Every buyer has multiple questions…and every buyer is different. I love love love being a valued and trusted resource for our buyers who are taking the first step in obtaining the American dream! While there are many different types of questions we hear, these are probably the most frequently asked. If you have any questions feel free to post them to the blog! Or reach out to us any time under the contact us tab.
- I’m not ready to buy a house, don’t I need 20%
You absolutely do not need 20% down to buy a house. The most popular packages start at as little as 1% down, 3%, 5%, 10% 15% and 20%. Many of these packages even avoid PMI or do not nearly have as high of interest rate as you think. Especially- when compared to the money you will be wasting renting or watching the market increase while you are saving to get that 20%.
- Why would I take part in a bidding war? I’m not over paying for a house.
There is a difference between “over paying” and winning a bidding war. A good buyer’s agent will walk you through the comps and have you feel comfortable with knowing the amount you are offering is comparative with the other homes in the immediate area. Just because you are paying above asking, does not mean you are paying above market rate.
- Will the inventory ever increase?
Markets are very cyclical, and while we have been in a strong low inventory and seller’s based market for close to 5 years, every season within this market is different. Traditionally you can expect to see highest levels of inventory in the fall after the year catches up and sellers learn what their neighbors have sold their houses for. This is the first year we are are starting to see rising inventory levels, even though in the summer months it doesn’t always feel that way.
- What happens if my home inspection fails
Home inspections are not pass fail. A home inspection is designed to teach you how to care for your house and to make sure it is safe & dry in advance of purchase. If we find out something is wrong along the way we can ask the seller to take care of the problem, we can ask for a closing cost credit or price reduction, or we simply change our mind and walk away from the offer and get your deposit back. But there is no pass/fail.
- What are closing costs & who pays them
One of the most common questions I get, often from first time homeowners who are hearing tidbits from their parents, is that the sellers are going to pay their closing costs. So let’s take this one 2 fold.
- What are closing costs: Closing costs are your mortgage fees, pre-paids, escrows, home insurance and title insurance fees. This varies depending upon the home, time of year purchased (since you are pre-paying quarterly taxes), and current tax rate. For your average home closing costs are typically around $10k.
- Who pays them?: Buyers are responsible for closing costs. You can always ask for a closing cost credit from the seller, but that is in essence reducing your offer price. You inflate your offer, and then ask for the credit back. There are risks associated with this, mainly your offer is less attractive to the seller compared to others without closing cost credits.
- When is the property mine
Some questions heard in the field….”So I can have painters come in now bc the house is vacant right?” or “I close at 10am my movers are coming at 10:15.”
While it would be SO fantastic to be able to do work in advance of closing, the reality is….the property is not yours until you pass papers, the property is funded with the mortgage company and the property is on record with the county registry of deeds. Once we get alerted the home is on record you will receive your keys and you can do what you would like with your new home!
- Who has my escrow money/what is escrow
Escrow is your good faith deposit. If you are putting down 5% or more than 5% as total down payment-the escrow amount due at the signing of Purchase & Sale will be 5% total. The listing agent’s brokerage holds the escrow in their account. Escrow accounts are non-interest bearing. It is not accessed or used for anything until the closing. The seller does not have access to these funds during this time frame.
- Why does no one want this house?
“This house has been on the market for 30 days. If no one else wants it, I certainly don’t want it. Isn’t there something wrong?”
While it is wise to have your guard up for a house with many days on market, more times than not there is nothing wrong! Sometimes the pricing was a little too aggressive and these sellers are ready to reduce and we can walk in and get a nice hefty price reduction and beat out the competition before they know the seller is willing to reduce. Other times it might be purely cosmetic reasons, or that it was listed at a less than ideal time of year. Going to see houses with substantial days on market can sometimes be the best way to get a deal on a house.
- If I talk to more than one mortgage broker, aren’t they going to strike my credit again
Once you do a hard pull from a mortgage lender, there is a 30 day window where any lenders can also do a hard pull without harming your credit. Even beyond that, it is not the same effect as the initial hard pull. You should always be comfortable exploring your options with other lenders to be sure you are getting the best rate and smoothest process.
- If I go direct to seller’s agent I get a better deal right
Wrong-when you go directly with the seller’s agent they cannot fully represent you. They are obligated to represent their sellers. This means they will not advise you on lower offer amounts, they can’t help you with a cost analysis on the house, they cannot help you negotiate the inspection, and they cannot disclose details the sellers have told them not to. A buyer’s agents job is do the exact opposite and work and fight in favor of YOU!