Real Estate FAQ

Selling Your Home

How do I figure out the value of my home?

There are a few ways to determine the value of a home.

A property appraisal is one way. It is a professional estimate of a property's market value. It is based on recent home sales comparable to yours, as well as location, square footage and construction quality. Appraisal cost varies depending on the price of your home.

A comparative market analysis (CMA) is an informal estimate done by a real estate agent based on similar sales and property attributes.

You can also get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.

How do I prepare my house to sell?

If you can afford it, take care of any major repairs that could prevent a buyer from buying your house such as replacing broken windows, patching up holes in walls, applying fresh paint, replacing worn out screen doors, etc. Next, work on your home's curb appeal. Make sure your landscape is presentable. Mow the grass. Plant a few flowers near the entrance or in pots to be placed by the door.

Other quick fixes that does not cost a lot of money:

  • clean windows
  • doorbell works
  • clean and freshen up rooms, furnishings, floors, walls and ceilings.
  • bathrooms and kitchens are spotless
  • organize closets
  • fix leaky faucets
  • organize frazzled cords
  • eliminate bad smells (ex. kitty litter box)
  • place vases of fresh flowers around the house

Am I obligated to disclose pertinent information about my property?

You and your agent are required to disclose all facts materially affecting the value or desirability of the property which are known or accessible only to you. This might include: homeowners association dues; whether or not work done on the house meets local building codes and permits requirements; the presence of any neighborhood nuisances or noises which a prospective buyer might not notice, such as a dog that barks every night or poor TV reception; any death within three years on the property; and any restrictions on the use of the property, such as zoning ordinances or association rules.. It is wise to check your state's disclosure rules prior to a home purchase.

Will a problematic neighbor reduce the value of my property?

While it may not reduce the actual value of your home, a cluttered landscape next door can detract from the positive aspects of your home. Review your local laws, which should be on file at the public library, county law library or City Hall. It may also be worthwhile to check into local zoning ordinances.

What is the difference between a list price and a sales price?

The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sold for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced under market conditions.

If you are a seller, you may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.

Can I deduct the loss I suffered when I sold my home?

The Internal Revenue Service does not allow deductions for losses on the sale of your own home.

 

Buying Your Home

How do you choose between buying and renting?

Home ownership offers tax benefits as well as the freedom to make decisions about your home. Of course, you are also responsible for maintenance and other financial obligations that come with owning a property. An advantage of renting is not worrying about these things.

Another advantage of home ownership is economic considerations. Unlike renters, home owners who secure a fixed-rate loan can lock in their monthly housing costs and make investment plans knowing these expenses will not increase substantially.

Home ownership is a highly leveraged investment that can yield sizeable profit on a nominal front-end investment. However, such returns depend on home-price appreciation.

As first-time homebuyers, should we dig deep into our pockets and buy a dream home or settle for a starter home?

Start by examining your priorities and asking the following questions:

  • Which is most important to you, the surrounding neighborhood and what it has to offer or the home itself?
  • Is the neighborhood safe?
  • Do any of the areas seem to attract more families with children or adult residents? And where do you fit in?
  • If you have kids or planning on having kids, are school proximity and/or quality important to you?

As for the return on your investment, home-price appreciation is hard to predict. In the late 1980s, and again 10 years later, the more expensive move-up housing appreciated wildly; however, during the recession that followed, smaller homes tended to hold their value better than more expensive ones.

How do I get the real scoop on homes I am looking at?

Home inspections, seller disclosure requirements and the agent's experience will help.

Below is a list of some things you could expect to see in a disclosure form:

  • Kitchen inclusions - a range, oven, microwave, dishwasher, garbage disposal, trash compactor.
  • Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom.
  • The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters.
  • Amenities such as a pool or spa, patio or deck, built-in barbeque and fireplaces.
  • Type of heating or cooling appliances, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels.
  • The type of water heater, water supply, sewer system or septic tank also should be disclosed.
  • Any significant defects or malfunctions existing in the home's major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.
  • Any presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property.
  • Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.
  • People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions.

Do I need a home inspection?

You don’t “need” a home inspection, but it is highly advisable. Buying a home "as is" is a risky recommendation. Major repairs on homes can amount to thousands of dollars. Plumbing, electrical and roof problems represent significant and complex systems that are expensive to fix.

How do property taxes work?

Property taxes are what most homeowners in the United States pay for the privilege of owning a piece of real estate. Rates vary across the states, between about 0.2% and 4% of the home value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of formulas.

Are property taxes deductible?

Yes. Property taxes on all real estate are deductible against current income taxes.

Do I have to pay a REALTOR® to help me buy a home?

No, there is no agent fee to buyers. REALTORS® get paid from the proceeds of the sale at closing when you buy a home.

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