FAQ for Buyers
Many people are interested in becoming home owners, but aren’t sure if they can qualify for a mortgage. The BEST way to find out is to speak to a lender. I have local lenders I work with and they are able to answer this question. Usually, people are able to buy right away…and often the cost of a mortgage is LESS than the rent they have been paying. Sometimes a small amount of credit repair is necessary to qualify, other times a lender can help you create a plan so you will be able to purchase in the near future. Please check out the financial tab for more information now.
This is another question best answered by the lender. There are often loan programs available to help with down payments, closing costs, and sometimes both. Aside from the down payment and closing costs, there are also some times in the purchase process that money will be needed.
Earnest Money: Once you have been pre-approved for a loan and you have found your dream home, made an offer and had if accepted…you will need to deposit earnest money. There is no set amount for this, but many sellers and listing agents would like to see earnest funds close to around 1% of the purchase price. So if you are buying a $200,000 home $2000 of earnest money is often expected. Earnest money will be held by the title company, a neutral 3rd party in the transaction. This money can be used towards down payment or closing costs at the close of escrow.
Inspections: Once an offer is accepted you will have 10 days to do inspections. Prices for this range on the size and age of the home, and whether the property has a pool and spa. Usually these range from $350-$500. Often buyers will also do a termite inspection, (usually $50-$75) and if additional inspections are needed then there may be additional costs involved in those.
Appraisal: Appraisals are usually paid up front, and done about 10 days after contract acceptance. Appraisals usually cost $400-$500…but the lender will be able to give you more specifics about this.
Those three costs will be needed before the purchase of the house, but the lender will be able to give you more specifics of how much you will need to cover closing costs and down payment. Don’t forget to budget for moving day too!
The seller of the house the buyer buys pays the buyer’s agent, so it costs a buyer nothing to use an agent!
This isn’t a question that has only one answer. There are so many factors that go into pricing a property, and knowing the value of a property. This is something you should really look to your agent for guidance about. The agent will look at days on the market, comparable sales in the neighborhood and surrounding area, the current market specs (average days on the market) , and the plusses and minuses that the particular property has to offer. For instance the size of the lot, the location within the neighborhood, the updates and upgrades that property has, or doesn’t have. It is important to trust the guidance that your agent offers you…we want you to get the property for the best price you can, but we especially don’t want you to lose your dream home by coming in with a less than strong offer.
Every seller, just like every buyer is different. Some WILL only care about price. Most sellers will look at other factors, such as the close of escrow date, the financing…both the loan and who the buyer is using, and if they buyer is asking for other concessions…such as the washer, dryer, refrigerator….or a home warranty with all of the bells and whistles. Usually sellers are worried about their bottom dollar, so if they leave their appliances, pay for a home warranty, and cover the buyer’s closing costs…that all affects their bottom dollar. Some sellers will want a quick close, others will need time to relocate…this is why it is best for the buyer’s agent to speak with the listing agent so you, as the buyer, can make an offer that will appeal to the seller, especially if you don’t mind waiting to close on the home, or can cover your own closing costs.
You are on your way to making the house yours, but there is still a lot of work to do. First of all, you must get the lender absolutely everything they need so your loan can progress appropriately. Then you must do inspections on the home…and decide if any deficit that the seller will not repair is acceptable for you to deal with after you purchase the home. Then the home also must appraise for at least the purchase price. If it appraises for more, you win! But less, then the difference between the contract price and the appraised price must be figured out. You as the buyer can make up the difference with cash, the seller can reduce the price of the home, or something in between can be negotiated. Once you have your loan approved, the repairs negotiated, a solid appraisal….you are most likely home free! Wait…Most likely??? Yes, well, real estate is always exciting and always different…so remember it is never over until it records with the county and you are given the keys on closing day!