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In real estate, almost everything comes down to supply vs. demand. In a seller's market, demand exceeds supply, leading to favorable conditions for sellers - higher prices and less room for negotiation. In a buyer's market, there are more homes than buyers, often resulting in lower prices and better deals for buyers.
Just because it's a seller's market doesn't mean it's a bad time to buy, and a buyer's market isn't necessarily a bad time to sell. It all depends on your individual goals and circumstances. There are always pros and cons in any market, and what matters most is finding the right opportunity that aligns with your needs.
What is a seller's market vs. a buyer's market?
When buying a new construction home, having a Realtor on your side is crucial. The builder's sales agent represents the builder's interests, not yours. A Realtor ensures that your best interests are protected throughout the entire process. They can help you navigate the complexities of contracts, negotiate better terms, and provide insight into upgrades, incentives, and potential pitfalls. With a Realtor by your side, you have an advocate who is solely focused on your needs and goals, ensuring a smoother and more successful home-buying experience.
Do I need a Realtor when buying a new construction home?
Deciding between new construction and an existing home depends on your preferences, lifestyle, goals, and timeline. If you value modern amenities, energy efficiency, and the ability to customize features to your liking, new construction might be a great option. New homes often come with warranties that cover major systems and appliances, which can provide peace of mind. However, new homes can be more expensive per square foot and might be located in developing areas that are farther from city centers. Additionally, there may be a waiting period while the home is being built.
On the other hand, existing homes are often located in established neighborhoods with mature landscaping and a sense of community. These homes may have unique architectural features and character that can be hard to find in new builds. They're typically move-in ready, allowing for a quicker transition. However, older homes might require more maintenance and updates to meet current standards. Depending on the home's age, you might need to budget for renovations or repairs.
Ultimately, the decision comes down to what's most important to you. If you want something brand new and are willing to pay a premium, new construction might be the way to go. If you're looking for a more established setting or a home with character, an existing home could be a better fit.
Is it better to buy new construction or an existing home?
Recent changes in the real estate industry mean that as a buyer, you'll now sign a written agreement with your Realtor before touring homes. This agreement clearly outlines the services your Realtor will provide and how they will be compensated. Traditionally, the seller typically covered the buyer agent's commission, which is still often the case. However, with these new regulations, it's more transparent and negotiable than ever. These changes were made to ensure that buyers fully understand their Realtor's compensation and services upfront. Even with these updates, it's important to know that in most cases, buyers won’t need to pay their agent out of pocket—seller concessions or other arrangements often cover the commission. But, it’s always a good idea to discuss the details with your Realtor so there are no surprises down the road.
How much do I have to pay my Realtor to help me buy a home?
An appraisal is an opinion of value, conducted by a licensed appraiser. It involves a thorough evaluation of the home's condition, features, and comparable closed sales in the area. Lenders typically require an appraisal to determine the loan amount they are willing to provide, making it a critical step in the transaction process. An appraisal typically costs $400 to $600 depending on the home's square footage.
What is an appraisal?
The home inspection is one of the most important steps in the buying process! I never recommend skipping it. Once your offer is accepted, most purchase agreements give you a 10 day inspection period where you'll complete your due diligence, including hiring a home inspector. Plan to spend about $400-700 depending on square footage and features of the home, such as a pool.
Should I get a home inspection?
Earnest money is a deposit you make when you submit an offer on a home, showing the seller that you're serious about purchasing the property. This money is typically held in an escrow account with the Title Company until closing. The amount typically ranges from 1% to 3% of the purchase price. In competitive markets, some buyers may offer a higher earnest money deposit to make their offer more attractive to the seller. While earnest money is generally refundable under certain conditions, it's important to understand the specific terms of your contract. For instance, if you back out of the deal for a reason not covered by a contingency, you could lose your earnest money.
What is earnest money, and how much should I expect to pay?
Yes, I frequently help families do just this! Buying and selling a home at the same time can be challenging, but it's definitely doable with the right strategy. Timing is crucial, so working with an experience Realtor who can help you coordinate the process and negotiate favorable terms is key.
I own a home - Can I buy and sell at the same time?
The amount of house you can afford depends on a few key factors: your income, debts, credit score, down payment, and the current mortgage interest rates. A good rule of thumb is to keep your monthly mortgage payment, including taxes and insurance, at or below 28% of your gross monthly income. Lenders will also consider your debt-to-income ration (DTI), which compares your monthly debt payments to your income.
To get a clearer picture of what you could afford, consider getting pre-qualified with a local mortgage lender. They'll be able to give you specific budget, how much you'll need for your down payment and closing costs, and if you qualify for any free grant down payment programs.
Isa has several preferred local Lenders that can help walk you through this process.
