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What Are the Closing Costs for Buyers?

When buying a home, it’s important to know that there will be certain costs you must pay when you close on the property. This is when the real estate transaction is finalized and the transfer of title from the seller to the buyer occurs.

When it comes to closing costs for buyers, there isn’t a flat rate or fee to rely on, so it is best to plan on it totaling about 3% – 5% of the purchase price of the home.

Here is a basic list of closing costs for buyers:

  1. Title insurance – This is a standard review of all recorded documents connected to or affecting a specific piece of property or parcel of land. You’re required to pay for lender’s title insurance at settlement, which protects the lender is a problem with the property’s title arises (such as unclear wills, unpaid taxes and easements).
  2. Attorney fees – In some states, like Massachusetts, it is common to hire attorney to complete the purchase. In New Hampshire, it is typically handled by a title company.
  3. Mortgage lenders fees – Lenders may charge an “origination fee,” which covers the cost of putting together everything needed for your loan.
  4. Points – You may have agreed to pay this money upfront to get a slightly lower interest rate on your mortgage.
  5. Appraisal fees – Required by the lender, an appraisal can cost about $350 to $600 and confirms that your home is worth what you are paying for it.
  6. Homeowners insurance – Homeowner’s insurance is required by all lenders and covers loss from fire or other calamity, theft and liability. You pay for the full year in advance before you close on the home, then monthly payments are set up to go into your escrow account and is collected as part of your mortgage payment.
  7. Flood insurance (if required) – If you home is in a “flood zone” the mortgage company may require that you to carry flood insurance.
  8. Mortgage insurance (PMI) – If your down payment on a home is less than 20% of the appraised value, you will have to pay for private mortgage insurance. This protects the lender if you default on your loan. PMI costs about 0.5% to 1.5% of the amount of the loan per year and is paid by your lender out of your escrow account.
  9. Government recording charges, transfer taxes – This includes the cost of transferring the property tax from the seller to the buyer’s name and the cost of the sale being recorded by the county government. The real estate transfer tax is on the sale, granting, and transfer of real property or an interest in real property. In New Hampshire, the tax is $ 15.00 per thousand, usually split equally between buyer and seller. In Massachusetts, the tax is $4.56 per thousand, which is usually paid by the seller.
  10. Initial deposit for escrow account – This sets up the separate escrow account that your lender will use to pay your insurance and property tax bills when they are due. Some lenders require this deposit to include several months’ advance payment of insurance, property taxes and fees. Each month, your mortgage payment will include a portion of the estimated annual costs along with your principal and interest.

Your mortgage lender will tell you what you need to bring to closing. If closing cost are going to be a challenge, there are ways to construct your offer to buy a home in a way that gets closing costs covered or shared. I would love to assist you in finding your new home and successfully navigating the closing process. Please give me a call to get started.

Why a CMA Matters – Overpricing Can Impact Good Offers

More is not always better, especially when it comes to the listing price of a house. Pricing a home far above it’s true market value can produce the opposite of what you intend with this strategy. In fact, it may prevent buyers from placing an offer.

Some sellers believe that buyers will offer more to meet a higher asking price, but that isn’t what typically occurs. Buyers usually have an agent advising them about current market values. So, they know your home is overpriced and will quickly look elsewhere. Overpricing also eliminates qualified buyers that looking within a certain price range and viewing homes just like yours. If your house is overpriced it will not make their list.

The number one reason a house fails to sell in a healthy market is that it is priced too high. But, this doesn’t mean you should price your home conservatively. It means you and your Realtor should discuss what the current market estimates your home will sell for, and this estimate is based on facts.

This is achieved with complete and thorough Comparative Market Analysis (CMA) on your home, which I research and compile for you. It creates a price range for us to consider together, based upon the data from recent sales of similar homes with comparable features.
In this research, I look for homes that have the same characteristics (as much as possible) to match your home’s features. Typically, the same number of bedrooms, baths, square footage, etc. If there are variables, I adjust the sold price to make up for those differences.
With this insight, I make a recommendation and we work together to decide the best asking price that will get you the most for your home and sell it within a reasonable timeframe.

The first step

Requesting a CMA is the first step in selling your home, and there is no risk or obligation. Please give me a call; I would be pleased to offer my experience and knowledge of the current market to correctly price your home to successfully sell for top dollar.

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The Best Time of Year to List Your Home

When is the best time to list your home for sale? April through July typically exceeds all the other times of the year when it comes to new listings and home sales. But, there are several benefits to each of the four seasons of the year when it comes to listing your home and successfully selling it.

The months of April, May, and June are referred to as the Spring Buyers Season for a good reason. Spring through early summer remains a popular time for sellers to list their home because of the upcoming school year. There are motivated buyers with children that want to be settled into their new home and have their kids ready to start at a new school when that school year begins.

But, there are huge benefits to listing your home in the Fall. From the curb appeal that beautiful fall foliage provides to the absence of summer vacation schedules, it is often an easier time of year to get your house ready for buyers and for buyers to find the time to start their home search.

Winter can be a slower period when it comes to homeowners deciding to list their home for sale, but that just means that all the serious buyers out there have fewer options to choose from. So, as a seller, you have less competition. Buyers also tend to be more serious in the winter. They are not simply browsing homes on a beautiful summer day but are motivated to find a home and place an offer. Winter is also a perfect time for a house to show beautifully – with tasteful holiday décor that gives buyers a warm, homey feeling that inspires them to place an offer.

In most New England markets, buyer demand remains greater than the number of home listings available. This means that there really isn’t a “best time” to list your home for sale as long as you are ready to sell.

Contact me to get started. I would be happy to offer my experience and expertise in listing and marketing your home, no matter the season, and achieve your home selling goals.

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