• Name and Social Security number of each applicant
• Current address
• Phone number where you can be reached
• Monthly salary and sources of income (include child support or alimony received)
• Information on length of employment, and employer address and phone number

MORTGAGES

1. What is a mortgage, and what are the benefits of different kinds of mortgages?Simply put, a mortgage is a loan that a homebuyer obtains directly from a lender to purchase real estate. The mortgage is a lien on the property that secures a promissory note (promise to repay the debt) that states the terms of the loan, including the interest rate and the number of payments.The most popular mortgages available to home buyers today can be divided into two general categories: those that offer fixed interest rates and monthly payments, and those in which one or both of those factors are adjustable.

   Fixed-rate/fixed-payment loans are more traditional and remain the most popular home financing method, currently accounting for about two-thirds of all residential mortgages. Their advantages are well-known: you always know what your monthly principal and interest payment will be, so your basic housing cost will remain unaffected by interest-rate changes until the mortgage is paid off.

   Mortgages that entail flexible rates and/or payments have grown in popularity in recent years, primarily during periods of high interest rates and/or rapidly rising home prices. Many, including the popular ARMs offer lower-than- market initial interest rates that allow buyers a measure of affordability unavailable in fixed-rate loans. The tradeoff may be higher interest rates and higher monthly payments later on.

   The “Mortgages at a Glance” table provides a brief synopsis of some of today’s most popular mortgages, their benefits and drawbacks. To find out about any one of them, talk to your ERA® real estate professional. He or she can put you in touch with a representative from ERA Mortgage, the preferred lender for ERA nationwide.

    

2. What are the different types of lenders, and how do I choose the right one for me?Before someone lends you the money to purchase your home, they’ll want to know a lot about you. And you’re entitled to know as much as you can about them too.It’s important because getting a mortgage is not just a one-time signing of documents, a handshake and a check. You will be depending on your lender to fund the loan as promised, on time, and over the life of the loan; to keep good payment records, pay your taxes and insurance (if included in your monthly payment); and to perform many other continuing services. As the preferred lender for ERA Real Estate, ERA Mortgage provides all such services.Talk to your ERA® real estate professional about the lenders you have in mind. Experienced sales professionals are quite familiar with mortgage lenders and can give you sound advice about a lender’s reputation, its qualifying procedures, and the unique programs and benefits it offers home buyers.

    

1. Can I get an FHA or VA mortgage?Just about anyone can apply for an FHA-insured mortgage through banks and other lending institutions. They are particularly well-suited for buyers of moderate income; the low down payment requirements (as low as five percent of the purchase price) are matched by a relatively low maximum mortgage amount.Similarly, VA-guaranteed loans often require no down payment for up to four times the amount guaranteed by the VA. These loans are reserved for either active military personnel or veterans, or spouses of veterans who died of service-related injuries.

   If there is a downside to these loans, it’s the qualifying process. Though you apply for government-insured financing through a lending institution, the Federal Housing Administration or the Department of Veterans Affairs must insure or guarantee the loan and may require specific documentation or procedures not necessarily required for conventional financing. That may take more time than is generally required for conventional mortgage approval. Additionally, FHA-required insurance must be added to your payment.

   As the preferred lender for ERA Real Estate, ERA Mortgage has been delegated authority by each of these agencies to ensure a quicker loan process.

   Return to Top

   DOWN PAYMENTS & AFFORDABILITY

2. How much of a down payment will I need to buy a home?The amount of money that a buyer must put down at closing depends on the loan-to-value ratio — the percentage of the property’s appraised value or sales price (whichever is less) that a lender is willing to loan.For example, if a property is appraised at $100,000 and the loan-to-value ratio is 90 percent, the lender would be willing to loan $90,000. The buyer’s down payment is the remaining $10,000. Because the loan-to-value is a percentage, the higher the sales price of a house, the higher the down payment.A down payment of 20 percent has been the benchmark for conventional financing, but today, many options are available, some requiring as little as five percent down. A representative from ERA Mortgage can help you determine which down payment option is right for you and your budget. Contact ERA Mortgage for more information about their services.

    

3. How does a lender determine the maximum mortgage I can afford?The three primary areas lenders examine in determining the size of mortgage you can handle include your monthly income; non-housing expenses; and cash available for down payment, moving expenses and closing costs.The most common way lenders interpret these variables to estimate your mortgage capacity is the Percentage Method. Most lenders feel a family should spend no more than 28 percent of its income on housing costs, including the mortgage, insurance, and real estate taxes. In addition, these housing costs plus your long-term debts (car loans, child support, minimum credit card payments, student loans, etc.) shouldn’t exceed 36 percent of your income. Some mortgage companies, including ERA Mortgage, have relaxed ratios to help you purchase the home of your dreams.Although it is not a standardized method, you can also use the Multiplier Method formula as a general rule of thumb to determine how much home you can afford. Most lenders’ guidelines allow a family to carry a mortgage that is two to three times its gross annual income (income before taxes and expenses are taken out). The amount of down payment and the type of mortgage (fixed or variable rate) will determine the precise ratio used by the lender.

   To get an idea of how much home you can afford, use the Sample Housing Cost Worksheet, or contact ERA Mortgage to receive a free pre-qualification in minutes.

   THE LOAN PROCESS

1. For buyers who qualify for conventional financing, but can’t handle the high down payment requirements, ERA Mortgage may still offer this financing with PMI, or private mortgage insurance.
2. Designed to protect the lender against default by the borrower, PMI allows you to obtain traditional financing with a down payment significantly lower than the standard 20 percent. By using PMI, you may be able to get a fixed-rate or adjustable-rate mortgage by putting as little as five percent down.
3. As with an FHA-insured loan, you must pay premiums for PMI coverage, the amount being determined by the type and amount of your loan. But unlike FHA financing, the maximum loan amount is determined by the lender. Moreover, PMI premiums are often lower than FHA insurance, and may be paid as part of your monthly mortgage payment, in annual installments, or in a lump sum at the time you obtain the loan.
4. If you’d like to find out more about the unique advantages of PMI, ask your ERA real estate professional to put you in touch with ERA Mortgage.
5. CLOSING COSTS

1. POINTS
3. What are points, and what’s the point in paying them?In real estate, the term “point” refers to one percent of the total mortgage loan amount. Buyers often pay lenders a supplemental fee, calculated in points, to get a better interest rate on a particular mortgage.For instance, a lender may offer you a choice of two 30-year mortgages: the first at eight percent with no points, and the second at 7.5 percent with an additional three points. If the loan is for $100,000, those three points will cost you an extra $3,000 up front — but you’ll get a payback of significantly lower monthly payments for the lifetime of the loan.Many lenders will advise you to pay the points for the better rate if you can afford it, especially if you plan on keeping the home for more than a few years. Like interest, the money you pay for points may be tax-deductible, and the investment may pay for itself through savings generated by lower monthly payments. We suggest you call your tax preparer.

   GOVERNMENT REGULATIONS

    

4. Is the lending process regulated by the government?Most definitely. There are many laws and government regulations that all lenders must follow to ensure that all applicants are given fair and equal treatment. For example, in 1968, Congress passed the Truth in Lending Law, which requires that lenders provide borrowers with information about a loan’s true interest rate. By law, lenders must reveal a loan’s annual percentage rate (APR).The law also stipulates that for refinancing and second mortgage loans, the borrower has up to three days after closing to change his or her mind and call the deal off. The lender may not disburse money until after this three-day “recession period” has passed.MORTGAGE PAYMENTS

   What is APR and how is it calculated?

   The annual percentage rate (APR) is a calculated rate of interest for a loan over its projected life. This rate includes the interest, all points (which are considered prepaid interest), Mortgage insurance, and other charges associated with making the loan that the lender collects from the borrower.

   The APR is calculated by a standard formula that all lenders use. This enables the borrower to comparison-shop between lenders and/or loan products.

   What is a good-faith estimate?

   Your lender or loan agent must provide you with a good-faith estimate within three days of your application. This is the information you need to make a fair and accurate judgment when shopping for a loan.

   Your estimate is a written document that shows all the costs that can be estimated in advance by the lender. You need this information so there are no surprises on the day you close your sale on the property to be purchased. You will be expected to pay closing costs.

    

5. What does my monthly mortgage payment include?The bulk of your monthly mortgage payment goes toward paying off the principal and interest of your loan. In addition, most lenders require that you pay a sufficient amount to cover your local real estate tax, plus your homeowner’s or hazard insurance. This amount is placed in an escrow account, from which your lender then pays your tax and insurance bills as they come due. 
6. Can I pay off my loan early?If you can afford it, and are interested in the considerable advantages of having more equity and/or owning your home free-and-clear at the earliest possible date, the answer in most cases is yes. Earlier in this section, “How to Pay off a 30-Year Mortgage in 15 Years Without Really Feeling It” — outlines a popular formula for pre-payment.The FHA, VA, and even some states do not allow lenders to charge penalties for paying mortgages early or refinancing. In fact, many lenders now include space on monthly statements for borrowers to itemize an additional principal payment they wish to include with their regular payment.If you’re unsure about the rules governing pre-payment, review your loan agreement.

    

1. Do adjustable-rate mortgages offer any protection against rising rates?Yes. ARMs and other variable-rate-of-payment plans offer lower-than-market interest rates initially, but because they are tied to the interest rates of U.S. Treasury Bills or other indexes, interest rates later in the loan term may rise. However, many such loans offer built-in safeguards designed to minimize the effect of any rapid escalation in interest rates.One such safeguard is the rate cap. Many ARMs include provisions for the maximum amount your rate can rise, both annually and over the life of the loan. For example, if your initial rate is 6.5 percent, the loan may include one-percent annual and five-percent lifetime caps…which means even if rates rise dramatically, you’ll pay no more than 7.5 percent next year, 8.5 percent the following year and so on, until a maximum rate of 11.5 percent is reached.

   An ARM may also allow your rate to decrease when the index it is tied to goes down. As you might expect, decreases are usually capped as well.

   A second protective device included in some ARMs is the payment cap. Under this provision, your monthly payments may rise by only a set dollar amount. The potential disadvantage of this type of cap is that it can slow or even reverse your equity build-up. If rates rise dramatically, you could actually wind up owing more principal at the end of the year than you did at the beginning.

   Of course, ARM holders can also consider refinancing to a fixed-rate loan after a few years. Some ARMs even include a provision for converting to a fixed-rate loan after a set period of time.

    

2. What can I do if I have a fixed-rate loan and interest rates go down?When interest rates drop significantly as they have in recent times, the homeowner should investigate the financial advantages of refinancing. Essentially, this means taking out a new loan to pay off your existing loan.Refinancing may require paying many of the same fees paid at the original closing, plus origination fees. Most mortgage experts agree that if you can get a rate two percent less than your existing loan, and you plan on staying in your home for at least 18 months more, refinancing is a good investment. 

WORKING WITH A PROFESSIONAL 

1. What are the advantages of using a real estate professional to help me buy a home?Buying a home is certainly one of the most rewarding experiences most of us ever have; it’s also one of the most challenging. If you’re buying for the first time, the process may seem overwhelming. And even if you’ve been through it several times, every move is different and presents new challenges.One clear advantage of enlisting the help of a sales professional is simply that you don’t have to go through it alone. A good sales professional has the background and skills to help you through each step of the process, and make the experience of finding, buying and moving into your new home as smooth, quick and enjoyable as it can be. Another advantage is that a sales professional represents a valuable source of information about market trends; communities and neighborhoods; and especially homes for sale throughout the area. Remember, not every home seller runs an ad in the local paper or puts a sign up in the yard. In fact, many homes actually sell before there is ever a need to advertise them. The market expertise a sales professional offers you is augmented by access to complete, regularly updated information about every home listed by area sales professionals through the Multiple Listing Service (MLS). As you’ll see in the following questions, such professional expertise and services can be of considerable help throughout the buying process.

   Return to Top

   STARTING THE BUYING PROCESS

    

2. Where do I begin the process of looking for a home?The first thing you should do is to begin focusing on what you’re looking for in a home. You can start by establishing priorities in the following three areas:Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood?Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens of styles, sizes, and settings.

   Budget: How much home can you comfortably afford?

   As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what’s available. Read the real estate listings in the newspaper to learn about current prices in the areas you’re considering. Talk to friends about the features that you’d really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.

   Then sit down and consider carefully all the things you’re looking for in a home. The Homebuyer’s Wish List worksheet later in this section is a good starting point. When you’ve filled it out, you’ll begin to get a good idea of what you’d like your dream home to be.

    

3. How do I find the right sales professional to work with?The key word here is “right.” While there’s certainly no shortage of qualified sales professionals to choose from, it’s important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect.Today’s buyers also have more choices when it comes to choosing the sales professional who can best represent them in a real estate transaction. Until recent years, virtually all real estate professionals involved in a given transaction worked for the seller. However, a growing number of today’s home buyers are choosing to be represented by a ” buyer’s agent,” who represents the buyer in contrast to the traditional seller/sales professional relationship.Many real estate companies throughout the United States have both buyer and seller agencies. A sales professional should present you with a disclosure statement before any working relationship is created. That statement should explain what a buyer’s agent is and does, what a seller’s agent is and does, and what dual agency means. It is very important to remember that real estate firms are governed by laws that can vary by state. Disclosure laws also vary by state.

   Here are a few guidelines about the kind of service and experience you should be looking for. Plus review the top Six Reasons to Choose an ERA Professional.

    

4. How do I know how much home I can afford?We’ve found that affordability is probably the single biggest concern of today’s first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it’s not surprising that many young families wonder how long it will take them to afford their first home.Our advice: Don’t sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will help find an option that fits your budget, and you may be surprised at just how much home you can afford.For tips on various mortgages and more, see the “Financing” section of this book.

   Return to Top

   RENTING VS. BUYING

    

1. What should I think about when I’m deciding which community I want to live in?Good city services, nice parks and playground facilities, convenient shopping and transportation, a track record of sound development and good planning — these are just a few considerations that are important to many people when they choose a community in which to live.As for individual neighborhoods within a village or city, there is no better source of information than your real estate professional. Sales professionals know the people and the communities they serve, and chances are they can help you find a neighborhood that really fits your family’s needs.

    

2. Where can I get information about local schools?Again, a good real estate professional is perhaps your best source. They know where the local schools are and can provide you with valuable information about school districts, including test scores, extracurricular activities, bus service and more. If you’re relocating, a sales professional may even be able to put you in touch with teachers and principals when you visit the area. And if you want to do a little searching on your own, the Internet may also be a good place to start. ERA.com has a special link to neighborhood information, including information about area school districts. 
3. How can I find out what homes are selling for in a given neighborhood?In most areas, home sales are a matter of public record — you can get all the information you want about recent sales, including prices and listing times, by calling the county Recorder of Deeds.An easier way is to ask your real estate professional. If you’re interested in a particular home, a sales professional may be able to provide you with a list of comparables — sale prices of homes in your area that are roughly the same size and age as the home you’re considering. Although there will certainly be some differences between the homes — the house next door may have an extra bedroom, or the one down the block may be older than the one you’re looking at — it’s a good basis for evaluating the seller’s asking price.Return to Top

   PROPERTY TAXES

    

4. How can I find out what my property tax bill will be?Usually, the total amount of the previous year’s property taxes is included on the listing information sheet for the home you’re interested in. If not, ask to see the seller’s receipt.Remember, tax rates change from year to year, so the previous year’s bill should be considered simply as a “ballpark” figure of what you would pay. For a more precise projection, call the local assessor’s office for assistance, or ask your real estate professional.Return to Top

   UNDERSTANDING LISTINGS

    

1. If you run across any other abbreviations or terms you don’t understand, don’t be embarrassed — after all, you don’t buy a home every day. The glossary of real estate terms in the back of this book provides further assistance, or you can simply contact a local ERA® office; they’ll be happy to “translate” for you.
2. Return to Top
3. HOME HUNTING TIPS

• Is the home’s floor plan right for your family?
• Is there enough storage space?
• Will you have to replace the appliances?
• Is the yard the size that you want?
• Are there enough bathrooms?
• How much maintenance and/or decorating will you need to do right away? Later?
• Will your present furniture work in this home?

1. Use our handy Home Buyer’s Checklist
3. How many bedrooms should I be considering?Whether you are married or not, or have kids or not, spare bedrooms come in handy when family and friends come to stay. And when you’re not having guests, extra rooms are useful as a library, den, or TV room.Another good reason to choose a home with extra bedrooms: extra space will make your home more appealing to a larger number of interested buyers when it comes time to sell. 

• Flashlight for seeing enclosed areas
• Tape measure for checking room sizes, clearances, etc.
• Camera (digital or 35mm)

1. Be prepared to investigate a little. After all, you want to know as much as possible about the home you buy. Sellers understand that because their home is on the market, it will be looked over pretty thoroughly.
2. If you need to go back to a home for another look, your sales professional will be happy to schedule an appointment. Also, be sure to ask any questions you have about the home, even if you feel you’re being nosy. You have a right to know, and the serious seller will not mind making you feel more confident that you’ve chosen the right house.
4. What should I ask about each home that I look at?As a rule of thumb, ask any questions you have about specific rooms, features, or functions. Pay particular attention to areas that you feel could become “problem ” ones — additions, defects, areas that have been repaired. And above all, if you don’t feel your question has been answered, ask until you understand and are satisfied.In most cases, your real estate professional will be able to provide you with detailed information about each home you see. You can also use the Home Features Worksheet in this section to note room sizes, features that need a second look, and other comments. 
5. What should I tell the sales professional about the homes I look at?Tell the sales professional everything you like and don’t like about each home you see. Don’t be shy about discussing a home’s shortcomings. Is the home too small for your needs? Let the sales professional know. Was the home perfect except for the carpeting? Let the sales professional know.However, remember that there can be two types of sales professionals involved in a real estate transaction; those working for the buyer, and, frequently, those paid by and working for the seller. The seller’s agent is obligated to help secure the best price for the seller. In addition, seller’s agents may also report any confidences you share with them — including any willingness to pay a higher price should the seller not accept your initial offer(s). This is why you may want to be represented by a buyer’s agent, because he/she will keep your input confidential. A buyer’s agent puts the interests of the buyer — not the seller — first. 

• Have you had any problems with water or dampness in the basement?
• Are there defects or problem areas that need to be fixed right away?
• How old is the furnace and the central air conditioning system?
• How old is the roof? Have you experienced any leaking?

1. Return to Top
2. APPRAISALS, INSPECTIONS, LEGAL, INSURANCE
4. How do I know I’m getting the best value for my money?A professional appraisal is the best way to tell if a home is priced fairly. A real estate appraisal is an unbiased opinion of a property’s value based on its style and appearance, construction quality, usefulness, and other factors, including the value of comparable properties nearby.When you apply for a mortgage, the lender will have a professional real estate appraiser perform an appraisal of the property. 
5. I’d like to have a professional look at the home before I buy it. What does a home inspector do?For your own safety, and to make sure you’re getting your money’s worth in the home you choose, using a professional home inspector is highly recommended. A home inspector will check a variety of things such as your home’s plumbing, heating, cooling, and electrical systems, and look for structural problems like a damp or leaky basement, etc.Usually, you call an inspector immediately after you’ve made an offer on a home. However, before you sign any written offer, make sure (or have your attorney make sure) that it includes an inspection clause, which says that your purchase obligation is contingent on the findings of a professional home inspector.Your inspector will not tell you whether he or she thinks the home is worth the money you are offering. Rather, the inspector’s job is to make you aware of repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make an informed decision.

   In choosing a home inspector, consider one who has been certified as a qualified and experienced member by a trade association. Your real estate professional can refer you to qualified inspectors in your area.

   Review the Home Inspection Checklist.

    

6. Should I be present during the inspection?Yes. It’s not required, but it is very much to your advantage. You’ll be able to clearly understand the inspection report and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most importantly, you’ll see the home through the eyes of an objective third party. 
7. Are there any other inspections I need to have done?In addition to the overall inspection, you may wish to have separate tests conducted to check for insects, the presence of radon gas, and the quality of drinking water, to name a few. Talk to your real estate professional for information about these tests and companies in the area that perform them. 

1. Return to Top
2. MAKING AN OFFER
4. When I’ve found the home I like, how do I make an offer?When you’ve found a special house you want to call home, you’ll probably feel excited and a bit nervous. Let the sales professional know you’re ready to write an ” offer to purchase” — a written document that declares how much you are willing to pay for the home provided that certain conditions are met. Because it’s a legally binding contract that you will sign and date, it may be a good idea to have a lawyer review it, within the grace period noted in the contract.This is the time when it is most important for you to keep in mind that, unless you have specifically retained the services of a buyer’s agent, the sales professional is working for the seller. As the legal agent of the seller, he or she is obligated to help the seller get the best price, and will report to the seller any confidence you share.It’s best to make your offer without sharing with the agent your willingness to offer any higher price if the seller does not accept your offer.

   Your offer should have a time limit for the seller to accept it, reject it, or make a counter-offer. If a counter-offer is made, you will have some time to respond. Often, several offers go back and forth until an offer is accepted, or one party decides to end negotiations.

    

5. How do I determine the amount of my initial offer?There is really no rule to use in calculating an initial offer. Naturally, the buyer wants the best value and the seller want the best price, but negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants to sell quickly, or a buyer who is set on a specific home.After you’ve looked at the home’s features, asked questions, checked comparables, and talked about it with your sales professional, you should have a good idea of what the home’s value is in the current market. Consider what you can afford, and make an offer that you consider to be fair.Most buyers and sellers negotiate on price, with both sides “giving” a little until both agree.

   At that point, you typically will begin the process of arranging for an inspection and applying for a mortgage. See the “Financing” section of this book for more information.

    

6. What is “earnest money” and how much do I need?When you sign an offer to purchase, your sales professional will ask you for ” earnest money.” This refers to a monetary commitment that shows you are serious about wanting to buy. Usually, you will be asked to write a check for one to 10 percent of the sale price.This money will be held in a special escrow account. If your offer is accepted, your earnest money will be included as part of your down payment. If your offer is not accepted, you’ll get back all your earnest money. But keep in mind that if you back out, you may forfeit the full amount. 
7. Is there any way I can protect myself against emergency repair bills in my new home?Yes. Home warranties offer you protection against many potentially costly problems not covered by your homeowner’s insurance. Such warranties have become increasingly popular in recent years, and for good reason. The coverage can save you thousands in the event of a major mechanical breakdown at a time when your cash reserves have been depleted by your down payment and moving expenses. For more about home warranties, see the information on the ERA® Home Protection Plan®.Return to TopCLOSING PROCEDURES AND MOVING

    

1. What should I look for on my final walk-through?In most cases, you’ll be given the opportunity to inspect the home immediately prior to closing. At this time, it’s important to check on any work the seller agreed to have done in response to your initial inspection. You should also carefully check the condition of walls and ceilings from which window treatments, pictures, or any other attached furnishings have been removed. If you find any problems, don’t hesitate to bring them up at the closing. It’s the seller’s responsibility to correct them. 

1. Is there anything I should do immediately after closing?The first thing you’ll want to do is have the locks changed. Also, put your deed and other important paperwork from the closing in a secure place, preferably a safe deposit box. Even though it’s all on file with the county, it’s smart to know where your copies are and have access to them at all times. 
2. Should I move myself or use a moving company?In almost every case, you can save yourself time and energy by using a reputable moving company to help you move.Ask your sales professional, friends, and co-workers for recommendations, then get estimates from several companies. Don’t choose a mover based on price alone — consider the reputation and professionalism of the company, too.Work closely with the moving company to coordinate your efforts and your move will be achieved with maximum efficiency.

    

3. Can a sales professional help with the move itself?Yes. Most sales professionals are more than willing to offer advice and assistance to new homeowners; all you have to do is ask.

1. Can I sell my house myself?Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. “Other people have sold their own homes,” they say – “so why can’t I?”Approximately 10 percent of American homeowners handle their own sales. But in order to do this, you’ll need to realistically assess exactly what’s involved. The routine parts of the job involve pricing your house accurately, determining whether or not a buyer is qualified, creating and paying for your own advertising, familiarizing yourself with enough basic real estate regulations to understand (and possibly even prepare) a real estate contract, and coordinating the details of a closing. These are serious responsibilities to take on, and they include the concerns that your house is only on the market when you’re home, your marketplace is limited to those you can reach locally, and a mistake may cost you the money you’re trying to save. Commissions are negotiable. You can talk with a broker to discuss the level of services you will require to sell your home and determine an agreed upon commission rate based upon the services provided.The best reason for working with a real estate broker is the enormous amount of information they have at their disposal – information that can help make your house sell faster and easier. Professionals know about market trends, houses in your neighborhood, and the people most likely to buy in such neighborhoods. They also know how to reach the largest number of people who may be interested in your house (both through old-fashioned sales skill and the Internet resources of a reputable real estate company), and are trained in areas like screening potential buyers and negotiating with them. Finally, they’re always “on-call,” and willing to do the things most of us don’t: working on the weekends and answering the phone at all hours.Return to Top

   MARKET CONDITION

    

2. What makes a house sell?This entire book could be devoted to answering this question. But to be as concise as possible, a successful sale requires that you concentrate on six considerations: your sale price, your terms of sale, the condition of your house, its location, its accessibility, and the extent of marketing exposure your house receives. While some of these factors are beyond your control (such as the actual sale price), you can compensate by taking advantage of others (like a new paint job) to make your property as attractive to prospective buyers as possible. 
3. When is the best time to list a house for sale?The “best” time to list your house is actually as soon as you decide to sell it.If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers; it also gives you time to consider more options if the market is slow or initial interest is low. 
4. Is there any seasonality to the market?Peak selling seasons vary in different areas of the country, and weather has a lot to do with it. For example, late spring and early fall are the prime listing seasons in many areas because houses tend to “show” better in those months than they do in the heat of summer or the cold of winter. And of course, people like to do their house shopping when the weather is pleasant.But keep in mind that there are also more houses on the market during the prime seasons, so you’ll have more competition. So while there is seasonality in the real estate market, it’s not something that should dominate your decision on when to sell. 
5. What about market conditions — price trends, interest rates, and the economy in general? Should they have any bearing on when I list?Probably not. Even if you’re under no pressure to sell, waiting for better market conditions is not likely to increase your profit potential.
6. How long should it take to sell?Average listing times vary from 30 to 180 days, according to market conditions in a particular region, town, or even neighborhood, and of course, price, terms, condition, location, accessibility and exposure play an even greater role. Selling in any market is easier if you keep time on your side. Most professionals will tell you that allowing yourself at least six months will put you in a position to get a better return from their marketing efforts. 
7. What if I can’t sell my old house before I have to move?This situation can arise for any number of reasons. For instance, getting the job promotion you’ve been waiting for may mean having to relocate very quickly. Another example: you finally find your “dream home,” and need to get it under contract before it sells to another buyer. Whatever the reason, don’t panic. You have some viable alternatives to the worrisome possibility of double mortgage payments.If you don’t have to sell in order to buy a new home, consider the advantages and disadvantages of renting your old house. If you’re being transferred before you’ve had a chance to decide on the new house, you may be able to obtain a short-term rental of your own while you’re becoming familiar with the new area. Either way, a local real estate professional can usually help, by advising you how much you can expect to pay for rent in your new city, or what you need to charge for your current home to both cover your mortgage payments and take care of other costs you’ll entail as a landlord.Another solution available from some brokers is the guaranteed sale plan, which is detailed in the next question. 
8. What if I do have to sell my current house first?Some brokers offer guaranteed-sale plans, which are essentially a written promise to buy your house at a pre-determined price if it doesn’t sell by a certain date. The amount of the guaranteed price varies considerably between brokers.If you opt for the guaranteed-sale route, look into the ERA® Sellers Security® Plan. It’s a unique guaranteed-sale plan offered in all 50 states. You’ll sleep better knowing your participating ERA Real Estate has the financial backing to fulfill the terms of the plan. You are also entitled to some additional benefits that are automatically included in the program.Return to TopPRICING 
9. How do I price my house?Always price your property sensibly.It is important to be realistic about your home’s value and price it accordingly. To determine the fair market value, a real estate professional can supply information on comparable homes that have sold or gone under contract in your area.Click here for information on the ERA Sellers Security Plan. 
10. What is “fair market value,” and how do I determine mine?Simply put, the fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase.To get an estimate of fair market value, contact a local ERA® office and ask for a Comparative Market Analysis (CMA) of your house. The analysis will give you a realistic figure based on the most salient features of the local real estate market. It should provide information about recent sales of similar houses, including how much they sold for and how long it took. The real estate professional’s price opinion is very helpful in determining the right asking price. 
11. What’s the difference between fair market value and asking price?You can assume that some negotiation will be necessary to reach an agreement with a buyer. The professional who presents you with the results of your CMA will provide all the data that establishes fair market value. Then, based on your own timing and marketplace variables, your real estate professional will be willing to help you establish a competitive pricing strategy. Generally speaking, the owner’s asking price — the advertised price of a house when it goes on the market — is set slightly higher than fair market value. 
12. Who can help me determine the right asking price?Real estate sales professionals suggest asking prices based on a wide array of information you may not have at your disposal, including recent listing and selling prices of houses in your neighborhood. If you’re not completely confident in their suggestions, you may want to order an appraisal.Next, establish clear priorities. If you had to choose, are you more concerned with selling quickly, or getting the best price?Someone else — a neighbor, friend or relative — may point out advantages or disadvantages about your house that you hadn’t thought about. Third-party views will help you start thinking of your house as a commodity, with positive and negative selling points. Then you should decide on a price that you feel is competitive and consistent with what other houses in your area have sold for. 
13. How flexible should I be about the asking price?Generally, the first three weeks will be the test period of your initial asking price. If you see showings drop off and very few return visits, you may want to consider repositioning your asking price. Most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller.While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good sales professional can be of great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills a real estate professional can offer you. As negotiations proceed — whether in writing, face-to-face, or by phone — your sales professional will inform you of your options in responding to each offer from the buyer, so you can make an educated decision as to how you want to proceed.HOME IMPROVEMENTS FOR SELLING 
14. Should I fix my house up before it goes on the market?Unless your house is nearly new, chances are you’ll want to do some work to get it ready to market. The type and amount of work depend largely on the price you’re asking, the time you have to sell, and the present condition of the house.If you’re in a hurry to sell, do the “little things” that make your house look better from the outside and show better inside. Read on for several specific ideas for making low-cost improvements. 
15. What is “curb appeal,” and how do I create it?” Curb appeal” is a common real estate term for everything prospective buyers can see from the street that might make them want to turn in and take a look. Improving curb appeal is critical to generating traffic. While it does take time, it needn’t be difficult or expensive, provided you keep two key words in mind: neat and neutral.Neatness sells. New paint, an immaculate lawn, picture-perfect shrubbery, a newly sealed driveway, potted plants at the front door — put them all together, and drive-by shoppers will probably want to see the rest of the house.Then, for both the inside and outside of your house, if you’re going to repaint, choose neutral colors, and keep clutter and personal knick-knacks, photos, etc. to a minimum. Remember, when a family looks at a house, they’re trying to paint a picture of what it would be like as their home. You want to give them as clean a canvas as possible. 
16. What should I do to make the house show better?First, make your house look as clean and spacious as possible. Remember, people may look behind your doors — closet and crawlspace doors, as well as those to the bedrooms and bathrooms. So get rid of all the clutter; rent a storage space if you need to, hold a garage sale or call a local charity.After you’ve cleaned, try to correct any cosmetic flaws you’ve noticed. Paint rooms that need it, re-grout tile walls and floors, remove or replace any worn-out carpets. Replace dated faucets, light fixtures, and the handles and knobs on your kitchen drawers and cabinets if needed.Finally, as with the outside of your house, try to make it easy for prospective buyers to imagine your house as their home. Clear as much from your walls, shelves, and countertops as you can. Give your prospects plenty of room to dream.Use the ERA® “Show & Sell” Checklist to get specific ideas on how to make your house look its best. Additionally, ask your real estate professional for any company brochures or videos on the subject. Such materials are usually free and extremely helpful to most homeowners.
    

    SHOWING TIP Before you list, give your house a bath — most equipment rental shops carry power washers.

     

17. Should I make any major home improvements?Certain home improvements that are useful to almost everyone have proven to add value or speed the sale of houses. These include adding central air conditioning to the heating system; building a deck or patio; finishing the basement; doing some kitchen remodeling (updating colors on cabinets, countertops, appliances, panels, etc.); and adding new floor and/or wall coverings, especially in bathrooms. On the other hand, improvements that return less than what they cost are generally ones that appeal to personal tastes that not everyone may share, like adding fireplaces, wet bars and swimming pools, or converting the garage into an extra room.The challenge that comes with any home improvement designed to help sell your house is recouping your investment. There’s always the risk of over-improving your house — that is, putting more money into it than neighborhood prices will support.So how much is too much? Professional renovators have found that, no matter how much you improve any given house, you’re unlikely to sell it for more than 15 percent above the median price of other houses in the neighborhood, whether you do $1,000 worth of work or $50,000. That’s why you might want to ask your sales professional’s opinion about the viability of recouping the cost of any major renovation you have in mind before you start the work. 
18. Should I do the work myself?If you have the time and talent, do-it-yourself improvements are the most cost-effective way to go. Painting, wallpapering, replacing cracked trim and old plumbing fixtures — the difference between work done by a competent amateur and a professional is usually time and money. Just make sure you don’t tackle something you can’t handle — this is no time for “on-the-job training.” If you’re not experienced, it may be worth calling in a professional.Larger jobs involving mechanical systems (heating, electrical, plumbing, etc.), or work that must meet local building codes, are another story. Even if you or the family handyman know exactly what you’re doing, it’s not a good idea to engage in this type of work unless you’re licensed to do so. Your attempts could make you responsible for more than you realize if something you worked on goes wrong after you sell. 
19. Am I liable for repairs after I sell?Yes. If the buyer’s inspection reveals major problems with your house’s structure or mechanical systems (heating, electrical, plumbing, etc.), the buyer may wish to negotiate the price downward on the basis of anticipated repair costs. So even though the repairs won’t be made until after the sale, practically speaking, you’ll be paying for them.Sometimes, repairs may be required before the transfer of title takes place. This is especially true in sales that involve financing that’s insured or guaranteed by the government ( FHA/ VA loans, for example).You may also have heard about lawsuits involving sellers who failed to disclose major problems before the sale — like an addition to the house that wasn’t built to code. Most states now maintain very specific disclosure laws that require sellers to disclose any pertinent information related to the condition of the property. For example, most states require sellers to notify buyers about the presence of any lead-based paint. It is important for you to be knowledgeable about your state’s disclosure laws.These are just a few good reasons to retain a lawyer or sales professional who know as much about the condition of your property as you do. It’s also a good idea to get the buyer’s written acknowledgment of any major problems when you accept their offer.Return to Top

    HOME WARRANTIES

     

20. What about home warranties? Are they available to sellers as well as buyers?Yes they are, and they’re worth investigating. It’s our belief that the ERA® Home Protection Plan® is one of the best selling points you can add to your house. It’s easy to see why. After a buyer has invested substantial funds in a down payment and moving expenses, the last thing they want to worry about is a costly home repair. With the ERA® Home Protection Plan®, they don’t have to.The warranty offers protection for you and your buyer, covering repair or replacement costs for breakdowns to most major systems and built-in appliances for up to a year after the date of closing. In many states, there is no additional cost to sellers who provide coverage for their buyers, except for a small deductible if you make a claim. And when you consider the peace of mind that comes with knowing 24-hour emergency service is always just a phone call away, it’s hard to imagine a better investment.For more information on the ERA® Home Protection Plan®, visit the “About ERA” section of ERA.com.
    

    SHOWING TIP Buyers want kitchens to be spotlessly clean and efficient, with as much counter space as possible.

    MARKETING YOUR HOME

     

21. How do I reach the right potential buyers?Today, people are moving farther and more frequently than they used to; it’s not unusual for upwardly mobile executives to relocate across the country more than once in a year. The result is that the pool of potential buyers for your house is much larger and spreads far wider than ever before, and the competition to reach them is fierce.
    

    These developments make it more important than ever to choose the real estate company with the most sophisticated and savvy marketing techniques. Companies with much-visited Web sites, extensive available listings, web tools designed to help consumers buy and sell, and prominent, effective advertising and marketing materials are essential for identifying the right buyers and convincing them that yours is the house for them. The yard sign is just the beginning, but with a knowledgeable sales professional, your selling process can promptly reach a happy ending. Learn more about the ERA Commitment to Cutting-Edge Technology.

     

22. What’s an MLS and why do I need one?A Multiple Listing Service, or MLS, is another resource to help ensure you reach a large number of prospective buyers and dramatically increase the exposure of a property.Quite simply, it’s a system under which participating brokers agree to share commission on the sale of houses listed by any one of them. So, for example, if you list your house with one broker and another broker actually sells it, they share the commission. The advantage to you is clear; more people have an interest in selling your house.Over the years, the MLS concept has grown from a strictly local sales tool into a powerful national marketing system. That’s due largely to ERA Real Estate, whose pioneering use of the fax machine, back in 1971, led to the development of the nation’s first interstate shared listing system.
    

    SHOWING TIP Remove any attached decorative items — e.g., chandeliers, stained glass, etc. — that you don’t intend to sell with the house.

     

23. How important is advertising?Advertising remains an important component in the marketing process. Today, however, this means much more that an ad placed in the local newspaper. Today’s real estate brokers have the knowledge and resources to market your home through an array of proven modern methods, including TV, magazines, radio, the Internet and direct mail in addition to traditional print advertising. They are trained to determine where the pool of buyers for your particular property might most likely be found and from that, can best determine the type of advertising that is best for your propertyReturn to TopOPEN HOUSE 
24. What should I expect from an open house?The open house is another valuable part of the marketing process, offering prospective buyers the chance to view houses in a low-pressure, “browsing” atmosphere. With that in mind, you shouldn’t expect it to generate a sale, at least not directly. What you should look for is interest expressed and requests for private showings made to your sales professional in the days following the open house.Open houses are always valuable. If many prospective buyers attend, it shows you that the property is attractive and saleable. If very few people show up, it can indicate that the price is too high, and cause you to look for ways to improve Curb appeal. Try not to draw your own conclusions — your sales professional will give you a full report on open-house activity and offer a professional assessment of its results.Sales professionals often hold an open house for other sales professionals shortly after a house is listed. This event, usually held mid-week when real estate people can give it their full attention, can be as important to your efforts as your listing in the local MLS. The more professionals who see your house, the more prospects you’re likely to reach. 
25. Should I try to avoid being at home when the house is shown?You should definitely plan to be out of the house during any open house your sales professional has scheduled; the same goes for first showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your house as their “dream home.” 
26. Who actually sells my house — a broker or a sales professional?Both. In legal terms, a real estate sales professional is an individual trained and licensed to act for other people looking to buy or sell a piece of property. While that definition applies to both, the broker is permitted to collect fees and/or commission for such work.Thus, the sales professional — with whom you have most of your day-to-day contact — works on behalf of, and is compensated by, the broker. 
27. Will my sales professional be present at the closing?If you wish. while the law does not require their presence, both the buying agent and the selling agent may attend the closing. Even though most of the procedures are handled by the lenders, title companies, and in some cases an attorney, you’ll find that your sales professional can be a valuable source of information and counsel, especially if any last-minute problems arise.Good sales professionals are also extremely helpful in the days immediately prior to the closing. They’ll help you prepare by giving you a step-by-step preview of the entire process and what will be expected of you. And they’ll make certain you bring all necessary documents and other information.Click here for some helpful tools:
    Five Days to a Smooth Closing
    Top Six Moving Tips  

    Return to Top

    WORKING WITH A REAL ESTATE PROFESSIONAL

     

28. What makes a sales professional effective?We believe good training and experience make the best sales professionals. But the truth is, not every sales professional is right for every seller. That’s why we suggest that you follow this simple formula to help you decide whether a particular sales professional will work well for youCOMPETENCE + COMFORT = CONFIDENCECompetence: When you first meet with a real estate professional, they’ll do their best to show you that they have what it takes to sell your house. You can expect to see a portfolio of credentials, past achievements, sales volume and letters of recommendation. Look for evidence that their background is relevant to your needs. The sales professional you choose should also be up-to-date on the current pool of potential buyers for houses like yours; professionals can stay informed of this through real estate company Web sites, such as ERA.com, and industry networking.Comfort: The importance of being comfortable with your sales professional as a person cannot be overstated. You’re going to be dealing with this individual on a regular basis, maybe for months, during a time that can be emotionally trying for you and your family.It takes a unique combination of these two characteristics — competence and comfort — to inspire the confidence a homeowner needs to maintain peace of mind through the process of selling a house. It’s something for which every ERA® sales professional strives. Always There For You® is more than a tagline. It’s our way of doing business.

     

29. How do I find the sales professional who’s right for me?A good place to start is by talking to friends, neighbors, and relatives — anyone whose recommendation you trust. You can also try responding to sales professionals’ local advertising, direct mail, or Web site profiles. If they have the resources and initiative to maintain such a presence in your marketplace, it’s a good sign that they may have the sales skill you’re looking for. 
30. Do I have to pay a commission even if I find the buyer?That depends on the type of listing you agree to. If you sign an exclusive agency contract, you may sell the house on your own without paying a commission. In an exclusive right-to-sell agreement, you owe a commission even if you find the buyer. Which type you choose may largely depend on which sales professional you work with and how much trust you place in his or her abilities (as well as how much time and expertise you feel you have to devote to finding a buyer and negotiating a contract on your own.) 
31. What is the advantage of an exclusive right-to-sell?Incentive — it lets sales professionals know that their time and effort will not go unrewarded. That’s one reason the great majority of residential listings are marketed under exclusive right-to-sell agreements. 
32. What if my sales professional doesn’t produce?Besides commission, the most important matter you negotiate at the time of listing your house with a broker is the duration of the listing contract. Terms vary, but listing agreements are seldom for less than three months or greater than one year.But what if you find yourself dissatisfied midway through a nine-month contract? While the listing contract is legally binding, some brokers offer homeowners an “out” if they are unhappy with the services they are receiving. The ERA Commitment to Service is one example of such a satisfaction-guarantee, and more information about it is available at the end of this section. 
33. Why list my house with an ERA Broker?Exclusive services that can make selling your house faster and easier, and unparalleled expertise in local and national markets — those are two of the most important reasons why no one can sell your house more effectively than an ERA® professional.Beyond that, we’re sincerely interested in helping make the experience of selling your home as smooth and easy as possible. So even if you’re not ready to list your house — if you simply have questions about the market in your area, price or mortgage trends, or anything else about real estate as it relates to you — just pick up your phone and call the ERA® office nearest you. As our tagline states, we’re Always There For You®.