In this post, we’ll be addressing all of the essentials when it comes to both buying and selling a house. There is a lot to know about both situations, and you’ll likely benefit from all of the information found here whether you are currently wanting to buy or sell.
Selling a Home
There are plenty of factors to consider before selling a house such as how to get the most for your house given the current housing market, how to measure your home’s square footage, and all of the documents you’ll need before you can sell.
Fortunately, there are some clear answers to these concerns.
How do you calculate the square footage of your home?
This is one of the most common questions people ask when selling their home. After all, no one is going to purchase a home that could be any given size. When a potential buyer comes to inspect the house, you will want to have accurately measured it.
What’s more, it’s important to measure not only the square footage of each individual room, but the square footage of the entire house as well.
The good news is, making these calculations is actually quite easy, or at least, easier than you might think. Here’s how it works.
For a single room:
- Measure both the length and width of the room.
- Take the two numbers and multiply them.
The answer to that calculation is the square footage of your room. It’s really that simple!
For the entire house:
This merely consists of calculating the square footage of each room in your home, and then adding them together. Sounds easy enough, but once you get started you may find yourself wondering if certain areas constitute “rooms”.
When in doubt, the answer is “yes”.
You want to add up every single area of your house that could in some sense be considered a room. That includes the:
- Miscellaneous areas
It’s also important to remember that while you want to measure accurately, you also don’t need to get bogged down to the decimal point. Most houses are advertised at an even square footage. When it comes right down to it, just use common sense and try to be accurate.
If you’re more of a visual learner, here is a video that will walk you through the process:
How to add more value to a house before you sell it.
The main thing to remember before you get into an investment like this is that people put more importance on a house that’s functional and sound. Good aesthetics is of course an important factor, but functionality is more important.
Most home buyers are planning on remodeling or improving the aesthetics of the house in some way after they move. This is almost a given. However, people aren’t looking for a house that they’ll have to “fix”. That’s different.
So when it comes to adding value to a house before you sell it, focus on utility. Consider the following:
- Can the insulation be replaced with insulation of a higher quality?
- Can the structural integrity of the house be improved?
- Is there damaged siding that needs repaired?
Things along those lines…
That said, maybe everything is up to par and you think it’s a better idea to add aesthetic appeal. In that case, you might consider:
- Adding more modern or up-to-date appliances to the kitchen.
- Installing an up-to-date toilet, a bathroom mirror that opens up with plenty of space behind it, or a walk-in shower that will save the future occupants some time.
- Installing a pool, sauna, or hot tub.
Before you make repairs, consider the following:
- The current market value of your home and the market value of the homes in the neighborhood around you (this may determine whether the repairs are worth it or not).
- The housing market in the area you live.
- The time and money you’re willing to put into these renovations.
- How much value you think you can ultimately add to your home.
What documents do you need before you can sell your house?
It might seem overwhelming, especially if you aren’t the organized type, but it’s important to gather as much of the following documents as possible:
- Documents on professional inspections that have been made on your house
- Your homeowner’s insurance
- Documents on improvements, maintenance, renovations, or repairs that have been made on your house
- Warranties on appliances that will be included in the house
- Documents related to real estate agents who have helped you with your house
- The original sales contract
- Financing or mortgage documents
- The title of the house
- Documents that prove who owns the house (these could be certificates of compliance with zoning or building regulations, property surveys, or certificates of occupancy
- Tax records
- Appraisal records
Buying a Home
Buying a house is just about as daunting as selling one, only for different reasons. This is always a major step in someone’s life. So, let’s start with the first thing that’s probably on your mind:
How much do you have to make to buy a house?
This depends on a number of different factors, particularly how large you want the house to be, what condition you’re willing to settle for, and the location of the house. First thing’s first: you’ll need to figure out a rough estimate of your gross monthly income. Here is a simple formula:
- [Hourly Pay] times [Hours Per Week] times 52 divided by 12 equals [Your Gross Monthly Income]
Your gross monthly income is one of the main factors that determines the size of the loan for which you’re able to apply. The reason for this is that mortgage companies are only willing to rent to people who they are confident in to pay the monthly mortgage, and your gross monthly income is the evidence they need.
Lenders determine your eligibility based on a certain formula. Generally speaking, you shouldn’t expect your monthly mortgage payment to be any higher than 28% of your gross monthly income. However, it’s important to remember that this isn’t just based on the price of the house alone. Your mortgage includes four factors:
Sometimes these are referred to collectively as PITI. You also have to consider how much you are able to put down as a down payment, which generally comes down to about five or ten percent of the home’s value.
Is it possible to buy a house with a low credit score?
It’s possible, but not easy. The reason lenders don’t like loaning to people with low credit scores is because, aside from your gross monthly income, your credit score is one of the main ways in which they can determine whether or not you can pay back the debt. If your credit score shows that you’ve spent your money irresponsibly, or have displayed bad spending habits, they are going to be less likely to loan to you.
What’s more, lenders want to see better than “zero” credit as well. They’re ultimately looking for someone they can trust to pay back the loan.
So, how low is “low” when talking about credit? Usually, it’s anything under 620. Not only that, but having a credit score at a solid 620 or just a bit higher is still going to impose many limitations.
That said, if your credit score is below 620, there’s still hope. You can apply for an FHA loan, which is a mortgage that’s backed by the US government, as well as being insured by the Federal Housing Administration.
What you need to know before buying a house.
Obviously you don’t want to just jump into the first house that seems good up front. You probably have a number of questions in mind that you want answered before taking such a big step.
Here are some questions that should take priority.
- What’s the house’s condition? You can’t rely on the answer of a seller for this one. It’s important to higher a professional to go through the house with you and make inspections. They know what to look for, and which questions to ask, to get an adequate answer. They will help you get a good idea of the condition of all major housing structures (foundation, plumbing, drywall, insulation), and will help you determine if any areas need repairs or replacement.
- Where is the house located? Your dream home isn’t such a dream home when you find out it’s in a noisy neighborhood with bad amenities, and located so far from work that it’s going to double or triple your gas budget. The location of your home is also one of the main factors that’s going to determine how much you have to pay. Before you decide on a house, take a look around the neighborhood, talk to the people who live there, and check out some information about it online.
- What is the asking price of the home? Again, this is a major factor when it comes to your gross monthly income and budget. However, it is also important to know this because the asking price of a home is often up for negotiation. If you’ve found the perfect home in the perfect location, yet it’s slightly above what you think you can afford, ask anyway and see if you can talk it down. There are many homeowners who will work with your budget. You can also show them that you have other options by showing them prices of similarly valued houses nearby, in which case they may suddenly be willing to settle for slightly less than the original asking price.
What Are Closing Costs?
Many people go into buying their first house only to find a bit of a surprise at the end – closing costs. It’s something many people don’t foresee, so it’s also something they don’t budget for. However, closing costs are there for a reason. They are costs owed to the lender that are added to the purchasing price of the house in order to cover various costs related to the lender and to the title of the house.
The amount you’ll have to pay in closing costs is determined by:
- The tax laws that are effective in the area where you’re purchasing the house, and
- How much you’ve been loaned.
Now that you know about closing costs, you can plan for them properly! You can expect your closing costs to fall somewhere between 2 and 5 percent of the price of your home, and will typically fall into these three categories:
- Lender Fees – These can all be included into a single lender fee, or may be broken down into a variety of sub-fees, including transfer taxes, flood certifications, courier fees, administrative fees, appraisal costs, etc.
- Property Title Fees – These are related to the insurance for the title, the settlement services, title search, and other things of that nature.
- Escrow or Prepaid Fees – Lenders will often need the buyer to create an escrow account for the homeowner’s insurance and property tax.
Buying or Selling a Home In Arizona? Housso Realty Can Help!
Housso represents an improvement in the way real estate agents do business. The advent of many online tools and resources, with all that they provide to modern real estate agents, has in effect reduced the amount of money that real estate agents can and should reasonably charge. These days, the value of a real estate agent lies in what he or she can provide for their clients in terms of communication and the ability to resolve any real estate issue that may arise. This means that sellers shouldn’t have to put up with unnecessarily high commission fees, or mediocre services.
When you hire a Housso real estate agent to represent you, you can expect fair commissions that are appropriate for the modern real estate industry, immediate and effective communication, and the skills necessary to solve your problems.
Not only are we dedicated to saving you thousands while selling your home, we can also contribute thousands if you are buying one as well. If you hire a Housso agent to represent you on the purchase of a home, we can donate up to $5,000 back to you in commissions at the close of escrow for closing costs.
Our agents will:
- Prepare your home for sale
- Hire professional photographers (on our dime!) to take pictures of your home
- Manage your showings and potential buyers
- Negotiate the contract
- Guide you through the closing process
- Save you money
Navigating the real estate market can be tough. It isn’t something most people are able to do effectively while attempting to make their homes ready for sale, finding a home to buy, and fitting in work and family time throughout the process.
That’s what the professionals are for.