Top 3 SURPRISE Costs of Buying a Home

Some surprises are great! Going to a surprise birthday party. Getting a surprise bonus on your check. Hitting a blind shot onto an elevated green when you were playing golf this weekend and finding your ball 6″ from the hole for your first birdie of the day. THOSE surprises are GREAT! If you’re anything like me, when making a big financial decision, like buying a home, surprises are probably one of the LAST things you want. I want to help you move smart and not be surprised by the costs of buying your next home. Today I’m going to share with you the three expenses of buying a home that most often catch buyers like you by surprise and teach you how to be a step ahead and save when you’re buying your home.
The first surprise expense of buying a home is the cost of inspections. When you agree to a contract with a seller to buy your new home from them, you have a period of time to perform any inspections to make sure the house is in good condition and there are no hidden issues you should know about. Home inspections, termite inspections and foundation inspections are all common for buyers to have performed. The cost of those inspections usually amount to $400 – $500 and, as the buyer, you have to pay for those out of your own pocket. A lot of buyers that I have talked with who are thinking about buying a home don’t anticipate this cost and it can throw them off. To move smart, you need to be prepared for the cost of inspections and have an inspector lined up to perform the right tests on your new home.
A second common surprise cost for home buyers is paying for a survey. What is a survey? A survey is a map of your new home that shows the boundaries of your property, any structures on your land and any important utility lines or other things on your property. Your lender will usually require you to have a survey for the property you are purchasing. Most of the time, the seller you are buying your home from already has a survey from when he bought the home, but sometimes that survey has been lost or too much has changed to the property since the last survey was completed and a new one has to be ordered. You will pay about $450 for a new survey. If that expense comes as a surprise to you when you are buying a home, it can feel like a gut punch – $450 is a lot of money, especially when you feel like these “surprise” costs are adding up. To move smart, before you submit an offer, find out if the seller has a good survey for you to use. If he doesn’t, have your agent negotiate on your behalf to have the seller pay for a new one.
One other surprise expense you need to know about is closing costs. Most buyers I work with have heard of closing costs but know very little about what to expect. They don’t understand what closing costs are, how much they are and what they can do to reduce their closing costs. As a result, they are caught off guard by the estimates their lender gives them or, worst yet, they are floored by the final closing statement they get right before closing! The simplest explanation for closing costs is that they are the lender fees, title fees and pre-paid taxes and insurance you pay at closing, in addition to any down payment you pay. Closing costs usually amount to 2-3% of the price of the home you are purchasing. So if you are purchasing a $300,000 home, closing costs can be as much as $6000 – $9000! That is a HUGE expense if you didn’t plan and prepare for it! To move smart, talk to a lender who can tell you exactly what to expect for closing costs depending on what type of loan you apply for so you can plan and save for that. You can save some on closing costs by working with your agent to negotiating for the seller to pay for some of your closing costs. There are some costs the seller usually expects to pay for but you can end up paying yourself if you don’t negotiate your contract the right way.
These costs are the three biggest surprises for home buyers. For a list of the costs you should expect when buying a home, sign up to receive my FREE Guide: Move Smart by Knowing Your Expenses. I hope this can help you Move Smart! If you are considering buying a home in the Austin area and want to make sure you move smart, contact me and I would be happy to help.

When Is the Best Time to Sell?

Selling your home at the right time could mean you’re moving with an extra $20,000 in your pocket. You know you’re going to sell this year, but knowing when to do that is crucial! Today I’m going to share with you when is the best time to sell your home, but first I’m going to tell you how one family sold smart, timed it right and won big! I was really excited to be working with a family who had outgrown their home and needed to find a bigger place to raise their children. When we met at their home, I knew we could list and sell their home right away, but they would be leaving money on the table. If we waited just a little bit and fixed up a few things in their house, they could sell their home and make the move with a lot more money than they expected. So we developed a plan to make their home more valuable and appealing buyers and determined the ideal time to sell their home to get them the best price. In the end, our plan was a huge success and together we sold their home for $20,000 more than they believed they could! Being able to see this all work out for them and seeing how happy they were is why I love my work! What would you do with an extra $20,000 you could make by selling your home at the right time?

To know when is the best time to sell, we need to look at three trends. We need to understand trends for the number of other homes available and sold each month (SUPPLY & DEMAND), how fast homes sell (VELOCITY) and how much homes sell for compared to the list price (VALUE).

SUPPLY & DEMAND – Number of Homes Available & Sold

Over time, we can see a trend where the number of homes for sale is greatest in June and July and fewest in December and January. This means that if you are selling your home, you have the most competition for buyers in the summer and the least competition in the middle of the winter. The number of homes sold each month will show us demand – more homes sold means more buyers buying. This trend is similar to supply – it usually peaks in June or July and is the lowest in January. Since it usually takes 30-45 days to close, we can assume that the number of buyers actively looking for a home like yours is a little ahead of this curve. The greatest demand is in May and June and the lowest demand is in November and December.

VELOCITY – How Fast Homes Sell

Knowing that supply and demand go up and down at the same time, you might expect the rate at which homes sell to be pretty consistent – WRONG! Homes are on the market for the least amount of time in April and May and that number gradually increases through the Summer and Fall, peaking during the holiday months. Remember the length of time it takes to close a home – 30-45 days – that means that homes that sell the fastest are probably listed for sale in March or April and close in April or May. I’m guessing you can start to see all the information coming together, but let’s look at one last thing.

VALUE – How Much Homes Sell For Versus List Price

The ratio of a home’s sale price to the price the owners listed it for is in some ways a combination of all the numbers we already looked at – supply, demand and velocity. Over the past few years, sellers are accepting the lowest offers compared to their listing price in January. That ratio climbs sharply to peak in April, declines slightly through the summer and then drops off in the fall.

I’m sure you’re a smart seller and can see the answer for yourself. They seem to indicate that the best time to sell your home to get the most amount of money is in March or April. The number of homes for sale is starting to grow but the number buyers looking at homes like yours is growing much faster – many people want to beat the summer rush. As a result, homes are selling faster and closer to their list price.

If you are thinking about selling, you really need to know how these trends are reflected in just your neighborhood. I made a FREE GUIDE for figuring out the best time for your neighborhood and included a few extra warnings about things to avoid. You can receive that for free by clicking HERE.

If you are at all thinking about selling your home and want to do this the smart way and make sure you get the most money you can, give me a call and I can show you how you could make that extra $20,000 on the sale of your home. Even if you have no choice about when you sell your home, there are other things you can do to make sure you get the most value.

Anyways, I hope this REAL ANSWER can make you a smarter homeowner. Enter your email in the column to the right to sign up to receive more REAL ANSWERS because the right answer can help you no matter when you decide to sell your home. You can also submit your own questions for me to answer. This is Real Estate and that’s the REAL ANSWER!

What is the BEST Open House Question?

KEY TAKEAWAYS

Rather Watch Than Read? Click Image for Video!
  • Ask the WHY, not the WHAT
  • Get the Sellers’ Insight

Every weekend, thousands of people leave their air conditioned homes to visit open houses. If you are going to give up a Saturday or Sunday afternoon to look at houses, I’m sure you want it to be profitable – useful – and feel like your time was worth it (Are you thinking of a move? I can make it easier – Let’s Connect!). If you want your open house visits to be as valuable as possible, you need to ask the right questions. What is the most common question I get at an open house? I already answered that in this blog post. 

The best questions will always focus on information you can’t find in a flyer or MLS listing – they will focus on the hidden details. So, what is the best question to ask? I couldn’t narrow it down to only one so here are the top two:

What do the sellers like MOST about this home?

The answer to this question can be very valuable because it will often highlight something about the home of area that you would be very hard to convey or understand unless you are actually at the home. Maybe the sellers love the floor plan or the neighborhood. Maybe they like the schools or the back yard has an amazing sunset view that you could never truly appreciate unless you saw the backyard for yourself. The answer could be any number of things, but it is most likely something that you would never learn from a flyer, MLS listing or the information I have already shared in social media leading up to my open house (Follow me on Facebook, Twitter or YouTube!).

The second best question to ask is…

Why are the sellers moving?

If you read my other post, you know that this is also the most common question I get at an open house. It is also a very good question that I recommend you ask on a visit to an open house. This is information that probably only the agent knows and it can be super helpful. The reasons the seller is moving is moving might be the same reasons that the home wouldn’t be a good fit for you but you haven’t considered yet. Also, maybe the home is a great fit for your needs, but knowing the answer to that question can give you extra insight into the house, neighbors or neighborhood!

If you have any questions about real estate or are thinking of buying a home, drop me a note or call me and I’d be happy to help!

By Kyle PfaffeREALTOR® e: KPfaffe@cityscapepg.com

m: 512-636-9707 w: AustinHomes4You.com

Open Houses – What is the Most Common Question?

KEY TAKEAWAYS

What is the most common open house question
Rather Watch Than Read? Click Image for Video!
  • There are no bad questions
  • Some questions give special insight

I do a lot of open houses – usually 2-3 a week. That adds up to 8-12 a month and almost 150 a year! I get a lot of questions from people that visit the houses I am holding open – no “bad” questions, but definitely some better than others. So I was thinking the other day, what is the most common question asked at an open house?

At first thought, you might think something like “What is the price?” or “How many square feet are there in this home?” I do get those questions often, but many times people come in to an open house already knowing a lot of information about an open house from what is posted online or what I have shared in social media leading up to my open house (Follow me on Facebook, Twitter or YouTube!)

I do get plenty of weird questions about a home but I am fine answering anything coming from a curious buyer (do YOU know someone looking to make a move? Introduce us!). All that being said, what is the most common question I get from visitors at my open houses???

Why are the sellers moving?

If you think about it, this is actually a really good question! This is information that probably only the agent knows – you can’t find it on the MLS, Zillow or in a flyer. It is also information that can be super helpful. The reasons the seller is moving is moving might be the same reasons that the home wouldn’t be a good fit for you but you haven’t considered yet. Also, maybe the home is a great fit for your needs, but knowing the answer to that question can give you extra insight into the house, neighbors or neighborhood!

The perfect follow up question to this is, What is the BEST question to ask an agent at an open house? I’ll be answering that in my next blog post so check back soon or, even better, FOLLOW my blog so you are notified when that next post comes!

If you have any questions about real estate or are thinking of buying a home, drop me a note or call me and I’d be happy to help!

By Kyle PfaffeREALTOR® e: KPfaffe@cityscapepg.com

m: 512-636-9707 w: AustinHomes4You.com