All about buying Advantages of using a real estate salesperson to help me buy a home? Where do I begin the process of looking for a home? How do I find the right real estate salesperson to work with? How do I know for sure which home I can afford? How does buying compare to renting? Where can I get information about the neighbourhood schools? How can I find out what homes are selling for in a given neighbourhood? can I find out what my property tax bill will be? When I start visiting homes, what should I be looking for the first time through? How many bedrooms should I be considering? Is an older home as good a value as a new home? What do I need to bring along when I am viewing homes? What should I ask about each home that I view? What should I tell my real estate salesperson about the homes I view? How many homes should I view before I buy? How do I know whether I am getting the best value for my money? Do I need to use a lawyer to buy a home? When I have found the home I like, how do I make an offer? How do I determine the amount of my initial offer? What is "option money" and how much do I need? Remember before I close a deal to buy. What do I have to do? What should I look for in my final walk-through inspection? All about selling Can I sell my house myself? What makes a house sell? When is the best time to list a house for sale? How long should it take to sell? What if I am unable to sell my old house before I have to move? How do I price my house? What is "fair market value" and how do I determine mine? What is the difference between fair market value and asking price? Who can help me determine the right asking price? How flexible should I be about the asking price? Should I fix my house up before it goes on the market? What should I do to make the house show better? Should I make any major home improvements? Am I liable for repairs after I sell? How do I reach the right potential buyers? What is a Multiple Listing System, and why do I need one? How important is advertising? Should I be present during the negotiation process? How do I find the right real estate salesperson to market my property? The difference between an open listing and an exclusive authorization to sell? What is the advantage of an exclusive authorization to sell? How do I select the right real estate agency to market my property?   Advantages of using a real estate salesperson 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. So one clear advantage of enlisting the help of a real estate salesperson is simply that you don't have to "do it alone." A good real estate salesperson has the training, the know-how, and the experience to help you through each step of the process, and make the process of finding, buying, and moving into your new home as smooth, quick, and enjoyable as it can be. Another advantage is that a real estate salesperson represents a valuable source of information about market trends, communities, neighbourhoods and especially, homes for sale throughout the area. A real estate salesperson is therefore able to offer you access to complete, regularly updated information about every home listed daily. Real Estate Specialists listed with the PNA website receive information on new listings daily through the PNA internet website. A final advantage is that, all of these services usually come at no cost to you. This is because almost all real estate salespersons involved in a given transaction work for the seller, and thus would be paid through the commission on the sale of the home by the seller. As you will observe in the following questions, a real estate salesperson's expertise and efforts can indeed be of considerable help throughout the buying process. Where do I begin the process of looking for a home? The first thing you should do is to start 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 housing/residential area because of a new job, or to be closer to your current job? How will the location of schools, amenities and transportation affect your choice of neighbourhoods? Personal tastes: How large a home do you need? Do you prefer a condominium with full facilities or would you and your family be happier with a landed property? Budget: Would a landed property be a financial burden, or would an apartment be more suitable for your budget? As you consider these areas, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighbourhoods that appeal to you to see what's available. Go through the real estate listings in the newspapers and PNA website to learn about current prices in the areas that you're considering. Talk to friends about the featres 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 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. How do I find the right real estate salesperson to work with? The key word here is "right". It's important that you find a qualified real estate salesperson who can fully understand your wants, needs and individual tastes, and whose personal and professional judgement you respect. That's why we suggest you talk to several different real estate salespersons before choosing one. We've included a few guidelines on about the kind of experience and service capabilities you should be looking for. Above all, look for someone who makes you feel comfortable. You may wish to sign a buyer's exclusive service agreement to engage the service of a salesperson. How do I know for sure which 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 a real estate salesperson. A good real estate salesperson 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 downpayments. The real estate salesperson will help find an option that fits your budget, and you may be surprised at just how much you can afford. How does buying compare to renting? Renting offers a lifestyle that's nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, and most likely no protection against regular rent increases. If your rent has averaged $2,000 a month for the last 10 years, you've spent $240,000 with nothing to show for it. Considering that your home would also have appreciated in value over the same period, isn't it time you invested in yourself instead of your landlord? a month for the last 10 years, you've spent $240,000 with nothing to show for it. Considering that your home would also have appreciated in value over the same period, isn't it time you invested in yourself instead of your landlord? Where can I get information about the neighbourhood schools? Again, a good real estate salesperson is perhaps your best source. He will know where the neighbourhood schools are, and can provide you with valuable information about these schools including their rankings, extracurricular activities, bus services and more. He may even be able to put you in touch with teachers and principals when you visit the area How can I find out what homes are selling for in a given neighbourhood? An easy way is to ask your real estate salesperson. If you're interested in a particular home, a real estate salesperson 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 been extensively renovated, or the one across the road may be older than the one you're looking at it's a good way to evaluate the seller's asking price. can I find out what my property tax bill will be? Simply ask to see the seller's latest property tax bill or alternatively, check with a real estate salesperson with access to the computerised List search system in the Internet. When I start visiting homes, what should I be looking for the first time through? The house you ultimately choose to call home will play a major role in your family's life. A home can be an excellent investment but more importantly, it should fit the way you really live, with spaces and features that appeal to everyone in the family . As you look at each home, pay closer attention to these important considerations: - Is there enough room for you now and in the near future? - Is the home's floor plan right for your family? - Is there enough storage space? - Will you have to replace any fixtures and fittings? - Will you have to do any major renovation? - Are there enough bathrooms? - How much maintenance and/or decoration will you need to do right away? - Will your present furniture fit in this home? - Do you like the orientation of the home? - Is there any water seepage problems? How many bedrooms should I be considering? Whether you are married or have kids, spare bedrooms come in handy when family and friends come by to stay. And when you're not having guests, extra rooms are useful as a study 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 to selling time. Is an older home as good a value as a new home? It's a matter of personal preference. Both new and older homes offer distinct advantages, depending upon your unique taste and lifestyle. With the combined problems of land scarcity and population growth, today's homes are usually built on smaller plots, unlike most homes built years ago, which offer more living space. The emphasis for older homes was on the interior layout unlike new homes which focus more on the external design. For instance, a new condominium comes in a smaller living unit averaging 1,100 sq. ft. compared to an older condominium unit which offers as much as 1,600 sq. ft. What do I need to bring along when I am viewing homes? Bring your own notebook and pen for note-taking and measuring tape for checking room sizes, clearance, etc if floor plans are not available. Be prepared to "snoop around" 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. If you need to go back to a home for another look, your real estate salesperson 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. Remember, you have the right to know! What should I ask about each home that I view? As a thumb rule, ask any questions you have about specific rooms, features, or functions. Pay particular attention to areas that you feel could become "problem" areas ~ additions, defects, areas that have been repaired. And above all, if you don't feel your question has been answered satisfactorily, ask until you do understand and are satisfied. Ask also about any announced changes in the neighbourhood such as road widening, new developments, amenities or facilities that are being planned for the locality. In most cases, your real estate salesperson will be able to provide you with information about each home you see. In addition, you can use the Home Features Worksheet to help you evaluate each home. What should I tell my real estate salesperson about the homes I view? Tell your real estate salesperson everything you liked and didn't like about each home you view. Don't be shy in talking about a home's shortcomings. Is the home too small for your needs? Let your real estate salesperson know. Was the home perfect except for the floor finishes? Let your real estate salesperson know that, too. The more open and descriptive you are, the easier it will be for your real estate salesperson to find the home you'll love. How many homes should I view before I buy? There is no set number of homes you should view before you decide to make an offer on one. That's why providing your real estate salesperson with as many details as possible upfront is so helpful. The perfect home may be waiting for you on your first visit. Even if it isn't, the house-hunting process will help you get a feel of the homes in the neighbourhood and narrow your choices to a few homes that are worth a second look. How do I know whether I am getting the best value for my money? In most cases, a is the best way to tell if a home is priced fairly. It's an unbiased opinion of a property's value based on its age, location, size, design and other factors. The transacted prices and asking prices of comparable properties nearby are used as a guide to determine its value. When you apply for a mortgage loan, the lender will have a professional real estate valuer perform a of the property. Do I need to use a lawyer to buy a home? Yes, for private properties. It is a requirement to work with a lawyer because the legal contracts and other paperwork involved in buying a home are complex, and can be confusing to the general public. Your lawyer will review contracts, make you aware of special considerations and potential problems, and help make everything go as smoothly as possible. If you don't know a real estate lawyer, ask your real estate salesperson for help. When I have 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. Your real estate salesperson is ready to help you through this important period. With your real estate salesperson, you'll write an "offer to purchase" ~ a written document that declares how much you will pay for the home provided that certain conditions are met. Your offer should have a time limit for the seller to accept, reject, or make a counter-offer. If a counter-offer is made, you will have some time to consider and respond. How do I determine the amount of my initial offer? There is really no hard and fast rule in calculating a realistic offer. Naturally, the buyer wants the best value and the seller wants 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 really wants a specific home. After you've looked at the home's features, asked questions, checked comparables, and talked about it with your real estate salesperson, 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 fair. Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree. When the price is agreed upon, the paperwork should be signed by both parties. What is "option money" and how much do I need? When you sign an offer to purchase, your real estate salesperson will ask you for option money ~ that is, money that shows you are serious about wanting to buy. Usually, you will be asked to write a cheque of 1% of the sale price. If your offer is accepted, your option money will be included as part of your downpayment. If your offer is not accepted, you'll get back all your option money. However, should you back out, you will forfeit the full amount of your option money. Remember before I close a deal to buy. What do I have to do? Your real estate salesperson can help you with many of the following items: - Are all the necessary inspections complete? - Are all the required repairs complete? - When will you conduct your final walk-through inspection? - Is your lawyer satisfied that title to the property is clear. - Have you confirmed a completion date and time for you and your lawyer? - Are all the necessary documents completed? - Have the property tax/quit rent and maintenance fee been paid up to the date of completion What should I look for in my final walk-through inspection? In most cases, you'll be given the opportunity to inspect the home prior to completion. 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 prior to your completion. It's the seller's responsibility to correct them. 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. "People sell their own homes," they say ~ "so why can't I?" In order to join the ranks of the successful ones, you 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, familiarising yourself with enough basic real estate regulations to understand (and possibly even prepare) a real estate contract, and coordinating the details of a closing. The greatest downsides are the demand on your time, and the possibility that a mistake may cost you the money that you're trying to save. The best reason for working with real estate salespersons is the enormous amount of information they have at their disposal ~ information that can help make your property sell faster and easier. These professionals know about market trends, houses in your neighbourhood, and the people most likely to buy there. They also know how to reach the largest number of people who may be interested in your house, 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 hate: working on weekends, answering the phone at all hours, and always being polite about it. 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 these considerations: the selling price, condition of your house, location, and buyer exposure. Since you can't control all of them, you may have to compensate in one or more areas to offset a competitive disadvantage in another. For example, if the location of your house is not ideal, it may not command as high a price. When is the best time to list a house for sale? 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. How long should it take to sell? The average listing time is about 90 days, depending on the selling price, condition of the house, its location and buyer exposure. Selling in any market is easier if you keep time on your side. Most professionals will tell you that allowing yourself at least three months will put you in a position to get a better return from their marketing efforts. What if I am unable to sell my old house before I have to move? This situation can arise for any number of reasons. For instance, getting the overseas posting 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's sold to another buyer. Whatever the reason, don't panic. You have some viable alternatives to the potential nightmare of double mortgage payments. If you don't have to sell in order to buy a new home, renting is one option to think about. Consider the advantages and disadvantages of renting your old house. A real estate salesperson can usually help to advise you on how much you can expect to charge to cover your mortgage payments and other costs you'll entail as a landlord. How do I price my house? In a word, realistically. Today's residential real estate market is no place to look for easy profit. That's not to say you can't get what your house is worth. You just have to be realistic about its value, and price it accordingly. A good place to start is by determining the fair market value. 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. It is usually not the asking price. To get an estimate of fair market value, call a real estate salesperson and ask for a Comparative Market Analysis (CMA) of your house. The analysis will give you a realistic figure based on the most salient points of the real estate market. It should provide information about recent sales of similar houses. The price range given in a CMA is very helpful in determining the right asking price. What is the difference between fair market value and asking price? 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. You can assume that some negotiation will be necessary to reach an agreement with a buyer. In most cases, the real estate salesperson who presents you with the results of your CMA will be willing to help you establish a competitive pricing strategy. Who can help me determine the right asking price? A real estate salesperson suggests asking prices based on a variety of information you may not have at your disposal, including recent listing and selling prices of properties in your neighbourhood. If you're not completely confident in the suggestion, you may want to request for a . Next, establish clear priorities. If you had to choose, are you more concerned with selling quickly, or getting the most money possible? Do you think the real estate salesperson's suggested asking price is reasonable? What would you pay for the house if you were the buyer? Someone else ~ a neighbour, 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. How flexible should I be about the asking price? Most buyers tend to negotiate before they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both you and the buyer. While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a real estate salesperson can be of great assistance to you during the negotiation process. In fact, negotiation is one of the valuable skills the real estate salesperson can offer you. As negotiation proceeds ~ whether in writing, face-to-face, or by phone ~ your real estate salesperson would inform you of your options in responding to each offer from the buyer. 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 of course, 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. Questions 13 and 14 offer several specific ideas for making low-cost improvements. 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, wardrobes as well as bedrooms and bathrooms. So get rid of all the clutter; have a clean-up and get rid of all unwanted items. After you've cleaned, try to correct any cosmetic flaws you've noticed. Paint rooms that need it as well as remove or replace any worn-out carpets. Replace faulty taps, light fixtures, and the handles and knobs on your kitchen drawers and cabinets. 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 PNA "Show & Sell" Checklist (page 8) to get specific ideas on how to make your house look its best. Additionally, ask any Real Estate Specialist for brochures on the subject. Such materials are usually free and extremely helpful to most homeowners. Should I make any major home improvements? Certain home improvements that are useful to almost everyone have been proven to add value and/or speed up the sale of houses. These include adding a new air conditioner, some kitchen remodeling and new floor and/or wall coverings, especially in bathrooms. 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 neighbourhood prices will support. So how much is too much? Generally, it has been observed that no matter how much you improve your house, you're unlikely to sell it for more than 15% above the average price of other houses in the neighbourhood. That's why you might want to ask your real estate salesperson's opinion about the viability of recouping the cost of any major renovation you have in mind before you start the work. Am I liable for repairs after I sell? .In certain situations. If the buyer's inspection reveals major problems with your house's structure or mechanical systems (air conditioning, electrical, plumbing, etc.), the buyer may wish to negotiate the price downwards 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 the title takes place. You may have heard about lawsuits involving sellers who failed to disclose major problems before the sale ~ like an addition to the house that was built without approval from the relevant authorities. Therefore it's a good idea to get the buyer's written acknowledgement of any major problems when you accept their offer. How do I reach the right potential buyers? There was a time when selling a house was simple. Your real estate salesperson would place an advertisement in the newspaper and wait. Of course, real estate salespersons still do those things ~ but that's far from all they do. Today, people are moving more frequently than they used to; it's not unusual for upwardly mobile executives to relocate overseas. The result is that the pool of potential buyers for your house is much larger and spread far wider than ever before, and the competition to reach them is fierce. PNA has responded by developing increasingly sophisticated marketing techniques that define likely buyers, where to find them, how to reach them, and how to persuade them to buy one house over another. The fact is, virtually everything we've discussed up to this point, from pricing to home improvements, the Comparative Market Analysis to the placing of advertisements, is part of a marketing process that's put into motion when you decide to list in PNA website. What is a Multiple Listing System, and why do I need one? A Multiple Listing Service (MLS) is one innovation that makes it easier to reach prospective buyers and increase the exposure of a property. Quite simply, it's a computer system under which participating real estate salespersons agree to share commission on the sale of houses listed by any one of them. How important is advertising? Advertising remains one of the most important components of the marketing process. But again, it's not as simple as it seems to be. To be effective, do not limit yourself to a three or four-line Classified ad you would probably run if you were selling the house yourself. If you list your property with PNA, your property can be advertised in more ways than just the Classified ads. Your Real Estate Specialist can place a photo listing advertisement in the Realty Guide magazine. These advertisements are designed to "find the buyer" with large-size and easy-to-read layouts, eye-catching photographs and professionally-written descriptions, plus the fact that they include not just one, but several houses for sale. How does the inclusion of other houses benefit yours? The power of numbers, plain and simple. Fewer than 5% of buyers actually purchase the first house they call about. When they call to respond to an ad, they're likely to be shown a number of houses similar to the one they initially express an interest in seeing. Today, real estate agencies also employ other proven advertising methods, including magazines, radio, TV, and direct mail. Other innovative advertising methods offered by PNA include the PNA Internet website. The PNA Pager Listing Network system and PNA Property Online (TCS Teletext) will be offered in the near future. Should I be present during the negotiation process? Good real estate salespersons will help you during the negotiation process. In fact, your real estate salesperson should be professionally trained to take care of your interest so that you need not be present. He should negotiate with the buyer to arrive at a price acceptable to you and present to you the buyer's offer. How do I find the right real estate salesperson to market my property? Start by talking to friends, neighbours, relatives or anyone whose recommendation you trust. Another source would be from responding to the advertising efforts of real estate salespersons, such as the marketing brochures that you receive or the corporate advertisements in the newspaper. Alternatively, call a reputable and established real estate office. They should be able to provide excellent help and information. The difference between an open listing and an exclusive authorization to sell? An open listing may be given to any number of real estate salespersons. However, the salespersons are not obligated to spend time and money in trying to make the sale as no commitments have been made. Their policy is to wait for an offer by a buyer ~ any offer for consideration by the owner. The disadvantage to the seller is that a considerable period of time may lapse before the property is sold. Very often, the control of price is lost in an open listing as real estate salespersons may resort to undercutting prices so as to close the deal. An exclusive authorization to sell is the right given by a seller to a particular agency to sell his property within a specific period of time. It is the only way a real estate salesperson can serve the seller properly as the seller would then have the right to demand proper attention in the marketing of the property. The real estate salesperson working on an exclusive authorization to sell will be able to control the marketing price without any unnecessary price undercutting and he is more likely to sell the property faster. What is the advantage of an exclusive authorization to sell? The answer is incentive -- it affords real estate salespersons the protection they need to know their time and effort will not go unrewarded. That's one reason many residential listings are marketed under exclusive authorization to sell agreements. Should I pay 2% commission whilst some agencies charge 1% commission? Firstly the Board of Valuers, Appraisers and Real Estate had recommended that a minimum 2% be payable. Secondly, a professional real estate agency will have a wider international network and a more established local network with a larger sales team to source for more potential buyers to view your property. It also offers more real estate products and services to enable your property to sell faster and has better real estate salespersons that are well-trained and more professional. Most importantly, buyers will be more willing and feel more secure in dealing with a professional and established real estate agency. How do I select the right real estate agency to market my property? Homeowners who are selling their properties should be aware of problems that lurk in sales handled by untrained or unscrupulous real estate agencies. They should select the agency carefully, taking into consideration several factors. One of the most important factors is to make sure that you are working with a licensed real estate agency that has a proven sales record. Select an agency that has a large sales team and an established local network simply because more salespersons will be looking for potential buyers for your property. The real estate agency should preferably also have an international network to connect you with potential buyers from other countries. Selecting a real estate agency that has a comprehensive range of effective marketing tools will mean that your property will be sold in the shortest time possible. You would also want a real estate agency that can provide you with the home warranty plan and a deposit guarantee programme to give you the advantage when your property is being marketed. Visit the office of the real estate agency and make sure that they have a full team of professionals to provide service and support to its real estate salespersons. Check to see if they have the full range of legal, , public relations and advertising support so that the sale of your property will be swift and trouble-free