Buying a home: maybe it’s your first home purchase, maybe it’s your 10th. Regardless, these questions are frequently asked questions designed to help you know what to understand and what answers you may receive. We have broken these up into questions throughout the entire home search process. Keep in mind, these are good suggestions, but do your research and know what additional questions are out there!
Before you Begin. Frequently Asked Questions.
1. Should I talk to the bank before looking at homes?
Short answer, YES! Longer answer, there are many reasons why you should speak with several banks, make a decision, and get pre-approved for an amount to make sure you are looking at homes that are in your budget. There is no reason to look at a house listed at $300,000 if you can only afford up to $250,000. There are also many “first time home buyer” incentives that you will understand once you speak with a bank, knowing exactly what is available to you is important. This is one of the most frequently asked questions!
An additional important reason to speak with a bank AND realtor is to understand all of the costs associated with purchasing a home. Sometimes home buyers don’t understand the difference between a down-payment, pre-paid items, escrows, and closing costs. Those can all be thoroughly explained by a home mortgage professional.
2. Should I buy or continue to rent?
This is a very personal question for each individual and family looking to purchase a house. There are many questions to consider including but not limited to your current rent, what interest rates are available, what your budget looks like, etc. Ultimately, these questions need answered and can help when making this decision.
3. I already own a home, should I buy another home before selling my current home?
This question has lots of differing opinions so we will give you both sides here. The largest benefits to purchasing another home before selling is simply that you have another suitable property lined up. The benefits of selling your home before purchasing another are you will be in an ideal situation to negotiate on the purchase of your new home because you are not contingent on the sale processing of your old home. The risk here is that you may sell faster than you can find a new purchase and be in a temporary location for a bit.
4. Do I really need a realtor when I buy a home?
YES! To be sure YOUR interests are being looked out for, you should have a realtor representing you that is separate from the realtor representing the seller.
5. Who pays the realtor fees when buying a home?
There are never guarantees, however, typically the seller pays the realtor fees.
Questions to Ask While House Hunting
6. What is a short sale?
The easiest way to understand a short sale is the sale of a home in which the proceeds of the sale are less than the balance of debts on the home and the owner cannot afford to pay the debts. Before deciding to purchase a short sale, a few things to consider would be that a foreclosure is still possible, and that many short sale properties are not well maintained and are in disarray.
7. What is a foreclosure?
A foreclosure can actually be a much smoother process than a short sale. A foreclosure is a property owned by a lender, it’s important to know that most of these foreclosures are sold “as is.”
8. How are the neighborhoods, schools, average utility bills?
Unfortunately, by law, a realtor cannot steer clients into certain neighborhoods, school districts, homes, etc. But, they can help you find websites and social pages that will help answer some of these questions.
Questions to Ask While Placing an Offer
9. How low is reasonable for an offer?
It’s suggested you ask for your Realtor’s advice and thoughts, but ultimately you are the only person who can determine how much you should offer.
10. What is an earnest money deposit?
Also referred to as a “good faith deposit”, the buyer provides the sellers real estate company with a deposit to hold in their escrow account. This is designed to show the sellers you are serious about purchasing their home. The amount deposited is subtracted from the final rate, and the larger the amount, the better the offer looks to the seller.
11. How long does a seller have to respond to our offer?
This can range from 12 hours to 3 or 4 days. You’re realtor can recommend how long to give based on how long the home has been on the market.
12. What if my offer is rejected?
If this happens, it’s not the end. If the seller says no flat out, you have the right to place another offer if you want.
OFFER ACCEPTED; now what?
13. What’s the next step?
Between offer acceptance and closing date there are a lot of items on a checklist.
a. Inspections thoroughly completed.
b. After inspections, you have to formally complete a mortgage application.
c. The title, abstract, survey, and other miscellaneous paperwork is completed.
14. Do I need to do a final walk through?
Legally no it is not required, but very necessary. You should complete a final walk through because during the closing process, which can take several weeks, a lot of things can change within the house. Make sure to check that the furnace is working, the toilets flush, and there is hot water.
15. How is a closing date determined?
A closing date is a target and not a guarantee so be sure to keep that in mind even though you are excited to move into your home. Also, the attorneys or title agencies are the ones who set the closing date and time, so your realtor doesn’t control this.
We hope this helps you through some of the top, burning, frequently asked questions while you are purchasing a home!