While advertising property for sale is easier than it’s ever been, the actual transaction still requires some know-how.
“The state of Washington has laws and some of those laws pertain to real estate sales,” said Scott Horner, RE/MAX KEY LAND Company real estate broker. “There are certain forms you need to fill out and provide to the buyer, and if you don’t, there are consequences to that.”
Horner said real estate brokers have seen an increase in properties for sale by owner. When people wish to sell a property on their own, certain brokers put sellers online in the Multiple Listing Service, then leave the seller to figure out the rest.
“Historically, whenever the market gets good, some people do a for-sale-by-owner,” Horner said. “Nowadays, with everything changing so dramatically in the last few years electronically, there are a number of websites people can sign up on and basically be their own broker.”
Horner said while advertising with the Multiple Listing Service and a sign in the front yard is all the advertising sellers really need, problems arise when it comes time for the actual transaction. This causes issues when brokers ask for certain documents sellers aren’t aware they need.
“There are things that leave them at risk for not having a complete or legal transaction, just because they have no idea what they’re doing,” Horner said. “It’s not quite as simple as it all appears.”
Sybil Kuhn, a real estate broker with Coldwell Banker Kline & Associates, purchased her first home at 20 and worked with a realtor at the time.
“I knew that getting (my first home) meant there are certain things you have to do to be a homeowner,” Kuhn said. “You have to have money to put down on a loan, or put down on a contract to pursue that home, or you need a job to be able to pay for the home and monthly fees.”
Kuhn said that renting is similar — in that renters need money and a job to pay monthly bills — but owning a home is a different level of commitment. However, Kuhn said, more people have the ability to purchase a home than realize it.
“Really anybody has the ability to be a homeowner,” Kuhn said. “There are just a few questions you need to ask. I think a lot of times they are just not asking the right questions or asking the right person those questions.”
Kuhn said one of those questions includes learning how to qualify for a loan. The two most important things, she said, is a good credit score and holding down a stable job, which works together.
“A lot of times people are holding down jobs and saving up money, but they’re not building their credit,” Kuhn said.
Horner said even for people living paycheck to paycheck, it’s still possible to purchase a home with minimal savings.
“You can go to a lender and the lender will sit down with you and say ‘here’s where you are, here’s where your problems are, these are the things you have to get off your credit,’” Horner said. “Clean up this bill, wait a year and then it goes away. So lenders will work with you on a multi-year plan to make yourself financeable.”
“Really, a good idea for anybody who wants to buy a house is to start out by getting themselves set up with a lender and getting a pre-qualification done,” Horner said. “That not only gives the seller some assurance you’re in fact a real buyer, but it also gives you some idea of what you should be looking for.”
Lenders provide buyers with the price range of what kind of home they can afford. The two factors that contribute most to what a buyer can afford is level of income and credit score.
“During the financial crisis, all you heard was people saying ‘you have to have 20 percent down and none of those cheap loans and yada yada,’” Horner said. “That was just not true because there were always zero down loans and there were always 3 percent loans. There still are zero down loans and 3 percent loans.”
Horner said for people with tight finances who are interested in purchasing a home, step number one is to improve their credit score.
“As far as anybody who wants to buy a house … stop buying stuff,” Horner said. “Clean up your credit, save up $3,000, $4,000, go to your lender and it works.”