Seller and Buyer FAQ's
Buyer and Seller
Q: What should I know about working with agents?
A: An Asheville agent/Realtor® has different duties to buyers, sellers or both. In some real estate transactions the agent works for the seller. In others, the seller and the buyer may each have agents. And sometimes the same agents work for both the buyer and seller. It is important to know if an agent is working for you as your agent or simply working with you while acting as an agent of the other party. This is quite common when an agent takes out a buyer without any agency agreement. Please view and familiarize yourself with the "Working With Agents Brochure", this explains all of the different agency relationships.
Q: How is a home's value determined?
A: A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and most agents will offer a free market analyses. You also can find comparable sales information available on public records. An appraisal is a professional estimate of a property's market value, based on recent sales of comparable properties, usually within the last 6 months. This service varies in cost depending on the size/price of the home. The lender will require an appraisal.
Q: How do property taxes work?
A: Property taxes are taxes assessed on a property by the County/Local Authority in the Asheville MSD area. They vary in cost due to area, in city or county, home value etc...
Q: What is the difference between market value and appraised value?
A: A comparative market analysis is an informal estimate of market value performed by a real estate agent based on mainly similar sales, but also look at active homes, withdrawn/expired homes, days on market of comparable properties. Most agents will perform a free market analyses for you. You also can find comparable sales information yourself through public records. An appraisal is a professional estimate of a property's market value performed by a licensed appraiser and it is based on recent sales of comparable properties, usually within the last 6 months. This service varies in cost depending on the size/price of the home. The lender will require an appraisal.
Q: What is a house really worth?
A: It's determined on other recent comparable sales with a few adjustments made. Mainly a home is worth what a buyer is willing to pay for it.
Q: How is the asking price set?
A: You can order an appraisal from an appraiser and/or have your agent give you a comparative market analysis. If not sold soon your pricing must be updated frequently to reflect market change. The market is changing daily and you need to keep up with this.
Q: What does it mean when it states Sold As-Is?
A; In some cases properties are offered and sold As -Is which means you can perform your home inspection to make sure the house is sound and for you to find out what repairs are needed. Under As-Is the seller is not obligated to make any repairs and it is not for negotiation.
Q: Why do some sellers only offer Sold As-Is?
A: There could be many reasons; seller is out of town does not want to hassle with it, property is being offered at a very low price, under foreclosure, seller does not have the funds to perform any repairs etc...
Q: How do I know what's wrong with the house, is there a disclosure?
A: Yes, the seller will supply a disclosure. The disclosure has a list of items for the seller to answer about the house. On the disclosure the seller is asked, do you know of any problems (with each of the topics outlined). The seller has the option to check one of three items for each topic; the seller has the option to check number 1. No, number 2. No representation or number 3. Yes, and then give a statement pertaining to a yes answer. Your Realtor needs to show you an actual copy of the SAellers Property Disclosure Statement.
Q: How much are my closing costs?
A: Closing costs can be a combination of loan fees, property taxes, escrows, attorney fees etc... Contact your lender for a good faith estimate and your real estate agent for all other closing costs.
Q: What kind of home insurance should I get?
A: You need to have homeowners/hazard insurance and you may require additional coverage, for example if your home is located in a flood zone, contact your insurance agent to discuss your property.
Q:How do you choose between buying and renting?
A: You way up the benefits of owning versus renting; owning a home can build equity for you and therefore is considered an investment. You can also write off the interest that you pay on your mortgage. You have the freedom to fix up, paint, landscape your home etc... As property prices increase over time you will be building up more equity in your home. Yes, you have to perform/pay for the maintenance and upkeep. With renting; you are paying someone else’s mortgage, the landlord is reaping the benefits of price increase and equity. The only benefit is that you don't have to maintain the home but you also get no financial reward.
Q: What's the differnce between a condo and a townhouse?
A: Condo unit owners own the inside of their units. Townhouse owners own the complete unit, including exterior surfaces and the land on which the unit is built. Every condo or townhouse development also has “common areas” of the property (recreation areas, sidewalks, parking lots, etc.). Read more on condominiums and townhomes.
Q: What's the deal with Earnest Money?
A: Earnest Money usually accompanies an offer; it is basically a good faith deposit. It shows the seller that you are interested in the property and that you are willing to put a little money down with your offer to show this. There is no law that says you have to put any earnest money down. The amount you put down is up to you, for example you might put down 1% of the offer price. The earnest money will be credited to your purchase at closing. The only way you really risk losing your earnest money is if you breach the contract. The earnest money does not go directly to the seller, it is normally held in the Asheville real estate companies trust account or in an Attorneys trust account. Both parties to the real estate transaction have to agree in writing to the release of the earnest money should the deal not go through. Read more on earnest money deposits.
Q: I'm a buyer what is my first step?
A: Your first step is to get pre-qualified by a lender of your choice. By getting pre-qualified you will know how much house you can afford and the lender can also give you a good faith estimate of closing costs. Once you have this you can then meet with an agent to discuss agency realationship (Working With Agents). You can also explore the internet and get a feel for what style, size and location you would like etc... Then you can contact an agent to help you find a home and help you with presenting an offer, contract, inspection of the home and closing procedure, see also Buying a Home.
Q: My lender set me up on an impound account, what is this?
Q: What is a lease with option to purchase?
A: When a tenant signs a lease with the option to purchase, they usually put down an agreeable deposit and all agree on a sales price and a time frame in which the tenant must purchase. This option is most popular with buyers who might not have enough for a down payment, closing costs, need more employment time to satisfy the lender etc...
Q: What are some tips on buyer negotiation?
A: For the buyer; it helps to have a prequalification letter presented with the offer and it also helps to have a decent good faith or earnest money deposit. This shows the seller that you are a serious and qualified buyer. It helps that the buyer be familiar with recent sales of comparable homes, to know what's on the market and how many days the subject property and other comparable properties have been on the market, to know the sellers motivation in selling the home. The more you know about the market and the seller's motivation, the stronger a negotiating position you are in.
Q: Can I put in a low offer?
A: Yes, you can put in what ever offer you would like.
Q: Do you recommend putting in a low offer?
A: It works on a case by case basis, meaning that if you are in a hot market and the property is at current market value then a low offer will probably not even be considered or countered and you might have just lost all credibility with the seller for any future come backs. If on the other hand you are in a down market or buyers market and the asking price is too high for the market then yes I would put in a lower offer. Your Realtor® will have to guide you with comparables and educate you on each home prior to you putting in an offer. This way you can make an educated decision before putting in the offer.
Q: Will the seller make any repairs if needed?
A: The seller has the option to make all repairs that are requested (per the repair agreement) by the buyer, some of the repairs, none of the repairs or even possibly offer to pay money to the buyer in lieu of seller doing the repairs, it is all negotiable. On the other hand the buyer has the option not continue on with the contract (if the buyer is still in his/her due diligence period) if the buyer and seller can't come to terms with the repair agreement. The purchase price that the buyer has offered usually (but not necessarily) dictates what the seller will repair. If the purchase price is real low the seller might feel reluctant (and might not have the money) to now spend a lot of money on repairs.
Q: Should I have a home inspection done prior to putting my home on the market?
A: Yes, I definitely recommend this and the reasons are; it makes the seller aware of problems or potential problems prior to placing it on the market "no surprises" and allows the seller to fix any problems, it can really make the real estate transaction go smoother/through. Nothing is worse than going through the offer, contract and buyers home inspection process to find out that the buyer wants out due to home inspection issues with the house. Depending on the language in the contract the buyer can walk and if this happens all parties have wasted a lot of time, market time and stress and now were back to the drawing board. This could have probably been prevented if the seller had a home inspection and fixed any issues prior to placing the property on the market. This way when the buyer performed their home inspection these issues would have already been addressed. Chances are if the seller does not get them addressed the next potential purchaser will probably find the same issues. To give you an idea in this area, a home inspection runs around $500.00, radon test runs around $120.00, water test for bacteria around $100.00, and there are plenty of other tests that can be performed. Please view more information on home inspections and you can also view a list of home inspectors that work in this area.
Q: I feel my property taxes are too high; can I appeal my property taxes?
A: Yes, but there is a time frame from when you receive your new assessment, contact your local tax assessor's office to discuss.
Q: Do sellers have to disclose other offers?
A: No, according to real estate experts.
Q: Can a home seller sell a home for less than the mortgage owing?
A: This is called a SHORT SALE. This is up to the lenders involved, they will take many things into consideration such as how long you have been delinquent, what kind of real estate market Asheville is currently in etc.. If you are behind on your mortgage payments and cannot get caught up, I would suggest contacting your lender and discussing the whole situation. Your lender will tell you what options you have.
Q: When does foreclosure begin?
A: It normally starts when you are three or more mortgage payments behind. The lender will then notify the purchaser that he or she is in default and foreclosure procedure is in process. Always contact your lender to see if anything else can be worked out or if you have any other options.
Q: Should I add on or buy a larger home?
A: If you are happy where you are then I would look into adding on to your current home. The next step will be to weigh up what it would cost to add on versus what it would cost to purchase a larger home. No matter which way you go, you will need to do some homework to see which way makes more financial sense. If adding on you will need to consider financing, equity in home, do you have a large enough lot, will your foundation support a second story? Obtaining the required approval to add on etc...
Q: How do I prepare my home for sale?
A: The first thing to do for the interior is to de-clutter your house, new paint where needed, clean or new carpet, organize over stuffed closets, and clean it spotless (see selling your home). I know this is a lot of trouble and you say to yourself "I don't even do this for my own family". Well, there's a new family moving in (with a little luck) and they will make a decision to buy your house or the one down the street. If they are similar in style and price they will start negotiating on the clean house and hopefully that will be yours. Most of the homes on the market today are in showroom condition. Once you think it is completed have an outside person/friend or your Realtor® take a look and see what they think. Sometimes we get so used to our own homes that we don't see all the cosmetic defects! For the exterior landscaping; mow, edge, weed, trim shrubs and re-mulch your flower beds. Make sure the exterior of the home is in good shape, repaint if necessary.
Q: How does someone sell a slow mover?
A: The reason you have a slow mover could be a variety of things but it usually starts with the asking price, condition of the property and location. What is usually the case (but not necessarily) is the seller owes too much on the home and is forced to put it on the market for a higher price (or the seller just thinks their house is worth a lot more) than the market bears. Number one, it has to be marketed at a market related price and the house and property have to be clean and in good condition or you won't move your property, unless you offer it at a large discount. If you have a good Realtor®, your property is fair market priced and in clean and good condition then more than likely you won't have a slow mover.
Q: How does a home go into foreclosure?
A: Proceedings usually start when a borrower has neglected to make three or more mortgage payments to the lender. The lender then records a "Notice of Default", and unless the debt is paid in full the lender will foreclose.
Q: When is the best time to sell your house?
A: The most activity in the our area is spring and summer, there are more buyers out there looking during this season. The buyers have a lot of inventory to pick from which means there is more competition amongst thesellers to lower prices and offer incentives like home warranties to attract these buyers. On the other hand during our slower season of fall and winter there are fewer buyers but there are also fewer sellers which could mean less competition amongst the sellers to reduce prices, offer incentives etc.. In a nut shell; if you need to sell your property no matter what time of year it is, put it on the market for a fair market price, make sure it is in showroom condition and get the process going. If you don't have to sell your property then you should probably hang on to it until the market is humming and you can get a great price for it. It all depends on each owners circumstances.