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4 Common Myths about Real Estate Agents in the Triangle: A Must Read

FFR Pic- Stockimages- freedigitalphotos.netThere are a few professions that have historically served as inspiration for an array of humor.  Automotive salespeople, attorneys, and yes, real estate agents. All have all had their turn in the humor department. Seriously, many people have heard both good and bad stories about working with real estate agents; just what is true and what is not? The professional real agents at Flat Fee Realty want home buyers and sellers in Cary and the Triangle to remember the following about real estate agents.

Flat Fee Realty shares four common myths about real estate, along with the straight truth:

  • Realtors and real estate agents are the same thing: Although the terms are sometimes used interchangeably, not all real estate agents are realtors. Earning a license in North Carolina makes someone an agent. A Realtor is an agent who is also a member of the National Association of Realtors. Realtors must adhere to an additional set of high standards and ethics beyond the legal requirements of North Carolina.
  • The higher a home’s selling price, the more money an agent makes: This is technically true, but it’s a misunderstanding. The home would have to sell for tens of thousands of dollars more to make any material difference in an agent’s commission. Consider that an increase of $10,000 would only net most agents an extra $150. Honest realtors and agents simply are not going to risk reputations over a few hundred bucks (or any amount, for that matter).
  • Agents recommend certain professionals because they get a kickback: If agents recommend a home inspector, a closing attorney, or other professional to a client, it’s almost always because they have worked with these individuals (often for years) and can vouch for their service excellence. It is important to note that it is unethical for agents to get any kind of incentive or favor from a vendor; it’s also illegal according to the Real Estate Settlement Procedures ACT (RESPA).
  • Agents must show homes to anyone who calls: A buyer’s agent isn’t obligated to show homes to clients unless there is a signed representation agreement in place. Typically, the agent would also require a pre-approval or pre-qualification letter. These documents show that buyers are serious and have the funds to complete a home purchase, ensuring the agent isn’t wasting his or her time.

It’s understandable why prospective home buyers and sellers would believe these common misconceptions. After all, buying or selling a home here in the Triangle is a complex financial and often emotional transaction fraught with worry and anxiety. However, that is exactly the reason it is essential for buyers and sellers to work with the right real estate agent.

Need help separating fact from fiction regarding the home buying or selling process? Give Flat Fee Realty a call today and let our realtors and agents earn your trust!

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This post on selling and buying a home in the Triangle is brought to you by the team at Flat Fee Realty and is intended for informational purposes only. 

The Future of Real Estate!

Flat Fee Realty

919 342 5230

Contact Us

Terry@FlatFeeNC.com

Photo: Stockimages, freedigitalphotos.net

3 Questions that Need Answers Involving Mortgage Insurance

stockimages, freedigitalphotos.net (3)Most types of insurance work like this: Clients pay a monthly or annual premium, and in return, insurance companies agree to assume financial responsibility and the risk in certain situations. While the traditional coverage is something that the insurance companies (and their clients) hope they’ll never need to use, it’s just one of life’s necessities.

Mortgage insurance works a little differently. And it can be confusing to homebuyers in the Triangle who aren’t sure what it is, let alone whether they’ll need to pay for it.

The professional agents at Flat Fee Realty want their clients to be as informed as possible. Below, we help to answer three common questions about mortgage insurance*:

What is Mortgage Insurance?

With mortgage insurance, the borrower still pays a premium, but they’re not exactly paying to for their own protection (and they don’t even get to choose the insurance company). The policy actually protects the lender in case the borrower defaults on the loan. So the question is not whether a borrower “needs” mortgage insurance, but rather if the lender will require it.

When is Mortgage Insurance Necessary?

Borrows usually will be required to purchase mortgage insurance if they make a down payment of less than 20%. The amount of the mortgage premium depends on the size and type of loan, but usually costs between 0.5 and 1% of the loan amount. Mortgage insurance can be private or public, depending on the type of loan.

How Can Borrowers Get Rid of It?

Most homeowners are responsible borrowers, and think that making on-time payments is the best way of getting the mortgage insurance requirement removed as quickly as possible. Unfortunately, this is not necessarily the case:

  • Private mortgage insurance automatically terminates when the loan balance reaches 78% of the original value of the home according to the amortization schedule. Extra payments won’t help homeowners cross that threshold any sooner. However, if the 78% mark is reached more quickly, a borrower can request that the insurance be removed.
  • Public mortgage insurance terminates when the loan balance reaches the same 78% threshold, but not sooner than 5 years into the loan. The borrower is going to pay mortgage insurance for at least 5 years.

Mortgage insurance is often an unwelcome (and unplanned) expense for many borrowers. When determining what type of mortgage payment is affordable, be sure to include mortgage insurance as part of those costs (along with the principal, interest, property taxes, and homeowner’s insurance).

Concerned about potential pitfalls in the home buying or selling process? Let the experienced agents at Flat Fee Realty explain how they can make the process easier than ever. Give Flat Fee Realty a call today!

*This post is for informational purposes and should be considered for reference only. We suggest consulting a financial specialist with experience in mortgage insurance if needed.

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This post on selling and buying a home in the Triangle is brought to you by the team at Flat Fee Realty and is intended for informational purposes only. 

The Future of Real Estate! 

Flat Fee Realty 

919 342 5230

Contact Us

Terry@FlatFeeNC.com

Photo: Stuart Miles, freedigitalphotos.net

3 Options Everyone Should Know About Real Estate Appraisals

FFR- Jan 19 Pic- Stuart MilesMost Triangle-area buyers and sellers think that the purpose of a real estate appraisal is to determine the real value of the home. In reality, an appraisal is an important tool that banks and other financial institutions use to help them make lending decisions. An appraisal justifies the purchase price of a home, so a low appraisal can have an effect on the entire transaction. This situation can sometimes result in big problems for buyers and sellers alike.

Flat Fee Realty wants buyers and sellers in Cary NC and the surrounding Triangle to know the options when an appraisal threatens to affect a potential deal:

  • Appraisers sometimes err on the safe side: Appraisers are held to a high professional standard and can be held accountable for their opinion of a home’s value. In the case of foreclosure, the appraiser could be held liable by the bank for over-appreciation. To avoid this risk, appraisers may be conservative with their figures, sometimes leading to a too-low appraisal.
  • Appraisals can contain mistakes: Sometimes, an appraisal that’s too low to meet the loan requirements can be the result of a simple error. Incorrect measurements or a transposed figure during data entry are seemingly benign errors that can cost home buyers their loan.
  • Appraisers and agents work together: It’s usually in everyone’s best interest that a given transaction moves forward, and problems with the loan can be disconcerting for everyone. Many times, a good appraiser will contact a home’s listing agent (who knows the property inside and out) if the appraisal is low. Together, they can verify measurements, make sure every detail is listed, discuss comps, and otherwise work together to get the value up.

In order for a financial institution to proceed with a buyer’s loan, the home’s appraised value must meet or exceed the agreed-upon purchase price. When this doesn’t occur, the entire transaction is at risk. An experienced agent is a lifesaver when it comes to challenging low appraisals, or any of the other complex issues involved in buying and selling real estate.

Need assistance navigating the buying or selling process? Flat Fee Realty is here to help. Give us a call with your questions today!

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This post on selling and buying a home in the Triangle is brought to you by the team at Flat Fee Realty and is intended for informational purposes only. 

The Future of Real Estate! 

Flat Fee Realty 

919 342 5230

Contact Us

Terry@FlatFeeNC.com

Photo: Stuart Miles, Freedigitalphotos.net

4 Important Tips to Boost a Triangle Home Selling Price

FFR- Jan 5 Pic- CuteimageNow that the holidays have passed, many Triangle homeowners will look to spruce up their homes in anticipation of selling during the busiest season. While winter is traditionally a slow period for the real estate market, the arrival of spring tends to heat things up. Most homeowners want to sell their homes quickly and for top dollar, and while that’s an admirable goal, the home really needs to be in tip top shape to accomplish it. Luckily, this usually doesn’t mean a major renovation is necessary. In fact, it’s often the little things that count the most.

Below, our real estate experts at Flat Fee Realty share the four important low-cost improvements homeowners can make for the highest return on investment come closing day.

  • Make an entrance: For a few years in a row, adding a new steel front door has topped the National Association of REALTORS Cost vs. Value report. Homeowners could recoup almost 100% of the cost of this improvement.
  • Add some power: According to the same report, installing a backup power generator brings back almost 70% of its cost, and is only trending upwards (perhaps because of the large-scale, unpredictable storms over the past several years). Here in North Carolina, this could be an excellent selling point.
  • Fix the fixtures: Although it’s actually an easy replacement, old fixtures (such as brass or gold) are a turnoff for many buyers. Replace them with a more contemporary design and watch buyer’s objections disappear.
  • Increase living space: Although this one is more of a a choice than a requirement, adding living space without increasing a home’s footprint (such as finishing a basement, creating an attic bedroom, or a rear deck addition) brings average returns of 77% – 88%.

By the time most Triangle homeowners are ready to sell, they look around their homes and see multiple areas that could benefit from some improvement. However, it’s important to look at the home through the eyes of a buyer. Homeowners should choose projects that appeal to the widest range of buyers, and avoid pet projects that will narrow the field.

Wondering what your home is worth, or whether pre-sale improvements are worth the expense? The experienced agents at Flat Fee Realty can help you look at the numbers. If you are considering selling or buying a home, give the agents at Flat Fee Realty a call today!

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This post on selling and buying a home in the Triangle is brought to you by the team at Flat Fee Realty and is intended for informational purposes only. 

The Future of Real Estate! 

Flat Fee Realty 

919 342 5230

Contact Us

Terry@FlatFeeNC.com

Photo: cuteimage, freedigitalphotos.net

 

 

 

 

 

 

Three Reasons Why For Sale by Owner (FSBO) in the Triangle Probably Won’t Save Money

FFR- Dec 15 Pic- MarkMoz12The average Triangle homeowner who is considering selling a home without help probably isn’t dreaming of becoming the next top real estate agent. People soon realize that it is very challenging to guide a parade of strangers through their home, giving up entire weekends to host open houses, or conducting heated and stressful negotiations with buyers, agents, or the ever present attorney. People marketing their homes as For Sale by Owner (FSBO) are looking for one thing: to save money for their next home.

The simple fact is that selling a home by owner probably won’t save much money.

Flat Fee Realty explains why with three important reasons:

  • Most sellers don’t know how commissions actually work: Usually, the commission charged by the listing agent (and typically paid by the seller from their proceeds) pays two agents. A portion of it is paid to the buyer’s agent, since most of the time (but not always), buyer’s agents work at no charge to their buyers. The commission split is typical for services rendered. This is a major area where FSBO’s will start to see their potential savings erode. Savings can be cut in half by simply offering a standard 2.5-3% commission to buyer’s agents.
  • Agents don’t work for free: Real estate agents are supposed to put the best interests of their clients first. This means that if an agent finds a home that is a fit for their clients, the amount of commission, or lack thereof, should not be a major ingredient. Unfortunately in practice, it doesn’t always work this way. Simply put, a seller who does not offer a commission to the buyer’s agent may just not get the home shown as often.
  • Look out for falling purchase prices: Lack of a seller-paid commission up front means that the commission becomes part of the ensuing negotiations, creating a potential headache (and maybe extra expense) for the buyer’s agent and their clients. Often, this translates to lower offers and ultimately a lower purchase price, because buyer’s will use the fact that they may now have to pay commission to their agent as a negotiation point to lower the purchase price of the house.

FSBO sounds like a great strategy in theory. Instead of using a real estate agent, sellers think they can save thousands of dollars. Unfortunately, this idea doesn’t go as planned for the vast majority of sellers, especially when potential buyers are represented by knowledgeable experienced agents.

Before deciding to sell by owner, it makes sense to sit down with an agent from Flat Fee Realty and discuss current market data and what to do next.

Want to level the playing field? Whether you’re considering selling on your own or just want to find out what your options are, give the agents at Flat Fee Realty a call today!

All of us wish the Happiest Holiday Season ever for everyone and a Prosperous New Year!

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This post on selling and buying a home in the Triangle is brought to you by the team at Flat Fee Realty and is intended for informational purposes only. 

The Future of Real Estate! 

Flat Fee Realty 

919 342 5230

Contact Us

Terry@FlatFeeNC.com

Photo: MarkMoz12 / Foter / CC BY