Frequently asked questions
Since 2008 we have received a lot of questions from both buyers and sellers and have put them together here for prospective buyers and sellers to help them with their real estate needs.
Do I need a Realtor to sell my house?
No, you are not legally required to hire a real estate agent to sell your home. FSBOs are perfectly legal in Texas.
The majority of sellers hire a listing agent because it’s a job that requires skill, dedication, patience and expertise. Most FSBO sellers have full-time jobs, and other life limitations that make it hard to dedicate the time necessary to sell their home for top dollar. Sellers often find that the 2.5% to 3% commission they pay their agent is outweighed by a higher sale price, quicker close or smoother transaction.
An agent with Sterling Realtor Group will be your go-to expert who understands your local market, consults on home improvements to maximize your home value, provides tips for marketing your home, and pulls a comparative market analysis (“comps”) so you know how similar homes are selling.
Do I really need a realtor?
If you’re wondering whether you need a Realtor to buy a home, the short answer is no. You might be hesitating to work with one because you don’t want to be saddled with Realtor fees, but typically, buyers don’t pay a real estate agent’s commission — sellers do. The fact is, many homebuyers use a Realtor to help guide them throughout the process, so before deciding whether or not to work with one when you buy a home, consider these pros and cons.
Reasons to buy a home with a Realtor’s help
Realtors are licensed professionals. In most cases, sellers have a real estate agent working for them — a listing or seller’s agent — so you’ll want someone on your side, a buyer’s agent, who also has your back in negotiations and can help you understand how to make an offer on a home.
A buyer’s agent can help homebuyers in a host of other areas, as well. Here are some of the tasks you’d have to do yourself if you were to buy a home without a Realtor:
- Find homes that match your budget and needs. Real estate search sites give you a sampling of what’s available, but you’ll have to research whether asking prices are justified based on comparable home sales in the area. Your Realtor can help you do this and save you time.
- Dig up facts on a neighborhood, including ones that a seller might not disclose that could be important to you. Your Realtor can share insight you might not have thought to ask about, too.
- Negotiate an offer, including the price and other clauses and contingencies in the purchase agreement.
- Navigate the home inspection, and negotiate repairs or credits with the seller.
- Decipher paperwork that could be filled with complex jargon and terms you don’t understand.
- Request and review seller disclosures. You might not know what to ask for or what sellers in your state are required to disclose.
The bottom line: Unless you’ve been through the process of buying a home before, it can be better to go with a Realtor than not.
3 Questions to ask yourself before selling on your own
- Do I have enough free time?
When your home is on the market, plan on doing something related to your sale at least once a day. One day you might be gathering pre-listing paperwork, the next you might be hiring a photographer, and on the weekend you might be hosting an open house. You’ll also field questions, take phone calls and schedule tours around the clock — real estate is not a nine-to-five business.
- Do I know the local market?
It can be easier to FSBO in a sellers market, because homes typically sell faster and closer to asking price, with fewer price cuts. Selling in a buyers market can be more challenging, because it may take longer to get a good offer, and many other listings have a professional agent doing the marketing over the long listing period.
- Can I price my home to sell?
Correctly pricing your home is incredibly important, and it can be complicated. You’ll need to know (or learn) how to run comparables to set a fair listing price that’s on par with other homes in your market. If you overprice your home, your listing may go stale, and you may have to cut the price. If you underprice your home, you could leave money on the table.
Should I talk to a bank / lender?
Most potential home buyers wait to talk to a mortgage lender until they’re ready to buy. Makes sense, right? Why bother digging up your financial statements and filling out a bunch of paperwork if you’re not going to buy right away?
If buying a home is one of your long-term goals, you may be doing yourself a disservice by not talking to a lender sooner rather than later. The goal of any good mortgage lender is to help you get “mortgage-ready.” This means getting you and your finances in order so you can qualify for the best mortgage possible, with financial terms and a monthly payment that make sense for you and your budget.
So even if buying a home is a few years away, sitting down with a mortgage lender today can help get you on the path to homeownership. Here are five reasons why you should talk to a lender, even if you’re not quite ready to buy.
1. You may be closer to buying a home than you think
One reason home buyers may hesitate to meet with a lender is that they think they aren’t financially ready. They may think their credit score is too low, or they don’t have enough saved up for a down payment.
2. You don’t need perfect credit to buy a home
Many people put off buying a home until they have a good credit score (typically a score of 700 or higher). According to Mahajan, a credit score of 620 is generally considered the minimum to qualify for a mortgage, but many lenders work with applicants with lower credit scores. Federal Housing Administration loans are available to applicants with scores as low as 580, and your lender may be able to connect you with other options.
3. A lender can help you create an action plan for improving your credit
If your credit score is on the lower end, you may want to take some steps to improve your credit so you can qualify for a better interest rate. Once your potential lender knows the ins and outs of your financial situation, it can develop a plan to help you pay down debts that are dragging down your credit score.
4. A lender can specify what you need for a down payment
Lenders can also clarify exactly how much you need to save for a down payment. FHA loans, for example, require a down payment of at least 3.5%. You may want to make a larger down payment to bring down your monthly payment or to offset negative credit items. A larger down payment of 25% to 30% lowers the lender’s financial risk, making your application more appealing.
A high down payment isn’t a requirement to qualify for a mortgage, though. Depending on your situation, you may qualify for a down payment assistance program. Many of these programs are localized, so to find out what you qualify for in your city and state, you should sit down with a lender in your area. For example, McRae reviews the pros and cons of local down payment assistance programs with her prospective home buyers to help them make an informed decision.
5. You’ll know what to expect
The mortgage application process is lengthy, even for experienced home buyers. For first-time buyers, sitting down with a lender can give them an understanding of the mortgage underwriting process, how long it takes, and what documentation they will need to have prepared.
With interest rates rising and the housing markets shifting, education and preparedness are more important than ever.
Why sellers hire real estate agents
Sellers go with an agent for the wide range of services they provide. Here are some of the most common services sellers rely on a listing agent to do when selling a home, according to statistical data.
- 74% have their agent provide guidance on the overall selling process.
- 73% have them organize and submit paperwork.
- 71% look to their agents to find interested buyers.
- 70% count on agents to lead contract negotiations.
Why do FSBOs eventually enlist an agent?
Among those who attempt the FSBO route, half eventually hire an agent. Here are their top three reasons for making the switch:
- Selling is easier with an agent.
- It takes too long to sell FSBO.
- They needed help with the paperwork.
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