-selling season, and for good reason:

• The weather is still conducive for house hunting
• Folks who want to buy a home and are thinking of tax breaks will be incentivized to move now
• Many want to be in their new home before the winter holidays

If you think you may be putting your home on the market this fall or winter, let’s get some exterior photos of it now, while everything is still green and the sun is shining. Think how much your listing will stand out in the MLS, compared to those with dormant trees and lawns.

2. How will you determine what our price will be?

If there is one aspect of selling a home that confuses home sellers more than anything else it’s the evaluation process. It doesn’t help that there’s so much misinformation online, so I get the befuddlement.

In a nutshell, your home is worth what a buyer is willing to pay for it – known as “market value.” And, no, we don’t read minds to find out how much buyers are willing to pay. That amount is reflected in the prices they’ve paid (in the recent past) for homes similar to yours.

So, we’ll study recent sales in close proximity to your home, and compare your home to each of these to come up with a list of what we call “comparables.”

We’ll then analyze these homes – features, size, age and more – to determine if your home’s market value is more or less until we arrive at a figure that we believe represents the market value of your home.

Next, we’ll need to figure out a list price for your home. While the homeowner has the last word with regards to the asking price, we will offer our expert opinion. By the way, we offer a free evaluation of your home’s current market value. No strings attached. . .no obligation.

3. How long will it take to sell my home?

While this question is common, because there are many variables to consider, it’s not one that has an easy answer.

The first of these variables is the current state of the local housing market. In a sellers’ market (when there are many buyers but few homes on the market), the home may sell quickly. That’s the market we’re in right now.

In a buyers’ market, where there is a large inventory of homes for sale and few buyers competing for them, the home may take longer to sell.

Your list price will also impact how long your home sits on the market. Price it too high and you’ll have few people view it, thus lengthening the time it will take to sell. There is a very good chance that you will end up taking less for the home than you’d hoped.

The agent you choose can make or break the sale of your home. A novice, or an agent who lacks a marketing budget, won’t be able to market your home in ways that will make buyers snatch it up. With a marketing-savvy agent, your home will spend less time on the market.

Finally, the offer to purchase will contain timelines that the buyer must meet for tasks such as loan approval, home inspections and others. These timelines, or contingencies as they are known, are negotiable, however, so you will have a say in how long the buyer has to complete them.

There are other variables to consider as well and we’re happy to discuss these with you. Feel free to reach out to us.

Like any other service, when you enlist the services of a real estate broker or agent, there will be a fee. In the real estate industry, this fee is known as the “commission.” Some real estate consumers don’t believe that professionals are worth their fee so they attempt to sell the home themselves.

They typically end up losing more money on the sale than they would have paid for professional representation.

“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $225,000 last year [2022], significantly lower than the median of agent-assisted homes at $345,000.” (National Association of REALTORS® “Profile of Homebuyers and Sellers.”)

Paying for expert services, be it a plumber, an attorney or, yes, a real estate agent, saves you from losing money and gives you the security that the job will get done.

So, let’s dive into the whole real estate commission topic.

How much will it cost me to hire a real estate agent?

The answer to this question is, it depends.

First, it depends on whether you are the buyer or the seller. Buyers do pay closing costs just as sellers do, but the real estate commission is typically charged to the seller.

How much? It depends on where the seller lives. Brokers in different regions charge different fees, but typically you can expect to pay between 5% and 6% of the sale price of the home.

Here’s an example: Joe sells his home for $300,000. Let’s assume that the real estate fee (which the commission is generally called) is 5% of that price, which works out to be $15,000.

Yikes! Does my real estate agent make THAT much money from each sale?

Wouldn’t that be nice? But, no, there are others that need to be paid. The broker for the buyer’s agent gets half of the commission and that of the seller gets the other half.

Then, it is divvied up to the agents. How much the agent will get depends on his or her arrangement with the broker.

For instance, newer agents tend to make less of a percentage than seasoned agents, but each agent negotiates his or her cut of the broker’s fee, which generally ranges from 50% to 95%. According to most studies, the average commission split is 50/50.

If you still think this represents a big gob of money, consider this:

The “… median income for real estate agents and brokers was $48,770 annually in 2021, according to the U.S. Bureau of Labor Statistics,”

according to Kellye Guinan and Taylor Freitas, Bankrate.com.

What does the seller get for this money?

The typical listing agent faces a hefty outlay of money for each listing he or she takes. Here are a few of the ways the commission money is spent:

• Lockboxes
• Online marketing
• MLS fees
• Direct mail marketing
• Photography
• Signage
• Fliers
• Broker’s open expenses
• Errors and Omissions Insurance
• Brokerage fees
• Association fees
• Lead generation website to bring in buyers

That’s the shortlist. Depending on how challenging the market is or the attractiveness and condition of the home, the agent may spend thousands of dollars to help you sell your home.

What you also get for that money is a buyer for your home. Priceless, right?

Questions? We’re happy to answer them. Feel free to reach out!

The one thing that many of our first-time homebuying clients worry about is whether or not they qualify for a home loan. The reason for this is the dreaded credit score; those three numbers can make or break the dream.

The worry is overblown for the most part. Yes, lenders rely heavily on the potential buyer’s credit score. After all, it is typically an indication of whether or not the borrower uses credit responsibly, if he or she pays bills on time and how much of a risk the borrower presents to the lender.

There are loans available to folks with less-than-perfect credit. The downside is that you may pay more in mortgage interest, fees and may need a higher down payment.

What’s a good and what’s a bad credit score?

Typically, credit scores can range from 300 to 850. “Although ranges vary depending on the credit scoring model, generally credit scores from:

• 580 to 669 are considered fair
• 670 to 739 are considered good
• 740 to 799 are considered very good
• 800 and up are considered excellent,”

According to the experts at equifax.com. Let’s put the above numbers into perspective. On a loan for $350,000, borrowers with credit scores between 760 and 850 will receive (as of July 2023) a mortgage interest rate that is 1.589 percent less than borrowers with a score between 620 and 639.

So, yes, provided all other stipulations are met (stable employment, income, etc.), you can buy a home if you have bad credit. You will, however, pay more for it than someone with better credit.

Your credit score may not be considered “bad”

Americans with less-than-stellar credit scores, those that fall below 670, are considered subprime borrowers. Learn more about getting a subprime mortgage at Experian.com.

If your score is lower than 579, it is considered “bad.” This is why it’s important to check your score before embarking on the journey to buy a home. It may not be as bad as you think, or it could be worse.

Thankfully, lenders also look at other aspects of your financial situation. These include:

• Your current debt and any delinquencies
• The amount of your down payment
• Your income

There are loans for that

The best route for those with poor credit is government-backed mortgages. These include mortgages backed by the:

• U.S. Department of Agriculture (USDA) Rural Development Department
• Federal Housing Administration (FHA)
• Veterans Affairs (VA)

USDA loans typically don’t require a down payment. The catch is that the home you will purchase must be located in what the department considers a “rural” area. If you have an idea of where you want to live, especially the address of a property, enter it on the USDA Rural Development’s website to see if it is eligible for the program.

The best part of this program, aside from the zero down payment for those who qualify, is that the credit score requirement is quite low: at least 580. Higher scores, however, qualify for the no down payment bonus.

FHA loans are quite popular among those with poor credit scores. The minimum credit score required is 500, although if yours is at least 580, you may only be required to put down 3.5% of the purchase price. Learn more about down payments at consumerfinance.gov.

If you or your spouse have served in the U.S. military, or are a widow or widower of someone who did, check out the mortgages offered by the Department of Veterans Affairs. Available to both veterans and active-duty members of the military, the minimum acceptable credit score is 580.

There is no down payment requirement for those who qualify. Learn more online at benefits.va.gov.

Additional tips

Before you begin the mortgage application process, take a deep dive into your credit reports. Look specifically for errors. Why?

“More Than a Third of Volunteers in a Consumer Reports Study Found Errors in Their Credit Reports,” according to Lisa L. Gill at consumerreports.org. Fixing these errors is one of the easiest and fastest ways to raise your credit score.

“You should dispute with each credit bureau that has the mistake,” suggests the experts at the Federal Trade Commission.   Follow the link to read a walk-through of the dispute process.

If all options fail, take the time to save cash. It’s king, remember? And lenders are more likely to approve your loan if you have cash to pay the difference between the price of the home and your loan approval amount.

Poor credit shouldn’t put an end to your homebuying dreams. There are options out there and we’re happy to discuss them in further detail with you.

The information above is not to be considered as financial advice, but is for informational purposes only. We are not financial or mortgage specialists.

Buying a house is a big deal – it’s like reaching for the stars and finally touching one.

But before you reach Sirius, you have some work to do. One of those is critical to your future use and enjoyment of that home you want so badly: hiring a home inspector.

These professionals are like the superheroes of home buying, ensuring your dream home is in tip-top shape. Let’s dive in and discover how to find the perfect home inspector and what questions you should ask to make the best decision.

Why a home inspector is your hero

Picture this: you’ve found the house of your dreams – cozy, charming, and just right. But wait! Before you get all starry-eyed, let a professional home inspector work their magic. These awesome folks are licensed and super-knowledgeable.

Their mission? To check the systems in your potential new home, from the roof to the foundation. They’ll spot any red flags that could turn your fairytale home into a real-life nightmare.

Mind you, their superpowers are limited. They only inspect what they can actually see. This means they can’t tell you what is happening behind the walls, under the floors or deep into the recesses of the HVAC system.

Those limitations, however, shouldn’t keep you from having the home inspected. What they can tell you may turn out to be the determining factor, positive or negative, on whether or not you still want that particular home.

The quest for the perfect home inspector

Now, let’s embark on the grand quest of finding the perfect home inspector.

Start by asking your family, friends and colleagues which inspector they used when they bought their homes. Many homebuyers turn to their real estate agent for a referral to a home inspector, but in some states, that activity is illegal.

Another good source of referrals can be found on neighborhood sites, such as NextDoor.com and any location-specific Facebook neighborhood groups.

While you’re online, check the review sites, such as Yelp.com and, of course, look at the home inspectors’ Better Business Bureau rating. Don’t forget to navigate to the inspector’s (or company’s) websites and peruse the reviews and general information.

Just in case you need more help in your quest:

• American Society of Home Inspectors (ASHI) has a Find an Inspector section on its website.
• International Association of Certified Home Inspectors (InterNACHI) provides the credentials of nearly 27,000 certified home inspectors.

This sounds basic, but it’s surprising how many homebuyers neglect this step: ensure the home inspector is licensed. We also urge you to interview more than one inspector.

Your list of questions for the home inspectors you interview

• “Are you licensed and insured?” A professional home inspector will proudly show you their credentials, including insurance. That way, the homeowner is protected if anything unexpected happens during the inspection.
• “How long have you been in the game?” The more experience, the better. An inspector with years of inspecting homes under their belt knows how to spot even the sneakiest of problems.
• “How long does the inspection take?” Most inspections take from 2 to 4 hours, according to Tobie Stanger at ConsumerReports.org.  Regardless of how experienced the inspector is, if he or she says he takes less time than that, reconsider hiring“. . . being knowledgeable doesn’t mean the inspector is going to be diligent or conscientious,” according to Stanger,  which they can’t be if they are “ … rushing through the inspection.”
• “Can I join you during the inspection?” Tagging along during the inspection allows you to ask questions you may not even think to ask if you just work off the written report. You’ll get to see first-hand what the inspector uncovers.
• “What do you check during an inspection?” A good inspector will cover everything, from the roof, plumbing, electrical, and more.
• “When will I get the report?” Residential home inspectors are aware that time is of the essence when one is under contract in a home sale so they are pretty speedy in getting the report finished.
• Let the inspector know the end date of your inspection contingency (it’s in the purchase agreement or, give us a call, we’re happy to help).
• “May I see a copy of an inspection you have performed?” This sample copy should give you an idea of how detailed the inspector’s reports are, what is inspected and the scope of work you can expect.

Also, compare this inspector’s report to the others you are interviewing.

“In Consumer Reports’ examination of reports from home inspectors across the country, we found that the typical report consists of a few dozen pages covering findings on all the major systems in the house, and includes photographs and descriptions of documented problems and maintenance suggestions,” Stanger said.

The home inspection is one of the most important aspects of the home purchase process. Ensure that you are getting what you pay for before you pay.

A 1031 exchange, also known as a like-kind exchange, is a tax-deferred real estate transaction authorized by the Internal Revenue Code. In fact, it takes its name from a section of the IRS Code – you guessed it, Section 1031.

The IRS, by the way, refers to it as a “like-kind exchange.” Here’s why:

The 1031 Exchange allows Americans who own investment properties to sell them and use the proceeds to buy another property while deferring capital gains taxes on the sale of the first property.

Let’s learn some 1031 Exchange lingo  

Like the home purchase and sale process, a 1031 Exchange transaction has its own lingo:

• Relinquished Property: The property being sold by the exchanger.
• Replacement Property: The property being acquired in exchange for the relinquished property.
• The Exchanger: This is the individual or entity selling the relinquished property and acquiring the replacement property.
• Qualified Intermediary (QI): Also known as a 1031 Exchange Accommodator, this is an impartial third party who helps facilitate the exchange by holding the funds during the process.

How a 1031 Exchange transaction works

Here’s a step-by-step breakdown of how a 1031 exchange works:

Step 1: Sell the Relinquished Property

The exchanger sells their investment property and identifies potential replacement properties within 45 days.

Step 2: Choose a Qualified Intermediary

According to IRS rules, a qualified intermediary is engaged to hold the funds from the sale until the replacement property is purchased.

Step 3: Identify Replacement Property

Within 45 days of selling the relinquished property, the exchanger must identify one or more replacement properties in writing to the QI.

Step 4: Acquire the Replacement Property

The exchanger has 180 days from the sale of the relinquished property to complete the acquisition of the replacement property.

Step 5: Complete the Exchange

The QI transfers the funds to purchase the replacement property, and the exchanger completes the exchange, deferring capital gains taxes.

Visit IRS.gov for more information on the 1031 Exchange

How to find the right 1031 qualified intermediary

“Under federal regulations for 1031 exchanges, practically anyone can become a qualified intermediary,” according to the experts at 1031CrowdFunding.com. This doesn’t mean you should appoint Uncle Fred who used to be a real estate agent for the job.

The folks at 1031CrowdFunding.com offer a list of QI duties, stressing the importance of choosing someone who knows what he or she is doing. Some of these duties include:

• Dealing with the legal documents
• “Preparing documentation regarding the relinquished and replacement properties.”
• Working with the title or escrow company with regards to giving them the instructions and documents.
• Placing the funds from the sale of the relinquished property in an escrow account until the exchanger has identified the replacement property.
• Making sure that the exchange is done in accordance with IRS rules.

There are additional considerations and you can find them at the aforementioned 1031Crowdfunding.com website.

Finding this 1031 superhero isn’t as difficult as it may seem. First, ask the title or escrow company for a referral. If that doesn’t pan out, consult the Federation of Exchange Accommodators website.

We must warn you, it’s a rather antiquated and not a user-friendly website but it does offer good information and contacts.

 The benefits of the 1031 Exchange

A 1031 exchange offers several benefits, chief among them the ability to defer capital gains taxes. By doing this, you can reinvest the full proceeds from the sale into a more valuable property, potentially increasing your wealth. Additional benefits include:

• The Exchange allows you to diversify your real estate portfolio by swapping properties in different locations or asset classes.
• Repeated exchanges can enable you to continuously defer taxes, facilitating the accumulation of wealth over time.

However, there are some considerations to keep in mind:

Remember what the IRS calls a 1031 Exchange? Like-Kind Exchange. The replacement property must be of “like-kind” to the relinquished property, typically meaning it should be investment or business property rather than personal property. So, no, you can’t use your home in a 1031 Exchange.

Then, there are the timelines. Yes, they are strict and yes, you will be expected to meet the deadlines.

Finally, we cannot impress upon you enough that a 1031 Exchange is not a DIY project for the newbie. Please consult with a qualified intermediary, tax advisor and real estate attorney to ensure compliance and make informed decisions.

Remember, while the concept of a 1031 exchange may seem overwhelming at first, consulting with professionals and qualified intermediaries can help you navigate the process smoothly.

So, if you’re considering selling an investment or business property and reinvesting, don’t forget to explore the potential benefits of a 1031 exchange.

Nobody really knows the total number of people who consider themselves landlords in the U.S.

The IRS puts the estimate at 7.1% of tax filers. They also claim that 17.1 million properties generated income for their owners,” according to David Bitton at Doorloop.com.

The most interesting statistics are of a financial nature. Bitton explains that, according to the US Census, “. . . landlords’ income is typically solid, earning up to $97,000 annually. It’s $35,000 more than the actual median household income.”

If you’re toying with buying a rental property, read on as we discuss five often-overlooked factors you should consider before becoming a landlord.

1. Legal and financial responsibilities

Being a landlord involves more than just collecting rent. You need to familiarize yourself with local landlord-tenant laws, which can vary significantly from one jurisdiction to another.

Understanding your legal obligations as a landlord is essential to protect your rights and avoid potential legal troubles down the road. We urge all new landlords to consult a legal professional to ensure compliance.

Moreover, being a landlord requires a solid grasp of your financial responsibilities. You’ll need to factor in costs such as property maintenance, repairs, insurance, property taxes, and possibly mortgage payments.

Be prepared for unexpected expenses, such as a leaky roof or a broken furnace, which can quickly eat into your profits. A comprehensive financial plan will help you weather these challenges.

2. Time and commitment

Owning rental properties may appear to be a passive income source, but it requires a significant investment of time and energy if you don’t hire a property manager.

From finding and vetting tenants to addressing maintenance requests and handling administrative tasks, being a landlord is a commitment that demands your attention.

Consider whether you have the time and willingness to take on these responsibilities. Are you prepared to be available 24/7 for emergencies? Can you handle tenant inquiries promptly?

If you’re already juggling a busy schedule, you might want to think twice before becoming a landlord. Alternatively, you can hire a property management company to handle these tasks, which will cut your profits.

3. Dealing with Difficult Tenants

As a landlord, you’re likely to encounter various types of tenants, and not all of them will be easy to deal with. While most tenants are responsible and respectful, there may be instances where you have to handle difficult situations.

Late rent payments, property damage, noise complaints, and even eviction procedures can be financially, emotionally, and mentally challenging.

Developing strong communication and conflict-resolution skills is crucial to handle these situations effectively. Being fair, firm, and proactive can help maintain a positive landlord-tenant relationship.

However, if confrontation and problem-solving aren’t your strong suits, being a landlord may not be the right choice for you.

4. Market volatility and vacancies

The real estate market is prone to fluctuations, and vacancies are an inevitable part of the job.

Assessing the local rental market and gauging the demand for rental properties in your area is important. Understanding the vacancy rates and rental prices will help you make informed decisions and set appropriate rent levels.

Additionally, periods of vacancy can result in financial strain, as you’ll still be responsible for mortgage payments and other property-related expenses. To avoid undue stress, have a financial buffer to sustain yourself during these lean periods.

5. Emotional attachment

While it’s natural to feel a sense of attachment towards your property, especially if it’s your former home or an investment you’ve poured your heart into, emotional attachment can cloud your judgment as a landlord.

Remember that this is a business venture, and making decisions based solely on sentimentality may not be in your best interest.

Treat your rental property as a business asset and make decisions based on sound financial considerations. Keep emotions at bay when dealing with tenant issues or making decisions about repairs and upgrades. It’s important to detach yourself emotionally and approach situations pragmatically.

Remember, being a landlord is not for everyone, and that’s perfectly okay. Weigh the pros and cons, evaluate your personal circumstances, consult with your legal and financial advisors, and make an informed decision.