This article was originally published by a www.houzz.com . Read the Original article here. .
Even in a seller’s market, where inventory is scarce and bidding wars are common, it still pays to invest some time and energy in positioning your home to sell for top dollar. This can involve a variety of steps, from working with a real estate agent who truly understands your local market to spending some money to make sure your home looks its best for buyers. Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you bring in a higher price.
1. Find a real estate agent
Working with a skilled local real estate agent who knows your area inside and out can help you sell your home more quickly, and often, for more money. In fact, data from the National Association of Realtors shows that between July 2022 and June 2023, homes listed without the assistance of a Realtor sold for a median price of $310,000, while those sold with one fetched a median of $405,000. Interview several candidates before you commit to one agent — the better you get along, the smoother the process is likely to be.
2. Invest in value-adding improvements
Determining which home improvements to invest in can be daunting, and the costs can add up quickly. The key is to spend your money on projects that will provide the most return on your investment.
Minor kitchen upgrades are typically a wise choice, says San Diego–area Realtor Jade Lee-Duffy. “The heart of the home is the kitchen, and many buyers will judge a property by its kitchen,” she says. Just don’t go overboard: “While a complete overhaul of this space can run into the tens of thousands, a minor update is where you can gain the greatest return,” she says. “Think about resurfacing cabinets, replacing countertops, a fresh coat of paint or updating the fixtures and hardware.”
Updating a bathroom is another smart investment, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” “Renovated kitchens and baths are the ‘money rooms’ — those that add the most value to a home,” she says.
3. Up your curb appeal
As the saying goes, you don’t get a second chance to make a first impression. “Make sure your front yard is free of debris, the bushes are pruned and the grass has been cut,” says Lee-Duffy. “Also, add some bright potted plants by the front door to make buyers feel welcome.”
Some other easy updates that can improve curb appeal include:
Touching up exterior paint
Adding window flower boxes
Installing a new mailbox
Adding new mulch around shrubs and trees
4. Get a pre-listing inspection
Investing in a home inspection before putting your property on the market is another step to consider. “You don’t want any unexpected surprises,” says Lee-Duffy. “It’s best to find out beforehand if there are any issues that you can fix, before buyers find out on their own.” That would give them negotiating power for a lower price or, worst case scenario, a reason to back out of the deal. So it may be worth a few hundred dollars for the peace of mind.
There is, however, a downside to a pre-listing inspection: “Beware, because once a seller becomes aware of an existing defect and does not correct it prior to listing, they are obligated to disclose it to a buyer,” says Severance. “Defects that a buyer learns were known but not disclosed, prior to accepting an offer, can kill the deal.”
5. Highlight the positive with professional photos
Spending a bit of money on high-quality photography can go a long way toward helping your home sell for a higher price. “The majority of people search for properties online,” says Lee-Duffy. “If the photos pop, it can translate into a higher sale price — and sell faster, too.”
It’s OK to leave some things to the imagination when it comes to your home’s online listing, though. “I advise against photographing every square foot of the home,” says Severance. “The goal of photographs is not to give all the goodies away online; it’s to make a buyer want to see more — to whet their whistle enough to entice them to see it in person. If they don’t come see the house, they probably aren’t making an offer.”
6. Stage your home
When it comes to home staging, says Severance, there are two rules of thumb: less is more and keep it neutral. “It’s very important to capture buyers’ interest from the front door,” she says. “Pay extra attention to the entry: Repaint; place flowers; buy a new area rug, an impressive mirror or a dramatic piece of art.”
Remove objects and clutter that visually shrink a room, such as large ottomans or too many plants, and remove everything from the kitchen counters except for one or two new-looking appliances. “And don’t forget to stage the deck or patio, because that is an extension of the house that can make a small home feel much larger than it is,” Severance adds.
You can do the staging work on your own or up the ante by hiring a professional stager. A pro will average around $1,800, according to HomeAdvisor.
7. Set the right asking price
Identifying the best price for your home can be critical to your success. “Setting the price too high can be detrimental and prevent buyers from walking through your front door,” says Lee-Duffy.
How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.
“Good pricing requires the expertise to thread the needle,” says Severance. “List at a number that is lower than comparable properties, in order to draw attention to it, but not so low that you will be disappointed if you only get one offer right at list price.” If enough buyers are enticed, you might even set the stage for a bidding war.
8. Remove personal items
“The goal of any showing is for the buyer to envision their own belongings in the space,” says Severance. So, while family photos and other knickknacks might seem like they have no bearing on how much money your home commands, they really do matter — especially if you are still living in the home while you’re trying to sell it.
If buyers are distracted by personal items, then chances are they won’t be able to see themselves in the space, and will not end up making an offer. “Buyers are thinking of their own furniture, where it will go and how it will fit. It’s the house they came to see, not the items inside of it,” she says.
9. Be ready to move fast
Once your property is listed on the market, things can happen quickly. It’s important to be well prepared ahead of time so that you can be as responsive as possible to potential offers. “Fill out all the necessary documents, such as any seller disclosures, and have paperwork for recent repair work, home renovation costs and utility bills on-hand for any buyer requests that come in,” says Lee-Duffy.
Sellers who are slow in reaction time or unresponsive can lose buyers, adds Severance. “If the buyer feels that they are not being dealt with fairly, they are very likely to walk away,” she says.
10. Use your head, not your heart
Finally, try to remove emotion from the equation and see the process as a simple transaction — your home is no longer “home” but a product for sale. It’s not unusual for prospective buyers to request credits or repairs, and it’s easy as a seller to take offense, so try to have a clear understanding of what issues and items you may be willing to make concessions on.
“It’s important to take emotion out of it and remember that the buyer usually doesn’t expect to get everything they ask for,” says Severance. “Take a closer look at which requests are valid and fair, and offer something. The cost to you is not in giving the concession — it’s the expense of losing the buyer, putting the property back on the market, starting all over again and getting a potentially lower offer.”
FAQs
How can I maximize my net proceeds from selling my home?
To maximize how much you earn from the sale, it’s important to put in some work to get your property market-ready. This includes improving your home’s curb appeal, investing in professional listing photos and staging your home before opening it up to buyers. Your real estate agent can provide home-selling tips based on your specific situation.
Do I need a real estate agent to sell my home?
No, you don’t necessarily need a real estate agent to sell your house. Selling without one is called a “for sale by owner” transaction, and they are not unusual. However, partnering with an agent can make the process much easier for you — agents help with important tasks like determining the right asking price, creating a listing that will attract buyers and hosting showings and open houses. Later in the process, they’ll negotiate with buyers and guide you through the closing, ensuring your interests are protected.
How can I sell my house fast?
If you’re in a hurry to move, consider selling to a cash homebuying company or iBuyer. These businesses buy properties for cash, often in as-is condition, and they can close deals far faster than a traditional market sale — often in just a couple of weeks or less. The downside is that you’ll likely earn less money selling this way than you would with a traditional home listing.
This article was originally published by a www.bankrate.com . Read the Original article here. .
FOX Business’ Gerri Willis breaks down speculation that the best time for homeowners to sell their homes might be sooner than expected.
If you’re a homeowner waiting on the sidelines for the perfect time to sell your home, this week could be your time to shine.
Despite mortgage rates inching closer to 7%, a recent research from Realtor.com indicated the week of April 14-20 might be the ideal week for potential sellers to list, as spring historically brings with it higher buyer demand and a market with low inventory, setting the stage for bigger bids.
Some homeowners have been on the sidelines for two years, waiting for mortgage rates to fall, additional survey data from the site showed.
However, while 50% say they’re willing to hold out longer in hopes of rate drops, nearly 30% say they need to sell soon for “personal reasons,” including profits, need for more space, or plans to rent, to name a few.
SELLING YOUR HOUSE? HERE’S THE BEST TIME TO DO IT
The best time to sell your home might be the week of April 14-20, according to Realtor.com data. (REUTERS/Jeff Haynes / Reuters Photos)
Survey data also showed that sellers are adjusting their expectations to meet the current market, with 8 in 10 settling in on the expectation that the mortgage for a newer home will be higher than their current home.
“With the market cooling in many areas, 12% expect a bidding war to take place (vs 27% in 2023), and only 15% expect to get more than their asking price (vs 31% last year),” the report continued.
The separate analysis from last month pointed to the April 14-20 listing timeframe by taking into account the number of buyers, listing prices and seasonal trends, to determine the period for the most favorable for home selling conditions.
TIME TO SELL YOUR HOME? HERE ARE 3 QUESTIONS TO ASK YOURSELF
50% of sellers still on the sidelines say they will wait out rates while 29% say they need to sell soon. (FOX Business / Getty Images)
“We’ve got the most favorable balance of all of these factors for sellers. It suggests they will be able to sell quickly at a good price and be happy with the outcome,” said Realtor.com chief economist Danielle Hale.
The report indicated that this week offers a higher-than-average number of buyers along with a lower-than-average time on the market and higher-than-average prices, coming in at 1.1% higher than the average for other weeks throughout the year.
REALTOR DESCRIBES THE SHIFT THAT’S DRIVING REAL ESTATE ‘ACROSS THE BOARD’ IN TOP MARKETS
Realtor.com analysis indicates that homes historically reached higher prices during the week of April 14. (Photo by STEFANI REYNOLDS/AFP via Getty Images / Getty Images)
FOX Business’ Gerri Willis, speaking on “Varney & Co.,” on Monday said “sellers are getting more realistic,” noting that they have to “embrace” current rates.
Rates for 30-year mortgages averaged 6.88% last week, according to Freddie Mac’s latest survey.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Fox Business real estate contributor Katrina Campins discusses a settlement that may cause homes to receive lower offers on ‘The Bottom Line.’
This article was originally published by a www.foxbusiness.com . Read the Original article here. .
Scoop up armfuls of blooms. What could be more cheerful than flowers all around the house? If flowers are blooming where you live, all you may need to do is walk out to your garden and start snipping away. If not, you can stop by a market, farmstead or flower shop and treat yourself to some beautiful blooms. Once you get home, trim the stems a bit (a fresh cut makes it easier for the flowers to drink water) and place them in vases of fresh water immediately. But don’t stop there — even if you bought just one bouquet, you can get more out of it by pulling out a few blooms to fill bud vases. Place a bud vase beside your bed, on the bathroom sink and in the kitchen to spread good cheer throughout your home.
This article was originally published by a www.houzz.com . Read the Original article here. .
This homeowner had fond childhood memories of spending time in her mom’s best friend’s house. So when an opportunity came up to buy the home, she jumped at it. She then hired interior designer Susan Yeley, who uses Houzz Pro business software, to perform a careful update that honored the home’s roots while giving it modern-day comforts. Wood-paneled walls wrap the interior in warmth. Vintage midcentury furnishings nod to the home’s origins. The kitchen features an inviting white-and-wood palette with new appliances. The primary bedroom boasts ample built-in storage. Colorful artwork throughout the home and monkey-shaped tile in the laundry room add playful punches.
Read more and save photos
This article was originally published by a www.houzz.com . Read the Original article here. .
Debra Kamin:
You’re absolutely right, that, for first-time homebuyers, it is often very difficult to scrape together just the money you need to be able to get that down payment to buy that first home, especially now, when the housing market is so tight and so expensive.
And in the past, one thing that homebuyers did not have to worry about was paying their real estate agents. So, as this settlement has its effects, one of the things we might see is that homebuyers now feel, oh, gosh, I also have to pay my real estate agent on top of everything.
But, most likely, what’s also going to happen is we’re going to see new models for compensation evolve out of this that didn’t exist before, where the way that we pay real estate agents, particularly on the buy side, might be completely different. It could be a flat fee. It could be by the hour. There’s all sorts of ways to pay agents that never existed before because there wasn’t a competition in the market that allowed those new methods to be introduced.
This article was originally published by a www.pbs.org . Read the Original article here. .
The share of new single-family homes built in the 1,600-3,000 square-foot range closely matches the share of buyers who want homes of that size, according to recent surveys from NAHB and the U.S. Census Bureau. The surveys show that 21% of buyers want homes with 1,600 to 1,999 square feet, and 22% of new single-family homes started in 2023 have that much floor space. In the next tier up, 38% of buyers want homes with 2,000 to 2,999 square feet, and 40% of new single-family homes fall within that size range.
Results on the square footage buyers want in their next home were published in the 2024 edition of What Home Buyers Really Want, based on a representative sample of 3,008 recent and prospective home buyers conducted in 2023. The size of homes started comes from NAHB tabulation of the recently released 2023 data file from the Census Bureau’s Survey of Construction.
Outside of the 1,600-3,000 square-foot range, the match between what buyers want and what builders provide is not as close. While 26% of buyers want homes under 1,600 square feet, only 16% of single-family homes started in 2023 were that small. And while 22% of new homes have at least 3,000 square feet, only 14% of buyers are looking for homes that large.
Part of the reason for the apparent mismatch, of course, is that builders are compensating for the existing stock of housing, much of which was built decades ago when homes tended to be smaller. According to the latest American Housing Survey (funded by HUD and conducted in odd-numbered years by the Census Bureau), a full one-third of existing homes in the U.S. have less than 1,500 square feet of floor space. Moreover, the median size of an existing single-family detached home is 1,800 square feet, compared to 2,200 square feet for single-family homes started in 2023 and the 2,067 square feet that home buyers say they want in the NAHB survey.
In other words, the median buyer wants a home that is 133 square feet smaller than the median new single-family home, but still 267 square feet larger than the median existing single-family detached home.
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This article was originally published by a eyeonhousing.org . Read the Original article here. .
Key takeaways
Capital gains tax is a levy imposed by the IRS on the profits made from selling an investment or asset, including real estate.
Primary residences have different capital gains guidelines than rental and investment properties do.
It’s possible to lower the capital gains tax you owe by taking advantage of available deductions, exemptions and exclusions.
Naturally, you want to make a nice profit on your home when you sell it. But beware a bite in your earnings when tax day rolls around: the capital gains tax. If your home has substantially increased in value, you could be liable for a substantial sum when you pay your annual income tax.
Fortunately, there are ways to avoid or reduce the capital gains tax on a home sale to keep as much profit in your pocket as possible. Here’s everything you need to know.
What is the capital gains tax on real estate?
Key terms
Capital gains tax
A levy imposed by the IRS on profits made from the sale of an asset, such as stocks or real estate — that profit is considered taxable income.
Long-term capital gains
A tax on assets held for more than one year.
Property value
The amount a buyer is likely to pay for a real estate asset (i.e., property).
Broadly speaking, capital gains tax is the tax owed on the profit (aka, the capital gain) you make when you sell an investment or asset. It is calculated by subtracting the asset’s original cost or purchase price (the “tax basis”), plus any expenses incurred, from the final sale price.
Special rates apply for long-term capital gains on assets owned for over a year. The long-term capital gains tax rates are 15 percent, 20 percent and 28 percent (for certain special asset types, like small business stock collectibles), depending on your income.
Real estate, including residential real estate, counts as a taxable asset. Therefore, any financial gains from a home sale must be reported to the IRS: You calculate and pay any money due when filing your tax return for the year you sold the property.
While its rates are typically lower than ordinary income tax rates, the capital gains tax can still add up, especially on profits for big-ticket items like a home — the largest single asset many people will ever own. The capital gains tax on real estate directly ties into your property’s value and any increases in its value. If your home substantially appreciated after you bought it, and you realized that appreciation when you sold it, you could have a sizable, taxable gain.
How much is capital gains tax on a primary residence?
Calculating capital gains tax in real estate can be complex. The tax rate depends on several factors:
Your income tax bracket
Your marital status
How long you’ve owned the house
Whether the house was your primary residence, a secondary residence or an investment property
Star Alt
Keep in mind: The tax is only assessed on the profit itself. If you purchased a house five years ago for $250,000 and sold it today for $500,000, your profit would be $250,000. (Though there are deductions you could take that would effectively reduce your net profit.) You would need to report the home sale and potentially pay a capital gains tax on the $250,000 profit.
For the 2023 tax year, you are not subject to capital gains taxes if your taxable income is $44,625 or less ($89,250 if married and filing jointly). If it’s between $44,626 and $492,300 as a single filer, or between $89,251 and $553,850 if married and filing jointly, you would pay 15 percent on the $250,000 profit. Above those top amounts, the capital gains rate would be 20 percent.
However, the IRS gives home sellers multiple ways to avoid or reduce their capital gains taxes, principally if their property is a primary residence. You can exempt a certain amount of the profit — up to $250,000 or $500,000, depending on your filing status — from the tax if you meet certain conditions.
An ill-timed sale could result in a significant tax bill that could have otherwise been avoided.
— Greg McBride, Bankrate Chief Financial Analyst
“Before selling your home, familiarize yourself with the capital gains tax exclusion rules and consult a tax advisor,” says Greg McBride, Bankrate’s chief financial analyst. “An ill-timed sale could result in a significant tax bill that could have otherwise been avoided. If the property has been your primary residence for less than 24 months, for example, you may decide to hold off until you’ve reached that threshold to avoid capital gains tax.”
If you sell a house or property in one year or less after owning it, the short-term capital gains is taxed as ordinary income, which could be as high as 37 percent. Long-term capital gains for properties you owned for over a year are taxed at 0 percent, 15 percent or 20 percent depending on your income tax bracket.
How much is capital gains tax on a rental property?
A rental property doesn’t have the same exclusions as a primary residence when it comes to capital gains taxes. You would have to pay a 25 percent depreciation recapture tax on the portion of your profit from previously claimed depreciation and 0, 15 or 20 percent in long-term capital gains taxes, depending on your income and filing status on the balance.
Suppose the property you bought for $250,000 and sold for $500,000 was a rental. If your profit included depreciation you claimed as a business expense, the IRS would levy a 25 percent depreciation recapture tax on that amount. Your profit balance would be taxed at a 0, 15 or 20 percent capital gains rate, depending on your income.
If you plan to sell a rental property you’ve owned for less than a year, try to stretch ownership out to at least 12 months, or your profit will be taxed as ordinary income. The IRS doesn’t have a ceiling for short-term capital gains taxes, and you may be hit with up to 37 percent tax.
How to avoid capital gains tax on a home sale
Capital gains taxes can greatly affect your bottom line. Fortunately, there are ways to reduce or avoid capital gains taxes on a home sale altogether. It depends on the property type and your filing status. The IRS offers a few scenarios to avoid capital gains taxes when selling your house.
Bankrate insight
When does capital gains tax not apply? If you have lived in a home as your primary residence for two out of the five years preceding the home’s sale, the IRS lets you exempt $250,000 in profit, or $500,000 if married and filing jointly, from capital gains taxes. The two years do not necessarily need to be consecutive. If you become disabled, receive a job offer in a new area or are forced to sell your home before you have lived there two years, you may qualify for an exception to the two-out-of-five rule.
Avoiding capital gains tax on your primary residence
You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years. But it can, in effect, render the capital gains tax moot.
Let’s say a single filer bought a home for $250,000, lived in it for three years, and then sold it for $400,000. Their profit is $150,000. But that’s exempt from any capital gains tax because it’s under the $250,000 threshold allowed for gains.
Of course, there are conditions. To qualify as your primary residence, the IRS requires that you prove the property was your main home where you lived most of the time. You’ll need to show that you owned the home for at least two years and lived in the property as your primary residence for at least two of the five years immediately preceding the sale.
However, there is wiggle room in how the rules are interpreted. You don’t have to show you lived in the home the entire time you owned it or even consecutively for two years. You could, for example, purchase the house, live in it for 12 months, rent it out for a few years and then move in to establish primary residency for another 12 months. As long as you lived in the property as your primary residence for 24 months within the five years before the home’s sale, you can qualify for the capital gains tax exemption. And if you’re married and filing jointly, only one spouse needs to meet this requirement.
Avoiding capital gains tax on a rental or additional property
If you own an additional property that you plan to sell, you will need to plan to lower your tax liability. There are several ways to mitigate any capital gains tax:
Establish the rental as primary residence
You might find that an investment property you rent out and plan to sell has spiked in value. Moving into the rental for at least two years to convert it into a primary residence to avoid capital gains may be a good idea. However, you won’t be able to exclude the portion you depreciated while renting the property. You’ll lose primary residency status on your main home, too, but that can be regained later by moving back in after the sale of the rental property. If you don’t plan to sell the main home for at least two years, you can re-establish primary residency and qualify for the capital gains exclusion later.
1031 exchange
You can also take advantage of a 1031 exchange. Known as a like-kind exchange, it only works if you sell the investment property and use the proceeds to buy another similar property. If you keep putting the sale proceeds into another investment property, you can put off capital gains tax indefinitely.
Opportunity zones
The 2017 Tax Cuts and Jobs Act created opportunity zones — areas around the country identified as economically disadvantaged. If you choose to invest in a designated low-income community, you’ll get a step up in tax basis (your original cost) after the first five years. And any gains after 10 years will be tax-free.
Deduct expenses
If you still have capital gains after taking advantage of exemptions and exclusions, focus on lowering the amount of the taxable profit or gains. Some qualifying deductions include:
The cost of repairs to a home or investment property
Improvements and upgrades, such as adding a bedroom or renovating a kitchen
Losses in investment property income due to tenants unable to pay rent
Cost of legal, professional and advertising fees to evict a tenant or find a new one
Closing costs from the property sale
Remember to keep organized records and documents, including receipts, bills, invoices and credit card statements, to support your expense claims in case you’re audited.
FAQs
How much is capital gains tax on real estate?
The capital gains tax rate on the sale of a primary residence can be as high as 20 percent of the profit on a home owned for more than a year, and as high as 37 percent on one owned for a year or less. If you own and live in the home for two out of the five years before the sale, you will likely be exempt from any capital gains taxes up to $250,000 in profit, or $500,000 if married and filing jointly.
Is there a way to avoid capital gains tax on the selling of a house?
You will avoid capital gains tax if your profit on the sale is less than $250,000 (for single filers) or $500,000 (if you’re married and filing jointly), provided it has been your primary residence for at least two of the past five years. For investment properties, capital gains taxes can be deferred with a Section 1031 like-kind exchange, in which you use the profit from the sale of one investment property to buy another of equal or greater value.
This article was originally published by a www.bankrate.com . Read the Original article here. .
A ‘For Sale’ sign is posted on the lawn in front of a home on March 15, 2024, in Miami, Fla. The National Association of Realtors announced that it had reached a nationwide $418 settlement of claims that the industry had conspired to keep agent commissions high.
Joe Raedle/Getty Images
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Joe Raedle/Getty Images
A ‘For Sale’ sign is posted on the lawn in front of a home on March 15, 2024, in Miami, Fla. The National Association of Realtors announced that it had reached a nationwide $418 settlement of claims that the industry had conspired to keep agent commissions high.
Joe Raedle/Getty Images
Big changes are coming to the way people buy and sell houses in the United States. The National Association of Realtors settled a lawsuit last week that could up-end the way real estate agents are paid, doing away with the traditional agent’s commission of 5-6%. That’s prompting a reckoning for buyers, sellers and real estate agents. Here are six things to know.
What if you already sold a house?
As part of the settlement, the National Association of Realtors agreed to pay $418 million over the next four years. That’s in addition to $210 million that various brokerage firms had already agreed to pay. Lawyers will get a chunk of that money, but the rest will go to people who sold their homes in recent years and paid what critics argue were inflated real estate commissions. Eligibility depends on where you live, but in some parts of the country, the settlement covers people who sold homes as much as a decade ago.
“We don’t know the exact number, but we estimate it to be in the neighborhood of 40 or 50 million” people, says Benjamin Brown, co-chair of the anti-trust practice at Cohen Milstein, one of the law firms involved in the class-action case.
To find out if they’re entitled to compensation, sellers can check the lawyers’ website: www.realestatecommissionlitigation.com.
How will this change real estate commissions ?
For decades, the norm in this country has been for the person selling a home to pay both her own agent and the buyer’s agent. What’s more, the buyer’s share of that commission had to be spelled out in order to advertise the home on the big regional listing sites. Realtors insist they never fixed those commissions, but as a practical matter, the public notice worked to set a standard — often in the neighborhood of 5 or 6%, split between the seller’s agent and the buyer’s agent.
For a home priced at $400,000 — which is close to the national average — that works out to $20,000 to $24,000 in commissions — much higher than people in other countries typically pay. In Germany, commissions average 4.5%. In the UK, they’re under 2%.
Starting in July, sellers will no longer have to spell out a commission for the buyer’s agent. Advocates say that should lead to more negotiation, more competition and ultimately lower costs.
What increased negotiations mean for buyers and sellers?
There’s going to be more opportunity to shop around, and likely a wider array of services, from deluxe agents who charge a premium price to discount agents with more limited services — similar to what exists in other markets like stock brokers and travel agents.
Sellers may be able to negotiate a flat fee to market their house, not connected to the selling price. Buyers may be able to purchase a la carte services — paying less if they do their own house-hunting on the Internet and more if they want to be chauffeured around to open houses.
Many sellers may decide not to pay the buyer’s agent, leaving buyers to shoulder that cost on their own, or go without an agent altogether.
Overall expenses are expected to be significantly lower, however. Economists at the Federal Reserve Bank of Richmond estimate the changes could save homebuyers $30 billion a year, with most of those savings coming out of the pockets of real estate agents.
Prospective home buyers leave a property for sale during an Open House in a neighborhood in Clarksburg, Md. on September 3, 2023. The new real estate commission structure could mean buyers have to pay more out-of-pocket fees starting in July.
Roberto Schmidt/AFP via Getty Images
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Roberto Schmidt/AFP via Getty Images
Prospective home buyers leave a property for sale during an Open House in a neighborhood in Clarksburg, Md. on September 3, 2023. The new real estate commission structure could mean buyers have to pay more out-of-pocket fees starting in July.
Roberto Schmidt/AFP via Getty Images
What does this mean for agents?
Agents are still sorting out what this might mean for their business. When fees are more negotiable, agents will have to make the case for what they’re worth. But the best agents feel like they do that already.
“Do I think that Realtors have to learn to do business in a different way? Absolutely,” says Kevin Wilson, president of the Greater Nashville Realtors. “But I also think this is a wrinkle in the landscape. Not a landmine.”
A drop in commissions might drive some agents into other lines of work, but that’s not necessarily a bad thing. The U.S. has 2.5 to 3 million real estate agents — which is far more than any other country, relative to the size of its housing market. For example, the U.S. has about six times more home sales each year than the U.K. does, but 26 times more agents.
“Do we see agents that work with buyers start to phase out of the business because they’re just not getting as many clients?” asks Jovani Ortiz, an agent on Long Island. “These are sort of the unknowns that most agents are looking at right now.”
While the commission pie is likely to shrink, it may be cut into fewer slices, so the remaining agents might end up making the same amount of money.
With home prices and mortgage rates already high, how will homebuyers pay for their own agents?
While sellers have traditionally paid buyers’ agents in the U.S. (and built that expense into the sales price of their home), many sellers may opt not to pay buyers’ agents in the future. In that case, buyers will have to pay their own agent out of pocket, on top of a down payment and other closing costs. Finding thousands of dollars to pay an agent could be a challenge, especially for first-time buyers, who typically have limited funds and also the greatest need for an agent’s guidance. First-time buyers accounted for just 26% of existing home sales in February — tying a record low.
“Many first time buyers are already at the absolute max of what they’re able to borrow,” says Vanessa Perry, a professor at George Washington University School of Business and a fellow at the Urban Institute’s Housing Policy Finance Center. “They’re not going to be able to come up with any additional cash to pay their own agent.”
Home sellers could still agree through negotiation to pay the buyer’s agent. But in a hot housing market, sellers may have little incentive to do so. Eventually, buyers may be able to fold the cost of their agent’s commission into their mortgage, stretching the payments out over the life of the loan. But that will require a change in mortgage underwriting rules. Over time, lower real estate commissions should lead to somewhat lower housing prices.
What should people who are thinking of buying or selling in the next six months do?
The settlement’s changes in commission rules take effect in July, just as many people will be shopping for homes ahead of a new school year. But it’s not clear how quickly the landscape will change. Buyers and sellers may want to talk with their agent about the costs and benefits of moving before the deadline or waiting until the new rules are in place. Remember, commissions account for $20,000 to $24,000 on a typical home. Still, that’s just one factor to consider when deciding when to buy or sell — along with interest rates, the supply of homes on the market and life circumstances like a new job or family member.
This article was originally published by a www.npr.org . Read the Original article here. .
AleksandarNakic/ Getty Images; Illustration by Austin Courregé/Bankrate
Key takeaways
Selling a home comes with a lot of documentation, most of which you’ll gather before listing the property on the market.
One important document is the seller net sheet, which will detail your all-in costs and potential profit.
Keep records of any major home improvements or repairs. This is not only helpful for the buyer, but also for your agent in pricing the home.
Selling a home is a complex process that requires a long list of documents from start to finish. From the initial listing agreement to mandatory disclosures, here are the key pieces of paperwork in the transaction.
Documents needed to sell a house
If you’re thinking of putting your home on the market, it can be helpful to understand the documents involved, some of which you can gather on your own and some of which will be provided by the professionals who facilitate the transaction. Here’s an overview of what you need to obtain, what you might see, and what you might need to sign during the transaction:
Pre-listing documents
Prior to listing your home for sale, track down the paperwork related to your ownership as well as any changes you made to the property while living there. This includes:
Documents related to your purchase of the home: This will include the closing documents and a copy of the deed.
Homeowners insurance policy documents: Keep a copy of your policy handy during the transaction, and be sure to maintain your coverage until the closing has taken place.
HOA documents: If your home is in a homeowners association, gather up any documents related to the HOA, such as CC&Rs or due schedules to disclose to the buyer. The title company involved in the transaction will order a review of these and information like the HOA’s financials, as well.
Major home improvement, maintenance and repair records: Aside from helping the buyer understand upkeep and any improvements to the home, these records can be used to more accurately price the home or dispute a low home appraisal.
Manuals and warranties: This isn’t a requirement to sell your home, but it’s customary for the seller to provide the buyer manuals for the home’s major appliances and systems, plus any warranty documentation if the seller has one.
Pre-listing inspection report: If you want to know what repairs a buyer might ask you to make, you can pay for a pre-listing home inspection. This report can help you prepare for these expenses, or even motivate you to make the repairs yourself before your home hits the market.
Listing agreement: If working with a real estate agent to sell your home, you’re required to sign a listing contract. Here’s more on exclusive right to sell agreements.
Comparative market analysis: “A licensed agent prepares a report of sold, pending and active listings in order to provide the seller with a sense of fair market value for their property,” says Tim Garrity, partner and broker of record at Copper Hill Real Estate in Philadelphia.
Seller net sheet: Sometimes referred to as the seller’s estimated costs, this document breaks down all of the costs associated with selling a home, as well as what the seller stands to profit when all is said and done. “It provides the seller with a sense of what they could potentially walk away with,” says Garrity.
Preliminary title check: Preliminary title searches help both the real estate agent and seller understand what’s owed on the property, as well as whether there are any issues impacting the title that could hold up the sale or reduce the home’s value. “Similar to CarFax for cars, a title search helps buyers and sellers understand more about a property before deciding to buy or sell,” says Garrity.
Seller’s disclosures: This mandatory disclosure form provides information to buyers about any significant issues or defects related to the home. The requirements surrounding such disclosures vary by state.
Mortgage payoff statement: The closing agent will request a mortgage payoff statement from your lender.
Listing documents
Once you list your home and receive offers, you’ll see the buyer’s proposed purchase agreement. This includes information regarding the method of payment (mortgage or cash), closing date and any contingencies, such as a financing or home inspection clause.
During this time, you’ll also receive the home appraisal report. If you had an appraisal done recently prior to listing, provide that documentation to the buyer, as well.
Closing documents
At the closing, you’ll work with the closing attorney or settlement agent to finalize the sale. You’ll see many documents, including an itemized closing statement of the closing costs and financials related to the deal, with any seller concessions you agreed to; the deed; and a proof of sale document.
FAQ
Do I need the original deed to sell my house?
Yes, you’ll need the deed to sell your home. But if you cannot locate this document, it’s possible to obtain a duplicate from your local recorder’s office.
What legal documents do I need to sell my house?
You’ll need a variety of documents in order to sell your home. Some of the most important include your mortgage loan documentation, mandatory disclosures and the deed.
What is a proof of sale document?
A proof of sale document is a record of the property’s transfer in ownership from the seller to the buyer.
This article was originally published by a www.bankrate.com . Read the Original article here. .
“Skylights are horizontal planes of glass that face the sky. Sunlight barrels through and can create unbearable, uncontrollable hot spots,” he says. “They don’t control the light, they don’t manipulate the light and they don’t filter or shape the light. Light monitors are a way of architecturally controlling the light.”
By making them north-facing, Finne ensured that they provide soft, easily controllable northern light. However, he rotated each monitor slightly toward the east. This created a more interesting pattern expressed by the ceiling beams, which follow the rotating positions of each light monitor. “If all the beams had been lined up parallel to one another, the design would have lost something,” Finne says.
Three of the five light monitors are operable. This allows them to vent out hot air as it rises. “Between the large sliding doors and the light monitors, this house stays nice and cool,” Finne says. “It doesn’t have air conditioning because it doesn’t need it.”