Top 5 Frequently Asked Buyer Questions

"Top 5" F.A.Q. From Buyers

1. "Should I talk to my lender or find a home I like first?"
   
   Our advice is always: Talk to your lender! Before offering on a home, it's important to know how much home you can afford and how much money you'll need to buy a home. Your preferred lender will want to take a look at your finances and talk about a monthly payment that's realistic. They will crunch some numbers and be able to provide the maximum loan amount you're "Pre-Approved" for overall. These days, having a Pre-Approval Letter from your lender can be crucial when making an offer. It shows the seller that you're serious and have your financing in order. 
   
   
2. "What does the timeline/process of buying a home look like?"
   
   When using a lender, the standard timeline from the acceptance of the contract to the closing table is between 30-45 days. The first week or two will mainly be scheduling any inspections, turning in the earnest money, getting homeowner's insurance quotes (if required), and negotiating any items from inspections the buyer would like the seller to address. The lender will also order the appraisal and request any documents needed on their end. Throughout this time, the title company handling the contract will verify that the title is clear and no other issues are present. Once the appraisal report is sent to the lender, approved by their underwriting team, and all loan criteria is met, they'll issue a "clear to close". At that point, the buyer will sign the initial closing disclosure and receive information on how much money is needed at to the closing table. 
   
   Keep in mind that this process can vary depending on the type of loan, inspection or appraisal issues, and many other factors. Patience and flexibility are key to getting the "keys"!
   
   
3. "What are the upfront costs associated with buying a home?"
   
   Downpayment: 0-5% of the total purchase price | This is an important conversation to have with a lender, since it can impact the overall loan amount and monthly payment. Some lenders offer first-time home buyers programs, where no money down is required, but PMI (private mortgage insurance) will likely be required as part of your monthly mortgage payment when a certain percentage isn't put down. Most loan programs will be between 3.5%-5% of the purchase price for a minimum downpayment! If you put 20%+ down, you will avoid the PMI fee!
   Earnest Money: 1-2% of the total purchase price | This is an upfront "good faith" deposit that shows the seller that the buyer is serious about the offer.
   Home Inspection: $350-500+ | We highly recommend hiring a certified inspector to check out the home from top to bottom for issues or deferred maintenance. If any extras are added on to the standard inspection (pool, radon, mold), the price may increase by a few hundred dollars.
   Termite Inspection: $75-125 | Some lenders may require a letter from a certified inspector, and we also recommend this inspection for buyer's own peace of mind!
   Appraisal Fee: $325-500 | If a buyer is obtaining a loan, most lenders will require an appraisal to make sure the value of the home meets or exceeds the purchase price.
   Closing Costs: 3% of the total purchase price | Again, this number can vary, depending on how closing costs were negotiated. In a competitive market with low inventory, it's likely a seller won't pay the buyer's closing costs unless there are extenuating circumstances (the home has been on the market for a while, they have no competing offers, negotiations on seller-paid closing costs instead of seller-paid repairs, etc.) Overall, 3% is a good rule of thumb to plan on bringing to the closing table. 
   
   
4. "Who pays my realtor's commission?"
   
   Real estate agents are paid via commission, which is typically a percentage of the home's sale price. When choosing a real estate agent to work with, it's standard to sign a "Buyer Representation Agreement", which is a contract stating that a buyer will exclusively work with their agent to buy a property. As a part of this contract, the buyer will not be expected to pay anything upfront, and the agent will outline a minimum amount of commission expected upon the purchase. The majority of the time, the seller offers the co-op commission to the buyer's agent. If the commission offered meets the agreed-upon commission outlined in the "Buyer Representation Agreement", there will be no cost to the buyer! However, if the seller offers less than the amount, the buyer will need to bridge the commission gap at the time of closing. If this happens, the buyer will be notified prior to the showing, and this co-op commission could be negotiated with the seller should the buyer choose to make an offer.
   
   
5. "How do I know that this home is priced well?"
   
   Unless you're already familiar with and experienced in the current local market, this is a very common question. A buyer's agent will be able to provide not only their expertise in neighborhood values, but will also run a comparative market analysis of the property. This is a tool used to estimate the value by evaluating similar homes that have recently sold in the same area. In doing this, an agent can confidently put together an offer that makes sense and is realistic to buyer and seller.

These are only a few of the questions buyers ask on a regular basis, and there's a reason we're consistently among the top agents in the area; we know our stuff! Check out reviews from our highly satisfied clients HERE.

If you're looking for more answers to your pressing buying or selling questions, we'd love to help! Simply fill out the information below, and a member of our team will be in touch quickly.