How to Finally Get Rid of Your PMI or FHA Mortgage Insurance

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If you’re planning to apply for a mortgage to help you finance a home purchase, you could get stuck paying mortgage insurance, depending on the type of home loan you take out and your down payment amount.

If it’s a conventional mortgage you’re applying for, you’ll need to come up with at least 20% towards a down payment, or else you will be required to pay Private Mortgage Insurance (PMI) on top of your mortgage payment. The amount you pay is based on a percentage of the initial purchase price of the home.

Fees for PMI range from anywhere between 0.3% and 1.5%, depending on factors such as your down payment amount and credit score. The higher these numbers are, the lower percentage you’ll likely be charged.

If you’re applying for an FHA-backed home loan, you’ll automatically be billed for FHA Mortgage Insurance Premium (MIP), which is an insurance policy that protects lenders if borrowers default on their mortgages. Regardless of the down payment amount, borrowers with an FHA-backed home loan will be responsible for paying MIP.

Since FHA loans come with less stringent lending requirements for borrowers – including a lower down payment amount and lower credit scores for approval – lenders who are eligible to issue them need added protection in the event of mortgage default.

FHA mortgage insurance policies have two separate payments: one is a lump sum that is paid upfront, and another is paid on a monthly basis over the life of the loan.

Regardless of whether you’re paying PMI or FHA MIP, the added fees can make your mortgage more expensive than it has to be. But there may be ways to get rid of that extra payment for good at some point in the future, which will help you keep more money in your pocket every month.

How to Eliminate PMI

Before you can get rid of PMI, you will need to pay down your mortgage to at least 80% or less of the principal amount of the loan. This can be done in a few different ways, including the following:

Pay down your loan – The most obvious way to get to the 80% equity mark is by simply contributing to your mortgage every month until your loan-to-value ratio (LTV) – which is the loan amount relative to the value of the property – is 80% or less. Once you’ve paid off at least 20% of the original loan amount and reached the 80% LTV threshold, you should be eligible to have PMI eliminated.

That said, you will likely have to get in touch with your lender once you’ve reached that 80% mark, as PMI cancellation doesn’t happen automatically until you’ve actually reached 78% of the outstanding principal.

Have the home appraised – The great thing about real estate is that it typically increases in value over time. Many real estate investors have built wealth by simply owning and holding real estate and allowing appreciation to add value. If you believe that your home is worth a lot more than what you paid for it, you may have built up enough equity through appreciation to bring your equity amount to at least 20% of the home’s value.

In this case, you would need to contact your lender to have an appraiser come out and assess the current value of your home. If it is determined that your home has in fact increased in value to the point that you’ve reached 20% equity or more, PMI can be removed.

Refinance your home loan – Another way to remove PMI from your mortgage is to refinance your mortgage. If you can refinance with a new loan that accounts for less than 80% of the value of your home and has a lower interest rate than your original home loan, you may be able to have your PMI dropped from your mortgage. Having said that, you’ll want to ensure that refinancing makes financial sense for you.

Update your property – By taking on certain home improvement projects, you may be able to effectively add equity to your home to make you eligible to have PMI removed. Just be sure to tackle smart projects that will add more value compared to the cost of the improvement. Your real estate agent will be able to help guide you in the right direction.

Automatic cancellation – Lenders are required by law to remove PMI automatically from a borrower’s mortgage if all pertinent criteria are met. When the loan balance drops to 78%, lenders must eliminate PMI as per the Homeowners Protection Act, as long as you stay up-to-date on all your scheduled payments.

How to Eliminate FHA MIP

FHA loans are not eligible for mortgage insurance cancellation. However, there are still ways that you may be able to get out of it, and refinancing is usually the way to go about it.

If your finances are in order and your credit score is high enough, you may be able to refinance out of your original FHA home loan into a conventional mortgage without PMI. Since FHA loans don’t have prepayment penalties for paying these types of loans off early, you won’t have to worry about having to pay an added fee to get out of it. As such, you can refinance whenever you like, as long as you have an LTV of at least 80%.

If you took out your FHA mortgage before June 2013, you can cancel your MIP after five years if you have a 30-year mortgage without the need to refinance. With a 15-year loan, there’s no minimum. In this case, you need to have at least 22% equity in your home and have been on time with all of your payments.

The Bottom Line

Paying mortgage insurance on top of your mortgage may seem like wasted money, but you may be able to cancel it if you’ve got all your ducks in a row. Be sure to speak with an experienced mortgage specialist to help you assess whether you’re ready to finally ditch that pesky payment once and for all.

Landlords: 9 Things Your Lease Contract Should Include

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A lease is a crucial component of renting real estate and is meant to ensure that both the landlord and tenant uphold their promises in the landlord-tenant relationship. As a landlord, you’ll definitely want to to be picky when it comes to who you choose to rent your unit out to. After all, a bad tenant can cause nothing but headaches and negatively impact your bottom line.

That said, a sound lease is an essential part of the puzzle and will help ensure that your tenant is up to speed on what is expected of them. That way, you have legal recourse with a written lease in hand if the tenant ends up breaching the contract.

When drafting up your lease, make sure the following items are included.

1. Names of All Tenants

The name of every adult who will be living in your unit will need to be included in your lease. The reason is that each person who lives there is equally responsible for all terms of the lease, including taking care of the place and paying rent on time. As a landlord, you have the right to go after any one of the named individuals stipulated in the lease should a problem ever occur.

2. Security Deposit Clause

As a landlord in California, you are allowed to ask for a security deposit to cover the costs associated with any damage incurred by the tenant. This amount can be the equivalent of two months’ rent for unfurnished properties or three months’ rent for furnished units. If the tenant has a waterbed (which is highly unlikely these days), you can tack on another half month’s rent on top of it.

3. Term of Tenancy

The standard lease term is usually an initial 12-month fixed-term, which means the tenant is responsible for paying rent for at least 12 months, after which the lease can be renewed or terminated by either party. Once this 12-month period is up, the lease usually takes the form of a month-to-month lease, unless other arrangements are made and another agreement is established.

That said, landlords and tenants can come up with their own unique lease term, as long as they both agree to it and sign off on it.

4. Start and End Dates

The date that the lease takes effect and when it expires should be clearly detailed in the lease contract. This will inform the tenant when they are expected to start paying rent and caring for the property and how long they will be required to uphold the terms of the lease.

5. Responsibility For Repairs

Who will be responsible for all repairs and maintenance? Maybe certain tasks will be handled by yourself, while others will be the responsibility of the tenant. Regardless, all repair and maintenance jobs should be clearly outlined, along with who is obligated to handle them.

A typical lease usually requires the tenant to keep the unit clean and cover the cost of any damage incurred by the tenant. If the property in question is a home, the tenant may also be responsible for cutting the grass and watering the lawn. Regardless of what you want your tenant to take care of, it should be clearly outlined in the release.

6. Rent Amount

Obviously, the rent amount will need to be included in the contract, along with when the rent is due (such as on the first of the month), and how it should be paid. You should also include information about late fees if the tenant misses the due date, as well as any charges associated with bounced checks for insufficient funds.

7. How You May Enter the Property

Tenants are entitled to privacy when they rent, which means you cannot barge into the premises whenever you feel like it, even though you’re the rightful owner. In order to protect yourself against any complaints from your tenant, make sure to outline your rights to access the property for reasons such as making repairs and showing the property to prospective buyers, and stipulate the amount of notice you will provide for such visits.

8. Pets

If you are open to allowing pets to live on the premises, the lease should specify any restrictions you may have, such as the number, type, and size of pets. It should also specify a requirement that the property will be free of pet waste. If you do not want any pets living on your property, your lease will have to specify a “no pets” policy, which is allowed in the state of California.

As a landlord, you have the right to reject applicants with a pet – or even just a specific type of pet. You can even evict a tenant who brings a pet to live on the property after having signed a lease that specifically states no pets allowed.

9. What the Tenant Can and Cannot Do

Your tenant will need to be clear on what is expected of them while they are living in your unit. If such behavior is discovered, your lease should also specify how the tenant will be dealt with. Whether it’s being excessively noisy, causing a disturbance in the neighborhood, causing damage to the property, or conducting illegal activity – such as dealing drugs or gambling – the lease should include a clause that strictly prohibits such behavior.

The Bottom Line

A lease is a binding contract, so you want to be sure that both you and your tenant are agreeing to a deal that has both your interests in mind. After carefully screening applicants for your property and choosing the one you feel is the right fit, you’ll still want to cover your back by ensuring they keep their end of the bargain, and a solid lease is the best way to do that.

Pros and Cons of Buying a Semi-Detached Home

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If you’re on the hunt for a new home, you’ve got a lot of decisions to make, including the type of home you want to buy. Of course, location is always a key factor in the search for a new home, but so is the type of space that you end up living in. You’ll want to make sure that the home you buy suits your lifestyle and offers you the commodities you need that will impact how you enjoy and use your home.

There are plenty of styles of houses out there, including semi-detached homes.

What is a Semi-Detached Home?

A semi-detached home is a single family home that is constructed as one part of a pair of homes that share one wall. Basically, it’s a type of home that is attached to another on one side. Many times, the layout of each attached home is the same, if not similar, as the other, making them easier to build and design. They differ from townhomes in that there are only two homes attached to one another, as opposed to several all in a row.

Is a semi-detached home right for you? Consider the pros and cons before making your purchasing decision.

Pros

Lower Purchase Price

Perhaps the biggest reason why buyers purchase a semi-detached home is that of the lower price tag compared to detached properties. Price usually dictates what type of property buyers purchase, and semi’s are more often less expensive than their detached counterparts.

Savings in Maintenance

In addition to the savings experienced upfront when buying the home, you may be able to experience ongoing savings in maintenance and repairs if you are able to share them with your neighbor, such as repairing the roof or sharing the cost of lawn maintenance.

More Space Than Townhomes and Condos

While semi-detached homes are often smaller than detached homes and sit on smaller lots, they still typically offer more space compared to other dwellings, including townhouses and condos. If price is a factor but you still would like to have some amount of outdoor living space and a bit more interior square footage, then a semi might make a better option compared to other types of residences.

Cons

Privacy

Obviously, the biggest drawback to owning and living in a semi-detached home is the level of privacy you are missing out on that you would otherwise enjoy in detached homes. Since your homes are attached to one another, you won’t have much privacy when you exit your front door, depending on the design of the homes’ elevation. In addition, your driveways or front yards will also be attached.

Noise

Perhaps just as bothersome as a reduced amount of privacy of a semi-detached home is the level of noise that you may have to deal with. Since you’re sharing a wall with your neighbor, it will be easy for noise to transfer through, despite the builder’s efforts to soundproof the wall. If the home is particularly old, you can expect the noise to be even more prominent. This may not be a problem if your neighbor is quiet, but if there’s a lot of partying or yelling going on next door, you’ll be hearing it.

Smells

It’s not unheard of for owners of semi-detached homes to complain of food smells making their way to the other side of the wall, especially if they are cooking something with a strong scent, such as fish or dishes prepared with strong spices.

Less Space

While there are definitely a lot of detached homes that have minimal square footage, semi-detached homes tend to be smaller in size. The key reason why semi-detached homes sell for less than detached homes is because of the smaller lot sizes in comparison to detached homes in the same neighborhood. When it comes to property value, land size has a lot to do with it.

Compromised Curb Appeal

Unless you and your neighbor can agree on the same exterior finishes, your home’s curb appeal can be negatively affected. For instance, many semi’s feature mismatched roofing materials, different colors on their front doors, and even different exterior wall materials. One side may have a lovely front porch while the other may have nothing more than overgrown weeds on the front lawn. All this takes away from the aesthetics of the home from the outside.

Arranging Repairs

If you plan to do any major renovations, you might need to arrange things with your next-door-neighbor first, depending on the scope of the work. Things can get even more sticky if exterior work needs to be done on parts of the home that are on or close to the border of the homes.

The Bottom Line

Semi-detached homes can certainly be an attractive alternative to a townhouse or condo if price is a major priority for you. They offer many of the conveniences of detached homes with a lower price tag in the majority of cases. But you might be making some compromises in addition to enjoying a lower price, which you’ll definitely want to consider before making a semi-detached the type of dwelling you end up buying. When in doubt, consult with your real estate agent to help you determine whether this type of house is right for you.

What is an Estate Sale and How Does it Work?

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An estate sale is the sale of a property of a recently deceased homeowner with the purpose of liquidating the home and all assets in it. While there could be any number of reasons to liquidate the property to free up cash, an estate sale usually happens when the owner passes away. Those who inherit the property will receive the proceeds from the sale.

That said, there may also be other potential reasons for an estate sale, also referred to as an “estate liquidation.” For instance, the surviving family members with stake in the property may be unable to agree on a decision about what to do with the property. In this case, a dispute might arise, forcing the situation to be resolved by the court. If this happens, the court will be the one to decide on an estate sale, after which the proceeds of the sale will be divided among the surviving members of the family.

Estate sales can also happen when the owner decides to downsize and liquidate everything, or when the deceased owner’s will requires a sale of all property assets.

Listings for estate sales typically stipulate that the property is being sold in “as is” condition, meaning the home likely has not been updated in a while and may need some improvements. Being sold “as is” means the seller will not be making any updates to the property before ownership changes hands.

Estate homes are often are priced well to accommodate for the fact that they require some improvements, which will cost money to do.

When Estate Sales Become Probate Sales

Many times the sale of a home and everything in it occurs when the owner dies without having a will in place or without naming any specific heirs. In this situation, the estate sale becomes a probate sale because the court will need to appoint a representative to handle the sale of the deceased owner’s property.

When an owner does not bequeath their property to anyone, the state usually steps in and deals with the sale of the home. As such, the court then assumes the responsibility of selling the home while adhering to specific regulations that must be followed during a sale like this, including the following:

  • The estate representative can find buyers directly or list the property for sale with a real estate agent;
  • The listing period cannot exceed 90 days (although extensions are possible);
  • An accepted offer from a willing buyer must be approved by the court;
  • A hearing date will be established by the court to confirm the sale, at which point other buyers may place their bids on the home;
  • The initial accepted offer is the starting bid of the auction;
  • The first overbid is subject to specific formulas to ensure a minimum bid amount;
  • The court can set minimum bid amounts for subsequent bids;
  • The court will only confirm the highest bid until its terms are deemed to be acceptable by the estate’s representative.

These rules are put in place in an effort to get the highest price for the estate. That said, the court has a lot of power in a probate sale and can disapprove a sale and require a new one if necessary.

Buyers often seek out probate sales because they are typically listed below market value. But with the auction-style bidding process, buyers will have to compete with other interested buyers to snag a property in a probate sale and may find themselves bidding pretty close to market value if the competition is fierce.

The Bottom Line

If you’re a buyer looking for a deal on a home, a probate sale might be a promising resource. But there are certain nuances that you need to be aware of if the property ends up being auctioned off in a probate sale. If you are considering purchasing a property that is being handled by an estate representative, be sure to team up with an experienced real estate agent who can help you navigate these waters and get the best price.

How Long is the Escrow Process?

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You’ve found a home you love, put in an offer, and the seller accepted it. That’s half the battle, but the process isn’t yet complete. There are still some hoops to jump through in order for the deal to close.

The time between offer acceptance and the actual closing date is referred to as the “escrow” process, and many important events typically happen during this time.

The reason for escrow is to ensure that a real estate transaction closes successfully, and in order for that to happen, an escrow company or representative is typically entrusted to handle the deed of the property and the monies involved in the transaction.

Clearly, escrow is very important in a real estate deal. The question is, how long does it take to complete?

How Long Does it Take to Close Escrow?

The real estate escrow process can range a great deal depending on what steps are involved in the deal and how long each step takes. That said, escrow usually takes anywhere between 30 to 40 days.

It can take a lot longer if there are any hiccups in the process, or it can be much faster if some steps are not involved or if everything goes very smoothly.

Generally speaking, escrow involves a number of steps that all play a role in how long escrow will take. These include the following:

Home inspection – Inspections are usually recommended to buyers and are included as a contingency in real estate contracts. This gives buyers the chance to have the home inspected in great detail to see if there are any issues that were not noticed before. If any major problems are identified, this can cause a delay in escrow, especially if the problems are so significant that they take a long time to be rectified before closing can occur.

Appraisal – Lenders will want to have a property appraised to ensure the purchase price agreed upon is in line with the current market. Usually, appraisals come back at or around the purchase price.

Sometimes, however, appraisals come in low, which means the purchase price is higher than the value that the market dictates. If this happens, the lender might refuse to extend the originally requested loan amount, leaving buyers left to either renegotiate a lower price with the seller, come up with the difference, or walk away from the deal altogether, all of which can either delay or quash closing.

Mortgage approval – Appraisals are just one factor that impacts whether or not a mortgage will be approved. Other factors can also come into play. For instance, if the borrower suddenly changes jobs or takes out additional loans, these actions can throw a wrench in the mortgage approval process. In these cases, the process might have to start all over so that approval is based on the borrower’s net income and debt load. 

Title search – Buyers will want to make sure that the title is clear of any clouds which could interfere with a successful real estate transaction. In most cases, the title search comes back clean, but instances do happen where liens, encumbrances and undisclosed heirs are identified that were not previously known about. Such issues will need to be dealt with prior to closing. In this case, escrow can be dragged out a little longer.

Document preparation – Specific paperwork will need to be prepared by the lender in regards to the mortgage. Such paperwork is then handed over to the escrow company who will assign an agent to check them over, along with other documentation, to make sure everything is ready for closing. If there is a discrepancy in the documentation, this could cause a delay. Not only that, the escrow company itself might have a backlog of work, which can also contribute to a lengthened escrow period.

While delays can certainly happen, the process can also be a lot faster in some cases. For instance, there are some instances where home inspections and mortgage financing are not part of the equation with all-cash homes purchases from investors who plan to tear down the home and rebuild a new one. In this case, escrow would likely not take very long because a couple of crucial steps have been eliminated.

In the majority of cases, however, escrow is most often closed within the originally stipulated time period that is outlined in the real estate contract. Delays only usually happen if there are unusual or unforeseen situations that were not anticipated. In some cases, a long, drawn-out escrow period can delay closing and may even lead to an unsuccessful deal.

The Bottom Line

The average escrow process takes approximately one month to complete. That said, there may be situations where the process can take longer or shorter. Buyers would be well advised to stay in touch with their mortgage broker and real estate agent who will be in contact with the escrow company. If there are any issues, the escrow company will inform your agent or mortgage broker to keep you in the loop.

How to Measure the Square Footage of Your Home

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If you’re selling your home in the near future, one thing that you will want to find out is its exact size. Calculating the square footage will be a critical detail that buyers will want to know and will need to be included in your listing. Your home’s square footage is a critical element in establishing the listing price of your home.

But if you don’t come up with an accurate measurement, the value of your home could suffer.

If your home was a completely square box, calculating its square footage would be easy. But such is typically not the case, as most homes come with a host of little intricacies that can make measuring its square footage complicated. Couple that with the fact that different people measure square footage differently, and you can see how this particular calculation can be confusing.

That said, the standards for measuring square footage are determined by the American National Standards Institute (ANSI). But it is not mandatory to comply with the ANSI standard, though it’s highly recommended.

The question is, how do you calculate the square footage of your home to find out how big it is?

Calculating the Square Footage of Your Home

To make things easy for you, start off by sketching a floor plan of the interior of your home. Ideally, each level should be sketched out separately, and be sure to leave out any unfinished areas.

Break down each floor of your house into easily-measured rectangles, which will help eliminate the temptation to guess the length and size of rooms with walls that are not perfect.

Measure the length and width of each rectangle. While a measuring tape can work to calculate the square footage of your home, a laser measuring tool would be much more convenient. Once you have the length and width accurately measured in feet, you can calculate the area of each rectangle by multiplying the length by the width to figure out the area.

Jot these numbers down in the appropriate spaces on the sketch you drew, then add them up to get the total square footage of your home. You likely might wind up with fractions, so just round up to the nearest foot.

If some of the rooms in your home have subsections, break the room down into smaller parts and measure each box on its own. Once you have all the measurements, add each of them up to obtain the total area of the room. For instance, in the case of a 700 square-foot bedroom with a 150 square-foot closet, both of these spaces would be measured separately. The total would then be 850 square feet when added together.

What About Rooms That Are Irregular in Shape?

Calculating the area of a square or rectangular room is easy enough. Simply multiply the length by the width and you’ve got your answer. But calculating the area of a room that’s circular or irregular in shape will require that you use the appropriate mathematical equations to come up with the final area. There several different mathematical equations that can be used to determine the area of a variety of shapes, so you’ll need to establish the shape of the room before using the appropriate equation.

There are also online calculators that you can use. Just plug in the shape and necessary measurements, and the calculator will do the hard work for you.

Not All Areas of the Home Should Be Included in Your Calculation

When calculating the square footage of your home, it’s important to note that not all areas should be included in the final number. For starters, any space that is below grade should not be part of the total square footage, which means any basements or crawl spaces would be excluded.

Attics would typically be excluded as well, unless the space is finished and there is at least a seven-foot clearance to make the space potentially habitable. If that’s the case, the attic would be included in your calculation. Garages, sheds, patios, and exterior staircases are also not to be included in your square footage calculation.

That said, you might still want to know how large these particular spaces are for your own knowledge. You can even include these dimensions in the listing for buyer information, as long as it is clear that they are not part of the overall square footage of the home.

The Bottom Line

If your home has perfectly square or rectangular rooms with little to no complexities, figuring out the square footage on your own is relatively simple with the right tools and simple math. But you can run into a little bit of trouble if your home is oddly shaped and has lots of spaces that are not exact squares or rectangles.

In this case, you might want to call in a contractor or appraiser who has experience in measuring the exact size of homes. This is definitely not a number you want to get wrong, because the answer you get will have a direct impact on the value of your home, as well as your listing price.

8 Reasons Why Sellers Regret Not Selling With a Real Estate Agent

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No one said that selling real estate was cheap. In fact, it can be downright expensive. Because of the potentially hefty price tag associated with selling, many sellers may be tempted to go it alone without the help of a seasoned real estate agent in an effort to save some money in commissions.

But while they think they may be avoiding some fees, solo sellers might actually be biting off more than they can chew. In fact, most sellers regret not employing the services of a real estate agent and wind up calling a professional at some point throughout the transaction.

Here are a few reasons why you might regret not hiring a real estate agent to help you sell your home.

1. You Don’t Have the Training and Experience

There’s a lot to know about selling real estate than just how to post a listing on MLS. Selling a house takes a lot of industry knowledge and know-how to ensure a successful transaction. Without the help of an agent, you’ll have to acquire all of this information on your own if you want to come out on the other end with a successful deal.

Many sellers who go the FSBO route regret not using a realtor for the simple fact that these professionals have far more education and experience that could have come in handy when marketing the property and negotiating a contract.

2. You Don’t Have the Inside Scoop of the Neighborhood

Sure, you may have lived in your home for a while, but how well do you know the area in terms of real estate value and what buyers might be willing to spend in your area? Do you know what buyers are looking for in a home in your neighborhood? In-depth knowledge of real estate in a particular community is crucial to ensuring a lucrative deal.

Real estate agents have in-depth knowledge and are experienced in finding the pertinent info about your neighborhood. They have the tools to find comparable sales to help you identify how much your home is worth, which will come in handy when it comes time to price your home.

They’ll also know the type of buyers searching in the area and what they’re looking for in a home to help you market it accordingly and attract an offer quickly. Unless you’re an agent yourself, you won’t be able to take advantage of this insider information.

3. You Won’t Have a Buffer Between You and Buyers

Do you really want to hear buyers complain and nit-pick about your home at showings and open houses? Do you want to wheel and deal directly with buyers at the negotiating table? Selling real estate is a highly emotional experience for sellers.

It’s not surprising to know that debates on price and other factors can get pretty heated between buyers and sellers. Part of the job of a real estate agent is to act as a buffer between buyers and sellers so that the transaction can proceed in a professional way without any heated exchanges.

4. You’ll Spend a Lot of Time Fielding Calls and Scheduling Showings

Like most Americans, you probably have a job to go to every day. As such, you probably don’t have a lot of free time to dedicate to selling your home. Real estate agents spend a lot of time taking phone calls, booking showings, hosting open houses, marketing the property, and networking with other agents to get the word out there about a listing.

Do you have the time and the network do all that? Probably not, which is a solid reason why an agent should be part of your sales team.

5. You Won’t Know Exactly How Much to List For

You might be tempted to price your home high in order to profit handsomely. But arbitrarily picking a price based on what you believe (whether accurately or falsely) your home is worth is not the way to sell a home in a reasonable amount of time. In fact, you could be sabotaging the sale of your home if you don’t price according to market values.

Real estate agents help guide their clients to make the right choices in terms of listing prices. They’re able to use the tools available to them and the knowledge they’ve acquired through training and experience to establish an appropriate listing price.

If you can come with the right listing price for your home, you stand the best chance of selling quickly and for top dollar. On the other hand, listing at a price that does not accurately reflect the current market will leave you high and dry.

6. You’ll Have to Gather All the Industry Experts Yourself

Selling real estate rarely only involves just a real estate agent. Typically, there are plenty of other experts that are involved with these types of transactions, such as lawyers, escrow companies, title insurance companies, home inspectors, home stagers, and contractors. These services are usually needed to successfully sell real estate.

Having an agent working with you will afford you with the benefit of being able to tap into their network of professionals. Sure, you can always find and choose your own professionals, but an agent can offer you recommendations of experts that they’ve previously had positive experiences with. For this reason, your agent can help you make the best decisions on who to work with.

7. You’ll Have to Deal With a Lot of Paperwork

Today’s real estate purchase agreements are several pages long and are filled with a ton of jargon that you might not understand. On top of the actual contract, there is usually other paperwork that is typically associated with transferring property ownership.

Not only is all that documentation time-consuming to go through, it can even land you in legal hot water if there is anything missing or incorrect. You don’t want to be on the hook for any mishaps with real estate paperwork, and you don’t have to be if you let the experts in real estate handle all that pesky paperwork for you.

8. You Might Not Have the Appropriate Negotiating Skills

Negotiating the sale price and all other terms of the contract requires a good deal of skill, level-headedness, and experience. If you’re the emotional type and have little to no experience wheeling and dealing real estate deals, you could wind up with a transaction that doesn’t benefit you as much as it could have had you hired an experienced real estate agent to handle the negotiations for you.

The Bottom Line

A real estate transaction is not the time to attempt a DIY endeavor. Your home sale is a big deal and is certainly not something that you want to mess up. As such, you’d be well advised to team up with an agent who knows all the ins and outs of selling real estate so that you don’t end up making mistakes along the way that can cost you a lot more than what you may have saved in commission fees.