Real estate is arguably the largest financial transaction most people will make in their entire life. Make sure you’re getting answers to the questions you should be asking. Below are the top 10 buyer related questions and answers to help set yourself up for homeowner glory.
Q:Where do I start?
A: Loan approval, fo sho. Finding out a number you’re working with is important not just for budgeting, but imagine spending all this time looking at houses to only find out you are way above or below your budget. Boo. Also, many houses will not accept or even see offers without a pre approval letter. By the time you get it done you can potentially miss out on that house. In today’s real estate market it is best to hit the ground running.
Q:How much should I save for a downpayment?
A: 3-5%. Despite the myth of having 20% down or more, many lenders are offering Conventional loan programs for 3-5% down. Obviously the more you put down the cheaper the mortgage but 20% is not the only way to go. Always consider refinancing down the road as well.
Q:How high should my credit score be?
A: Low 600’s can get it done, improving your credit score and going in with the highest number possible will be worth the wait in the long run.
Q:How much do I pay the Realtor?
A: Nada! Sellers are the ones who pay commission to each party.
Q:What other fees can I expect along the way?
A: Closing costs usually cost you about 3% of the purchase price of your new home. You will also have loan origination and notary fees. During escrow it is usually standard to have a home inspection and termite inspection that usually will be paid for by the buyers.
Q:How long does it take to buy a home?
A: 30-45 days is standard for the escrow process. If all contractual obligations are met and the loan funds early then you are clear to close!
Q:What does the Realtor do?
A: Aiding you in your home search while staying on top of the market for you. Saving you from overpaying on a home while negotiation a solid deal. Making sure all contractual obligations are met within the required time frames between both parties, making your escrow go as smooth as possible to help create a memorable experience in your home buying process.
Q:What is the difference between loan programs?
A: Generally speaking, you are dealing with FHA, Conventional or VA. Unless it’s all cash. VA loans are for service members, offering no down payment options and no points. FHA and Conventional loans are your most common ones. Typically a Conventional loan is a little stronger and preferred by sellers due to its generally speaking “more qualified buyers” presenting less risk of falling out of escrow. FHA are still great loans that fund for millions of homes a year.
Q:This house is listed higher then I can afford, but I want it. What do I do?
A: Write an offer. You NEVER know how a seller will react, specially if they have been on market for a while and are MOTIVATED to sell.
Q:How should I choose my realtor?
A: Matt Salit.
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