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The Ripple Effect of Buying a Home in Your Community

 

There are hidden benefits to the community when you buy or sell your property.


 

There have been countless articles focusing on the benefits of buying and selling homes for home buyers and home sellers. Rarely do you find one talking about how it can benefit your community. I recently spoke with an older gentleman who lived in his house for 30 years. Back then, the price of the house was very low, and now he is considering selling or renting it out. Either way, his decision will impact the community in different ways.


According to a yearly survey by the National Association of Realtors, a new construction home can contribute around $124,000 to the community, while a resale generates roughly $54,000. Buying or selling a property involves a lot of people, not just Realtors, escrow companies, and title reps. When you need to fix up your home, you need to hire termite companies, moving companies, and plumbing companies. Moreover, for inspections and showings, you need to consult with electricians, pool cleaners, stagers, and photographers.


"Real estate activity impacts different industries, boosting the economy in different ways. "

 

Real estate activity impacts different industries, boosting the economy in different ways. The survey also found that a home sale creates about three jobs. This is also good for the local economy, as it brings in more money and tax revenue. In California, for example, selling a $1.1 million property generates roughly $12,000 in property taxes alone. This is compared to a house that sold 30 years ago for $50,000, which would only bring in about $5,000 in taxes.


There’s also the income tax benefit. All of the jobs created by the purchase of a home mean more people paying income taxes. On top of that, there are gas taxes paid by the service providers working on your property, corporate taxes from the companies involved, and employee taxes. There’s a ripple effect happening that affects the local economy in many ways. 


So, if you are considering buying or selling a home, know that it’s not just a personal endeavor; you are also contributing to the community. Feel free to reach out to me if you have any questions or are thinking about making a move. I’ll help you achieve your goals while helping the community.

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Do Sellers Need to Offer Buyer's Commission?

 

Discussing the key benefits of offering competitive buyer agent rates.


 

In case you don’t know, the real estate world was flipped on its head recently. A lawsuit against the National Association of Realtors is challenging how buyer agents get paid, and it’s left a lot of people confused. Here’s the short version: A court recently ruled that the current structure of buyer’s agents’ commissions was illegal and needed to change. In the past, the seller would pay full commission to their agent, and the seller’s agent would then split that commission with the buyer’s agent. In this way, the buyer wouldn’t actually need to put any money down for their representation. Now, the buyer commissions are negotiated separately from the seller side. So, do you still need to pay the buyer’s agent’s commissions when selling your home? If you want the best representation possible, yes, and there are a few key reasons why:


1. Offering a competitive rate will help your home sell. Just like you look at similar homes in your area to determine your listing price, you should also look at similar buyer’s agent rates in your area to determine how much commission you offer. A higher rate is a sign to buyers that you’re serious about getting your home sold and will probably reduce your time on the market. However, you don’t want to make your rate too high and end up paying unnecessary fees. Work with your agent and look at similar homes in your market to find a Goldilocks rate that isn’t too high or too low. 2. Setting a rate upfront avoids negotiations. Since buyer commissions are now negotiable, it’s better to get ahead of things and agree to a rate before negotiating. If you wait until closing to negotiate your buyer commission rate, it could become a sticking point that slows down your sale or jeopardizes the translation altogether. You may even have to end up paying extra just to make your buyer happy. Instead, I recommend communicating upfront about what you’re willing to pay to avoid confusion and unnecessary negotiations.


"Set your rate based on comparative home sales in your area."

 

3. Offering no commission to buyers comes with risks. You may think it makes the most sense to offer zero commission upfront and simply negotiate a low rate at closing; however, this isn’t how things will work in practice. Just because you list your home and offer a 0% rate upfront does not mean you won’t pay any buyer commissions—most buyers will simply ignore your home if they think their representation won’t be compensated. Instead, it means you’ll have to negotiate the rate at closing, which can lead to a drawn-out sale and potentially paying more than you would have otherwise.

I know this topic can be a little confusing, so don’t hesitate to call or email me if you have any questions. Plus, I offer a flexible commission menu so that you can pay for representation no matter what your budget is. I look forward to hearing from you!

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What’s The Best Way To Buy a Home Before Selling?

 

What homeowners need to know about buying a home before selling.


 

Selling your current home before buying a new one is the conventional way to move. However, depending on your situation, there will be times when buying before you sell is the better option. Whatever your reason, you should know that buying first comes with additional risks, such as paying two mortgages, if your current home takes a long time to sell. If you’re in a situation where you must buy first before selling, don’t worry. It’s not impossible, but it takes some strategic planning to make it happen. Here are three things that will help you buy before you sell: 1. Use a home equity line of credit. A home equity line of credit, or HELOC, is a second mortgage that allows you to borrow cash based on the value of your home. In other words, it allows you to use your equity without selling your home. While lenders vary on how much they’ll let you borrow, 85% of your equity is industry standard. If you choose this option, you’ll need to act fast. Getting approved for a HELOC often takes longer than a traditional mortgage approval, so you should have it in place before applying for the mortgage on your new home. Once you have moved into your new property, you can put your old one up for sale at your leisure and pay back your HELOC using the profits. 2. Finance with a bridge loan. A bridge loan is a short-term, high-interest loan. When you buy with a bridge loan, you can use your existing home as collateral to get a loan for your new house. To close your bridge loan faster, try to align the closing dates of your buying and selling transactions.


"You need to move fast in our competitive spring housing market."

 

3. Use a service that will help you make a cash offer. Companies like Knock and Homeward are revolutionizing the way people buy and sell homes. These types of companies offer game-changing home loan products that let you make competitive cash offers on your dream home before the sale of your current one and help you avoid paying two mortgages simultaneously.

Buying a new home before selling your existing one has its unique challenges, but if you can leverage the three options above and utilize the guidance of an experienced agent, you can come up with the best solutions for your situation. If you want more details about this topic or have any real estate concerns, don’t hesitate to call or email me. I’ll be happy to help.

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