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The home-buying process is exciting, exhilarating, extremely tiring and probably one of the most overwhelming tasks you’ve ever attempted. There could be hundreds of little things (and some big ones) that can go wrong and put your emotions in a tailspin.

The searching part is mostly fun and you’re getting to see what’s available in your price range and envision the home after you put your personal touches on it. Then, comes the journey to closing. That’s when anything and everything can happen.

You may be fortunate enough to avoid most of these trying possibilities, but you should know something about the top things that can go wrong. For example, you discover that the loan you cosigned for your cousin last year is in arrears and the payment has never been made on time. Or, the listing indicated that property taxes on the home were only $1,500 per year, but it’s been reassessed and now they’re $2,500 per year. Sometimes an appraisal doesn’t turn out to be all you hoped for and the lender balks at it being so much lower than the seller is asking for.

It’s pouring down rain during the final walk-through and you feel it dripping on your head from the ceiling in the bedroom. You might be suffering from buyer’s remorse and are thinking of calling the whole thing off. Even worse – the seller may be having seller’s remorse and thinking of calling the whole thing off. Or, what if the money you were going to use for a down payment on the home never materializes – such as a gift of money from your aunt and uncle.

You may have forgotten a critical piece of information about your financial history – such as having filed for bankruptcy six years ago. You’re in trouble with the lender if you haven’t filed income tax returns for the past year or more.

Your spouse or significant other decides he or she doesn’t really like the home you’ve chosen and wants to continue looking around for another. To top off everything, you find out the seller hasn’t paid his property taxes in a few years.

You didn’t qualify for the amount of loan it would take to buy your dream home and the amount you did qualify for is a joke. All of the above and so much more could go wrong between the mortgage application, the approval of the loan and the closing date.

But chances are most of these dire possibilities will never happen to you. If they do, keep in mind that all of the problems can usually be worked out – perhaps not in your preferred time – but eventually.

Hopefully, it will be worth the stress, headaches and heartaches when you finally do sign on the dotted line, turn the key in the door of your new home and begin to think about all the possibilities you can make come true.

Selling a house can be a tricky business, but one you can easily do when you have the right information. The amount of money that you can make or lose will depend on how you handle an offer. 

There are times when you should accept an offer – such as if your home is in an area where homes are harder to sell. Some places, like out of the way rural areas, don’t always move real estate as quickly as more populated cities and towns. 

So your first offer might be the best one to take if you’re in a hurry to move. As long as it’s close to your asking price, you’ll want to seriously consider it. Obviously, if it’s a ridiculously lowball offer, you’re better off turning it down. You don’t want to practically give your home away. There are times when you should automatically counteroffer. Sometimes a potential buyer will make a first offer that’s much too low. Some homeowners are immediately offended by this and won’t even bother negotiating. A real estate agent will keep the emotion out of the deal because he knows it’s just business. 

Buyers want to save money as much as sellers want to make money on the transaction. If you don’t think you can keep the emotion out of it, then you need to let an agent handle the deal. But if you can handle it and you really want to sell the house, then offer a counteroffer to the buyer. In many cases, it can be helpful to come down just a little on the asking price. Not much, but enough to show that you’re open to negotiations. There can often be a back and forth between the buyer and the seller before both parties reach a price they’re happy with. If you have a lot of interested buyers, then you can afford to stand firm on your asking price because you might end up in a bidding war. You can wait until multiple offers come in and decide which one is the best for you. Sometimes the counteroffer won’t have anything to do with money. You can have buyers who want to ask for a lot of concessions and sometimes these can be over the top. They want you to put in a lot of extra work for things they want you to change. These things usually don’t have anything to do with the structural integrity of the house. They might want to include something that’s not in the original offer. Or they have demands that are costly like paying all their closing costs. In cases where a buyer wants a lot of concessions, you’re always better off counter offering. If your home is priced to sell and it’s a hot market, there’s no reason why you shouldn’t fight for more.

Tips to Ensure Your Home’s Showing Is a Success

The purpose of showing your home is to hook a buyer. You want the buyers to come through your house and be impressed – so impressed in fact, that they’re ready to make an offer! You’ll have one chance to make a great first impression on the potential buyers, so make sure to follow these five helpful tips to really make it count!

1. Focus on the outside. Make sure that you don’t neglect the outside of your home. Curb appeal can make or break the odds of someone even bothering to get out of the car to come in. If they pull up and see a home with a lawn that obviously needs edging and has an unkempt flower bed, they’re going to wonder what else hasn’t been cared for properly. You want the outside of your home to be spotless. Clean the siding, the windows, and the doors. Make sure there are no dirt smudges, no cobwebs, and that anything that needs painting has been spiffed up. 
2. Take yourself out of the house. That means that you want to take out all the personal stuff. Remove the family photos from the wall or tables. You want the home to look neutral so that the potential buyers can look at your house and picture it as themselves living there. Everything should be as neutral as possible in terms of personal items. 
3. Remove all the extra clutter you see at first glance. If you look around, it’ll amaze you at how much stuff you’ve accumulated over the years. Some of it might very well be important, but that doesn’t mean that your potential buyers should see it. When you have a lot of clutter, it shrinks the living space of the house. It makes it look and feel cramped and smaller. Many homeowners get something called house blindness. They’ve lived in the home for so long with the same clutter that they don’t even really see it anymore. But a stranger will always notice. So clean out your house and make the space as big as possible.
4. If you have a pet, no one that walks through your house should be able to notice it exists. That means no cat litter box, no dog to jump on anyone, no food sitting around in a dish. Your home should not have any pet odors. Having a clean house that’s odor-free is a big selling point. You don’t want to lose a possible deal just because they can smell your pet’s presence or your pet makes a bad impression.
5. Stage your home! You can hire a professional or you can do it yourself. Stage your living areas in a way that shows off your home. You can rent furniture to make your home furnishings look good if you don’t use a stager. Someone who knows how to stage a house knows how to play up the best features of your home and knows what to bring in or get rid of to make the entire house appeal to a buyer. 

First impressions are HUGE when showing your home to potential buyers, but by following the simple tips above you will be well on your way to making a great impression and, hopefully, receiving multiple offers!  (And if you are at all anxious about this important step, just reach out to a trusted real estate agent in your area who can help guide you through this process!)

Selling a house is a big deal and you stand to gain or lose money depending on how the transaction is handled. You can put your home on the market and try to sell it on your own or you can hire an agent. 

There are pros and cons for doing it either way. If you sell your home yourself, you’re the one who has to handle all the showings. You might be someone who enjoys meeting people and letting them come into your home and sometimes having a good connection with the homeowner can lead to a sale. However, you can miss out on potential buyers if you don’t have an agent because most agents want to show homes to people who are represented by other agents. It’s a professional courtesy and agents know that other agents are aware of the ins and outs of home selling, whereas a homeowner won’t be. When you’re the one handling the sale, you’re close to the situation. 

Anything that a buyer points out that you don’t like can sound like a personal criticism. Sometimes buyers will point out what they perceive to be as faults with the home and inexperienced homeowners might be tempted to take less money. 

An agent is your go-between and handles any issues like that which might come up. When selling a home yourself, you might run into a case where the house sits on the market and just isn’t selling. You might not understand why that’s happening, whereas an agent would. However, you know your house better than an agent and you know which selling points to push that an agent may not point out. 

Selling a home is a lot of hard work. If you handle it like a business transaction and you have the time to be there to show your home or answer questions when prospective buyers reach out, then you can save on the expense of hiring an agent. 

One problem you might encounter, though, is that you might not have the kind of time that it takes to deal with potential buyers. An agent fields the calls, the email inquiries and the showing. He or she can also help a potential buyer know what to do in order to prequalify. Some homeowners have a large social media presence and a large circle of contacts that they can tap to put out the word that they’re selling their homes themselves. 

In some cases, for sale by owner homes have sold because of word of mouth. But on the other hand, the size of the audience that a real estate agent can reach will be larger. The bigger the potential buying audience, the more chances that your home will sell quickly. Once you have an interested buyer, you’ll have to have a contract drawn up. For this, you’ll need to pay for the services of an experienced real estate attorney. You’ll also have to hire an attorney to handle the closing. Real estate agents include this in the price of doing business with you.

A real estate agent understands the importance of an escrow and earnest money. If you’re selling your home by owner, you need to know what these are and how they apply to you. 

Earnest money is just like it sounds. It means that the potential buyer is earnest in his desire to buy your home. While you don’t necessarily have to have earnest money when you’re selling your home by the owner, it’s a good idea. It helps to weed out those who waste your time from those who are truly looking to buy. If you and the potential buyer are able to iron out all the issues during the negotiation, that earnest money is then considered part of the cost of buying the home. It gets counted as part of the down payment if one is required or it goes toward paying the closing costs. Keep in mind that earnest money does not always lock a potential buyer in. 

If, during the home negotiation, an issue arises with the house, the buyer has a right to get his money back. If you don’t know what to charge for the amount of earnest money, you can look at what the laws are in your state regarding that if there are any. As the usual rule of thumb, at least 1% of the home’s value should be offered. Some real estate deals though have set amounts in place as the earnest money such as $1,000 to $2,000. 

The supply and demand of the market can also impact the amount of earnest money required. You can’t spend the earnest money that you receive. You have to place that money in an escrow account until the home sale is finalized. Escrow is basically the same thing as earnest money. It just means that it’s where the earnest money is. Escrow funds are kept by the person dictated by the laws of your state. In some cases, it’s going to be the title company representative. It might be the company handling the closing or it could be a real estate attorney. This is known as third party handling. The purpose of this is to make sure that the transaction is completed and that the funds aren’t dispersed until it is. It protects both the seller and the buyer until all the documents are signed and the home changes ownership. It’s a way of making sure that all the agreements or contingencies between the parties were met. If, at the last moment, the buyer just decides he doesn’t want the house even though all his conditions or contingencies were met and breaks the deal, then the seller can be entitled to keep the escrow.

Buying a home is a big event, especially if it is your first home.  There will probably be many things you don’t know, because you simply haven’t been through the home buying process before.  One of the most common questions of first-time homebuyers is whether they need to hire a buyer’s agent.

There is nothing that requires anyone to hire a buyer’s agent.  You can find homes for sale on your own and work directly with the seller’s agent.  The problem with that is that the seller’s agent has the seller’s best interests in mind.  He will try to get the highest possible price for the seller, and is in fact contractually bound to do so.  He is also obligated not to share any confidential information about his client with you.

Working with a buyer’s agent gives you the advantage of having a knowledgeable and experienced agent looking out for your best interests.  Your agent will help you find property that meets your needs.  He will then assist you in negotiations to help you get it at the lowest possible price.

You can work with an agent without signing a buyer’s agency contract.  In fact, it’s a good idea to do so for a while until you’re sure that you want that agent to represent you.  You need time to determine whether the agent will listen to your needs, and whether the two of you will be able to get along.

An agent is not legally bound to keep information, such as the highest price you would pay for a property, confidential until you sign a contract with him.  If he is a dual agent that also represents sellers and you want to buy a home that belongs to one of his clients, he has to share that information unless he is legally representing your interests.  So keeping such things to yourself until there is a written agreement is a good idea.

An agent should not pressure you into signing an agreement right away.  That is a bad sign in and of itself.  If after a while you’re still unsure, you can talk to the agent about signing an agreement that only lasts for a short time.  You could also consider a non-exclusive agreement, which allows the agent to represent you but also allows you to work with other agents.

A buyer’s agent is not necessary when you are buying a home, but having someone with experience on your side can make your home buying experience a more pleasant and potentially less expensive one.  In many cases your agent and the seller’s agent will split the commission.  That means that you can have your own agent without having to spend more money.

If you aren’t familiar with options for financing, it is never too late to get started.  Understanding the different terms and having the ability to relate them to each other will help you to avoid situations that are not financially possible.  One of the terms that you should know is balloons.  This can either help you financially or cause you problems.  Understanding the details of how balloons work and using them to your advantage will give you the ability to pop into the right loan.  

Balloons are used as ways to lower monthly payments.  It does this by consolidating a specific percentage of your loan each month.  At the end of your entire loan, you will pay the additional percentage that is left.  Usually, this will equal about fifty percent of the loan you have.  

You can work with balloons to your advantage if you have the right finances in place.  If you know that you will have a large amount of money at the end of your loan term, then having a balloon can help you to save now and build your credibility with financial investments later.  

If you aren’t certain of your financial status and what it will be in ten years, then a balloon will most likely not help you.  Because you will be expecting to pay a large amount at the end, it can lead to debt and won’t help you to make an investment in another house in the future.  In relation to this, if you are making a specific amount now but know that you will be making more later, then you can use a balloon in order to stabilize your financial conditions.  

By using a balloon, you will be put into a situation where your mortgage will blow up to twice as much at the end of the term.  This can be an advantage or a disadvantage, depending on your situation.  By knowing exactly how to tie the end of the balloon, you will be able to find the best financial options for your situation.

There are many reasons why you may have decided to purchase a home – a growing family that needs more space, you’re tired of paying rent and want to invest your money and you’d like to get the tax breaks that homeowner’s enjoy. Those are just a few.

Don’t simply compare what you’re paying in rent to what you’d be paying with a low interest mortgage payment. Even though it can be an asset for the future, you may not be ready financially to make the commitment.

The pros in homeownership highly recommend that you have a down payment of at least 10 to 20 percent and have an emergency fund socked away that can get you through 3 to 6 months of bill payments.

There are also other points to consider when deciding whether to rent or buy. Buying a home is touted as ‘smart’ and renting as ‘dumb’ but that’s not always the case. Purchasing a home can be a good decision, but some experts believe that it’s a bad financial decision and that the idea of home ownership is overrated.

Some things to consider when deciding whether to rent or buy include the fact that when you pay off your mortgage the home belongs to you. If your home has appreciated more than the taxes, mortgage and interest you’ve paid in – you’ve earned a return or simply break even.

Keep in mind that owning a home also qualifies you for tax credits that can offset some of the costs. But, even though you may own your house outright, you’ll still pay a significant amount of taxes and interest.

You should also realize that renting isn’t exactly “throwing your money away.” You get a place to live and you don’t have to pay for issues such as repairs and maintenance. So, rather than make a decision on what the headlines are saying about home ownership being the best route, you should consider your current situation.

Figure it out by researching the pros and cons of homeownership, crunching numbers and taking a long, hard look at your finances and lifestyle. You may be moving from place to place in your career and don’t need the hassle of putting your house on the market every year or so.

Consider the cost of housing in your area. Houses may be too expensive for your pocketbook right now, so it could be better to rent. But, renting may also be expensive and owning a home might be the better option.

Can you get more of a return on a home investment or by investing your money in the stock market or other methods of investing? All of these caveats must be considered before you should make a final decision on whether to buy or rent.

Your situation isn’t like others and you need to think about where you want to live, what type of house and environment you’re looking for and how it will all pan out in the future. In the end, know that sometimes it’s best to rent rather than buy – it all boils down to what feels right to you.

It’s great to see the housing market recover after a big letdown and enjoy the hot new market. But, with the recovery comes a tight supply of homes, multiple offers – and bidding wars. Knowing a few tricks of the real estate trade can help you emerge with the best bid and be the winner in a bidding war. For one, you should try to be the first offer – but don’t insult the seller with a lowball offer – especially with so few listings on the market today.

Bid at the asking price or only slightly below. The seller will know you’re a serious bidder with that type of beginning. One trick of the trade that really works is to add an escalation clause to the bid. For example, if the price of the home is $500,000 and you think it might rise as high as to $550,000, add a clause that says you will go as high as $560,000 (if that’s true and you really want the home).

The clause should state that the seller can only raise the winning bid to just above the competing offers. For example, if the bids on the home only go as high as $530,000 you won’t be expected to pay $560,000 but only slightly above the highest bidder.

Another little known way to make your bid count is to send the seller a letter (possibly through your real estate agent). Tell the seller how much you love the home and mention something about the home that you particularly like and how your family will enjoy and take care of the home. Plan to spend as much cash as you on the down payment and be sure to get approved for a loan ahead of time to close. Mortgage lenders suspect loans that aren’t a sure thing and bringing cash to the table makes a difference. Go in armed with a pre-inspection. The few hundred dollars it will cost is well worth the time and money. And the seller will know that you’re serious about wanting the home. Have the pre-inspection performed before making an offer on the house.

Your real estate agent can be a huge asset in a bidding war. She can let the seller know that you’re completely enamored with the house and be specific about what you like about it. Chances are, the seller will appreciate that you noticed the touches he was responsible for.

Finally, be smart during a bidding war. Compare the most recent comps and research the market before getting into a bidding war and don’t let your emotional attachment to the house empty your wallet.

It’s easy to overpay when you get caught up in the emotions of a bidding war, but remember there’s always another house that you’ll love and enjoy. Too many buyers get caught up in the emotional aspect of purchasing a home and go overboard in a bidding war. Most regret it later on.

The house you’ve chosen to buy may look exactly like the home you’ve always envisioned – great neighborhood, granite countertops, plenty of room to entertain. But, there may be some hidden sins that you’re not aware of.

The few hundred dollars it will cost you to get a pre-inspection of the home can come back to you tenfold if there’s anything significantly wrong with the house. Even if there are no hidden problems, you’ll have peace of mind that’s so important during the house-buying process. During the home inspection, the inspector will examine the home thoroughly and provide you with an evaluation of the condition of the home. Even though the home inspector may not catch every issue with the home, they are experts in what they do and can recognize costly, potential problems in the future. If the inspector finds quite a few problems with the home, you can use that information to your advantage by negotiating a lower price or have it written in the contract that the owner must take care of specified repairs before the closing date.

Not getting an inspection may be costly down the road. You could have faulty wiring that leads to a fire, a defective water heater and many more problems that could impact your future in the home. An inspection is especially critical if you’re purchasing a foreclosed home or an old home – even one that has been renovated. You may feel attached to the home because it appears to be the one you’ve always dreamed of – but don’t let that attachment make you blind to the red flags that may be costly and discouraging. You may need to go beyond a licensed home inspector if you suspect problems such as foundation problems and hire a structural engineer to examine the home and let you know of potential issues.

If the yard of the home you’re considering slopes toward the home, there may be drainage issues and you need to get a landscaper’s opinion. Knowing ahead of time so you can make the proper changes can save time and money from flooding and water damage. The septic system of a home should always be inspected by a septic system inspector to see if the ground is wet or soft around it. That could indicate a major crack or failure of the system.

Considering buying an older home? Be sure to hire a toxic substance inspector to detect whether the home has traces of mold, asbestos, lead or radon. Those can be costly or even deadly issues if not addressed.

A pest inspector should be called if you notice wood shavings, softwood or buzzing within the wall. Pests such as termites can cause an abundance of damage to your home.

If your home is in an area that experiences frequent earthquakes or floods you may want to hire a geotechnical inspector to examine the home for possible problems in the home’s structure or retaining walls.

You may love the big, old trees surrounding the home you want to purchase. But, beware of large roots and tree canopies which can damage what’s beneath it. The foundation, roof and driveway could all be at risk from the roots of trees.

It’s worth the money to inspect your home thoroughly before signing on the dotted line to make sure you are getting your dream home and not a nightmare that will cost you more in the future.