Q: How far in advance should I contact a real estate agent ?
A: It's NEVER too early to contact your agent. By contacting your agent early, they can sit down with you and establish what you are looking for a in a home.
They can set up a search for you by entering your parameters directly into the MLS (Multiple Listing Service), and set up automatic notifications when homes
that meet your criteria come onto the market. This gives you a chance to passively watch the real estate market and further refine your property search before
you are actually ready to go out looking at houses.
It is also never too early to contact your local loan officer. By getting pre-qualified early, if your loan officer finds any potential issues that may prevent you from qualifying for your home loan, this will give you more time to correct those issues before closing.
Q: What does it cost me to have a buyer’s agent?
A: Absolutely nothing! The commission is paid by the seller.
Q: After meeting with a Buyer's agent, what is my next step towards purchasing a new home?
A: Your next step should be to speak with a loan officer who can pre-qualify you for your loan. Your real estate agent can recommend several excellent local loan officers. Most loan officers are able to gather enough information from you over the phone to get you pre-qualified. Getting pre-qualified will not only give you an idea of how much you can spend on your new home but a good loan officer can give you a rough estimate of your monthly payments and also let you know what can expect with regards to closing costs.
Q: What is a Short Sale?
A: A Short Sale is when the Seller owes more money (Mortgage, Closing Costs and Commissions) than the sales price of the house. In this case, the Seller must get permission to sell the property. In most cases the lender will eat the loss if they approve the Short Sale. As a buyer, your concern should be the length of time it will take to complete the purchase. Short Sales can take several months for approval. Most Short Sales are also “As-Is”, with the Seller unwilling to complete any repairs.
Q: Should I have a Home Inspection? How much will it cost me?
A: You should always have a Home Inspector check out the property to ensure there are no major flaws in the home that would be “Deal Breakers”. Also, the necessary repairs can often be negotiated. Home Inspections normally cost between $300-$400.
Q: How much money am I going to have to spend up front, when I am ready to make an offer to purchase?
A: When you write an offer on a property, you will need to make an Earnest Money Deposit (EMD). This is usually in the form of a check and accompanies your purchase offer. The typical amount of the EMD is $1000. 00. However, sometimes a seller will accept a lower amount if the sales prices of the homes is lower, (< $200,000). The amount that a buyer offers as an earnest money deposit can vary depending on the sales price of the home, seller requirements, and whether or not the home is new construction. The EMD is credited to you at closing, so it will be applied to any expenses you may have (down payment, uncovered closing costs...etc).
The other expense that is paid up front will be your Home Inspection ($300-$400) and in some cases your appraisal. Once the home inspection is done, the buyer's bank orders an appraisal. The cost of an appraisal is typically around $400. Some loan officers will require payment for this upfront and others will roll the cost of the appraisal into a buyer’s closing costs.
Q: How long will it take to close on my home?
A: You should plan on between 30-60 days. There are many variables that can affect the amount of time, but 30-60 days is a good number for an overwhelming majority of transactions.
Q: Do sellers have to disclose the terms of other offers?
A: Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.
Q: Is a low offer a good idea?
A: While your low offer in a normal market might be rejected immediately, in a buyer's market a motivated seller will either accept or make a counteroffer. Full-price offers or above are more likely to be accepted by the seller. But there are other considerations involved:
- Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition.
- Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
- Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.