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Whether a buyer is purchasing their first home or their fifth home, the home buying process can create many emotions and feelings. One of the best ways to ensure the process is not overwhelming for a buyer is to be well educated and properly prepared for the process.
There are normally many questions that home buyers will have throughout the process. Even an experienced home buyer can forget exactly how the process works and what the proper steps are to ensure the process is relatively smooth.
When buying a home, one of the most important things to understand is that "no question is a dumb question." If you're unsure of something when buying a home, ask!
There are many questions that home buyers seem to ask quite often. Some questions are before starting the home buying process, during a house hunt, while writing a contract, or after an offer is accepted. Here are the top frequently asked questions from home buyers.
The answer to the question is YES! There are tons of reasons why you should talk with a bank and get pre-approved before looking at homes. First and foremost, talking with a bank before looking at homes can help you understand exactly how much you can afford. There is no reason to look at homes that are listed for $250,000 if you can only afford up to $200,000.
If you're a first time home buyer, talking with a bank before looking at homes is strongly suggested, as there are many first time home buyer programs available. These programs can vary from state to state and county to county, so knowing exactly what's available to you, is critical.
Another important reason to talk with a bank before looking at homes is so you understand exactly what costs are associated with buying a home. There are many home buyers who don't understand the difference between a down payment, pre-paid items, and escrows, which can be thoroughly explained by a mortgage professional. A mortgage professional can give you advice on the type of financing you should be looking to obtain and also whether or not you should request the seller to contribute towards your closing costs, also known as a seller's concession.
Buying a home can be a very solid investment. This being said, renting can also be a better option for some, depending on the circumstances. The current interest rates are incredible. A 30-year FHA mortgage can be locked in at a rate of around 3.5%. Since the interest rates are so low, it actually can be cheaper to pay a mortgage right now than paying rent.
There are questions that you should ask yourself before deciding to buy a home. One of the most important things to consider is the length you plan on staying in a home, if you were to purchase. If the answer is only a few years, it's likely the better decision is to continue renting. Another question to ask yourself is whether you are ready to take on the additional "responsibilities" of owning a home. When owning a home there will be general home maintenance that should be done, are you ready for that?
Buying a home is a great option in many cases, but not always.
Can you find a needle in a haystack? Of course you can, but the probability isn't very high. The same can be said about a rent-to-own property. A common question from home buyers is whether rent-to-owns exist or whether an owner would consider that option. They are out there, but there are somethings that you need to know before agreeing to a rent-to-own.
When an owner is offering "rent-to-own" as a possible financing option, they are taking on a high risk since in most cases, a rent-to-own buyer has a credit score that is not impeccable. Since an owner is taking a higher risk the terms for a rent-to-own must be considerably favorable for the owner. This often leads to less than favorable terms for a buyer. When looking at a rent-to-own as an option you can expect to provide a considerable amount of money down and a higher interest rate than what a lender is currently offering.
If you're able to purchase a home by financing through a bank or lender, you will be better off because the terms will be more favorable.
There is truly no concrete "correct" answer to this question. There are pro's and con's to buying a home before selling your current home and the same can be said about selling your current home before buying another.
Buying a home before selling your current home
The biggest benefit to buying a home before selling your current home is the fact that you have a suitable property lined up. This can reduce the stress and pressure of having to find a home once your current home is sold. This however also can create disappointment and heartbreak. If you are unable to purchase a new home without having to sell your current home, you're purchase offer is going to be contingent upon sale and transfer of title of your current home. If your current home does not sell in a timely manner, this can lead to you getting "bumped" by a non-contingent buyer and you losing out on the home you're looking to purchase, which can be devastating.
Selling your current home before buying a new home
The time it takes to sell your current home is unpredictable. There is no crystal ball that exists that can tell you exactly how many days it will take. Selling your current home before buying a new home will put you in an ideal position to negotiate on the new home you're purchasing due to the fact you are purchasing without the sale contingency of your current home.
One risk of selling your current home without buying a new home first is the chance of not being able to have a place to live. There are options if your current home sellers before buying another though. A "rent-back" can sometimes be negotiated with the buyer of your current home. A "rent-back" would allow you to retain possession of your current home for a certain number of days after closing at the expense of paying the buyers mortgage. A "rent-back" allows for additional time to find a new home.
When buying a home, it's strongly recommended you have a Realtor. There are many reasons why you should have a Realtor represent your best interests when buying a home. Keep in mind, all Realtors are not the same! When choosing a buyers agent, make sure you know how to properly interview prospective Realtors when buying a home.
Attempting to buy a home without a Realtor can really make the home buying process more difficult. Having a Realtor is always recommended when buying a home. One thing not to do when buying a home is calling the listing agent because you don't want to "bother" your Realtor. This is one thing that real estate agents hate.
One reason why buyers ask the question about the need of having a Realtor when buying a home is because they don't understand who pays the Realtor fees when buying a home. There are no guarantees, however, in most cases the seller pays the Realtor fees.
When buying a home, a common question home buyers have is regarding the neighborhood/area. As a real estate professional, there are rules against steering and providing personal insight into specific areas and neighborhoods. This doesn't mean that your Realtor cannot provide you with tips to help you choose the right neighborhood when buying a home. Many buyers wonder about the growth of the local economy, crime statistics, taxes, and local amenities. If you have a top Realtor when buying a home, you should be able to receive all of the pertinent information to allow you to make an educated decision on areas and neighborhoods.
This is another question that Realtors should tread very lightly with. There is no doubt that schools impact property values. Just like tips for selecting a neighborhoods, a top Realtor should be able to provide you with names or websites where you can find information on the local schools so that you can determine whether or not the schools are acceptable to you or not.
When buying a home, it's important to know what additional costs will be in addition to the monthly mortgage payment. Utility bills are just one of the additional costs to consider when buying a home. Utility bills can be obtained from the home owner and in some cases, from the local utility company, who can provide averages over the past 12 months. Keep in mind, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.
This question is often asked and is a simple answer. The answer is, there is no specific number of homes you should look at before buying a home. Don't feel that if you were to purchase the first home you look at that you're making a mistake. Same can be said if it takes you looking at 25 homes.
Whether you are selling your first home or you are a seasoned home seller, the home selling process can create many emotions and feelings. One of the best ways to ensure the process is not overwhelming for yourself as a seller is to be well educated and properly prepared for the process.
There are normally many questions that home sellers will have throughout the process. Even an experienced home buyer or seller can forget exactly how the process works and what the proper steps are to ensure the process is relatively smooth.
When selling your home, one of the most important things to understand is that "no question is a dumb question." If you're unsure of something when selling a home, ask!
There are many questions that home sellers seem to ask quite often. Some questions are before even listing the house, during a potential viewing, while writing the conditional agreement, or after an offer is accepted. Here are the top frequently asked questions from home sellers.
SOLD! Properties sell year round. It is mostly a function of supply and demand, as well as other economic factors. The time of year you choose to sell can make a difference in the amount of time it takes and the final selling price. Weather conditions are often a consideration. As a general rule the real estate market picks up in the early spring following a seasonal lull in the winter months. During the summer, the market usually slows. The end of July and August are often the slowest months for real estate sales. The strong spring market often places upward pressure on interest rates, many prospective home buyers and REALTORS® take vacations during mid-summer. After the summer slowdown, sales activity tends to pick up for a second, although less vigorous, season which usually lasts into November. The market then slows again as buyers, sellers and REALTORS® turn their attention to the holidays.
The supply of homes on the market diminishes because sellers often wonder whether or not they should take their homes off the market for the holidays. There are still buyers in the market place, but now those buyers have fewer homes to choose from. Those homes on the market at that time have considerably less competition. Generally speaking, you'll have the best results if your house is available to show to prospective buyers continuously until it sells.
The two most important factors are price and condition in selling a home. The first step is to price it properly. Then, go through the house to see if there are any cosmetic defects that can be repaired. A third factor is exposure. It is also important that the home gets the exposure it deserves through open houses, advertising, good signage and listing on the local multiple listing services, as well as the internet. Choose the real estate REALTOR® that you believe will get the job done, not the one that quotes you the highest price - sometimes just to buy your listing.
There are two methods many people use to determine their homes value, an appraisal and comparative market analysis. Appraisals vary in cost and are defendable in court. They average about $300 for a single family home and more on multi-family dwellings. Appraisers review numerous factors and base information on recent sales of similar properties, their location, square footage, construction quality, excess land, views, water frontage and amenities such as garages, number of baths, etc.
A comparative market analysis on the other hand is an informal estimate of market value performed by a real estate REALTOR® or broker. It is based on sales and listings that will compete with your property that are similar in size, style and location. A range of values will be determined thus arriving at a probable market value. Many REALTORS® offer a free analysis anticipating they will have a new client. The analysis or opinion should be in writing and should involve professionally accepted appraisal practices.
The way you live in a home and the way you sell a house are two different things. First and foremost, "declutter" counter tops, walls and rooms. Too many "things" make it difficult for the buyer to see their possessions in your rooms or on your walls, however don't strip everything completely or it will appear stark and inhospitable. Then clean and make attractive all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless. Organize closets. Make sure the basic appliances and fixtures work and get rid of leaky faucets and frayed cords. Make sure the house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter, and possibly put vases of fresh flowers throughout the house. Pleasant background music is also a nice touch.
The second important thing to consider is "curb appeal." People driving by a property will judge it from outside appearances and make a decision then as to whether or not they want to see the inside. Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard. Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. Also make sure that the doorbell works.
Minor repairs before putting the house on the market may lead to a better sales price. Buyers often include a contingency "inspection clause" in the purchase contract which allows them to back out if numerous defects are found. Once the problems are noted, buyers can attempt to negotiate repairs or lowering the price with the seller. Any known problems that are not repaired must be revealed as a material defect. You do not have to repair the problem, only reveal it and the house should be appropriately priced for that defect. It is best to give us a call and book a short walk through your home and chat about what should and shouldn't be done before going on the market.
Items sellers often disclose include: homeowners association dues; whether or not work done on the house meets local building codes and permits requirements; the presence of any neighbourhood nuisances or noises which a prospective buyer might not notice, such as any restrictions on the use of property, including but not limited to zoning ordinances or association rules. It is wise to review the seller's written disclosure prior to a home purchase and ask questions if it does not satisfy you entirely. Sellers do not have to disclose the terms of other offers. You may disclose the existence of other offers, so that all parties are aware that they should be submitting their best offer.
Yes, the two most basic contingencies in a purchase contract are financing and inspections. You should read and fully understand all the contingencies or clauses in a contract before you sign.
That often depends on if you are in a buyer's or a seller's market, the condition of your home, the price you hope to get, how motivated you are to sell, as well as the quality and quantity of the offers you are getting. Any conditions that are negotiated are written into your contract. Both the buyer and seller can place requirements on the table during the negotiation phase. A frequently seen condition is regarding the sale and closing of the buyers home before they can purchase yours. Whether this requirement is reasonable, or even achievable, depends on the individuals involved. Financial capabilities usually play a major role in negotiations. Few people can afford to own two homes simultaneously, except for some all-cash buyers.
Even in a slow market, price and condition are the two most important factors in selling a home. If a home is not getting the activity it needs in order to sell it is probably because it is overpriced for the market. The first step is to lower the price. Then go through the house and see if there are cosmetic defects that you missed that can be repaired. The second step is to make sure that the home is getting the exposure it deserves through open houses, advertising, good signage and a listing on the multiple listing service and internet. A third option is to remove the home from the market and wait for overall housing conditions to improve and catch up to the price you're asking. Finally, frustrated sellers who have no equity and are forced to sell because of a long term illness, divorce or financial considerations should discuss their specific situation with their mortgage lender and their lawyer.