What the first step?

Getting pre-approved. Most real estate agents will require a pre-approval before showing homes. Getting a pre-approval letter from a bank/lender get you in the right direction. You need to know how much you can borrow. This will narrow down your home searching to properties you actually can afford. Being pre-approved demonstrates that you are really interested and a serious buyer to both your real estate agent and the person selling their home. 

What is a mortgage and how does it work?

A mortgage is a type of loan to finance a property. The majority of people are not wealthy enough to purchase a house in total. Thus, a mortgage serves as a secure loan that comes with a fixed interest rate and gets paid off over 15 or 30 years. If need be, your client can refinance their mortgage and payments in the future.

How long does it take the process?

Once a home is selected an the offer is accepted, generally -and if everything rolls out smoothly- the process of buying a home takes about 10 to 12 weeks. The average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.

What is a seller’s market?
Major demand on homes drives up prices.
Here are some driving factors:

• Economic factors – When the local market heats up, brings an influx of new home seekers, and pushes up home prices before more inventory of homes can be introduced in the market.

• Interest rates trending down – This factor improves home affordability, creating more buyer interest, mainly for first time home buyers who can afford bigger homes as the cost of money goes lower.

• A short-term spike in interest rates - This maybe convinces  “on the fence” buyers to move forward with the  purchase, if they believe the upward trend will continue. 

• Low inventory - fewer homes on the market because of shortages in new construction. Prices for existing homes may go upward because there are fewer units available.

What is a buyer’s market?

A buyer’s market is characterized by declining home prices and reduced demand.

• Interest rates going higher – the amount of dollars the people can borrow to buy a home is reduced because the interest on the loaned money is higher, therefore, this reduces the total number of potential buyers in the market. Home prices drop to meet the level of demand.

• Short-term drop in interest rates – can give borrowers a temporary advantage with more purchasing power before home market's prices can react to the recent interest rate changes.

• High inventory – a new subdivision and can create downward pressure on prices of older homes nearby,

How much do I have to pay an agent to help me buy a house?

For the majority of the cases, there are two real estate agents involved in the deal: one that represents the seller and another who represents the buyer.

Listing brokers represent the seller and they charge a fee to represent them and market/advertise the property. The property will also be placed in the local multiple listing service (MLS), where other agents in the area (and nationally) will be able to search and find the home for sale.

Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. 

What kind of credit score do I need to buy a home?

Most loan require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.

Should I sell my current home before buying a new one?

If the equity in your home will be applied to the down payment on the new home, naturally the former will need to be sold first.

Buyers often have a short time frame to sell their current home when relocating to a new city because of a job transfer. 

How should I prepare my house before selling it?

First impressions always matter, but especially in real estate. Anyone walking through a house  will be looking for ways to negotiate down on the price. You must help clients make sure that the HVAC, plumbing, and electrical system all work properly. Each room should look clean and decluttered with no  damage insight.

Is there a reason my home’s assessed value differs compared to the market value?

A public tax assessor gives the assessed value for a property. This assessment typically occurs yearly for taxation purposes. The fair market value is an agreed-upon price between a willing buyer and seller. There is usually a difference between the assessed value and market value. For homeowners, the assessed value is a double-edged sword. Because, if their annual assessed value increased then their yearly taxes will also be raised. On the flip side, when selling a house it can help boost its market value.

Is there a reason my home’s assessed value differs compared to the market value?

A public tax assessor gives the assessed value for a property. This assessment typically occurs yearly for taxation purposes. The fair market value is an agreed-upon price between a willing buyer and seller. There is usually a difference between the assessed value and market value. For homeowners, the assessed value is a double-edged sword. Because, if their annual assessed value increased then their yearly taxes will also be raised. On the flip side, when selling a house it can help boost its market value.

How many homes should I view before buying one?

That’s up to you! For sure, home shopping today is easier today than ever before. The ability to search for homes online and see pictures, even before setting a foot outside the comfort of your living room, has completely changed the home buying game. 

What is earnest money?

When you make an offer on a home, your agent will ask for a check  (checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price). Earnest money is made in good faith to demonstrate - to the seller - that the buyer’s offer is genuine. Earnest money essentially takes the home off the market to anyone else and reserves it for you. What typically is called 'under contract'

Important: if the terms of a deal are agreed upon by both parties, but then the buyer backs out, the earnest money may not be returned to the buyer. Ask your agent about the ways to protect your earnest money deposit and the ways to protect it – such as offer contingencies.

What if my offer is rejected?

Sellers can simply accept or reject an offer. But there a third path that is quite common, sellers can initiate a counteroffer. A deal isn’t done until it’s done. So, if a counteroffer is proffered by the seller, you’re still in the game. You and your agent just need to review it determine whether the counteroffer is acceptable. If so, then approving it closes the deal immediately.

Should I order a home inspection?

Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected.