Whether a home buyer is purchasing for the first time or the second or third time I have found I get the same frequent questions from home buyers. Likely because buying a home can induce a lot of emotionally charged anxieties. The best way to be prepared is to be well educated and knowledgeable of the process. Most importantly is to remember that no question is a dumb question when possibly making one of the largest investments most make in a lifetime. So, if you are unsure of something ask! Here are some top asked questions from home buyers.
1. Do I Need to have money in the bank to buy a home? — It is always good to have some liquid-able assets put aside before starting the process of buying a home. While there are many buyer assistance programs available there usually are still some out of pocket expenses needed to be prepared to buy a home. Available Assistance programs can vary depending on your state, county, and lender selected.
2. Should I consult with a lender before looking for a home? — Definitely a yes on this common question. It is important to know what you are afforded to spend on a home if you can’t pay for it fully with cash. One of the most frustrating things for a buyer is to have begun looking at houses they like in a $300K price range and learn they can’t get a loan for more than $200K. A good lender should be able to find programs that you may qualify for, specific loan types that are best for you and give you an estimated amount your monthly note would be for your approved amount.
3. Can I Rent to Own? — This type home purchase is very difficult to find. In most cases a seller that is willing to do so has to slant the term of the sale to be in their favor not yours. Usually a larger down-payment is required and you end up with much higher interest rates. Buying with the leverage offered by a lender is usually more favorable to your best interest.
4. Since I own my current home should I buy another one before selling mine? — In truth this depends on your financial circumstances when you are ready to buy another home. There really is no absolute answer to this question. Selling first may be a great option if you need the funds from your current home to buy another home. However, this could lead to the circumstance of having to make offers with a contingency of the sale of your home to complete the purchase of an offer you want to make. Sellers often will select an offer with no contingencies more readily than one with conditions. Buying a home prior to selling your home may be more advantageous if you have set aside funds to cover your mortgage for a few months. It is important to remember that if your home takes longer than your budget set aside you could be in a position to pay two notes simultaneously which can be a financial strain.
5. Do I truly need a Realtor when buying a home? — Buying a home without a professional can make your home buying process a bit more difficult as well as stressful. It is highly recommended to select a Realtor when buying a home to have someone familiar with the current market trends looking out for your best interest. Always remember the seller or their listing agent is not looking out for your interest but their net sale profit. With that said it should dictate that contacting the seller or the sellers agent to assist you with your purchase would not be advantageous.
6. Do I have to pay my Realtor’s commission fees? — Technically you the buyer are responsible for your buyer’s agent fees when you select an agent. However, the seller usually pays the commission fees to your buyer’s agent for you. This isn’t absolute and on rare occasion a buyer may have to pay the fee themselves. Buying a for sale by owner property, which often does not use the professional Realtor MLS process may be an instance when you pay your agent fees or a portion of them.
7. Should I buy a short sale or foreclosure home to save money? — It is very important to understand what a short sale and foreclosure sale is. A short sale occurs when a home owner can’t afford to pay their mortgage any longer and must sell their home to pay back the debt. When a home’s market value is below the lien balance a short sale may be allowed by the bank holding the lien. Short sales can be complicated and often take longer than the average sale to process. Also, short sales are still subject to foreclosure which in some cases can end your purchase option. A foreclosure is when a homeowner has lost their property due to sustained lack of mortgage payments and the bank takes back possession of the property. Both for short sales and foreclosure sales they are generally sold “AS IS”. This means most conditions that need repairs and flexibility for negotiation of selling price are limited or non-existent for the potential buyer. Both time and money are needed if a buyer chooses to buy these type property sales.
8. Is the house in a good neighborhood with good schools? — Real Estate professionals must abide by equal housing guidelines and are required to be careful of steering a buyer based on their opinions of an area or school district. A good real estate agent should provide you with the needed resources to make an informed decision but may not legally decide on these matters for you.
9. How many houses should I consider before making an offer? — Simply put whether the first house you look at is perfect for you or the 23rd house is “the one” can vary. You don’t have to hastily buy the first house you look at but at the same time you shouldn’t exhaust yourself with excessive property choices as this can be frustrating as well. There is no formula for this question that gives an irrefutable result. Staying focused on what you need in a home should be your priority.
10. How much should I offer and do I really need to put an earnest money deposit? — The only person that can decide how much you decide to offer a seller is you the buyer. A good agent will ensure you know what the fair market values are for similar houses to the one you may want to buy but, the final decision is yours. While an earnest money or good faith deposit isn’t required it is definitely important to consider providing. The purpose of this deposit is to ensure the seller you are serious about buying the home and they can be confident enough to take the property off the market. Chances are high that an offer with no earnest money deposit may not be selected over another offer with a deposit offered. The earnest money is placed in an escrow and is applied to your purchase at the closing.
11. Should I get a professional inspection done on the house? — Yes it is highly advised that an inspection on any major investment be completed. An inspection is not required for a sale but is a protection for a buyer that is well worth the fee. Further if you request a home warranty from the seller on the property, many of these policy issuers require a review of claim requests by way of a home inspection documentation obtained prior to your ownership of the house.
12. How long do I have to wait for my offer to be accepted or rejected? — Unfortunately there is no standard answer to this question. Depending on the stability of the market in the location you seek to buy in, it varies. Your agent most likely will advise a shorter offer expiration time for newly listed properties. Whereas your agent may advise 24 to 72 hours if the house has been on the market for a longer period of time.
While these aren’t all the frequently asked questions from home buyers, they are the more pertinent ones that I hear repeatedly. Remember no question is too dumb to be asked? If you have other questions that weren’t listed here, please contact me with any others you may have by CLICKING HERE.
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