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Questions You Should Ask Real Estate Agents Before Hiring Them

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By Megan Wild, author of Your Wild Home blog 

If you’re planning to buy or sell a house in the near future, you will likely be working with a real estate agent. Before you decide to work with them, you need to ask prospective real estate agents a few questions. It’s best to ask these questions of at least three prospects. Their answers will help you make sure the agent you work with is experienced, professional and has availability and a working style compatible with yours.

Here are some common questions to help you choose the right real estate agent for you.

How Long Have You Been a Real Estate Agent?

There’s no substitute for experience. You want someone who knows how to buy and sell houses and has done so many times. If you hire a rookie, they are going to be learning on your dime. If you do talk to an inexperienced real estate agent and like them, make sure they are working closely with a more senior person.

How Familiar Are You With the Neighborhood?

A good real estate agent should be able to reel off facts and figures about the neighborhood in which you’ll be looking. School districts, community organizations, even crime statistics and the nearest fire department should be among the information they don’t have to look up. Plus, a real estate agent who is familiar with the neighborhood will know how fast and for what price the homes are moving. They might even have the inside track on homes that haven’t been listed yet.

agentDo You Work Full or Part Time?

It’s important to know whether your agent is full or part time, for several reasons. First, if you have a very busy work schedule, it might be tough for a part-time real estate agent to be flexible enough to see homes on hours convenient for you. If you do decide to use a part-timer, ask what hours they work. Second, part-time people may have a primary commitment to another job, or are just trying the real estate business on for size. Weigh your feelings about this as part of your assessment.

Do You Have Any Certifications, Real Estate Education or Continuing Education?

Many real estate agents have certifications or education in particular areas, such as property preservation and maintenance, appraisals and mortgage originations. Their education in these areas can help ensure you will be receiving good advice. Plus, their commitment to keeping up with their field is a sign of professionalism.

Do You Specialize in Buying or Selling?

Most real estate agents work both for buyers and sellers. However, most also specialize in one or the other, since the markets and expertise required in both is very different. You want a real estate agent who can give you the optimum advice for your situation. You also want one who can help you negotiate the most advantageous deal. A buyer’s agent will specialize in getting the lowest price for the buyer. A seller’s agent will know negotiation tactics to get the selling price as close to the asking price as possible. It’s best to choose an agent who specializes in your situation.

How Many Homes Did You Sell/Help Someone Buy Last Year?

There’s no one magic figure here, but you want it to be more than one or two. You want to make sure your real estate agent is active and working. If it’s a low figure and the real estate market in your area is not sluggish, avoid the agent.

How Many People Do You Work With at a Time?

Real estate professionals themselves say that an agent working with more than 10 people at a time will be stretched thin. Assess your own need for a real estate agent’s time. If you are new to home transactions and need a lot of advice or hand-holding, pick someone who isn’t pushing the envelope of being too busy.

What’s Your Marketing/Sales Strategy?

If you’re buying a home, you need a sales strategy. If you’re selling it, you need a marketing strategy. Your real estate agent should have a strategy. Does he recommend paying in cash if you can to beat a hot real estate market, for example? Should you make a bid immediately if you see a home you like? Does he recommend a video tour for marketing a home you’d like to sell? Should you do a mini-kitchen renovation as a sweetener?

Can I Talk to Your References?

This is only a rhetorical question, since everyone interviewing a real estate agent should talk to at least three references, in person. We realize many people post customer satisfaction information on their websites, but you need to ask the references specific questions. Was the real estate agent easy to work with? Were they available when you needed them? Was their advice good, practical and up-to-date?

If you’re going to be working with a real estate agent, be sure to ask them questions. You want to ascertain they are experienced and that working with them will suit your needs.

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A Guide To Mortgages, HELOCs, and More

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Whether you’re looking to make a first-time purchase, refresh an existing home or simply leverage built-up equity for other reasons, it’s important to figure out which path is right for you and understand the lending options available.

First-time buyers must start with determining what is affordable. In addition to the mortgage payment, housing costs will include property taxes, homeowners insurance and fees, such as homeowner association dues. Altogether, costs should be no more than 28 percent of monthly gross income and should leave room to continue servicing other debt, such as student loans, credit cards or auto loans.

When preparing to buy a home, work through credit pre-approval to be ready with a strong offer when the opportunity arises. In addition to reviewing credit history, a loan originator will consider the amount of the down payment. A down payment typically ranges from 3-20 percent, and one that is less than 20 percent may require you to purchase mortgage insurance.

A mortgage originator, however, can provide a variety of lending options to optimize your investment, from 15- and 30-year mortgages to fixed and variable terms. If planning to make some improvements to a much-loved residence, consider financing the updates through a home equity line of credit (HELOC). Eligibility depends on how much equity has been built up in the home and the lender’s loan-to-value ratio. A HELOC works much like a credit card and offers flexibility. A minimum amount is paid monthly, and interest applies to the amount borrowed. Before embarking on a remodeling project, do some homework.

Start with the lender to determine the value of the home and the loan amount available. Then, establish a budget, leaving room for unexpected expenses. Work with a reputable professional to define the project and its requirements, and shop around for bids and recommendations to confidently select a contractor. Some lenders offer checklists to help get the most from the investment.

Another option for financing a project through a home’s equity is a home equity loan (HELOAN). As with a mortgage, the loan is granted as a lump sum and is paid back in installments over time, typically 10-15 years and at a fixed rate locked in at the time of securing the loan. A HELOAN works well for a one-time goal to improve the value of a home. Be mindful that either a HELOAN or a HELOC introduce some uncertainty, as monthly expenses will increase and must be maintained to avoid foreclosure risk. Remember to consult a professional for advice applicable to your specific situation. Start with a lender who can help you identify financial options available to home buyers and owners today.

With careful planning and budgeting, the financing you need may be well within reach.

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Home Warranties: What You Should Know Before Buying

home warranties

By Megan Wild, author of Your Wild Home blog 

Should you buy a home warranty when buying a home? There are several considerations to think about when making the decision.

What a Home Warranty Is and What It Covers

Home warranties are essentially service contracts that cover your home. They cover repair on large systems and appliances within a home. For example, warranties commonly cover heating, ventilation and air conditioning (HVAC) systems, hot water heaters, plumbing and electrical systems and major appliances.

home warrantiesDo not confuse home warranties with insurance on systems and appliances. Insurance on a system or appliance will pay the insured party if there is a malfunction or if the item doesn’t perform as advertised. As a homeowner, you’d receive an insurance payout that would enable you to purchase a replacement item.

Under a home warranty, if a covered system or appliance does not work properly or breaks, the homeowner gets in touch with the warranty company. That company, in turn, gets in touch with the contractors they employ to make the repair. Those contractors are the ones who will come to your house to look at the system or appliance.

If the contractors cannot make a repair, but the system or appliance needs to be replaced to work properly, the contractor will also replace it under the terms of the home warranty. They will replace an item if the malfunction is due to normal wear and tear.

home warrantiesBut the home warranty will not cover a repair or replacement that the contractors deem due to actions of the homeowner, pre-existing conditions or misuse. If the HVAC stops working because children have stuffed toys in the vents, for example, the damage will not be covered by the warranty. If the boiler’s damage occurred before a homeowner bought the home, the warranty may not cover it, because it is pre-existing damage.

The homeowner pays for the cost of the warranty per year. Home warranties cost from $350 to $500 per year. In addition, the contractor charges a service fee, usually approximately $100.

Sometimes, real estate agents or sellers add a home warranty to a home being purchased, because malfunctioning or breakage of major systems shortly after a sale is often the seller’s responsibility.

Several companies offer home warranties. Sears, for example, offers them, as does American Home Shield® and Total Protect.

Are They a Good Idea?

Now that we’ve explained what a home warranty is and what they cover, it’s time to consider whether they are a good idea.

From a consumer standpoint, a home warranty may not be necessary if the home you’re buying is new construction or the home is relatively new. Many states require the structure of a home be guaranteed for 10 years. Modular homes often come with a 10-year warranty as well. So, if your roof on a new home suddenly develops leaks, for example, the builder is likely required to repair or replace it.

Major systems like HVAC and major appliances are all likely under warranty in new home construction. It’s a good idea to check into the warranties for individual systems and appliances. Some may last a year, and others may last more. If all the individual appliances and major systems are already under warranty, purchasing another one would be a waste of money.

If you are buying an older home, however, a home warranty might make sense. Most systems and major appliances in a home need to be replaced when they reach a certain age, ranging from 15 to 30 years. The roof and siding need to be replaced every 15 to 20 years. If you believe a warranty would help cover the cost of replacement, it may be a good idea.

Warranties may also provide peace of mind to first-time homebuyers who are worried about the cost of maintenance and repair on a home.

Just be aware of what they do not cover. Leaky faucets, for example, are almost never covered by a warranty.

There might also be difficulties with the quality of the contractors. Some consumers complain the contractors home warranty companies send perform less-than-ideal repair and maintenance work.

Poor workmanship can be frustrating. It may result in either the system or appliance not working properly, or in the homeowner having to replace it or hire another contractor to fix it despite the warranty.

It’s a good idea to read reviews of warranty companies and their contractors before purchasing a home warranty.

While home warranties may be a good idea for buyers of older homes, especially for first-time home buyers, they may be redundant for purchasers of new homes. Many states require builders to guarantee the structure of new homes for a decade, and new appliances may already have individual warranties. Homebuyers should consider the pros and cons of purchasing home warranties.

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