5 First-Time Homebuyer Mistakes to Avoid

5 First-Time Homebuyer Mistakes to Avoid

6 Keys to Selling your House

Every homeowner’s dream is to sell their property quickly and for the best possible price. The more time a house sits on the market, the more likely it is that the price may have to be lowered in order to attract interested buyers. So your job is to make your home as appealing as possible. It might take a little bit of elbow grease, but it will be worth it when your house sells faster than the ones already on the market.

Here are some areas to focus on so you don’t lengthen your sale by overlooking the basics.

1. Clean. Every corner of your house needs to sparkle. The appearance of a dirty home will turn off most buyers. Hiring a cleaning service to scrub kitchen and bathroom floors, dust and polish all woodwork, and clean carpets is well worth the cost.

2. Odors. You have to eliminate bad smells, not just mask them. Remove the source of the odor if possible (carpets, trash, litter boxes), and use enzyme cleaning products. Pet smells are so pervasive, some sellers even board their pets while their house is for sale.

3. Light. People like light and spacious, not dark and cave-like. Clean your windows and keep them clear of trees or shrubbery. Remove blinds and drapes to clean them thoroughly. Increase bulb wattage in areas where you need more light.

4. Repairs. Prospective buyers like to make sure everything in the house works. They will turn on lights, open drawers and test faucets. Fix or replace broken or missing hardware, grease hinges and joints, repair cracked caulk, and make sure your outlets work.

5. Clutter. Potential buyers don’t want to see your stuff. They want to envision their belongings in your house. Make your decor as impersonal as you can. Bonus: minimal furnishings can make your home appear bigger.

6. Curb Appeal. If you don’t have it, buyers will drive right on by. The National Association of REALTORS® estimates that adding curb appeal can boost your sale price by up to 4 or 5 percent. Keep the lawn and garden neat, add some potted plants, repair cracks in the driveway, use a power washer or even repaint your exterior.

Protect Your Possessions with a Home Inventory

We pay for home insurance to protect our homes and possessions in case of burglary, damage or fire. But if calamity were to strike and you should need to recount what was lost, would you be able to remember everything? To save yourself the worry and the trouble, take time now to create a home inventory. This can help you keep track of everything you own, and it speeds up the insurance claims process.

The best way to create a thorough inventory is to physically walk around your house from room to room and build your list. Take pictures of everything, including serial numbers and receipts where you can. For each item, try to include a description, when it was purchased and an estimated value.

There are a variety of tools available to help you. You can simply write everything down in a notebook, create a spreadsheet (Microsoft Office has templates online), or use one of the new inventory apps on your computer or smartphone. The Insurance Information Institute and the National Association of Insurance Commissioners offer free apps with secure online storage. Many insurance companies have their own apps, as well. The best tool is the one that you will actually use.

Creating an inventory now isn’t difficult, though it can be a little time-consuming. But it is well worth the effort, and if disaster strikes, you’ll be thanking yourself later.

Risks When Buying a Short-Sale Home

If you are looking to buy a home at a significant reduction in price, you might have heard about pursuing a short sale. A short sale can occur when a homeowner can no longer pay the mortgage and wants to sell the property for less than the amount currently owed on the loan. This tactic has the potential to save you money, but it also has its risks. Here are few you should look out for:

Time — The short-sale process generally takes longer than the regular closing process. The seller’s mortgage lender needs to approve the sale, which typically takes about two months. If there are other liens on the house (such as a second mortgage or home-equity line of credit), those lenders must approve it as well. Sometimes final approval can take six months or more.

Deal falls through — Sometimes the lender’s approval might come with conditions that the seller is unable or unwilling to meet, and they will back out of the deal, even after months of time already invested.

Extra costs — Lenders rarely agree to pay for extras that a seller would typically take care of (such as inspections and repairs), so your closing costs could be higher.

Deferred maintenance — Cash-strapped sellers may have let maintenance and repairs go by the wayside, resulting in a lot of fixing-up that the buyer would be responsible for.

Equity Position Improvements

Another sign of an improving economy — an improvement in the equity position of U.S. households. The Federal Reserve Board of Governors recently released data showing that homeowners are continuing to regain the equity in their homes they lost during the housing crisis that began in 2007.

In its analysis of the data, CoreLogic found that at the end of the first quarter of 2014, 12.7 percent (6.3 million) of homes with a mortgage were in negative equity, meaning the homeowners owed more on the mortgage than the property was worth. This is a significant decrease from the year prior, when 20.2 percent of homeowners were “underwater.”

“Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year, “ said CoreLogic president and CEO Anand Nallathambi. “An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap.”

States with the highest share of negative-equity properties include Nevada, Arizona, Florida, and Mississippi. Those with the lowest share are Texas, Montana and North Dakota.

The current level has not been seen since 2007 and bodes well for the real estate market, as fewer underwater borrowers help unlock housing supply and demand.

Speculation Abounds on Mortgage Applications

The Mortgage Bankers Association’s Purchase Index keeps tabs on the rate that people are applying for mortgages, and that number can give economists some insight into what’s going on within the market.

The first half of 2014 saw the numbers falling, corresponding with a slower-than-expected recovery in home sales during first quarter.

But then over the course of one week in early summer, the index rose by 10 percent. Such a jump is leading real estate professionals and mortgage lenders to speculate about the future. Some believe it is just a blip, a repeat of a similar temporary increase that occurred in 2013. But others are more hopeful.

National Association of Mortgage Brokers vice president Rocke Andrews said he saw the jump as a good sign. “This is a response to an increase in consumer confidence and feeling good about the economy, along with a short-term dip in interest rates,” he said. “The economy is getting better and people are feeling better about their jobs. If interest rates stay stable, we will see a pretty good rebound.”

Lender loanDepot conducted a survey and reported that half of the potential home buyers surveyed indicated that they had not pursued financing for a home purchase because they were afraid they wouldn’t qualify.

President and COO of loanDepot Dave Norris said too many people are sitting on the fence. “Potential buyers are forfeiting their dreams of homeownership before they find out what financing options are available to them. It’s never been easier than it is today to go online and research your options.”

Easy Ways to Increase Home Value

Whether you are planning to put your house on the market or you just want to grow your investment in your home, there are a number of simple ways you can increase your home’s value without tackling a large remodeling project. 

Inspect Your Home
Typically buyers will request an inspection of your home. Beat them to it by regularly inspecting it yourself and taking care of any problems you find along the way.

Paint Kitchen Cabinets
You don’t have to replace all your cabinetry to give your kitchen a new look. Just give cupboards a fresh coat of paint and maybe some new hardware to spruce them up.

Replace Light Fixtures
Light fixtures tend to be put up and be forgotten, so replacing old lighting with new fixtures can give rooms a more modern feel.

Add Seating
Anyplace you have open space, think about putting in a table and some chairs. This showcases the potential of the space, which can translate into a perceived higher value.

Declutter
The simplest way to make a room appear bigger is to remove the photos, knick-knacks and other clutter that accumulate over time.

Highlight Storage
Creating or showing off the storage capabilities of your house lets potential buyers see that their stuff will fit there too. Even a wire rack closet system presents the appearance of organization.

Before investing a lot of time or money into a home-improvement project, give me a call. As your real estate professional, I can let you know what buyers in your area are looking for and save you money by preventing unnecessary upgrades!

 

Leading Markets Continue to Improve

Although it’s been slow, the economy does continue to improve, and along with it the housing market. The National Association of Home Builders (NAHB) and First American Title Insurance Co. produce a “Leading Markets Index” (LMI), which uses single-family housing permits, house prices and employment levels in various metro markets to measure how close to normal the markets are functioning.

 The LMI indicates that, nationally, we are running at 88 percent of normal economic and housing activity. Scores for metro areas varied, but 59 of the 351 measured are at or exceed 100 percent of normal activity, and 85 percent improved over the last year.

 “Things are getting slowly better overall,” said NAHB Chairman Kevin Kelly. “The nation’s economy is headed in the right direction.”

Cash Purchases on the Rise

The latest Confidence Index, published by the National Association of REALTORS® (NAR), found that more home buyers are paying cash – 33 percent in the first quarter of 2014. Usually when that number goes up, it’s because the number of distressed home sales has gone up. But in this case, the number of distressed home sales has actually gone down, a fact that has economists puzzled.

“Distressed home sales, most popular with investors who pay cash, have declined notably in the past two years, yet the share of all-cash purchases has risen,” said Lawrence Yun, NAR chief economist. “At the same time, investors have declined as a market share, indicating other changes have been under way.”

A number of factors could explain the increase in cash purchases:

• Mortgage lending regulations.


• The baby-boom generation, and its accumulated equity, is retiring and trading down.


• Individual investors and purchasers of second or vacation homes usually pay in cash.


• Foreign buyers typically pay cash.

Save Money through Window Treatments

Are you thinking about changing up your window treatments? Why not make them more energy-efficient and save a little money while you’re at it?

The U.S. Department of Energy (DOE) states that window shades can be one of the simplest and most effective window treatments for saving energy. Dual shades that are highly reflective (white) on one side and heat-absorbing (dark) on the other can be reversed with the seasons. Drapes can also be effective in any season, depending on fabric type and color.

In warm seasons, blinds and high-reflectivity film can reduce heat gain. The DOE estimates that, used correctly, blinds can reduce heat gain by as much as 45 percent. However, blinds aren’t that efficient at keeping out the cold, and film reflects sunlight regardless of the season, so these options are best for warmer climates.

For exterior changes, your best bets are awnings or overhangs. Overhangs can shade south-facing windows in the summer and, if oriented correctly, still allow sunlight in during the winter. Awnings can be quite effective in the summer, reducing solar heat gain by up to 77 percent. Plus, they add some personality and curb appeal to your home.

Tip: The key to any window treatment’s effectiveness in conserving energy is proper installation, so be sure to do your research.

Alternative Ways to Pay Your Mortgage

Are you looking for a different way to pay your mortgage? Maybe your payment is eating up all of one of your bimonthly paychecks and you’d like to spread it out. Or maybe you want to pay it off earlier. You have several options for making payments, either involving your lender or on your own.

Some lenders will set up bimonthly or biweekly payment plans for you. Paying bimonthly just splits your monthly payment in half, and you pay it twice a month. This can take the burden off your whole monthly payment coming out of one paycheck. Paying biweekly involves making half of your monthly payment every two weeks, which over the course of a year adds up to an additional monthly payment made (26 payments biweekly vs. 24 payments bimonthly). This speeds up the rate at which you pay off the loan, resulting in years being taken off the term. The drawback to paying biweekly is that most lenders charge extra fees.

If you like the idea of shortening your term but don’t want to pay extra, you can do it yourself by changing the amount you pay each month. Add an extra 1/12 of your monthly payment each month, and at the end of the year you will have made the equivalent of 13 monthly payments.

Note: Anytime you pay an amount that exceeds your monthly payment, be sure to indicate to your lender that you want the additional money to go toward the principal.

How are real estate agents paid?

Whether you're buying or selling a home, you'll probably work with a real estate professional during the transaction. If you're a seller, the REALTOR® that you work with will offer expert advice about the community and competition, provide marketing and advertising, and handle schedules for all the transactions that must occur. For buyers, the agent will help them identify properties that fit their needs, handle negotiations and also help with the paperwork and scheduling.

For all that they do, agents are paid by commission, rather than on an hourly rate. The commission they receive is based on the sale price and only after the completion of the sale. If they do not sell the home, or if they are unable to locate a home for a buyer, they aren't paid.

How much is the commission?

The typical commission is about 6 percent of the sale price, and it is usually split between the buyer's agent and the listing agent. The commission percentage that the seller agrees to pay is negotiable.

Who pays the commission?

The fee for the transaction is subtracted from the proceeds of the sale. It’s important to note that the fee comes out of the cost of the house and is not tacked on in addition to the sale price.

Don’t forget the garage when staging your home

It's well documented that staging your home for a sale helps you sell it quicker and for more money. It helps the buyer imagine what their stuff would look like in their new home.

Many homeowners forget that the garage is an extension of the home and use it as a storage space for all their clutter when getting ready for a sale. That's a big mistake.

The garage is an important amenity. Home buyers like the room for storing their stuff. So when staging the home, make sure to stage the garage so they can see the potential in it, whether they want to fill it with shelves for storage, put cars in it, use it as a shop area, or a man cave.

Here is the to-do list for staging your garage:

De-clutter

Get rid of all that extra stuff that you don’t use anymore, including the things from inside the home, and have a garage sale.

Use heavy-duty hooks to hang larger items that are taking up space.

If you have cabinets, shelves, or storage systems, organize everything in them. Get everything off the floor and into cabinets, shelves, or bins.

Put tools away in drawers or cabinets or hang them on a pegboard.

Make sure all flammable items, tools, and chemicals are stored correctly.

Clean everything

Dust the walls and corners, just like you would the rest of the house. If the walls don't come clean after scouring, they need a fresh coat of paint.

Clean the garage floor. Attack any stains and get rid of them. Like the walls, if the floor doesn't look great after a good scrubbing, consider painting and sealing it or adding a floor covering.

Don’t forget the garage door! Make sure it's clean and free of scuffs and marks. A fresh coat of paint will do wonders to increase the curb appeal of your home.

Maintenance and improvements

If it doesn’t already have one, install a smoke detector in your garage.

Check the lighting and replace all bulbs. If it's still dim, consider adding lights.

Make sure your garage door opener is working properly, along with all the extra functions, including the automatic light, automatic reverse, emergency release and wall control panel.

Tell your REALTOR® about any unique features, workbench, or extra storage space in the garage so they can be pointed out to potential buyers.

Making sure your garage is clean, organized and in good repair sets the stage for a good first impression. It may not be a deal breaker, but if a home buyer is on the fence about making an offer, it can be the small difference that tips the odds in your favor.

Should you FSBO?

On the surface, selling your own home seems like a good idea. After all, who knows your home better than you?

This is known in the real estate industry as FSBO, or For Sale By Owner.

Advantages of selling your own home

The biggest advantage of selling your home yourself is that you won't pay a commission to a REALTOR®. You also have complete control of the transaction. You don’t have to rely on anyone else. You schedule the showings, do the marketing, answer inquiries, etc.

Why it's better to work with a REALTOR®

First and foremost is experience. Most buyers choose to work with a buyers’ agent whose job it is to get a home at the best possible price for the client. As a rule, they are good at negotiation. The possibility exists that you could sell your home for less money, and you could leave yourself open to potential legal problems. If you do choose to go the FSBO route, have an experienced real estate attorney examine the contract.

Loss on the price

If you sell your home, you may end up selling it for less than you should. Real estate agents hire appraisers whose job it is to find things wrong with your home. You don't have access to all of the data that real estate agents do - including sale prices of comparable homes, the prices other homes in the area are listing for, etc.

Marketing expenses

You will have to pay for marketing, listings, signage, printing, and advertising (for which you'll pay more, because you won't get an agency's volume discount.)

Commission

Although it seems like you'll pocket what you would pay in commission - which is a tremendous savings - if you do sell your home, the buyer knows that you're saving commission, so they will probably negotiate for you to pay the buyer's commission, so expect to pay around 3% of the purchase price to the buyer's agent. And don't forget that you'll have to pay for a lawyer to review the contract.

Added time

Selling a home takes time, and because you'll be learning everything about the process on the fly, you can expect it to take longer.

Complicated process

Because selling a home is so involved, with many steps, government agencies and procedures that have to be accomplished before the sale can be finalized, there are things that will fall through the cracks.

Shrinking the pool of buyers

Because you may not be able to advertise as effectively as a real estate agent, you're going to miss some potential buyers. Also, some buyers may decide the best way to avoid any of the potential problems is to work with an agent and will avoid homes listed FSBO.

It’s not that it can’t be done, but FSBO is a tricky, time-consuming and somewhat costly endeavor. Make sure to weigh the pros and cons before making the decision.

Should you replace your roof before putting the house on the market?

One of the biggest concerns home buyers have is whether they will have to replace the roof. A new roof is worth a lot to potential buyers because it puts their minds at ease. A new roof is a big expense, particularly worrisome if the new homeowner is cash-strapped after a down payment and paying closing costs.

If you are considering selling your home, you may be asking yourself if you should replace the roof.

The first thing you should do is schedule a home inspection. The inspector will examine the roof and let you know whether you need a repair, replacement, or if it's in good shape.

If you own the home outright, your decision to replace the roof may depend on whether you are looking to maximize the sale price. Someone who still owes a great deal on the principal and wants to leave the deal with as much cash as possible may opt to not replace the roof.

If you can't afford to spend money out of pocket, you may need a home equity loan to replace the roof, which means more debt that will need to be paid when the house is sold.

Look at the competition in your area. If there are a lot of competitively priced homes, a new roof may be a major incentive to potential buyers.

Consider how much of a negative impact leaving the roof as is will have. If you have already seen leaking or if there is a possibility that damage could occur if the roof is left as is, there's no question that it should be replaced. Leaving it as is would make it difficult for a buyer to get a mortgage if the roof needs repair or replacement.

If insurance will cover part of the repair, it makes sense to go ahead with the repair.

It is possible that a partial repair can fix your problem. You could also offer to lower the sale price to cover the roof replacement.

A new roof can definitely help the sale of your home. Ask your real estate agent for advice regarding your ability to recoup the expense of roof repair or replacement.

What stays with the house when it is sold?

Sometimes there are misunderstandings about what goes and what stays when a home is sold. Nasty emails and phone calls between buyers, sellers and real estate agents after the sale are common. Some people even end up in court because buyers assume that sellers would be leaving something behind.

In many cases, it depends on laws of the state. In other cases, it merely depends on what is customary for your location. That’s why it is important to work with a local REALTOR® who knows the ins and outs of the local market.

The question to ask is “Is it permanently attached?” If so, it’s fixture, and usually, it stays. However, some fixtures fall into the category of personal property. And that’s where we enter a gray area.

What is personal property?

Beds and furniture … there’s little question that they are personal property. Mirrors, art, chandeliers … they may seem custom made to fit the home, but they still fall under the category of personal property, even though the art may look as if it were made specifically for the home. If there is a question, it’s always best to ask. And get it in writing.

Here are three things usually included in the sale:

Appliances

It’s not the norm everywhere to include all major appliances - including refrigerators and dishwashers - with the property. Always ask your REALTOR® about what is customary. If there’s any doubt, be sure to put it in writing as to what exactly is to be left behind, up to and including name brands.

Window Coverings

If there are window coverings present, they usually stay with the new owner. However, be sure to ask. The seller may have had the drapes custom made to match the furniture and will want to take the drapes to their new home. Make sure to ask and get it in writing.

Flat Screen TVs

TVs used to fall under personal property 100% of the time. Used to. But now media rooms and the large, flat screen, high definition TVs that are now professionally mounted above the fireplace or on the wall like a piece of art with the wires running through the walls are common. As a result, TVs are considered fixtures. Again, make sure to ask and get it in writing.

Sometimes sellers decide that they want to keep something or that they will part with it for a price. Sellers should document everything that will be included and will be excluded so there’s no doubt in the buyer’s mind what stays and what goes. Buyers should be as detailed as possible from the beginning and always ask the real estate agent during the showing or open house. If they say it’s included, make sure to get it in writing.

One more warning: Sometimes sellers will advertise “Appliances are included” and replace their high end appliances with lower-end models. Make sure to specify that “existing appliances” are included. And get it in writing.

What should be included in your home listing

Did you know that what you say and how you say it can have a big impact on how effective your home listing is? The results can be selling your home more quickly and for a better price.

By the same token, using the wrong words and phrases can turn a buyer off as quickly as the right one can motivate a buyer to learn more. Here are some tips to improve your listing:

Be specific

Give as many details or facts about a property as you can. Include updates such as a new roof or driveway and items that differentiate your home from competitive properties. If your kitchen is a draw, don’t be afraid to drop brand names.

Use good grammar

Bad spelling and grammar, and using abbreviations that aren’t easily understood can be a big deterrent to potential buyers.

A photo’s worth

In a buyer’s market there may be more properties available than buyers to purchase them. With that much competition, sometimes the photo can draw the attention of a buyer or agent. Make sure you’re putting your home’s best foot forward with great photos.

Mention amenities

A great view or privacy won’t be apparent in photos or property details. Use the description to talk about features that aren't obvious.

Avoid exaggeration

Be realistic in your listing. Building a buyer’s expectations with a fluff-filled description only to have it fall far short in reality can turn a buyer off.

Use the right adjectives

The words you use can make a difference. Use descriptive opinion words if they are appropriate. Also use descriptions of the property within the copy. Using property descriptors and opinion words were found to increase the sale price by just under 1% for each instance. However, there is a limit. Don’t overdo it and turn off prospective buyers.

Motivate the buyer

In advertising, sometimes saying something is enough to make a large number of people believe it. That goes for pronouncements on pricing. Telling them it’s a good deal is enough to motivate them without being dishonest, even if it priced competitively with other homes in the area.

Remember that you have a very short time to attract a buyer’s attention. Make sure to deliver the biggest selling features in the first couple of lines.

The dual agency role in real estate

One of the things those who work in real estate can’t seem to agree on is that of “dual agent” on a home sale. While it’s legal – in some form, anyway – in all 50 states, getting people on both sides of the sale to come to a consensus is difficult at best.

What is a dual agent?

Many, if not most, REALTORS® can represent sellers as the listing agent. Their responsibility is to sell the home as quickly as they can and at as close to the listing price as possible. They act with the seller’s best interest in mind. For their efforts, they receive a commission.

When someone is ready to buy a home, they can employ a buyer’s agent to help them find their dream home. The agent acts on their behalf to negotiate the price, arrange for inspections, closing and all other things associated with buying a home. For their efforts, they receive a commission.

It may be called “transaction brokerage” by some states, or “designated agency” by others. Simply put, double-ending occurs when the same agency represents both sides of the sale of the home – the buyer and the seller. While it is legal, there are many who find the practice questionable.

The good news is, whether you’re buying or selling, if an agency hopes to represent both sides of a home sale transaction, they have to notify the parties involved.

The advantage is that with fewer people involved, the sale can be done quicker and more efficiently. The advantage to the agent or agency is that the commission is not split.

And thus arises the conflict because a single agent cannot represent the seller’s best interest while representing the buyer’s best interest. They could try to convince the seller to sell at a lower price, or oversell the attributes of the home to the buyer, in order to make the sale.

When you are hiring an agent, make sure to ask if he or she could possibly take you into a dual agent sale. If you feel comfortable, then proceed. However, if you feel that you may have remorse at the end of the transaction, it’s best to avoid the situation.

Tips to make the mortgage process go faster

Mortgage lending is a very competitive industry. Lenders will sometimes promise home buyers that they can speed up the process. While they can cut a few days off of the process, it generally takes 30-45 days to close. To expedite the process somewhat, they can speed it up by scheduling appraisers, home inspectors and underwriters. There are some things you can do on your end to help cut down on the time is takes to close.

Get a handle on your credit

Having good credit is beneficial for so many reasons. Obviously, you'll need to meet a lender's credit benchmark in order to even qualify for financing. You're more likely to qualify for a more competitive rate and term if you have higher credit scores. It also saves time because you'll spend less time producing documentation and explaining some of the bad things that may appear. It's important to pull your credit reports and credit scores so you’ll know what’s there and what you can clean up.

Respond quickly to requests

You'll be asked to supply things such as tax returns and documentation from your employer. Ask your REALTOR® what your mortgage lender will need.

Buy a house that meets requirements

Federal Housing Administration and VA loans have standards and requirements that must be met in order to qualify for a loan. Make sure to ask your REALTOR® if your home meets those standards.

Don't add any new credit

Don't buy a car, boat, or make any other large purchase that can change your credit score. Don't even apply for a new credit card at a department store.

Find the right lender

Specialized products like government-backed Veteran Affairs and United States Department of Agriculture home loans require different knowledge. Make sure to ask about their turnaround times on loan files and the average number of days from contract to close.

Be sure to talk to your real estate agent about what you should and shouldn’t do to speed up the mortgage process.

Follow these tips to price your home correctly

Along with choosing a real estate agent that you’re comfortable with and marketing the home effectively, determining the correct asking price are three essential aspects of selling your home quickly and for the highest amount possible. The first are personal decisions; the last requires some research, finesse and some educated guessing.

Here are some tips to help you price your home right.

Look at the neighborhood

Consider comparable homes nearby that were for sale, recently sold or are currently for sale. This is perhaps the most important factor in pricing your home.

Local market conditions

Home sales is no different than any other industry. Supply and demand is a determinant of price. Your REALTOR® will have information about the supply of available homes compared to the demand of buyers.

Check out the competition

Visit open houses in the area to see how your home stacks up.

Price to appraise

The buyer’s appraisal price considers the prices of recently sold homes. Your sales price will be subject to an appraisal, unless your buyer agrees to pay cash or waives an appraisal contingency.

Don't pay for an appraisal

Though the buyer's appraisal will be important when it comes time to close, you don't need to obtain a separate appraisal prior to pricing your home.

Square footage

Every home listing states the square footage, but not all square footage is created equal. Two homes could have exactly the same square footage, but one could be an open floor plan while the other has separated rooms.

Beware of the high asking price

An agent may propose a high asking price to flatter you in order to win the listing, but will then push hard for a price reduction almost immediately. This is known in the business as "buying the listing." Make sure to avoid the trap by talking to several agents. If one comes in way higher than the others, they could be buying your listing.

Irrelevant factors

When it comes to pricing, there are a number of things that many homeowners think are contributing factors, but aren’t:

• Price you paid for your house


• Amount you want to net from the deal


• Price the house would have sold for a few years ago


• Amount you've spent on repairs, maintenance and improvements

Don't overprice your home

You may be inclined to list at more than what your home is worth in order to hit the price point you really want to get when the buyer makes an offer. This is dangerous because if you don’t get an offer, you may have to reduce the price, which can be an indication to buyers that it's probably more over-priced than the amount you just reduced.

Don't underprice it, either

Some homeowners deliberately underprice their home to attract more buyers and start a bidding war. This is just as risky as overpricing the home. If the bidding war you hoped for doesn’t materialize, you may only receive one offer at exactly your artificially lowered asking price.