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Do you need to sell your home in Orlando before you can buy?
If so, you naturally need to know what a new home will cost and whether you’ll qualify for the payments. You don’t want to let go of your present home only find that you can’t purchase a new one! That said, you should do a little looking on line and speak with a mortgage lender before going any further. Looking on line will give you a good idea of pricing on homes of the size you need in the neighborhoods you want. You’ll likely see a wide range, because some of those homes will be in top condition and some won’t. Assume that the home you’ll choose will be at the high end of the range.
Speaking with a lender will tell you whether you’ll qualify for a purchase at that price. BUT – Don’t make the mistake of shopping for that new home just yet! Wait until you’ve listed your present Orlando home and have accepted an offer from a qualified buyer. Shopping for a new home before you have the ability to make a purchase can cost you money and lead to disappointment. Very few sellers will accept an offer contingent on the sale of a house that is not yet under contract. It just doesn’t make sense for them to take their house off the market on the chance that your house will sell and you’ll be able to close. Of course, a few will do it if you’re willing to put down a sizeable non-refundable earnest money deposit. Even if you do already have an offer on your current home, sellers are wise to be cautious and will perhaps counter with a “bump clause” allowing them to accept a different offer if you can’t close within the specified time frame. If by chance the seller does accept your offer, you’ll have put yourself in another difficult situation – that of needing to sell your present house quickly. That, in turn, means you’ll be more likely to accept a low offer just to get it done. The need to hurry could cost you thousands of dollars.
So what else will happen if you shop too soon? The worst case: You’ll find “the perfect house” and you won’t be able to buy it. And after that, no other house will measure up. Even if you find a different home that in reality is a better fit for you and yours, you’ll always think the other one would have been better.
My advice: Exercise patience. First, list your home at its current market value. Then do all you can to make it attractive, appealing, and accessible to qualified buyers and their agents. Then negotiate reasonably and get that home under contract. Once your house is under contract with a solid buyer, start shopping for your new Orlando home.
One more reason to buy a home… Cheaper to buy a home than rent! When the real estate bubble burst, millions of Americans, many right here in Central Florida, found themselves out of their homes, but still needing a roof over their heads. They became renters. And then, in perfect accord with the laws of supply and demand, rents began to rise. Now as many as 3 million former homeowners are expected to rebound and become homeowners again within the next five years. In the meantime, investment property owners in many areas can almost name their rental rates – so they do.
You may have heard that homes offered “For sale by owner” sell for 13% less than homes listed with a real estate brokerage. For years we’ve heard that it was simply a difference in the value of the homes. The feeling was that people with lower priced homes were more likely to want to save the cost of the commission.
Recent research from the National Association of Realtors suggests different reasons. First and probably most significant is that homes listed with agents get extensive Internet coverage while “for sale by owner” homes get little to none. With 92% of home buyers now searching on line, those homes are simply “not seen” by the majority of home buyers and are not given the benefit of marketplace competition. Research shows that 44% of homes sold by owner are sold to people already acquainted with the seller. Does that make the seller less likely to press for market value? Or is it because those sellers don’t have access to the latest sales figures and thus don’t KNOW the market value?
The unfortunate thing about this kind of research is that it doesn’t answer all of the questions. Only about 15% are sold to people who approached the seller directly. The rest went to buyers who were represented by an agent – very likely an agent who is well-practiced and skilled in negotiating with sellers. That may be another reason why unrepresented homeowners sell for less. The real estate commission on a sale of a home is usually between 5% and 7%. The average “loss” to a homeowner for selling without an agent is 13%. Of course averages are just averages. Some homeowners do save some or all of that 5 to 7%. Others lose far more than the 6 to 8% difference between the commission and the reduction in price.
Of course, the ultimate selling price is only part of what homeowners need to consider before making the decision to hire an agent or go it alone. The other factor is the work involved. Without an agent, sellers have to do their part in keeping the house ready to show; then they have to do the agent’s part in showing, advertising, negotiating, and monitoring the details of a transaction.
Which path is right for you as you ponder the sale of your Central Florida home? It’s a question that deserves careful consideration.
Declutter, paint and plant your way to that ‘sold’ sign. Spring is almost here, and soon it will be home-selling season. Some economists expect 2015 to be a good one for home sales because mortgage interest rates will continue to hover at near historic lows, the overall economy is heating up and there’s a lot of pent-up demand.
It’s getting more expensive to buy a house. Prices rose 6% in the fourth quarter of 2014 as buyers competed for fewer and fewer available homes for sale, according to new data from the National Association of REALTORS®.