Kenneth Tribble, Broker Associate, RE/MAX Realty Group

Commissions paid to real estate agents are entirely negotiable. In the typical scenario an agent will represent the seller at an agreed upon commission. That agent will offer out a portion of that commission to other agents who may be representing buyers. The result is that the seller pays your agent's commission at closing and no additional fee is due from the buyer.

A local market can be hot in one category and cooler in another. A stratified market happens where supply and demand characteristics differ by price point, in the same area. For example, home sales for properties above $1.5M may be brisk while homes under $750k may be sluggish. This scenario comes along every so often in Florida cities where international investors - looking to park their money in the United States and buy expensive real estate. At the same time, home sales activity in mid-priced homes could be entirely different.

A buyer’s market is characterized by declining home prices and reduced demand. A big employer may shut down operations, laying off their workforce. Higher interest rates reduce buying power and that can reduce the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals. A short-term drop in interest rates can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes. High inventory can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features. Natural disasters can tank property values in the neighborhood where those disruptions occurred.

In a sellers’ markets, increasing demand for homes can drive up prices. Here are the primary drivers of demand: As the local job market heats up, new residents often push up home prices before more inventory can be built. Downward trending interest rates improves home affordability and creates more buyer interest. A short-term spike in interest rates may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power gets eroded. Low inventory and fewer homes on the market because of a lack of new construction can cause prices for existing homes to rise because there are fewer units available.

Once a home is selected and the offer is accepted, the average time to complete the purchase of a home is 30 to 45 days (under normal market conditions). However, well-prepared home buyers who pay cash have been known to purchase properties in as little as 5 days. Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. That is because the many parties involved in the transaction often can get behind when business suddenly picks up.

If you are financing the purchase, Pre-Approval is the first step of the home-buying process. That can usually be done over the phone, at no cost to you. Your lender will determine a maximum loan amount, cash required, and monthly payments based upon your income, debt and credit score. You may choose to borrow less but there is peace of mind knowing your maximum buying power. Save time searching by only considering homes that you can afford. Know exactly how much cash will be required at closing. Save on the purchase price. Sellers are much more willing to negotiate with a pre-approved buyer Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and your seller.