Frequently Asked Questions

Am I ready to own a home?

You are probably ready to buy a home if you have a good credit score, money saved up for a down payment and closing costs, and make a stable income. However, answering this question requires more than just a knowledge of mortgages, down payments and credit scores. Home repairs and maintenance become your responsibility as a homeowner. Are you ready to get that leaky roof fixed, unclog that kitchen sink or replace that broken dishwasher?

Is my credit good enough to buy a home?

This question is especially important if you need a mortgage. You can qualify for a home loan backed by the Federal Housing Administration (FHA) with a 10% down payment and a minimum 500 credit score. However, the approval process may be difficult and you’ll pay a much higher interest rate than you would with a higher credit score. A higher credit score often leads to a smoother loan approval, and a much lower interest rate and monthly payment. Conventional lenders typically require a minimum 620 score, but they’ll likely reward you with a lower rate if your score is 740 or higher.

What is the first step in buying a home?

The absolute first step is to get approved for a mortgage. Without being approved for a mortgage it will be quite difficult, if not impossible, to purchase a new home.

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

This is a tricky question, and the answer primarily depends on one’s funds and ability to find temporary housing. If you need more equity to purchase a new home or meet a mortgage plan, then it is best to sell your current home before purchasing your next one.

Should I do a home inspection?

Yes. A home inspection is one of the most vital steps when purchasing a property. A professional inspector has a keen eye for how well the house has been taken care of. The inspectors can comment on structural and cosmetic issues, along with any local code issues. Moreover, a home inspector will help you better determine the home’s value.

Should I do a final walk-through?

A final walk-through is not required but highly recommended. Final walk-throughs give buyers a chance to make sure nothing has changed since their initial inspection or previous visits. Also, if repairs were requested as part of the sale offer then a follow-up visit ensures all repairs are done according to the agreement and contract.

How does earnest money work?

Earnest money is similar to a deposit when renting a place. It is made in good faith to demonstrate to the seller that the buyer’s offer is legitimate. The amount is usually 1-2% of the selling price and essentially takes the property off the market. The money also gives the buyer extra time to conduct a title search, get an inspection and property appraisal, and financing.

How long will it take to sell my home?

Once the house is on the market, it may take anywhere from four to six weeks to sell. However, if the market is fairly hot, a seller could see their house off the market within a week. On the flip side, if there is a lull in the market or issues arise such as negotiation, lack of exposure, or house conditions then the property can sit on the market for months.

How should I prepare my house before selling it?

First impressions matter in business, but especially in real estate. Anyone walking through a house or touring it virtually will be looking for ways to pass or 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 overt damage insight.

Should I order a home inspection?

Getting a pre-sale home inspected is never a bad idea, especially if you want to get the best price for your home. Some homebuyers will feel uncomfortable purchasing a house without seeing a home inspection. Many will often hire their own inspector. It’s better to be safe than sorry.

What is the selling price of my home?

The selling price of a house fluctuates depending on multiple factors. The most common ones are the neighborhood and what similar-sized houses are currently selling for. The age and condition are also contributing factors. Do major repairs need to be done? If so, that might lower the property value. Like everything else, home prices vary depending on supply and demand.

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.

What is an agent’s commission fee?

In a real estate transaction, the agent is usually paid by the seller via commission as opposed to a flat free. Typically, a real estate commission fee is 5–6% of the home’s final sale price. In many cases, both the buyer’s agent and the seller’s agent split the commission fee 50/50. Both receiving 2.5–3%.

Should I price my home higher to leave room for negotiations?

No, you shouldn’t. Don’t price in negotiations. It is better to list at fair market value and not negotiate, than list high and expect to negotiate. Additionally, when you overprice your home, your target demographic may not even see your home when searching online.

What are the common closing expenses for home sellers?

Typical closing expenses for home sellers include the abstract and title search, instrument survey, real estate commissions, and transfer taxes which also are known as revenue stamps.